[2017] FWCFB 1001
1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Penalty Rates
(AM2014/305)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT ASBURY
COMMISSIONER HAMPTON
COMMISSIONER LEE
MELBOURNE, 23 FEBRUARY 2017
4 yearly review of modern awards – penalty rates – hospitality and retail sectors
CONTENTS
Chapters Page Paragraph
1. Introduction
1.1 The Process
7 [1]
[16]
2. The Decision: An Overview
2.1 The Legislative context and proposed changes in
penalty rates
13
[34]
3. Legislative Framework
3.1 Statutory constructions – general observations
3.2 The relevant statutory provisions
3.3 The Modern Awards Objective
3.4 The proposed ‘material change in circumstances’ test
3.5 Summary
25
[95]
[101]
[113]
[230]
[269]
4. Award Modernisation and the Transitional Review
4.1 Overview
4.2 Award modernisation
4.3 Transitional Review 2012
61
[271]
[274]
[286]
DECISION
AUSTRALIA FairWork Commission
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Chapters Page Paragraph
5. Submissions overview
5.1 Principal parties
5.2 Productivity Commission Inquiry Report:
Workplace Relations Framework
5.3 Other submissions
69
[302]
[308]
[349]
6. Weekend work
6.1 Overview of data and evidence
6.2 Expert evidence
6.3 Employment effects of changes to penalty rates
6.4 Summary
93
[424]
[508]
[611]
[689]
7. The Hospitality Sector
7.1 Overview
7.1.1 Features of the hospitality sector
7.1.2 Hospitality sector employees
7.1.3 Summary
7.2 Hospitality Industry (General) Award 2010
7.2.1 The claims
7.2.2 Background to the Hospitality Award
7.2.3 The Hospitality Industry
7.2.4 The Evidence
7.2.5 Consideration
7.2.6 Conclusion
7.3 Registered and Licenced Clubs Award 2010
7.3.1 The claims
7.3.2 Background to the Clubs Award
7.3.3 The Clubs Industry
7.3.4 The Evidence
7.3.5 Consideration
7.3.6 Conclusion
7.4 Restaurant Industry Award 2010
7.4.1 The Claims
7.4.2 The Cafes and restaurants industry
7.4.3 Background to the Restaurant Award
7.4.4 The Evidence
7.4.5 Consideration
7.4.6 Conclusion
7.5 Fast Food Industry Award 2010
7.5.1 The Claims
7.5.2 Background to the Fast Food Award
7.5.3 The Evidence
7.5.4 The Fast Food industry
7.5.5 Fast Food industry employees
7.5.6 Consideration
7.5.7 Conclusion
143
165
205
227
257
[691]
[745]
[907]
[1010]
[1161]
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Chapters Page Paragraph
8. The Retail Sector
8.1 Overview
8.1.1 Features of the Retail Sector
8.1.2 Retail sector employees
8.2 General Retail Industry Award 2010
8.2.1 The claims
8.2.2 Background to the Retail Award
8.2.3 The Retail industry
8.2.4 The Evidence
8.2.5 Consideration
8.2.6 Conclusion
8.3 Pharmacy Industry Award 2010
8.3.1 The claims
8.3.2 Background to the Pharmacy Award
8.3.3 The Pharmacy industry
8.3.4 The Evidence
8.3.5 Consideration
8.3.6 Conclusion
309
332
384
[1410]
[1466]
[1721]
9. Public Holiday Penalty Rates
9.1 Overview
9.2 The claims
9.3 Consideration
9.4 Conclusion
423
428
[1893]
[1909]
[1926]
[1947]
10. The Right to Refuse Work 441 [1982]
11. Transitional Arrangements 445 [1998]
12. Next Steps 453 [2030]
ATTACHMENTS
Attachment A—List of witnesses
Attachment B—Research reference list
Attachment C—Comparison of penalty rates under key
instruments against modern awards rates
Attachment D—Terms of reference for Productivity
Commission inquiry
Attachment E––List of cases and additional references
Attachment F—List of tables, figures and charts
509
516
526
535
537
543
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ABBREVIATIONS
AAWI average annualised wage increases
ABI Australian Business Industrial and the New South Wales
Business Chamber
ABS Australian Bureau of Statistics
ACCI Australian Chamber of Commerce and Industry
ACTU Australian Council of Trade Unions
AFEI Australian Federation of Employers and Industries
Ai Group Australian Industry Group
AIRC Australian Industrial Relations Commission
AHA Australian Hotels Association
AMSRS Australian Market and Social Research Society
ANZSIC Australian and New Zealand Standard Industrial
Classification
APESMA The Association of Professional Engineers, Scientists
and Managers, Australia
ARA Australian Retailers Association
ARS Award Reliance Survey
ASR Australian Survey Research Group Pty Ltd
AWRS Australian Workplace Relations Study
Benchmarking Survey restaurant and catering benchmarking survey conducted
by RCI in 2014
CAI Clubs Australia Industrial
Clubs Award Registered and Licensed Clubs Award 2010
CoE Characteristics of Employment Survey
Coffs Club Agreement Coffs Ex Services Memorial and Sporting Club
Enterprise Agreement 2015 [AE415387]
Commission
1
Fair Work Commission
EA Survey Survey by Elections Australia Pty Ltd of RCI Members
EEBTUM Employee Earnings, Benefits and Trade Unions
Membership
EEH Employee Earnings and Hours
Fast Food Award Fast Food Industry Award 2010
FW Act Fair Work Act 2009 (Cth)
FWO Fair Work Ombudsman
FWO Wave 2 Report National Hospitality Industry Campaign Restaurants,
Café’s and Catering (Wave 2)
FWO Wave 3 Report National Hospitality Industry Campaign 2012–15
Takeaway Foods (Wave 3)
HERRC industries hospitality, entertainment, retail, restaurants and cafes
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HILDA Household, Income and Labour Dynamics in Australia
Hospitality Award Hospitality Industry (General) Award 2010
Hospitality Employers Australian Hotels Association and the Accommodation
Association of Australia
Hospitality and Retail Awards Hospitality, Restaurant, Retail, Fast Food and
Pharmacy Awards (see [1915])
IPART NSW Independent Pricing and Regulatory Tribunal
Jetty survey survey by Jetty Research
KPMG Clubs Report KPMG ‘National Club Census 2011’
MGA Master Grocers Australia Limited
NES National Employment Standards
NRA National Retailers Association
PC Final Report Productivity Commission Inquiry Report: Workplace
Relations Framework
PGA The Pharmacy Guild of Australia
Pharmacy Award Pharmacy Industry Award 2010
QSR Quick Service Restaurants
RCI Restaurant & Catering Industrial
Request Request by Minister for Employment and Workplace
Relations to modernise awards in accordance with
s.576C(1) of the WR Act
Restaurant Award Restaurant Industry Award 2010
Retail Award General Retail Industry Award 2010
Retail employers Australian Retailers Association, National Retail
Association and Master Grocers Association
Review 4 yearly review of modern awards
SDA Shop, Distributive and Allied Employees Association
Taskforce Report Final Report of the Visitor Economy Taskforce: A Plan
to Double Overnight Visitor Expenditure to NSW by
2020
TPCA Act Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009
Transitional Review Transitional (or 2 year) review of modern awards under
Item 6 of Schedule 5 to the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009
Victorian Shops Interim Award Shop, Distributive and Allied Employees Association -
Victorian Shops Interim Award 2000
WAD Workplace Agreements Database
WR Act Workplace Relations Act 1996
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1. Introduction
4 yearly review
[1] Section 156 of the Fair Work Act 2009 (the FW Act) provides that the Fair Work
Commission (the Commission) must conduct a review of all modern awards every four years
(the Review).
[2] As detailed in a statement issued on 6 February 2014,
2
the Review consists of an
Initial stage (dealing with jurisdictional issues), a Common issues stage and an Award stage
(which would review all modern awards in four groups).
3
[3] As part of the Review, various employer bodies have made application to vary penalty
rate provisions in a number of modern awards. These applications have been heard together.
[4] In an Issues Paper dated 24 February 2014, the Commission indicated its preliminary
view that proposals to vary penalty rates would not be dealt with as a common issue, but
would be dealt with in the Award stage of the Review.
4
This preliminary view was confirmed
in a Statement and Directions issued on 17 March 2014 and it was noted that the penalty rates
matter would be dealt with by a separately constituted Full Bench.
5
[5] The modern awards subject to claims are:
Award title Award code Matter No.
Fast Food Industry Award 2010 MA000003 AM2014/267
General Retail Industry Award 2010 MA000004 AM2014/270
Hospitality Industry (General) Award 2010 MA000009 AM2014/272
Pharmacy Industry Award 2010 MA000012 AM2014/209
Registered and Licensed Clubs Award 2010 MA000058 AM2014/283
Restaurant Industry Award 2010 MA000119 AM2014/284
[6] This decision deals with those claims.
[7] Table 1 below sets out claims employer parties have made to reduce weekend penalty
rates in respect of each award that is the subject of this decision. Table 1 sets out the current
penalty rates for work performed on a Saturday and Sunday in each award, and the proposed
change for each award is highlighted in red text.
https://www.fwc.gov.au/documents/modern_awards/award/MA000003/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000003?m=AM2014/267
https://www.fwc.gov.au/documents/modern_awards/award/MA000004/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000004?m=AM2014/270
https://www.fwc.gov.au/documents/modern_awards/award/MA000009/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000009?m=AM2014/272
https://www.fwc.gov.au/documents/modern_awards/award/MA000012/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000012?m=AM2014/209
https://www.fwc.gov.au/documents/modern_awards/award/MA000058/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000058?m=AM2014/283
https://www.fwc.gov.au/documents/modern_awards/award/MA000119/default.htm
https://www.fwc.gov.au/awards-and-agreements/modern-award-reviews/4-yearly-review/award-stage/award-review-documents/MA000119?m=AM2014/284
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Table 1
Weekend Penalty Rates
Full-time Part-time
Casual (inclusive of
casual loading)
% of permanent base
rate
% of permanent base
rate
% of permanent base
rate
Sat Sun Sat Sun Sat Sun
Restaurant Industry Award
2010
125 150 125 150 150 150
(175)
1
Restaurant Industry Award
2010
2
(proposed by RCI)
125 125 125 125 150 150
Registered and Licensed
Clubs Award 2010
150 175 150 175 150 175
Registered and Licensed
Clubs Award 2010
(proposed by CAI)
125 150 125 150 150 150
General Retail Industry
Award 2010
125 200 125 200 135 200
General Retail Industry
Award 2010
(proposed by the Retail
Employers and ABI
3
)
125 150 125 150 135 150
Hospitality Industry
(General) Award 2010
125 175 125 175 150 175
Hospitality Industry
(General) Award 2010
(proposed by AHA and AAA)
125 150 125 150 150 150
Fast Food Industry Award
2010
125 150 125 150 150 175
Fast Food Industry Award
2010
(proposed by RCI)
125 125 125 125 150 150
Fast Food Industry Award
2010
(proposed by Ai Group)
125 125 125 125 150 150
Pharmacy Industry Award
2010
4
200, 125,
150, 175
200 200, 125,
150, 175
200 225, 150,
175, 200
225
Pharmacy Industry Award
2010
(proposed by the Pharmacy
Guild)
200, 125,
150
200, 150,
175
200, 125,
150
200, 150,
175
200, 125,
150
200, 150,
175
1
Level 1–2 employees receive a penalty rate of 150% on Sundays, Level 3–6 casual employee receive 175%.
2
ABI have made a claim in relation to the Restaurant Award to reduce the public holiday rate only.
3
The Retail employers are also seeking to reduce the penalty rate for shiftworkers on Sunday from 200% to
150%.
4
There are currently up to four penalty rates, based on the time of working
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[8] The principal parties to the proceedings are identified in Chapter 5.1.
[9] In a statement on 8 September 2016 directions were issued in which we sought to
clarify the status of the various claims before us in the penalty rates proceedings. A draft
summary of the claims was issued along with the statement, requesting parties’ comments.
[10] Australian Business Industrial and the New South Wales Business Chamber (ABI)
confirmed that the variations to the Hair and Beauty Industry Award 2010 which had been
proposed by ABI and the Hair and Beauty Australia Industry Association, were no longer
pressed. Correspondence was also received from Restaurant & Catering Industrial (RCI)
confirming that its claim in respect of clauses 34.4(c) and 34.4(d) of the Restaurant Industry
Award 2010 was no longer pressed.
[11] No correspondence was received from other parties in relation to the draft summary.
[12] A finalised version of the summary was republished as a statement on
12 October 2016.
6
[13] In addition to the claims set out in Table 1 above, a number of other claims have been
made. These claims generally relate to the public holidays clause, for example the Hospitality
Employers (the Australian Hotels Association and the Accommodation Association of
Australia) seek to introduce a two-tiered regime into the Hospitality Award in respect of
public holiday penalty rates under which higher penalty rates are prescribed for work
performed on the public holidays specified under s.115(1) of the FW Act. Other claims seek
to reduce the existing penalties paid for work on public holidays. We set out all these claims
in more detail in Chapter 9. Claims have also been made seeking changes to the early/late
night work penalties in a number of the awards.
[14] We deal with each claim in detail later in this decision.
[15] As noted in the Statement issued 17 December 2014, further proposals to alter penalty
rates in other modern awards will be dealt with on an award-by-award basis in the award
stage of the Review.
7
1.1. The Process
[16] After a consultation process, a consensus emerged among interested parties that the
modern awards and issues in relation to penalty rates would be dealt with jointly but
sequenced into three ‘groups’, as follows:
(i) Common evidence—evidence relevant to the consideration of claims in all awards
and industry sectors.
(ii) Hospitality group—includes the following awards:
Amusement, Events and Recreation Award 2010
Hospitality Industry (General) Award 2010
Registered and Licensed Clubs Award 2010
Restaurant Industry Award 2010
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(iii) Retail group—includes the following awards:
Dry Cleaning and Laundry Industry Award 2010
Fast Food Industry Award 2010
General Retail Industry Award 2010
Hair and Beauty Industry Award 2010
Pharmacy Industry Award 2010
[17] Applications to vary the Amusement, Events and Recreation Award 2010, Dry
Cleaning and Laundry Industry Award 2010 and Hair and Beauty Industry Award 2010 were
withdrawn by the parties at various points in the proceedings.
8
[18] A number of conferences were held and various procedural Statements issued by the
Commission dealing with a range of programming and scheduling matters. There was general
agreement that ‘common evidence’ would be heard first and separate to the particular
evidence relating to the Hospitality group and the Retail group, followed by a submission
process.
[19] Common evidence is evidence that is relevant to the consideration of claims in all of
the relevant awards and industry sectors, and would generally be provided by an expert. Such
evidence could include government reports and statistical or social commentary material.
Award or industry-specific evidence would be presented during the Hospitality and Retail
group stages.
[20] Final directions and a hearing timetable were issued in a Statement on 3 March 2015.
9
The directions set out the process for the filing of evidence (including witness statements
from expert witnesses and lay witnesses across the three streams), objections to any evidence,
submissions, proposed findings and survey material.
[21] The directions and timetable were revised on 7 August 2015,
10
after a number of
parties sought variations to the 3 March 2015 directions.
[22] Parties were advised that issues in relation to the penalty rate payable on a public
holiday in the awards referred to in paragraph [5] of this decision were to be dealt with during
these proceedings, and not as part of the common issue public holiday proceedings.
11
[23] The Commission heard evidence on 8–25 September, 1 October, 12–28 October, 4–
6 November, 15–16 and 21 December 2015. Evidence was given by 143 lay and expert
witnesses of whom 128 were required for cross-examination. Witnesses included employers
and employees from the relevant industry sectors, appearing either in person or from around
Australia (including regional locations) via videolink. The expert evidence included
academics with expertise in economics and workplace relations. A complete list of witnesses
is attached to this decision at Attachment A.
[24] A number of Mentions have been held concurrently while evidence is being heard,
dealing with scheduling of witnesses, objections to evidence (both expert and lay), legal
professional privilege claims and applications for confidentiality orders. As part of these
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proceedings, the Commission has issued 38 Orders for the production of documents, and eight
confidentiality orders.
[25] In total there have been 39 days of hearings and an additional 15 mentions and
conferences.
[26] The dates for filing final submissions were revised following requests from the parties,
and final hearings in the matter were held from 11–15 April 2016 and 28 September 2016.
The final written submission was received on 4 February 2017.
[27] In addition to material received from parties, the Commission has published its own
research material. Three reports have been prepared and published by the Workplace and
Economic Research Section of the Commission to assist parties with their submissions in the
matter:
(i) Industry profile – Accommodation and food services
(ii) Industry profile – Retail trade
(iii) Changing work patterns
[28] These reports have been updated and republished a number of times to take into
account new data. The most recent update to all three reports was on Friday 20 January 2017
to take into account the following:
Australian Bureau of Statistics (ABS) Employee Earnings and Hours, May 2016;
and
Household, Income and Labour Dynamics in Australia (HILDA) survey, 2015.
[29] A Research Reference List was published on the Commission’s website on 15 January
2016 containing references that had been cited in the substantive evidence of expert witnesses
and the submissions of the parties. Additional publications identified by staff of the
Commission that may be of relevance were also included in the list. Interested persons were
given an opportunity to comment on the list
12
. The Research Reference List is contained in
Attachment B.
[30] The conduct of the Review has been open and transparent, in accordance with s.577 of
the FW Act. The Commission’s website has been used extensively to provide information to
any interested person in order to facilitate broad participation in the Review. Interested
persons were encouraged to subscribe to the dedicated penalty rates subscription notification
service to keep them informed about the penalty rates matter.
[31] On 15 January 2016
13
, revised directions were issued directing that:
‘Any interested person who is not a party to the proceedings may put forward a position (and
file material in support of their position) in relation to varying the penalty rate provisions in the
above awards by no later than 4.00pm Wednesday 17 February 2016.’
[32] This direction was publicly advertised in major newspapers nationally on 20 January
2016.
14
Some 5845 public contributions from individual employees and employers were
received and published on the Commission’s website
15
and 55 additional confidential
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contributions were forwarded to the Full Bench and provided to the principal parties, but not
published.
[33] Throughout the process and in addition to the 5845 public contributions,
36 submissions have been received from organisations who are not principal parties to the
proceedings. These organisations included Members of Parliament and State governments,
unions, student organisations, community groups, small businesses, churches and industry
groups. Of these submissions 14 supported a reduction to the current penalty rates regime and
22 did not support any change to the current system. These submissions are addressed in
Chapter 5.3.
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2. The Decision: An Overview
2.1 The Legislative context and proposed changes in penalty rates
[34] Section 156 of the FW Act provides that the Commission must conduct a 4 yearly
review of modern awards (the Review). Subsection 156(2) deals with what must be done in
the Review and provides that the Commission must review all modern awards and may,
among other things, make determinations varying modern awards.
[35] This decision deals with the review of the weekend and public holiday penalty rates
and some related matters, in a number of Hospitality and Retail awards.
[36] The Commission’s task in the Review is to decide whether a particular modern award
achieves the modern awards objective. If it does not then it is to be varied such that it only
includes terms that are ‘necessary to achieve the modern awards objective’ (s.138).
[37] The modern awards objective in s.134(1) of the FW Act is central to the Review. The
modern awards objective is to ‘ensure that modern awards, together with the National
Employment Standards (NES) provide a fair and relevant minimum safety net of terms and
conditions’, taking into account the particular considerations identified in sections 134(1)(a)
to (h). Fairness in this context is to be assessed from the perspective of the employees and
employers covered by the modern award in question. ‘Relevant’ is intended to convey that a
modern award should be suited to contemporary circumstances. We deal with the relevant
legislative provisions in more detail in Chapter 3.
[38] Historically, industrial tribunals have expressed the rationale for penalty rates in terms
of both the need to compensate employees for working outside ‘normal hours’ (the
compensatory element) and to deter employers from scheduling work outside ‘normal’ hours
(the deterrence element).
16
[39] Having regard to more recent authority, the terms of the modern awards objective, and
the scheme of the FW Act, we have concluded that deterrence is no longer a relevant
consideration in the setting of weekend and public holiday penalty rates. We accept that the
imposition of a penalty rate may have the effect of deterring employers from scheduling work
at specified times or on certain days, but that is a consequence of the imposition of an
additional payment for working at such times or on such days, it is not the objective of those
additional payments. Compensating employees for the disutility associated with working on
weekends and public holidays is a primary consideration in the setting of weekend and public
holiday penalty rates.
[40] We note that the Productivity Commission has expressed a different view in respect of
public holiday penalty rates:
‘… by definition, genuine public holidays are intended to serve a special community role and,
as such, there are strong grounds to limit the expectation that they are for working. In that
sense, the original concept of deterrence continues to have relevance’.
17
[41] We accept that public holidays, by their nature, are intended ‘to serve a special
community role’ and that the expectation (and practice) is that the vast majority of employees
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do not work on public holidays. But these features do not support the adoption of deterrence
as an objective in setting public holiday penalty rates. However, these features are relevant to
determining the amount of compensation to be provided to employees who work on public
holidays, given the additional disutility associated with working on a day when the vast
majority of other employees are enjoying a day of leisure.
[42] A central contention advanced by the Shop, Distributive and Allied Employees
Association (SDA) and United Voice in these proceedings is that before the Commission can
vary a modern award in the Review, it must first be satisfied that since the making of the
modern award there has been a material change in circumstances pertaining to the operation
or effect of the award such that the modern award is no longer meeting the modern awards
objective (the ‘material change in circumstances test’). If adopted the proposed test would
require the proponent of a variation to establish that there has been a material change in
circumstances since the modern award was made. The proposed ‘material change in
circumstances’ test seeks to place a constraint on the discretion conferred by s.156 which is
not warranted by the terms of this section or the relevant statutory context and purpose. There
is no such express or implied requirement in s.156.
[43] We reject the proposition advanced by the Unions. The adoption of the proposed
‘material change in circumstances test’ would obfuscate the Commission’s primary task in the
Review, determining whether the modern award achieves the modern awards objective. To
adopt such a test would add words into s.156 in circumstances where it is not necessary to do
so in order to achieve the legislative purpose. For completeness we record our agreement with
the point advanced by the Australian Industry Group (Ai Group) in its submission in reply
18
that the variation of a modern award may be warranted if it was established that there was a
‘material change in circumstances’ since the modern award was made, but the establishment
of such a change is not a condition precedent to the variation of a modern award in the
Review.
[44] As mentioned, the modern awards objective is central to the Review. In determining
whether an award achieves the modern awards objective the Commission must take into
account a range of considerations, including those set out in s.134(1)(da). Relevantly,
s.134(1)(da)(iii) requires that we take into account the ‘need to provide additional
remuneration’ for ‘employees working on weekends or public holidays’.
[45] An assessment of ‘the need to provide additional remuneration’ to employees working
in the circumstances identified requires a consideration of a range of matters, including:
(i) the impact of working at such times or on such days on the employees concerned
(i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g. through
‘loaded’ minimum rates or the payment of an industry allowance which is intended to
compensate employees for the requirement to work at such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
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[46] Assessing the extent of the disutility of working at such times or on such days (issue
(i) above) includes an assessment of the impact of such work on employee health and work-
life balance, taking into account the preferences of the employees for working at those times.
[47] Section 134(1)(da) speaks of the ‘need to provide additional remuneration’ for
employees performing work in the circumstances mentioned. We note that the minority in the
Restaurants 2014 Penalty Rates decision
19
made the following observation about
s.134(1)(da): ‘…the objective requires additional remuneration for working on weekends’.
20
[48] To the extent that the above passage suggests that s.134(1)(da) ‘requires additional
remuneration for working on weekends’, we respectfully disagree. We acknowledge that the
provision speaks of ‘the need for additional remuneration’ and that such language suggests
that additional remuneration is required for employees working in the circumstances
identified in paragraphs 134(1)(da)(i) to (iv). But the expression must be construed in context
and the context tells against the proposition that s.134(1)(da) requires that each modern award
must provide additional remuneration for working in the identified circumstances.
[49] The various employer parties have sought reductions in Sunday and public holiday
penalty rates. These claims are summarised in Tables 1 and 74. There were also some claims
to vary the penalty payments for early/late night work in some awards.
[50] Generally speaking, no changes are sought in relation to Saturday penalty rates.
21
[51] We have reviewed the Saturday penalty rates in 4 of the 6 modern awards before us
and (subject to the observations at [65] and [66]) we are satisfied that the existing Saturday
penalty rates achieve the modern awards objective – they provide a fair and relevant
minimum safety net. The review of Saturday penalty rates in the Clubs and Pharmacy Awards
is to be the subject of further proceedings (see [994]–[1009] and [1872]–[1892]).
[52] Variations to modern awards must be justified on their merits. The extent of the merit
argument required will depend on the circumstances. Significant changes where merit is
reasonably contestable should be supported by an analysis of the relevant legislative
provisions and, where feasible, probative evidence.
[53] We have decided that the existing Sunday penalty rates in 4 of the modern awards
before us (the Hospitality, Fast Food, Retail and Pharmacy Awards) do not achieve the
modern awards objective, as they do not provide a fair and relevant minimum safety net.
[54] Except in the Fast Food Award (for the reasons set out at [1394]–[1397]), we do not
propose to reduce the Sunday penalty rates to the same level as the Saturday penalty rates. As
we mention shortly, for many workers Sunday work has a higher level of disutility than
Saturday work, though the extent of the disutility is much less than in times past. In this
regard we also note that it is implicit in the claims advanced by most of the employer interests
that they accept the proposition that the disutility associated with Sunday work is higher than
the disutility associated with Saturday work. If this was not the case then they would have
proposed that the penalty rates for Sunday and Saturday work be the same, but they did not.
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[55] The reductions in Sunday penalty rates we have determined are set out below:
Award
Sunday Penalty Rate
Hospitality Award
full-time and part-time employees:
(no change for casuals)
175 per cent 150 per cent
Fast Food Award
(Level 1 employees only)
Full-time and part-time employees:
Casual employees:
150 per cent 125 per cent
175 per cent 150 per cent
Retail Award
Full-time and part-time employees:
Casual employees:
200 per cent 150 per cent
200 per cent 175 per cent
Pharmacy Award
(7.00 am – 9.00 pm only)
Full-time and part-time employees:
Casual employees:
200 per cent 150 per cent
225 per cent 175 per cent
[56] In relation to the Fast Food Industry Award 2010, for reasons associated with the
preferences of the relevant employees and the limited impact of Sunday work upon those
employees (see Chapter 7.5), we have decided to reduce the Sunday penalty rate, for level 1
employees from 150 per cent to 125 per cent (for full-time and part-time employees) and from
175 per cent to 150 per cent (for casual employees). We do not propose to change the Sunday
penalty rate for Level 2 and 3 employees.
[57] The differential treatment of Level 1 versus Level 2 and 3 employees is on the basis
that Level 2 and 3 employees experience a higher level of disutility associated with Sunday
work than that experienced by level 1 employees. The evidence supports the retention of the
current Sunday penalty rate for level 2 and 3 employees. In this context we note that level 2
and 3 employees are, generally speaking, regarded as ‘career’ employees with the major
chains whereas casual and part-time crew members (level 1 employees) are usually regarded
as ‘non-career’ employees.
[58] We also note that in addition to the changes to Sunday penalty rates we have decided
to vary some of the penalty provisions in relation to early/late night work in the Restaurants
and Fast Food Awards (see [1126]–[1137], [1154], [1324]–[1334] and [1391])
[59] As to the Pharmacy Industry Award 2010, at this stage, we are not persuaded to make
the changes proposed to the loadings for work before 7.00 am and between 9.00 pm and
midnight, on weekends and Monday to Friday. We deal with the next steps in the review of
this award in Chapter 12.
[2017] FWCFB 1001
17
[60] On the material presently before us we are not satisfied that the variations proposed to
the Registered and Licensed Clubs Award 2010 and the Restaurant Industry Award 2010 are
necessary to ensure that these awards achieve the modern awards objective. In short, the
employer organisations concerned have not established a merit case sufficient to warrant the
granting of their claims. We deal with the deficiencies in the cases put and the next steps in
relation to the review of these 2 awards in Chapter 11 at [2044]–[2050].
[61] We have also decided to reduce the public holiday penalty rates in the Hospitality and
Retail Awards (except for the Clubs Award, for the reasons set out at [1915]).
[62] We also conclude that the two-tiered approach to public holiday penalty rates
advanced by the Hospitality Employers lacks merit. The distinction sought to be drawn
between those public holidays expressly mentioned in s.115(1)(a) and the other days declared
or prescribed by or under a law of a State or Territory as a public holiday (s.115(1)(b)), is
illusory. In that regard we concur with the views expressed in the 1994 Public Holidays Test
Case decisions and the Modern Awards Review 2012 – Public Holidays decision, that, in
essence, the number and standardisation of public holidays across Australia is primarily an
issue for the Commonwealth, State and Territory legislatures.
[63] The effect of our decision in respect of public holiday penalty rates is shown (in
marked up format) in Table 2 below.
Table 2
Proposed public holiday penalty rates in the Hospitality and Retail awards
Award title
Public holiday penalty rates (%)
Full-time &
part-time
Casual
Hospitality Award (cl. 32) 250 225 275 250
Restaurant Award (cl. 34) 250 225 250
Clubs Award (cl. 29) 250 250
Retail Award (cl. 29) 250 225 275/250 250
Fast Food Award (cl. 30) 250 225 275 250
Pharmacy Award (cl. 31) 250 225 275 250
[64] The changes we propose to make to Sunday and public holiday penalty rates will
result in greater consistency in penalty rate settings in the Hospitality and Retail Awards .
[65] In each of the Sunday and public holiday penalty rates we have fixed we have adopted
what the Productivity Commission Inquiry Report: Workplace Relations Framework (PC
Final Report) describes as the ‘default approach’ to setting the appropriate rate for casual
employees (see [333]–[338]). Under this approach the rate of pay for casual employees is
always 25 percentage points above the rate of pay for non-casual employees. Hence if the
Sunday penalty rate for full-time and part-time employees is 150 per cent, the Sunday rate for
casuals will be 150 + 25 = 175 per cent.
[2017] FWCFB 1001
18
[66] We note that the approach we have adopted may have implications for the rate paid to
casuals for Saturday work under the Retail Award. We refer to that issue at [1716]–[1720]. It
may also result in a shift from casual to part-time employment in respect of those employed in
the modern awards which we propose to vary.
[67] The decision to reduce Sunday and public holiday penalty rates in these awards is
based on our conclusions with respect to the common evidence (see Chapter 6) and our
assessment of the evidence in relation to each of these particular awards (see Chapters 7.2,
7.5, 8.2 and 8.3).
[68] In Chapter 6 we consider the ‘common evidence’ adduced in these proceedings and
deal with the incidence and effects of weekend work and the employment effects of reducing
penalty rates. The following propositions emerge from the common evidence before us:
1. There is a disutility associated with weekend work, above that applicable to work
performed from Monday to Friday. Generally speaking, for many workers Sunday
work has a higher level of disutility than Saturday work, though the extent of the
disutility is much less than in times past.
2. We agree with the assessment in the PC Final Report that there are likely to be some
positive employment effects from a reduction in penalty rates, though it is difficult to
quantify the precise effect. Any potential positive employment effects from a
reduction in penalty rates are likely to be reduced due to substitution and other effects.
[69] As to proposition 1 above, we are aware that our conclusion is different to that in the
PC Final Report. However, in the proceedings before us we have had the opportunity to
consider evidence not available to the Productivity Commission, such as the Pezzullo
Weekend Work Report, the Rose Report and the Sands Report in addition to a substantial
amount of lay employer and employee evidence. None of the above reports concluded that the
activities conducted on, and attitudes towards, Saturdays and Sundays were identical.
[70] As to proposition 2, the Hospitality and Retail Employers’ lay evidence supports the
proposition that the current level of Sunday penalty rates has led employers to reduce labour
costs associated with Sunday trading by imposing a number of operational limitations, such
as:
restricting trading hours;
lowering staff levels; and
restrictions on the type and range of services provided.
[71] The Hospitality and Retail Employers’ lay evidence also supports the proposition that
a reduction in penalty rates is likely to lead to:
increased trading hours on Sundays and public holidays;
a reduction in the hours worked by some owner operations;
an increase in the level and range of services offered on Sundays and public
holidays; and
[2017] FWCFB 1001
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an increase in overall hours worked.
[72] We do not suggest that these changes will apply uniformly across all hospitality and
retail businesses. The actual impact of a reduction in Sunday penalty rates will depend on the
circumstances applying to individual businesses.
[73] As to public holiday penalty rates, we note that the disutility of working on public
holidays is greater than the disutility of working on Sundays (which in turn is greater than
Saturday work). The notion of relative disutility supports a proportionate approach to the
fixation of weekend and public holiday penalty rates. In determining the appropriate penalty
rate for public holiday work we have had regard to the level of Sunday penalty rates in the
Hospitality and Retail Awards (after applying the decisions we have made to reduce those
rates).
[74] We also note that the disutility in relation to public holidays has been ameliorated
somewhat by the introduction of the statutory right to refuse to work on such days, on
reasonable grounds. Contrary to ABI’s submission, we would not characterise s.114(3) of the
FW Act as making public holiday work ‘voluntary’ (it is a limited right to refuse to work, on
reasonable grounds), but it is still a significant contextual matter which was not taken into
account when the existing 250 per cent penalty was set.
[75] In addition, public holiday work is more common in the Hospitality and Retail sectors
and, on the evidence before us, reducing the public holiday penalty rate will increase
employment and have a number of positive effects on business.
[76] It is important to appreciate that the conclusions we have reached in relation to the
weekend and public holiday penalty rates in the Hospitality and Retail Awards is largely
based on the circumstances relating to these particular awards. The Hospitality and Retail
sectors have a number of characteristics which distinguish them from other industries.
[77] The distinguishing characteristics of the Hospitality and Retail sectors are alluded to in
the PC Final Report, where it explains the rationale for focussing on the ‘HERRC’
(hospitality, entertainment, retail, restaurants and cafes) industries.
‘… the appropriate level for regulated penalty rates for weekend work — particularly on
Sundays in a number of discretionary consumer service industries — has become a highly
contested and controversial issue. The industries of greatest concern are hospitality,
entertainment, retail, restaurants and cafes (HERRC). These are industries where consumer
expectations of access to services has expanded over time so that the costs of penalty rates
affect consumer amenity in ways they did not when penalty rates were first introduced. Such
industries are also important sources of entry-level jobs for, among others, relatively unskilled
casual employees and young people (particularly students) needing flexible working
arrangements. The provision of discretionary, and therefore demand responsive, services on
weekends is less frequent in most other industries, which is a key (but not only) rationale for a
focus of concerns on the HERRC industries. It is notable that the FWC is currently also
considering appropriate penalty rates in awards, and that their focus almost exactly matches
the group of industries that the Productivity Commission has identified as the most relevant.’ 22
(footnotes omitted)
[2017] FWCFB 1001
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[78] The data on weekend work shows that workers in the Retail and Hospitality sectors are
more likely to work on weekends than workers in other industries. As shown in Table 3A
below (see [457]).
Table 3A
23
Proportion of employees who work on weekends, by industry
Industry 2002–2008 2009–2016
Accommodation and food services 58.6 60.8
Retail trade 44.4 47.6
All employees 25.9 27.5
[79] The sections that provide an overview of the Retail and Hospitality sectors (see
Chapters 7.1 and 8.1) also highlight some differences between these two sectors and other
industries. Both industries are much more likely to comprise small businesses (employing
fewer than 20 persons) than across all industries and fewer businesses in both the Hospitality
and Retail sectors operate on weekdays only, with a greater proportion working 6 or 7 days a
week (an average of 6.2 to 6.7 days a week) than businesses across all industries (an average
of 5.8 days) as shown in Table 3B below.
Table 3B
24
Structure and operations, 2014
Retail trade Accommodation and
food services
All industries
(%) (%) (%)
Operating days
Weekdays only 18.9 8.6 48.8
Weekdays and Saturday 37.1 5.3 17.5
Some weekdays and weekend 2.8 5.4 2.3
Operating 7 days 40.6 80.5 31.1
Other np np 0.4
100.0 100.0 100.0
Average number of operating days per week 6.2 6.7 5.8
Average years of operation under current
ownership
18.9 15.6 18.5
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
[80] Data on the characteristics of employees in these industries presented in Chapters 7.1
and 8.1 show that they are more likely to be female, younger (under 25 years), work part-time
hours, be employed on a casual basis and be award reliant than employees in other industries.
Employees in these industries are also more likely to be low paid.
[81] Given the distinguishing characteristics of the Hospitality and Retail sectors, the
decisions we have made in respect of the Hospitality and Retail Awards provide no warrant
for the variation of penalty rates in other modern awards. Each case must be determined on its
merits. We note the views expressed in the PC Final Report in this regard:
[2017] FWCFB 1001
21
‘There is no case for common penalty rates across all industries The Commission is not
recommending a reduction in the Sunday penalty rates beyond HERRC. Regulated penalty
rates as currently constructed for essential services and many other industries are justifiable.
The original justifications have not altered materially: they align with working arrangements
that often involve rotating shifts across the whole week, are not likely to reduce service
availability meaningfully, are commensurate with the skills of the employees, and are unlikely
to lead to job losses.’
25
[82] We deal with the implementation of our decision in Chapter 11: Transitional
Arrangements.
[83] In the numerous submissions before us little attention was given to the implementation
of any variations to Sunday penalty rates arising from these proceedings. One exception was
in the PC Final Report which recommends that 12 months’ notice of any change be given,
rather than an extended transition process involving staggered small changes to Sunday
penalty rates. We also note that some submissions also alluded to the need to protect the take
home pay of workers affected by any changes to penalty rates.
[84] A substantial proportion of award-reliant employees covered by these modern awards
are low paid and the reductions in Sunday penalty rates we have determined are likely to
reduce the earnings of those employees who currently work on Sundays. As observed in the
Productivity Commission Inquiry Report: Workplace Relations Framework (PC Final
Report), in general, most existing employees would probably face reduced earnings as it is
improbable that, as a group, existing workers’ hours on Sundays would rise sufficiently to
offset the income effects of penalty rate reductions.
[85] The evidence of the SDA and United Voice lay witnesses puts a human face on the
data and provides an eloquent individual perspective on the impact of the award variations.
Many of these employees earn just enough to cover weekly living expenses, saving money is
difficult and unexpected expenses produce considerable financial distress. The immediate
implementation of all of the variations we propose would inevitably cause some hardship to
the employees affected, particularly those who work on Sundays. There is plainly a need for
appropriate transitional arrangements to mitigate such hardship.
[86] We have concluded that appropriate transitional arrangements are necessary to
mitigate the hardship caused to employees who work on Sundays. We have not reached a
concluded view as to the form of those transitional arrangements and we propose to seek
submissions from interested parties as to that issue. For the assistance of those parties who
wish to make submissions as to the form of the transitional arrangements we have expressed
the following provisional views:
(i) Contrary to the views expressed by the Productivity Commission we do not
think it appropriate to delay making any changes to Sunday penalty rates for 12
months, as it would impose an unnecessary delay on the introduction of any
reduction in Sunday penalty rates and would give rise to a sharp fall in earnings
for some affected employees at the end of the 12 month period.
(ii) If ‘take home pay orders’ are an available option then they may mitigate the
effects of a reduction in Sunday penalty rates. But we do not favour any
[2017] FWCFB 1001
22
general ‘red circling’ term which would preserve the current Sunday penalty
rates for all existing employees.
(iii) The reductions in Sunday penalty rates should take place in a series of annual
adjustments on 1 July each year (commencing 1 July 2017) to coincide with
any increases in modern award minimum wages arising from Annual Wage
Review decisions.
(iv) As to the number of annual instalments, the 5 annual instalment process which
accompanied the making of the modern awards is too long for present purposes. It is likely
that at least 2 instalments will be required (but less than 5 instalments). The period of
adjustment required will depend on the extent of the reduction in Sunday penalty rates, the
availability of ‘take home pay orders’ and the circumstances applying to each modern award.
[87] The changes to public holiday penalty rates will take effect on 1 July 2017.
[88] We deal with the next steps in these proceedings in Chapter 12. The matters addressed
include:
transitional arrangements having regard to the impact of the Sunday penalty
reductions for some employees;
the potential further review of the Clubs Award, the Restaurants Award and other
retail modern awards;
the terminology of penalty rates; and
the potential for loaded rates in retail modern awards.
[89] As to the last matter, a ‘loaded rate’ in this context refers to a rate which is higher than
the applicable minimum hourly rate specified in the modern award and is paid for all hours
worked instead of certain penalty rates (such as the penalty rates for Saturday and Sunday
work).
[90] It seems to us that, subject to appropriate safeguards, schedules of ‘loaded rates’ may
make awards simpler and easier to understand, consistent with the considerations in
s.134(1)(g). Schedules of ‘loaded rates’ would also allow small businesses to access
additional flexibility without the need to enter into an enterprise agreement.
[91] We also note that the Fair Work Ombudsman (FWO) has reported significant levels of
non-compliance in the Hospitality and Retail awards which are before us. It appears from the
various FWO reports we mention in Chapter 12 that some businesses in the Hospitality and
Retail sectors already provide ‘flat’ (or loaded) rates of pay, in order to simplify their payroll
process, but they underestimate the additional premium (or loading) required in order to
compensate employees for the loss of penalty rates, resulting in non-compliance. The
insertion of ‘loaded rates’ schedules in these modern awards may have a positive effect on
award compliance.
[92] In raising this matter, we are alive to the potential complexity involved in the task of
developing schedules appropriately for loaded rates. It has to be borne in mind that any loaded
[2017] FWCFB 1001
23
rate will remain part of the safety net and will have to be fair and relevant. Determining an
appropriate loaded rate would not be straightforward. For example, an employee who worked
the vast majority of their hours on a weekend or late at night, when a penalty rate would
apply, would require a higher loaded rate than, say, an employee who worked the vast
majority of their hours during the ordinary spread of hours, Monday to Friday.
[93] Any loaded rate and the associated roster configuration, would, of course, need to be
relevant to the needs of industry and employees. Accordingly, there would be benefit in
further engagement with interested parties as to the dominant roster patterns in the relevant
industries so that appropriate rates can be developed.
[94] We envisage that the development of loaded rates will be an iterative process
undertaken in consultation with interested parties. That process will commence after we have
determined the transitional arrangements in respect of the reductions in Sunday penalty rates.
[2017] FWCFB 1001
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[2017] FWCFB 1001
25
3. The Legislative Framework
3.1 Statutory construction – general observations
[95] This part of our decision deals with the legislative provisions relevant to these
proceedings. We begin by making some general observations about the task of statutory
construction.
[96] The starting point is to construe the words of a statute according to their ordinary
meaning having regard to their context and legislative purpose. Context includes the existing
state of the law and the mischief the legislative provisions was intended to remedy.
26
Regard
may also be had to the legislative history in order to work out what a current legislative
provision was intended to achieve.
27
[97] Each provision of the FW Act must be read in context by reference to the language of
the FW Act as a whole.
28
The relevant legislative context may operate to limit a word or
expression of wide possible connotation.
29
The literal meaning (or the ordinary grammatical
meaning) of the words of a statutory provision may be displaced by the context and legislative
purpose, as the majority observed in Project Blue Sky:
‘… the duty of a court is to give the words of a statutory provision the meaning that the
legislature is taken to have intended them to have. Ordinarily, that meaning (the legal
meaning) will correspond with the grammatical meaning of the provision. But not always. The
context of the words, the consequences of a literal or grammatical construction, the purpose of
the statute or the canons of construction may require the words of a legislative provision to be
read in a way that does not correspond with the literal or grammatical meaning.’
30
[98] The provisions of an act must be read together such that they fit with one another. This
may require a provision to be read more narrowly than it would if it stood on its own.
31
[99] More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue
32
(Alcan) the High Court described the task of legislative interpretation in the following terms:
‘This Court has stated on many occasions that the task of statutory construction must begin with
a consideration of the text itself. Historical considerations and extrinsic materials cannot be
relied on to displace the clear meaning of the text. The language which has actually been
employed in the text of legislation is the surest guide to legislative intention. The meaning of
the text may require consideration of the context, which includes the general purpose and
policy of a provision, in particular the mischief it is seeking to remedy.’
[100] We now turn to the specific provisions relevant to these proceedings.
3.2 The relevant statutory provisions
[101] Section 156 of the FW Act provides that the Commission must conduct a 4 yearly
review of modern awards as soon as practicable after 1 January 2014. Subsection 156(2) deals
with what must be done in the Review and provides that the Commission must review all
modern awards and may, among other things, make determinations varying modern awards.
[2017] FWCFB 1001
26
[102] The requirement in s.156(5) to review each modern award ‘in its own right’, is
intended to ensure that the Review is conducted ‘by reference to the particular terms and the
particular operation of each particular award rather than by a global assessment based upon
generally applicable considerations’.
33
However, while the review of each modern award must
focus on the particular terms and operation of the particular award, this does not mean that the
review of a modern award is to be confined to a single holistic assessment of all of its terms.
34
In these proceedings we are considering whether the relevant modern awards achieve the
modern awards objective in relation to the penalty payments they prescribe for working at
certain times.
[103] Subsection 156(5) provides that in the Review each modern award is reviewed in its
own right, however, this does not prevent the Commission from reviewing 2 or more modern
awards at the same time.
[104] The Commission must be constituted by a Full Bench to conduct the Review and to
make determinations and modern awards in the Review (see ss.616(1), (2) and (3) of the FW
Act). Section 582 of the FW Act provides that the President may give directions about the
conduct of the Review.
[105] In addition to s.156 a range of other provisions in the FW Act are relevant to the
Review: s.3 (objects of the Act); s.55 (interaction with the NES); Part 2-2 (the NES); s.134
(the modern awards objective); s.135 (special provisions relating to modern award minimum
wages); Divisions 3 (terms of modern awards) and 6 (general provisions relating to modern
award powers) of Part 2-3; s.284 (the minimum wages objective); s.577 (performance of
functions and exercise of powers of the Commission); s.578 (matters the Commission must
take into account in performing functions and exercising powers); and Division 3 of Part 5-1
(conduct of matters before the Commission).
[106] The general provisions relating to the performance of the Commission’s functions
apply to the Review. Sections 577 and 578 are particularly relevant in this regard. Section 577
states:
‘FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that FWC performs its functions and
exercises its powers efficiently etc. (see section 581).’
[107] Section 578 states:
‘In performing functions or exercising powers, in relation to a matter, under a part of this Act
(including this Part), FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
[2017] FWCFB 1001
27
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent
and eliminate discrimination on the basis of race, colour, sex, sexual preference, age,
physical or mental disability, marital status, family or carer’s responsibilities,
pregnancy, religion, political opinion, national extraction or social origin.’
[108] As stated in s.578(a), in performing functions and exercising powers under a part of
the FW Act (including the Review function under Part 2-3 Modern Awards) the Commission
must take into account the objects of the FW Act and any particular objects of the relevant
part. The object of Part 2-3 is expressed in s.134, the modern awards objective. The object of
the FW Act is set out in s.3, as follows:
‘3 Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive
workplace relations that promotes national economic prosperity and social inclusion for all
Australians by:
(a) providing workplace relations laws that are fair to working Australians, are flexible for
businesses, promote productivity and economic growth for Australia’s future economic
prosperity and take into account Australia’s international labour obligations; and
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and
conditions through the National Employment Standards, modern awards and national
minimum wage orders; and
(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages
and conditions can no longer be undermined by the making of statutory individual
employment agreements of any kind given that such agreements can never be part of a fair
workplace relations system; and
(d) assisting employees to balance their work and family responsibilities by providing for
flexible working arrangements; and
(e) enabling fairness and representation at work and the prevention of discrimination by
recognising the right to freedom of association and the right to be represented, protecting
against unfair treatment and discrimination, providing accessible and effective procedures to
resolve grievances and disputes and providing effective compliance mechanisms; and
(f) achieving productivity and fairness through an emphasis on enterprise-level collective
bargaining underpinned by simple good faith bargaining obligations and clear rules governing
industrial action; and
(g) acknowledging the special circumstances of small and medium-sized businesses.’
[109] In conducting the Review the Commission is able to exercise its usual procedural
powers, contained in Division 3 of Part 5-1 of the FW Act. Importantly, the Commission is
not bound by the rules of evidence and procedure (s.591) and may inform itself in relation to
any matter before it in such manner as it considers appropriate (s.590(1)).
[110] The Review is to be distinguished from inter partes proceedings. Section 156 imposes
an obligation on the Commission to review all modern awards and each modern award must
[2017] FWCFB 1001
28
be reviewed in its own right. The Review is conducted on the Commission’s own motion and
is not dependent upon an application by an interested party. Nor is the Commission
constrained by the terms of a particular application.
35
The Commission is not required to
make a decision in the terms applied for (s.599) and, in a Review, may vary a modern award
in whatever terms it considers appropriate, subject to its obligation to accord interested parties
procedural fairness and the application of relevant statutory provisions, such as ss.134, 138
and 578.
[111] The scope of the Review was considered in the 4 Yearly Review of Modern Awards:
Preliminary Jurisdictional Issues Decision.
36
We adopt and apply that decision and in
particular the following propositions:
(i) The Review is broader in scope than the Transitional Review of modern awards
completed in 2013.
(ii) In conducting the Review the Commission will have regard to the historical
context applicable to each modern award.
(iii) 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.
(iv) Variations to modern awards should be founded on merit based arguments. The
extent of the argument and material required will depend on the circumstances.
[112] We now turn to the relevance of the ‘modern awards objective’ to the Review.
3.3 The modern awards objective
(i) General observations
[113] The modern awards objective 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 FW Act. The Review function is set out in s.156,
which is in Part 2-3 and so will involve the performance or exercise of the Commission’s
modern award powers. It follows that the modern awards objective applies to the Review.
[114] The modern awards objective is set out in s.134 of the FW Act. It states:
‘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
[2017] FWCFB 1001
29
(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.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern
award powers, which are:
(a) the FWC’s functions or powers under this Part; and
(b) the FWC’s functions or powers under Part 2-6, so far as they relate to modern
award minimum wages.
Note: The FWC must also take into account the objects of this Act and any other applicable
provisions. For example, if the FWC is setting, varying or revoking modern award minimum
wages, the minimum wages objective also applies (see section 284).’
[115] The modern awards objective is to ‘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 the particular considerations identified in sections 134(1)(a)
to (h) (the s.134 considerations). The objective is very broadly expressed.
37
The obligation to
take into account the s.134 considerations means that each of these matters, insofar as they are
relevant, must be treated as a matter of significance in the decision making process.
38
No
particular primacy is attached to any of the s.134 considerations and not all of the matters
identified will necessarily be relevant in the context of a particular proposal to vary a modern
award.
[116] While the Commission must take into account the s.134 considerations, the relevant
question is whether the modern award, together with the NES, provides a fair and relevant
[2017] FWCFB 1001
30
minimum safety net of terms and conditions. As to the proper construction of the expression
‘a fair and relevant minimum safety net of terms and conditions’ we would make three
observations.
[117] First, fairness in this context is to be assessed from the perspective of the employees
and employers covered by the modern award in question. So much is clear from the s.134
considerations, a number of which focus on the perspective of the employees (e.g. s.134(1)(a)
and (da)) and others on the interests of the employers (e.g. s.134(1)(d) and (f)). Such a
construction is also consistent with authority. In Shop Distributive and Allied Employees
Association v $2 and Under (No. 2)
39
Giudice J considered the meaning of the expression ‘a
safety net of fair minimum wages and conditions of employment’ in s.88B(2) of the
Workplace Relations Act 1996 (Cth) (the WR Act). That section read as follows:
‘88B Performance of Commission’s functions under this Part …
(2) In performing its functions under this Part, the Commission must ensure that a
safety net of fair minimum wages and conditions of employment is established and
maintained, having regard to the following:
(a) the need to provide fair minimum standards for employees in the context
of living standards generally prevailing in the Australian community;
(b) economic factors, including levels of productivity and inflation, and the
desirability of attaining a high level of employment;
(c) when adjusting the safety net, the needs of the low paid.’
[118] As to the assessment of fairness in this context his Honour said:
‘In relation to the question of fairness it is of course implicit that the Commission should
consider fairness both from the perspective of the employees who carry out the work and the
perspective of employers who provide the employment and pay the wages and to balance the
interests of those two groups. This must be done in the context of any broader economic or
other considerations which might affect the public interest.’
40
[119] While made in a different (albeit similar) statutory context the above observation is
apposite to our consideration of what constitutes a ‘fair … safety net’ in giving effect to the
modern awards objective. We would also endorse the following observation by the Full
Bench in the Equal Remuneration Decision 2015:
‘We consider, in the context of modern awards establishing minimum rates for various
classifications differentiated by occupation, trade, calling, skill and/or experience, that a
necessary element of the statutory requirement for ‘fair minimum wages’ is that the level of
those wages bears a proper relationship to the value of the work performed by the workers in
question.’
41
[120] Second, the word ‘relevant’ is defined in the Macquarie Dictionary (6
th
Edition) to
mean ‘bearing upon or connected with the matter in hand; to the purpose; pertinent’. In the
context of s.134(1) we think the word ‘relevant’ is intended to convey that a modern award
should be suited to contemporary circumstances. As stated in the Explanatory Memorandum
to what is now s.138:
[2017] FWCFB 1001
31
‘527 … the scope and effect of permitted and mandatory terms of a modern award must be
directed at achieving the modern awards objective of a fair and relevant safety net that accords
with community standards and expectations.’ (emphasis added)
[121] Finally, as to the expression ‘minimum safety net of terms and conditions’, the
conception of awards as ‘safety net’ instruments was introduced by the Industrial Relations
Reform Act 1993 (Cth) (the 1993 Reform Act). The August 1994 Review of Wage Fixing
Principles decision
42
summarised the changes made to the legislative framework by the 1993
Reform Act. In particular, the Commission noted that:
‘The Act now clearly distinguishes between the arbitrated award safety net and the bargaining
stream. It intends that the actual wages and conditions of employment of employees will be
increasingly determined through bargaining at the workplace or enterprise.
Under the Act the Commission, while having proper regard to the interests of the parties and
the wider community, is now required to ensure, so far as possible, that the award system
provides for ‘secure, relevant and consistent wages and conditions of employment’
(s 90AA(2)) so that it is an effective safety net ‘underpinning direct bargaining’ (s 88A(b)).’
[122] Relevantly for present purposes, the 1993 Reform Act inserted s.88A into the
Industrial Relations Act 1988 (Cth) (the IR Act). Section 88A set out the objects to Part VI –
Dispute Resolution and Settlement, in the following terms:
‘88A The objects of this Part are to ensure that:
(a) wages and conditions of employment are protected by a system of enforceable awards
established and maintained by the Commission; and
(b) awards act as a safety net of fair minimum wages and conditions of employment; and
(c) awards are simplified and suited to the efficient performance of work according to the
needs of particular workplaces or enterprises; and
(d) the Commission’s functions and powers in relation to making and varying awards are
performed and exercised in a way that encourages the making of agreements between
employers and employees at the workplace or enterprise level.’ (emphasis added)
[123] The protective nature of the award safety net at that time is apparent from the language
used in s.88A(a) and (b).
43
[124] The Workplace Relations and Other Legislation Amendment Act 1996 (WROLA Act)
renamed the IR Act the WR Act and, among other things, restricted the range of matters that
would be dealt with in federal awards (see s.89A WR Act) and repealed what had been Part
VI C of the IR Act, which dealt with ‘Paid Rates Awards’. The objects of Part VI were
amended but the characterisation of awards as a ‘safety net’ which ‘protected’ wages and
conditions of employment, remained. It is not necessary to canvass the various legislative
amendments from the WROLA Act to the FW Act.
[125] The objects of the FW Act are set out in s.3 (see [108]), relevantly s.3(b) speaks of:
[2017] FWCFB 1001
32
‘ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and
conditions through the National Employment Standards, modern awards and minimum wage
orders.’
[126] It is apparent from the scheme of the FW Act that modern awards and the NES
‘underpin’ enterprise agreements, through the operation of s.55 and the ‘better off overall test’
(s.186(2)(d) and s.193).
44
Under s.57 a modern award does not apply to the extent that an
enterprise agreement applies to a particular employment relationship, even where the award
deals with matters not covered in the agreement.
45
[127] In their reply submission the Australian Chamber of Commerce and Industry,
Australian Business Industrial and the New South Wales Business Chamber (the joint
employer reply submission) submit that the reference to a ‘minimum safety net’ in s.134(1)
means the ‘least … possible’ to create a ‘minimum floor’:
‘The notion of a ‘safety’ ‘net’ is effectively the creation of a floor ensuring employees are
‘caught’ preventing them from being exposed to ‘hurt, injury, danger or risk’.
The addition of the term ‘minimum’ reinforces the level that this floor is calibrated to: namely,
‘… the least quantity or amount possible …’
The creation of the minimum safety net by sections 134 and 284 of the FW Act illuminates
what the phrase ‘only to the extent necessary’ in s 138 relates to.
That is, section 138 is dictating that the Commission may only include terms in a modern
award to the extent necessary to create a minimum floor. Once this minimum floor is created,
section 138 restrains the Commission from going any further irrespective of what historically
would be called the ‘general industrial merits of the case’.’
46
[128] The proposition advanced relies on dictionary definitions of some individual words
within s.134(1). But the argument advanced pays scant regard to the fact the modern awards
objective is a composite expression which requires that modern awards, together with the
NES, provide ‘a fair and relevant minimum safety net of terms and conditions’. The joint
employer reply submission gives insufficient weight to the statutory directive that the
minimum safety net be ‘fair and relevant’. Further, in giving effect to the modern awards
objective the Commission is required to take into account the s.134 considerations, one of
which is ‘relative living standards and the needs of the low paid’ (s.134(1)(a)). The matters
identified tell against the proposition advanced in the joint employer reply submission.
[129] We conclude our general observations about the modern awards objective by noting
that the nature of modern awards under the FW Act is quite different from the awards made
under previous legislative regimes.
47
In times past awards were made in settlement of
industrial disputes. The content of these instruments was determined by the constitutional and
legislative limits of the tribunal’s jurisdiction; the matters put in issue by the parties (i.e. the
‘ambit’ of the dispute) and the policies of the tribunal as determined from time to time in
wage fixing principles or test cases. An award generally only bound the employers, employer
organisations and unions who had been parties to the industrial dispute that gave rise to the
making of the award and were named as respondents. Modern awards are very different to
awards of the past.
[2017] FWCFB 1001
33
[130] Modern awards are not made to prevent or settle industrial disputes between particular
parties. Rather, the purpose of modern awards, together with the NES and national minimum
wage orders, is to provide a safety net of fair, relevant and enforceable minimum terms and
conditions of employment for national system employees (see ss.3(b) and 43(1)). They are, in
effect, regulatory instruments that set minimum terms and conditions of employment for the
employees to whom the modern award applies (see s.47).
[131] Nor are there named respondents to modern awards. Modern awards apply to, or
cover, certain persons, organisations and entities (see ss.47 and 48), but these persons,
organisations and entities are not ‘respondents’ to the modern award in the sense that there
were named respondents to awards in the past. The nature of this shift is made clear by s.158
which sets out who may apply for the making of a determination making, varying or revoking
a modern award. Under previous legislative regimes the named respondents to a particular
award would automatically have the requisite standing to make such applications; that is no
longer the case.
48
[132] Under the FW Act modern awards form part of a minimum safety net which provides
‘fair, relevant and enforceable minimum terms and conditions’ of employment to national
system employees. As such, modern awards, together with the NES and national minimum
wage orders, provide a minimum set of terms and conditions that must be provided to the
employees to whom a modern award applies. And, as we have mentioned, modern awards
also underpin enterprise bargaining.
(ii) Section 138 and the modern awards objective
[133] Section 138 of the FW Act emphasises the importance of the modern awards objective
in the following 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.’
[134] To comply with s.138 the terms included in modern awards must be ‘necessary to
achieve the modern awards objective’.
[135] In Shop, Distributive and Allied Employees Association v National Retail Association
(No.2)
49
Tracey J considered the proper construction of the expression ‘the Commission is
satisfied that making [a determination varying a modern award] … is necessary to achieve the
modern awards objective’, in s.157(1). His Honour held:
‘The statutory foundation for the exercise of FWA’s power to vary modern awards is to be
found in s 157(1) of the Act. The power is discretionary in nature. Its exercise is conditioned
upon FWA being satisfied that the variation is “necessary” in order “to achieve the modern
awards objective”. That objective is very broadly expressed: FWA must “provide a fair and
relevant minimum safety net of terms and conditions” which govern employment in various
industries. In determining appropriate terms and conditions regard must be had to matters such
as the promotion of social inclusion through increased workforce participation and the need to
promote flexible working practices.
The subsection also introduced a temporal requirement. FWA must be satisfied that it is
necessary to vary the award at a time falling between the prescribed periodic reviews.
[2017] FWCFB 1001
34
The question under this ground then becomes whether there was material before the Vice
President upon which he could reasonably be satisfied that a variation to the Award was
necessary, at the time at which it was made, in order to achieve the statutory objective …
In reaching my conclusion on this ground I have not overlooked the SDA’s subsidiary
contention that a distinction must be drawn between that which is necessary and that which is
desirable. That which is necessary must be done. That which is desirable does not carry the
same imperative for action. Whilst this distinction may be accepted it must also be
acknowledged that reasonable minds may differ as to whether particular action is necessary or
merely desirable. It was open to the Vice President to form the opinion that a variation was
necessary.’
50
[136] The above observation – in particular the distinction between that which is ‘necessary’
and that which is merely desirable – is apposite to our consideration of s.138. Further, we
agree with the observation that reasonable minds may differ as to whether a particular award
term or proposed variation is necessary (within the meaning of s.138), as opposed to merely
desirable. It seems to us that what is ‘necessary’ to achieve the modern awards objective 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 context, including the circumstances pertaining to
the particular modern award, the terms of any proposed variation and the submissions and
evidence.
51
[137] The SDA and United Voice submit that the terms of s.138 require that the
Commission be satisfied that the variations proposed by the various employer parties are
necessary to achieve the modern awards objective.
52
The submission put focuses attention on
the particular variation proposed, rather than on the terms of the modern award, as varied.
[138] We do not think the Unions’ contention is correct. In the Preliminary Jurisdictional
Issues decision the Full Bench considered what had to be demonstrated by the proponent of an
award variation and concluded that:
‘To comply with s138 the formulation of terms which must be included in modern awards or
terms which are permitted to be included in modern awards must be terms ‘necessary to
achieve the modern awards objective’… In the Review the proponent of a variation to a
modern award must demonstrate that if the modern award is varied in the manner proposed
then it would only include terms to the extent necessary to achieve the modern awards
objective.’
53
[139] The above proposition is supported by the terms of s.138 and the legislative context.
Section 138 requires that ‘[A] modern award may include terms … only to the extent
necessary to achieve the modern awards objective’. The section focuses attention on the terms
of a modern award, rather than on the terms of a proposed variation. Further, as we have
mentioned, the jurisdictional basis for the Review is s.156. Section 157 deals with the
variation of modern awards outside the system of 4 yearly reviews. Section 157(1) states,
relevantly:
[2017] FWCFB 1001
35
‘The FWC may:
(a) Make a determination varying a modern award … if the FWC is satisfied that making the
determination … outside the system of 4 yearly reviews of modern awards is necessary to
achieve the modern awards objective.’ (emphasis added)
[140] Section 157(1) makes express reference to the Commission being satisfied that the
‘determination varying a modern award’ is necessary to achieve the modern awards objective.
There is no such express reference in either s.138 or s.156. The difference in the language
used in ss.138, 156 and 157 tells against the proposition advanced by the SDA and United
Voice.
[141] Contrary to the Unions’ contention the Commission’s task in the Review is to make a
finding as to whether a particular modern award achieves the modern awards objective. If a
modern award is not achieving the modern awards objective then it is to be varied such that it
only includes terms that are ‘necessary to achieve the modern awards objective’ (s.138). In
such circumstances regard may be had to the terms of any proposed variation, but the focal
point of the Commission’s consideration is upon the terms of the modern award, as varied.
The approach outlined is supported by the terms of s.138 itself, the legislative context and the
judgement of the Full Court of the Federal Court in National Retail Association v Fair Work
Commission.
54
[142] We now turn to the application of the modern awards objective to the issues raised in
these proceedings.
(iii) The modern awards objective and weekend penalty rates
[143] Historically industrial tribunals have expressed the rationale for weekend penalty
payments in terms of both the need to compensate employees for working outside ‘normal
hours’ (the compensatory element) and to deter employers from scheduling work outside
‘normal’ hours (the deterrence element).
55
For example, in the 1947 Weekend Penalty Rates
case Drake-Brockman ACJ and Sugarman J made the following observation about the
expression ‘penalty rate’:
‘‘Penalty rate’ is not a term of art. It is used by those skilled in industrial law in widely
divergent meanings. Usually an award provides for an ordinary rate of remuneration, payable
for the ordinary work of a standard period performed under normal conditions, and for
additional amounts to be paid where work is done under special conditions of time, place or
circumstance. In one sense the use of the term ‘penalty’ as applied to such additional amounts
is a misnomer, there is no question of punishment about the matter. But in another sense it
expresses accurately enough the operation of the requirement of additional payment as, inter
alia, a deterrent against calling upon employees to work in the circumstances in which the
additional payment is required to be made. Most, if not all, of such requirements combine the
element of compensation with that of deterrence.’
56
[144] Similarly, in 1950 a Full Bench of the NSW Industrial Commission described the
rationale for weekend penalty rates in the following terms:
‘In our opinion additional rates for weekend work are given to compensate the employee for
having to work on days which are not regular working days for all employees in industry. The
aim is to compensate for disturbance of social and family life and the full opportunity of
[2017] FWCFB 1001
36
religious observance, and in some cases to discourage employers working employees on non-
regular working days.’
57
[145] More recently industrial tribunals have eschewed any reliance on the historical
‘deterrence element’ in setting appropriate loadings for working ordinary hours on a weekend.
For example, in setting weekend penalty rates in the hospitality industry, in 1993,
Commissioner Gay said:
‘The rate to apply in the hotel industry for weekend work should have no element designed to
deter an employer from requiring work to be performed on Saturdays and Sundays and no
punitive element designed to punish when such work is actually required to be performed.’
58
[146] Similarly, in fixing the rate for Sunday work in the Victorian retail sector, the majority
(Watson SDP and Raffaelli C) in Re Shop, Distributive and Allied Employees’ Association
and $2 and Under and Ors
59
said:
‘In our view, in the context of the reality that retailing in Victoria is a seven-day a week
industry… the Sunday ordinary time penalty… should be directed to the compensation for the
disabilities upon employees and should not be directed to deterring the working of Sunday
ordinary hours’.
[147] Further, in the 2012 Transitional Review – Penalty Rates decision the Full Bench said:
‘Although described in the modern awards as penalty rates, they are in reality a loading which
compensate for disabilities.’
60
[148] It is apparent from these more recent decisions that the deterrence element is no longer
a relevant consideration in setting the rate of pay for working ordinary hours on a weekend.
Indeed, as submitted by the Australian Hotels Association (AHA) and Accommodation
Association of Australia (AAA) in these proceedings,
61
it is difficult to reconcile the notion of
deterrence with the purpose of the FW Act.
[149] The object of the FW Act is ‘to provide a balanced framework for cooperative and
productive workplace relations that promotes national economic prosperity and social
inclusion for all Australians’, by the means specified in s.3(a) to (g). Deterring the working of
ordinary hours on a weekend is not one of the specified means of achieving the object of the
FW Act.
[150] Nor does the notion of deterrence sit conformably with the modern awards objective
and the considerations the Commission is required to take into account in giving effect to that
objective.
[151] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’. As we have
mentioned, fairness in this context is to be assessed from the perspective of the employees
and employers covered by the modern award in question. It is difficult to conceive of the
circumstances in which setting a rate of pay for work at particular times or on particular days
with the objective of deterring the scheduling of work at that time or on those days can be said
to be fair to the employers covered by the relevant modern award.
[2017] FWCFB 1001
37
[152] Nor is the notion of deterring the scheduling of work at particular times or on
particular days expressly mentioned as a s.134 consideration. Indeed the matters mentioned in
s.134(1)(a) to (h) appear to be inconsistent with the concept of deterrence. In particular, the
‘need to promote flexible modern work practices and the efficient and productive
performance of work’ (s.134(1)(d)) appears antithetical to the idea of deterring the
performance of work at specified times.
[153] Further, s.134(1)(da)(ii) and (iii) refer specifically to employees working ‘unsocial …
hours’ and ‘working on weekends or public holidays’ and ‘the need to provide additional
remuneration’ for employees in such circumstances. We deal later with the proper
construction of s.134(1)(da), but it suffices for present purposes to observe that the provision
is focused on the compensatory element of the historical rationale for penalty rates – there is
no express reference in s.134(1)(da) to the notion of deterrence.
[154] We also note that the FW Act directly addresses the adverse consequences associated
with working excessive hours by providing a right to refuse to work unreasonable hours.
Section 62(1) provides:
‘(1) An employer must not request or require an employee to work more than the following
number of hours in a week unless the additional hours are reasonable:
(a) for a full-time employee--38 hours; or
(b) for an employee who is not a full-time employee--the lesser of:
(i) 38 hours; and
(ii) the employee’s ordinary hours of work in a week.’
[155] Section 62(2) gives an employee a right to refuse to work additional hours ‘if they are
unreasonable’. The criteria for determining whether additional hours are reasonable or
unreasonable are set out in s.62(3):
‘(3) In determining whether additional hours are reasonable or unreasonable for the purposes of
subsections (1) and (2), the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee’s personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
working additional hours;
(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
[2017] FWCFB 1001
38
(g) the usual patterns of work in the industry, or the part of an industry, in which the
employee works;
(h) the nature of the employee’s role, and the employee’s level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included
under section 63 in a modern award or enterprise agreement that applies to the
employee, or with an averaging arrangement agreed to by the employer and employee
under section 64;
(j) any other relevant matter.’
[156] The Explanatory Memorandum to what is now s.62(2) makes clear (at paragraph 250)
that ‘the relevance of each of these factors and the weight to be given to each of them will
vary according to the particular circumstances’, and that in some instances ‘a single factor
will be of great importance and outweigh all others’, whilst in other instances it will be
necessary to undertake ‘a balancing exercise between factors’.
[157] The cases which have applied these provisions make it clear that an employer cannot
simply require an employee to work additional hours without regard to the employee’s
personal circumstances.
62
What is ‘reasonable’ is necessarily assessed on a case-by-case basis,
by reference to the employee’s circumstances and the employer’s business in accordance with
the terms of s.62(3).
63
[158] Having regard to recent arbitral authority, the terms of the modern awards objective,
and the scheme of the FW Act, it seems to us that deterrence is no longer a relevant
consideration in the setting of weekend penalty rates. We accept that the imposition of a
penalty rate may have the effect of deterring employers from scheduling work at specified
times or on certain days, but that is a consequence of the imposition of an additional payment
for working at such times or on such days, it is not the objective of those additional payments.
Compensating employees for the disutility associated with working on weekends is a primary
consideration in the setting of weekend penalty rates.
[159] We note that the Productivity Commission has expressed a different view in respect of
public holiday penalty rates:
‘… by definition, genuine public holidays are intended to serve a special community role and,
as such, there are strong grounds to limit the expectation that they are for working. In that
sense, the original concept of deterrence continues to have relevance’.
64
[160] We accept that public holidays, by their nature, are intended ‘to serve a special
community role’ and that the expectation (and practice) is that the vast majority of employees
do not work on public holidays. But these features do not support the adoption of deterrence
as an objective in setting an appropriate penalty rate for working on public holidays. Rather,
they are relevant considerations in determining the amount of compensation to be provided to
employees who work on public holidays, given the additional disutility associated with
working on a day when the vast majority of other employees (and, it may be inferred, a
substantial proportion of their friends and family) are enjoying a day of leisure.
[161] We now turn to the s.134 considerations.
[2017] FWCFB 1001
39
(iv) The s.134 considerations
[162] In order for the Commission to be satisfied that a modern award is not achieving the
modern awards objective it is not necessary to make a finding that the award fails to satisfy
one or more of the s.134 considerations.
65
Generally speaking, the s.134 considerations do not
set a particular standard against which a modern award can be evaluated; many of them may
be characterised as broad social objectives. As the Full Court of the Federal Court said in
National Retail Association v Fair Work Commission:
‘It is apparent from the terms of s.134(1) that the factors listed in (a)–(h) are broad
considerations which the FWC must take into account in considering whether a modern award
meets the objective set by s.134(1), that is to say, whether it provides a fair and relevant
minimum safety net of terms and conditions. The listed factors do not, in themselves, however,
pose any questions or set any standard against which a modern award could be evaluated.
Many of them are broad social objectives. What, for example, was the finding called for in
relation to the first factor (“relative living standards and the needs of the low paid”)?
Furthermore, it was common ground that some of the factors were inapplicable to the SDA’s
claim.’
66
[163] There is a degree of tension between some of the s.134 considerations. The
Commission’s task is to balance the various considerations and ensure that modern awards
provide a fair and relevant minimum safety net of terms and conditions. This balancing
exercise and the diverse circumstances pertaining to particular modern awards may result in
different outcomes in different modern awards. As the Full Bench observed in the
Preliminary Jurisdictional Issues decision:
‘The need to balance the competing considerations in s.134(1) and the diversity in the
characteristics of the employers and employees covered by different modern awards means
that the application of the modern awards objective may result in different outcomes between
different modern awards.
Given the broadly expressed nature of the modern awards objective and the range of
considerations which the Commission must take into account there may be no one set of
provisions in a particular award which can be said to provide a fair and relevant safety net of
terms and conditions. Different combinations or permutations of provisions may meet the
modern awards objective.’
67
[164] Some of the s.134 considerations have been the subject of comment in other
proceedings and some were the subject of submissions in the present proceedings.
[165] Section 134(1)(a) requires that we take into account ‘relative living standards and the
needs of the low paid’. This consideration incorporates two related, but different, concepts. As
explained in the 2012–13 Annual Wage Review decision:
‘The former, relative living standards, requires a comparison of the living standards of award-
reliant workers with those of other groups that are deemed to be relevant. The latter, the needs
of the low paid, requires an examination of the extent to which low-paid workers are able to
purchase the essentials for a “decent standard of living” and to engage in community life. The
assessment of what constitutes a decent standard of living is in turn influenced by
contemporary norms.’
68
[2017] FWCFB 1001
40
[166] In successive Annual Wage Reviews the Expert Panel has concluded that a threshold
of two-thirds of median full-time wages provides ‘a suitable and operational benchmark for
identifying who is low paid’, within the meaning of s.134(1)(a).
69
There is, however, no single
accepted measure of two-thirds of median (adult) ordinary time earnings. The surveys that
provide the information about the distribution of earnings from which a median is derived
vary in their sources, coverage and definitions in ways that affect the absolute values of
average and median wages (and, accordingly, what constitutes two-thirds of those values).
70
The two main Australian Bureau of Statistics (ABS) surveys of the distribution of earnings
are the ‘Employee Earnings, Benefits and Trade Unions Membership
71
(the ‘EEBTUM’) and
the survey of Employee Earnings and Hours
72
(the ‘EEH’). We note that the EEBTUM is no
longer published and the relevant data is now produced as part of the Characteristics of
Employment Survey
73
(the ‘CoE’). Some data is also available from the HILDA survey.
74
[167] In the 2015–16 Annual Wage Review decision the Expert Panel noted that the
submissions provided different estimates of the ‘two-thirds of median (adult) ordinary time
earnings’ threshold. The relevant extract from that decision, and the Expert Panel’s
conclusion, are set out below:
‘In its submission, the Australian Government provided two estimates to identify low-paid
workers:
$18.67 per hour (or about $710.00 per week over a 38-hour week), using the May
2014 EEH data; and
$18.42 per hour (or about $700.00 per week over a 38-hour week) using the 2014
HILDA survey data.
The Australian Government contended that there were about 1.3 million low-paid employees
in 2014 (or 13.3 per cent of all employees), with around one-third of award-reliant workers
being low paid in the EEH data. Their analysis took explicit account of the number and the
level of pay of junior workers.
The ACTU used unpublished ABS EEH data on the distribution of award only workers by
hourly earnings to estimate the number of employees at each award classification level. On the
basis of the May 2014 data, the ACTU estimated that 43 per cent of award only employees
had hourly earnings at or below the C10 rate of pay in May 2014 ($724.50).
Research Report 6/2013 found that around 75 per cent of adult award-reliant employees in the
non-public sector were earning below the C10 rate of $18.60 per hour.
Whilst no specific conclusion is available, the information as a whole suggests that a sizeable
proportion—probably a majority—of employees who are award reliant are also low paid by
reference to the two-thirds of median weekly earnings benchmark.’
75
(footnotes omitted)
[168] The most recent data for the ‘low paid’ threshold is set out below:
Two-thirds of median full-time earnings
Characteristics of Employment survey (Aug. 2015)
76
Employee Earnings and Hours survey (May 2016)
77
$/week
818.67
917.33
[2017] FWCFB 1001
41
[169] The assessment of relative living standards focuses on the comparison between award-
reliant workers and other employed workers, especially non-managerial workers.
78
As noted
in the 2015–16 Annual Wage Review decision:
‘There is no doubt that the low paid and award reliant have fallen behind wage earners and
employee households generally over the past two decades, whether on the basis of wage
income or household income.’
79
[170] Award reliance is a measure of the proportion of employees whose pay rate is set
according to the relevant award rate specified for the classification of the employee and not
above that rate. Table 4.8 from the 2015–16 Annual Wage Review decision sets out the extent
of award reliance by industry.
80
Relevantly for present purposes, the most recent data identify
the Accommodation and food services and Retail trade industries as among the most award
reliant in that they are the industries in which the highest proportion of employees are award
reliant (42.7 per cent and 34.5 per cent, respectively).
[171] The relative living standard of employees is affected by the level of wages they earn,
the hours they work, tax-transfer payments and the circumstances of the households in which
they live.
81
As a general proposition, around two-thirds of low-paid employees are found in
low income households (i.e. in the bottom half of the distribution of employee households)
and have lower living standards than other employees. Many low-paid employees live in
households with low or very low disposable incomes.
82
[172] In taking into account ‘relative living standards’ in the context of Annual Wage
Reviews, the Expert Panel has paid particular attention to changes in the earnings of all
award-reliant employees compared to changes in measures of average and median earnings
more generally.
83
[173] In the 2015–16 Annual Wage Review decision the Expert Panel also observed that
increases in modern award minimum wages have a positive impact on the relative living
standards of the low paid and on their capacity to meet their needs.
84
It seems to us that the
converse also applies, that is, the variation of a modern award which has the effect of
reducing the earnings of low-paid employees will have a negative impact on their relative
living standards and on their capacity to meet their needs.
[174] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’.
[175] In the context of Annual Wage Review decisions the Expert Panel has consistently
adopted the following propositions about the relationship between increases in minimum
wages and enterprise bargaining:
whilst the gap between award minimum wages and bargained wages is likely to
increase the incentive for employees to bargain, a large gap may be a disincentive
for employers to bargain;
minimum wages are only one element of the incentive to bargain; and
there is no evidence that the incentive to bargain has been adversely affected by the
increases in minimum wages which have occurred over the last decade.
85
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42
[176] Further, Research Report 7/2013, dealing with incentives to bargain, concluded as
follows:
‘The study did not reveal a positive or negative relationship between AWR increases and the
incentive to bargain, instead pointing to a complex mix of factors that may contribute to
employee and employer decision-making about whether to not to bargain…
The workplace case studies, qualitative relativities analysis and Award Reliance Survey each
suggest that there may be a link between minimum wages (and their associated instruments)
themselves and over-award wage outcomes, but the extent of this link remains unclear and
may require further investigation.’
86
[177] In the Annual Wage Review 2013–14 decision the Expert Panel commented on the
above research, noting that:
‘The research does not reveal any particular relationship between minimum award increases and
the incentive to bargain. Instead it points to a complex mix of factors that may contribute to
employee and employer decision-making about whether or not to bargain.’
87
[178] It seems to us that the observations made by the Expert Panel in the context of Annual
Wage Reviews are also apposite to the present context. A reduction in penalty rates is likely
to increase the incentive for employees to bargain, but may also create a disincentive for
employers to bargain. It is also likely that employee and employer decision-making about
whether or not to bargain is influenced by a complex mix of factors, not just the level of
penalty rates in the relevant modern award.
[179] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. The use of the conjunctive ‘through’
makes it clear that in the context of s.134(1)(c), social inclusion is a concept to be promoted
exclusively ‘through increased workforce participation’, that is obtaining employment is the
focus of s.134(1)(c).
[180] However, we also accept that the level of penalty rates in a modern award may impact
upon an employee’s remuneration and hence their capacity to engage in community life and
the extent of their social participation. The broader notion of promoting social inclusion is a
matter that can be appropriately taken into account in our consideration of the legislative
requirement to ‘provide a fair and relevant minimum safety net of terms and conditions’ and
to take into account ‘the needs of the low paid’ (s.134(1)(a)). Further, one of the objects of the
FW Act is to promote ‘social inclusion for all Australians by’ (among other things) ‘ensuring
a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions
through … modern awards and national minimum wage orders’ (s.3(b)).
88
[181] The likely impact of any exercise of modern award powers on ‘employment growth’ is
also one of the considerations we are required to take into account, by s.134(1)(h). It is these
considerations (i.e. ss.134(1)(c) and (h)) which have led us to assess the likely impact of any
proposed change to penalty rates on employment growth, that is the creation of new jobs or an
increase in hours worked.
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[182] Section 134(1)(d) requires that we take into account ‘the need to promote flexible
modern work practices and the efficient and productive performance of work’.
[183] We deal further with this consideration later in our decision when addressing the
review of the particular modern awards before us.
[184] Section 134(1)(da) requires that we take into account 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.’
[185] Section 134(1)(da) was inserted by the Fair Work Amendment Act 2013 (Cth), with
effect from 1 January 2014. The Explanatory Memorandum to the Fair Work Amendment Bill
2013 made the following observation about the addition of s.134(1)(da):
‘Under the FW Act, the FWC must ensure that modern awards, together with the National
Employment Standards, provide a fair and relevant safety net of terms and conditions. In
making or varying modern awards, the FWC must take into account the modern awards
objective (see subsection 134(1) of the FW Act).
Item 1 of Schedule 2 to the Bill amends the modern awards objective to include a new
requirement for the FWC to consider, in addition to the existing factors set out in subsection
134(1) of the FW Act, the need to provide additional remuneration for:
employees working overtime;
employees working unsocial, irregular or unpredictable hours;
employees working on weekends or public holidays; or
employees working shifts.
This amendment promotes the right to fair wages and in particular recognises the need to
fairly compensate employees who work long, irregular, unsocial hours, or hours that could
reasonably be expected to impact their work/life balance and enjoyment of life outside of
work.’
[186] In the second reading speech to the Fair Work Amendment Bill 2013 the then Minister
for Employment and Workplace Relations said:
‘… as part of this Bill, the Government is seeking to ensure that work at hours which are not
family friendly is fairly remunerated. This will be done by amending the modern awards
objective to ensure that the Fair Work Commission, in carrying out its role, must take into
account the need to provide additional remuneration for employees working outside normal
hours, such as employees working overtime or on weekends…’
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[187] Section 134(1)(da) is a relatively new provision and one which did not exist at the
time the modern awards under review were made. These provisions have not yet been the
subject of substantive arbitral or judicial comment.
[188] Five observations may be made about s.134(1)(da).
[189] First, s.134(1)(da) speaks of the ‘need to provide additional remuneration’ for
employees performing work in the circumstances mentioned in s.134(1)(da)(i), (ii), (iii) and
(iv).
[190] An assessment of ‘the need to provide additional remuneration’ to employees working
in the circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a
range of matters, including:
(i) the impact of working at such times or on such days on the employees concerned
(i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g. through
‘loaded’ minimum rates or the payment of an industry allowance which is intended to
compensate employees for the requirement to work at such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[191] Assessing the extent of the disutility of working at such times or on such days (issue
(i) above) includes an assessment of the impact of such work on employee health
89
and work-
life balance, taking into account the preferences of the employees for working at those times.
[192] The expression ‘additional remuneration’ in the context of s.134(1)(da) means
remuneration in addition to what employees would receive for working what are normally
characterised as ‘ordinary hours’, that is reasonably predictable hours worked Monday to
Friday within the ‘spread of hours’ prescribed in the relevant modern award. Such ‘additional
remuneration’ could be provided by means of a penalty rate or loading paid in respect of, for
example, work performed on weekends or public holidays. Alternatively, additional
remuneration could be provided by other means such as a ‘loaded hourly rate’.
90
[193] As mentioned, s.134(1)(da) speaks of the ‘need’ to provide additional remuneration.
We note that the minority in Re Restaurant and Catering Association of Victoria
91
(the
Restaurants 2014 Penalty Rates decision) made the following observation about s.134(1)(da):
‘This factor must be considered against the profile of the restaurant industry workforce and the
other circumstances of the industry. It is relevant to note that the peak trading time for the
restaurant industry is weekends and that employees in the industry frequently work in this
industry because they have other educational or family commitments. These circumstances
distinguish industries and employees who expect to operate and work principally on a 9am-
5pm Monday to Friday basis. Nevertheless the objective requires additional remuneration for
working on weekends. As the current provisions do so, they meet this element of the
objective.’
92
(emphasis added)
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[194] To the extent that the above passage suggests that s.134(1)(da) ‘requires additional
remuneration for working on weekends’, we respectfully disagree. We acknowledge that the
provision speaks of ‘the need for additional remuneration’ and that such language suggests
that additional remuneration is required for employees working in the circumstances
identified in paragraphs 134(1)(da)(i) to (iv). But the expression ‘the need for additional
remuneration’ must be construed in context, and the context tells against the proposition that
s.134(1)(da) requires additional remuneration be provided for working in the identified
circumstances.
[195] Section s.134(1)(da) is a relevant consideration, it is not a statutory directive that
additional remuneration must be paid to employees working in the circumstances mentioned
in paragraphs 134(1)(da)(i), (ii), (iii) or (iv). Section 134(1)(da) is a consideration which we
are required to take into account. To take a matter into account means that the matter is a
‘relevant consideration’ in the Peko-Wallsend
93
sense of matters which the decision maker is
bound to take into account. As Wilcox J said in Nestle Australia Ltd v Federal Commissioner
of Taxation:
‘To take a matter into account means to evaluate it and give it due weight, having regard to all
other relevant factors. A matter is not taken into account by being noticed and erroneously
disregarded as irrelevant’.
94
[196] Importantly, the requirement to take a matter into account does not mean that the
matter is necessarily a determinative consideration. This is particularly so in the context of
s.134 because s.134(1)(da) is one of a number of considerations which we are required to take
into account. No particular primacy is attached to any of the s.134 considerations. The
Commission’s task is to take into account the various considerations and ensure that the
modern award provides a ‘fair and relevant minimum safety net’.
[197] A further contextual consideration is that ‘overtime rates’ and ‘penalty rates’
(including penalty rates for employees working on weekends or public holidays) are terms
that may be included in a modern award (s.139(1)(d) and (e)); they are not terms that must be
included in a modern award. As the Full Bench observed in the 4 yearly review of modern
awards – Common issue – Award Flexibility decision:
‘… s.134(1)(da) does not amount to a statutory directive that modern awards must provide
additional remuneration for employees working overtime and may be distinguished from the
terms in Subdivision C of Division 3 of Part 2-3 which must be included in modern
awards…’
95
[198] Further, if s.134(1)(da) was construed such as to require additional remuneration for
employees working, for example, on weekends, it would have significant consequences for
the modern award system, given that about half of all modern awards currently make no
provision for weekend penalty rates.
96
If the legislative intention had been to mandate
weekend penalty rates in all modern awards then one would have expected that some
reference to the consequences of such a provision would have been made in the extrinsic
materials.
[199] Third, s.134(da) does not prescribe or mandate a fixed relationship between the
remuneration of those employees who, for example, work on weekends or public holidays,
and those who do not. The additional remuneration paid to the employees whose working
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arrangements fall within the scope of the descriptors in s.134(1)(da)(i)–(v) will depend on,
among other things, the circumstances and context pertaining to work under the particular
modern award.
[200] Fourth, s.134(1)(da)(ii) is not to be read as a composite expression, rather the use of
the disjunctive ‘or’ makes it clear that the provision is dealing with separate circumstances:
‘unsocial, irregular or unpredictable hours’ (emphasis added).
[201] Section 134(1)(da)(ii) requires that we take into account the need to provide additional
remuneration for employees working in each of these circumstances. The expression ‘unsocial
… hours’ would include working late at night and or early in the morning, given the extent of
employee disutility associated with working at these times. ‘Irregular or unpredictable hours’
is apt to describe casual employment.
[202] Fifth, s.134(1)(da) identifies a number of circumstances in which we are required to
take into account the need to provide additional remuneration (i.e. those in paragraphs
134(1)(da)(i) to (iv)). Working ‘unsocial … hours’ is one such circumstance (s.134(1)(da)(i))
and working ‘on weekends or public holidays’ (s.134(1)(da)(iii)) is another. The inclusion of
these two, separate, circumstances leads us to conclude that it is not necessary to establish that
the hours worked on weekends or public holidays are ‘unsocial … hours’. Rather, we are
required to take into account the need to provide additional remuneration for working on
weekends or public holidays, irrespective of whether working at such times can be
characterised as working ‘unsocial … hours’.
97
Ultimately, however, the issue is whether an
award which prescribes a particular penalty rate provides ‘a fair and relevant minimum safety
net.’ A central consideration in this regard is whether a particular penalty rate provides
employees with ‘fair and relevant’ compensation for the disutility associated with working at
the particular time(s) to which the penalty attaches.
[203] For completeness we note that the Australian Chamber of Commerce and Industry
(ACCI) and ABI drew attention to the fact that s.134(1)(da)(iii) speaks of ‘working on
weekends’ and does not distinguish between Saturdays and Sundays and submit that:
‘It is noteworthy that the FW Act does not prescribe that Sundays are to receive an increased
loading. Instead, section 134(1)(da)(iii) accords Saturdays and Sundays equal treatment by
referring to both days as the “weekend”.
Unless there is an evidentiary basis that justifies providing employees working Sundays with
increased remuneration, employees working weekends should all be treat in the same manner.
There is nothing contained within the modern awards objective that would suggest a different
approach.’
98
For our part we do not think that any particular significance attaches to the reference to
‘weekends’ in s.134(1)(da)(iii), rather than ‘Saturdays and Sundays.’ It cannot be reasonably
inferred that the use of the word ‘weekends’ manifests a legislative intention that there be no
distinction between the level of additional remuneration provided for Saturday and Sunday
work. Any additional remuneration provided for Saturday or Sunday work in a particular
modern award will depend on the circumstances and merits in each case.
[204] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’.
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[205] The ‘Dictionary’ in s.12 of the FW Act states, relevantly:
‘In this Act:
equal remuneration for work of equal of comparable value: see subsection 302(2).’
[206] The expression ‘equal remuneration for work of equal or comparable value’ is defined
in s.302(2) to mean ‘equal remuneration for men and women workers for work of equal or
comparable value’.
[207] The appropriate approach to the construction of s.134(1)(e) is to read the words of the
definition into the substantive provision such that in giving effect to the modern awards
objective the Commission must take into account the principle of ‘equal remuneration for men
and women workers for work of equal or comparable value’.
99
[208] United Voice contends that women make up the majority of the hospitality workforce
and a significant proportion of the workers who receive penalty rates. On this basis United
Voice submits that:
‘Cuts to penalty rates will disproportionality affect women’.100
[209] To make good the proposition advanced, it would have to be shown that more female
hospitality workers usually work on Sundays, than males. But no data has been presented
which shows the number of hospitality workers who usually work on Sundays, by gender.
Further, the available data does not appear to support the proposition advanced.
[210] Dr Oliver’s expert report deals with the impact of penalty rates on the wages of
hospitality workers. The report utilises unit record data from both the HILDA Survey and the
Australian Workplace Relations Study (AWRS) to show that:
of all hospitality workers who receive penalty rates, 50.7 per cent are male
compared to 49.3 per cent who are female (AWRS data).
101
Of all hospitality workers who usually work on either Saturdays and/or Sundays,
57.4 per cent are male compared with 42.6 per cent who are female (HILDA
data).
102
[211] The SDA advanced a similar submission
103
to that put by United Voice in relation to
retail workers and submits that any cuts to penalty rates in the General Retail Industry Award
2010 will ‘disproportionately affect women’.
104
There is no evidence before us which shows
the number of retail workers who usually work on Sundays, by gender.
[212] Data drawn from the ABS Working Time Arrangements series shows that across
surveys conducted in 2006, 2009 and 2012 the proportion of male employees who usually
work on Sundays was greater than the proportion of female employees who usually work on
Sundays.
105
But this is ‘all industries’ data. It is not confined to the retail industry.
[213] Using HILDA data, Dr Watson and Peetz conclude that females outnumbered males
among young workers (i.e. aged 15–18 years) in the weekend retail workforce.
106
The SDA
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acknowledges that this material does not directly deal with the question of whether more
female retail workers work on Sundays than males, but submits that this data:
‘… does provide a strong basis to infer that women working in retail on Sundays outnumber
men in some material proportion.’107
[214] We disagree. The data relied on deals with weekend retail work, it is not confined to
Sunday work and, further, it only relates to young workers not all retail workers. In this regard
it is relevant to observe that over the past decade the proportion of 15–19 year olds in the
retail workforce has gradually declined from 23.5 per cent in November 2004 to 18.3 per cent
in November 2013.
108
[215] Further, even if it was shown that a reduction in Sunday penalty rates
disproportionately impacted on women workers that fact would not necessarily enliven
s.134(1)(e). Section 134(1)(e) requires that we take into account the principle of equal
remuneration for men and women workers ‘for work of equal or comparable value’. Any
reduction in Sunday penalty rates in these awards would apply equally to men and women
workers.
[216] However, if it was shown that a reduction in penalty rates did disproportionately affect
female workers then it is likely to have an adverse impact on the gender pay gap. Such an
outcome may well be relevant to an assessment of whether such a change would provide a
‘fair and relevant minimum safety net’, but it does not necessarily enliven s.134(1)(e).
[217] Section 134(1)(f) requires that we take into account ‘the likely impact of any exercise
of modern award powers on business, including on productivity, employment costs and the
regulatory burden’.
[218] We note at the outset that s.134(1)(f) is expressed in very broad terms. We are
required to take into account the likely impact of any exercise of modern award powers ‘on
business, including’ (but not confined to) the specific matters mentioned, that is,
‘productivity, employment costs and the regulatory burden’.
[219] It is axiomatic that the exercise of modern award powers to vary a modern award to
reduce penalty rates is likely to have a positive impact on business, by reducing employment
costs for those businesses that require employees to work at times, or on days, which are
subject to a penalty rate. The impact of a reduction in penalty rates upon productivity is less
clear.
[220] The term ‘productivity’ appears in several Parts of the FW Act:
Part 1-1 – Introduction: s.3 Object of the Act
Part 2-3 – Modern Awards: s.134 The modern awards objective
Part 2-4 – Enterprise agreements: s.171 Objective of the Part, ss.241 and 243 Low
paid bargaining and authorisation
Part 2-5 – Workplace determinations: ss.262 and 275
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Part 2-6 – Minimum wages: s.284 The minimum wages objective
Part 2-8 – Transfer of business: ss.318–320 Making and variation of transferable
instruments.
[221] ‘Productivity’ is not defined in the FW Act but given the context in which the word
appears it is clear that it is used to signify an economic concept.
[222] The Productivity Commission defines productivity as:
‘… a measure of the rate at which outputs of goods and services are produced per unit of input
(labour, capital, raw materials, etc). It is calculated as the ratio of the quantity of outputs
produced to some measure of the quantity of inputs used’.
109
[223] Similarly, the Commonwealth Treasury also defines productivity by reference to
volumes of inputs and output:
‘Productivity is a measure of the rate at which inputs, such as labour, capital and raw materials,
are transformed into outputs. The level of productivity can be measured for firms, industries
and economies. Productivity growth implies fewer inputs are used to produce a given output
or, for a given set of inputs, more output is produced.’
110
[224] The conventional economic meaning of productivity is the number of units of output
per unit of input. It is a measure of the volumes or quantities of inputs and outputs, not the
cost of purchasing those inputs or the value of the outputs generated. As the Full Bench
observed in the Schweppes Australia Pty Ltd v United Voice – Victoria Branch:
‘… we find that ‘productivity’ as used in s.275 of the Act, and more generally within the Act, is
directed at the conventional economic concept of the quantity of output relative to the quantity
of inputs. Considerations of the price of inputs, including the cost of labour, raise separate
considerations which relate to business competitiveness and employment costs.
Financial gains achieved by having the same labour input – the number of hours worked –
produce the same output at less cost because of a reduced wage per hour is not productivity in
this conventional sense.’
111
[225] While the above observation is directed at the use of the word ‘productivity’ in s.275,
it is apposite to our consideration of this issue in the context of s.134(1)(f).
[226] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’.
[227] We deal further with this consideration later in our decision when addressing the
review of the particular modern awards before us.
[228] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’.
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[229] We note that the requirement to take into account the likely impact of any exercise of
modern award powers on ‘the sustainability, performance and competitiveness of the national
economy’ (emphasis added) focuses on the aggregate (as opposed to sectorial) impact of an
exercise of modern award powers. We deal further with this consideration later in our
decision when addressing the review of the particular modern awards before us.
3.4 The proposed ‘material change in circumstances test’
[230] A central contention advanced by the SDA and United Voice in these proceedings is
that in order to enliven its discretion in the Review to vary a modern award the Commission
must first be satisfied that since the making of the modern award there has been a material
change in circumstances pertaining to the operation or effect of the award such that the
modern award is no longer meeting the modern awards objective (the ‘material change in
circumstances test’). It is said to follow from this proposition that a sufficient merit argument
and supporting probative evidence must be directed at establishing the existence of the
requisite material change in the period since the making of the modern award. The material
change in circumstances test is said to be consistent with the approach articulated in the
Preliminary Jurisdictional Issues decision; more recent Full Bench decisions and the statutory
context of the Review. The more recent Full Bench decisions referred to are: Re Security
Services Industry Award 2010
112
and Re Stevedoring Industry Award 2010.
113
[231] The Australian Council of Trade Unions (ACTU) puts the test somewhat differently:
‘… the safety net has evolved on the basis of whether particular conditions of employment are a
necessary or desirable minimum for workers and whether such conditions are achievable given
the impact on employers and the economy more generally. In this framework, it is unsurprising
that the minimum conditions contained in awards are rarely eroded: to do so would effectively
require proof that economic and social development had regressed to a point where it is no
longer economically sustainable to continue to provide such minimums, notwithstanding their
desirability.’114
[232] It is convenient to refer to the proposition advanced by the ACTU as the ‘economic
unsustainability test’.
[233] We turn first to the relevant statutory context. The SDA advances this aspect of its
argument in the following way:
‘… The critical aspect of the statutory context is the legislative acceptance (recognised by the
Full Bench in the Preliminary Jurisdictional decision) that, at the time a modern award was
made, it was meeting the modern award objectives. In this way, the award is in effect deemed
to meet the modern award objective. Once this is understood, it necessarily follows that a
material change in circumstances must be established in order to properly justify a proposed
variation to a modern award - to do otherwise is to ignore the statutory mandate that modern
awards, when made, achieved the modern award’s objective. The fact of the making of the
modern awards and their legal character as meeting the modern award objective forms an
essential part of the historical context of the Review recognised by the Full Bench in the
Preliminary Jurisdictional decision.
The fact that particular minimum entitlements in a modern award might not have been the
subject of detailed evidentiary consideration in award modernisation is irrelevant to a proper
understanding of the Commission’s statutory function in the 4 yearly review. That function is
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directed at ensuring instruments which, when made 6 years ago met the modern award’s
objective, continue to meet that objective.
Given the character of modern awards as being deemed to have met the modern award
objective when made, it must necessarily follow that any variation of their terms requires the
making of a finding by the Commission of some material change in the circumstances
pertaining to the operation or effect of an award such that it no longer can be said to meet the
modern awards objective. That task necessarily directs attention to the existence, or otherwise,
of change in relevant circumstances since the making of a modern award.’115
[234] Section 156 sets out the requirement to conduct 4 yearly reviews of modern awards
and what may be done in such reviews. As we have mentioned, ascertaining the meaning of
s.156 necessarily begins with the ordinary and grammatical meaning of the words used.
116
These words must be read in context by reference to the language of the Act as a whole and to
the legislative purpose.
117
Section 578(a) of the FW Act also directs attention to the objects of
the FW Act. Of course it must be borne in mind that the purpose or policy of the Act is to be
gleaned from a consideration of all of the relevant provisions of the Act.
118
Section 15AA of
the Acts Interpretation Act 1901 (Cth) requires that a construction that would promote the
purpose or object of the FW Act is to be preferred to one that would not promote that purpose
or object. The purpose or object of the FW Act is to be taken into account even if the meaning
of a provision is clear. When the purpose or object is brought into account an alternative
interpretation may become apparent. If one interpretation does not promote the object or
purpose of the FW Act, and another does, the latter interpretation is to be preferred. Of
course, s.15AA requires us to construe the FW Act, in the light of its purpose, not to rewrite
it.
119
[235] Section 156(1) provides that the Commission must conduct a 4 yearly review of
modern awards starting as soon as practicable after each 4
th
anniversary of the
commencement of Part 2-3 of the FW Act. Part 2-3 commenced on 1 January 2010,
120
hence
the first Review is to start as soon as practicable after 1 January 2014.
[236] Section 156(2) deals with what has to be done in a Review; it provides that the
Commission:
must review all modern awards (s.156(2)(a));
may make one or more determinations varying or revoking modern awards
(s.156(2)(b)(i) and (iii)) and may make one or more modern awards
(s.156(2)(b)(ii)); and
must not review, or make a determination to vary, a default fund term of a modern
award (s.156(2)(c)).
[237] Section 156(3) deals with the variation of modern award minimum wages in a Review.
‘Modern award minimum wages’ are defined in s.284(3) as 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.
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52
[238] Section 156(3) provides that the Commission may vary modern award minimum
wages ‘only if’ the Commission is satisfied that the variation is justified by ‘work value
reasons’. ‘Work value reasons’ is defined in s.156(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.’
[239] We note here that subsections 156(3) and (4) were the subject of some consideration in
the Equal Remuneration Decision 2015
121
in which the Full Bench said:
‘We see no reason in principle why a claim that the minimum rates of pay in a modern award
undervalue the work to which they apply for gender-related reasons could not be advanced for
consideration under s.156(3) or s.157(2). Those provisions allow the variation of such
minimum rates for ‘work value reasons’, which expression is defined broadly enough in
s.156(4) to allow a wide-ranging consideration of any contention that, for historical reasons
and/or the application of an indicia approach, undervaluation has occurred because of gender
inequity. There is no datum point requirement in that definition which would inhibit the
Commission from identifying any gender issue which has historically caused any female-
dominated occupation or industry currently regulated by a modern award to be undervalued.’122
(emphasis added)
[240] The absence of a datum point requirement in s.156(4) is a matter of some significance
in the present context and we return to it later.
[241] Section 156(5) requires that each modern award must be reviewed in its own right,
though this does not prevent the Commission from reviewing 2 or more modern awards at the
same time.
[242] The mode of expression used in s.156 is a significant textual indicator of legislative
purpose. As Spigelman CJ observed in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd:
‘Substantial, indeed often, but not always, determinative weight must be given to language
which is in mandatory form.’
123
[243] The words ‘must’ and ‘must not’ in ss.156(1), (2)(a), (2)(c) and (5) constitute language
in mandatory form.
124
The use of these words may be contrasted with the use of ‘may’ in
s.156(2)(b)(i), as in the Commission ‘may make one or more determinations varying modern
awards’. The word ‘may’ usually connotes the conferral of a discretion.
125
That is plainly the
intent of s.156(2)(b)(i) and no party contended otherwise.
[244] Section 156 clearly delineates what must be done in a Review, what must not be done
and what may be done. Further, where the legislative intent is to qualify a discretion it is done
expressly, as in s.156(3). The Commission may vary modern award minimum wages ‘only if’
it is satisfied that the variation is justified by work value reasons. This may be contrasted with
the discretion in s.156(2)(b)(i) to make determinations varying modern awards in a Review
which is expressed in general, unqualified, terms.
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53
[245] An unqualified discretion is confined only by the subject matter and the legislative
context and purpose.
126
The apparent scope of a discretion such as that in s.156(2)(b)(i) may
be limited by other sections of the FW Act.
[246] A number of provisions in the FW Act which are relevant to the Review operate to
constrain the breadth of the discretion in s.156(2)(b)(i). As we have already mentioned, in
exercising its powers in a Review the Commission is exercising ‘modern award powers’ (see
s.134(2)(a)) and hence the modern awards objective and s.138 apply to the Review.
[247] Any variation of a modern award arising from the Review must also comply with the
requirements of the FW Act which relate to the content of modern awards. Division 3 of Part
2-3 deals with the terms of modern awards, in particular terms that may or must be included in
modern awards, and terms that must not be included in modern awards. This division also
deals with the interaction between the NES and modern awards. These provisions are relevant
to the Review and, in an appropriate case, may operate to constrain the power in s.156.
127
[248] Similarly, Division 6 of Part 2-3 contains specific provisions relevant to the exercise
of modern award powers – these provisions apply to the Review. If the Commission were to
make a modern award, or change the coverage of an existing modern award in the Review,
then the requirements set out in s.163 must be satisfied. Sections 165 and 166 deal with when
variation determinations come into operation. Determinations varying modern awards arising
from the Review will generally operate prospectively, unless the Commission is satisfied that
the variation is made under s.160 (which deals with variations to remove ambiguities or
uncertainties, or to correct errors: see ss.165(2)(a) and 166(3)(a)) and there are exceptional
circumstances that justify retrospectivity (ss.165(2)(b) and 166(3)(b)).
[249] As is apparent from their submissions, the Unions’ contention relies on ‘the legislative
acceptance … that at the time a modern award was made, it was meeting the modern awards
objective’. It is said to necessarily follow from this ‘legislative acceptance’ that a ‘material
change in circumstances’ must be established in order to justify the variation of a modern
award in the Review because ‘to do otherwise is to ignore the statutory mandate that modern
awards, when made, achieved the modern awards objective’.
[250] In support of this general proposition counsel for the SDA
128
relied on the
observations of Kirby P (as he then was) in Commissioner of Stamp Duties v Permanent
Trustee Co Ltd (Trustee for Anzareno dal Bon and Silvanio dal Bon),
129
regarding the
preferred construction of inter-related legislation. In particular, the SDA relied on the
following paragraphs from his Honour’s judgment:
‘Upon the hypothesis (which is admittedly often sorely tried) that there is a rational integration
of the legislation of the one Parliament, it is proper for courts to endeavour to so construe inter
related statutes as to produce a sensible, efficient and just operation of them in preference to an
inefficient, conflicting or unjust operation. This is the approach which I take to the task of
statutory interpretation…
The result is that, in construing the legislation under consideration here, I will prefer that
construction which is available in the language used and which facilitates the sensible
operation together of the four statutes mentioned, avoiding inefficiency and the capricious
operation of revenue law which would seriously impede or discourage the availability of
beneficial statutory provisions for the sale or partition of property held by co-owners. In the
case of ambiguity of the legislation I consider this to be the modern approach which this Court
[2017] FWCFB 1001
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should adopt in implementing the will of Parliament. We should presume that Parliament
intended its legislation to operate rationally, efficiently and justly, together.’
130
[251] The above observation has been endorsed by other intermediate appellate courts
131
and
we have applied it to our consideration of s.156. But the adoption of such an approach does
not warrant the importation of a condition on the exercise of the discretion in s.156(2)(b)(i).
[252] The terms of s.156 and the statutory context do not support the ‘material change in
circumstances test’ advanced by the SDA and United Voice.
[253] The modern awards objective provides that the Commission must ensure that modern
awards, together with the NES, provide a fair and relevant minimum safety net of terms and
conditions, taking into account the s.134 considerations. One of those considerations is the
need to ensure a ‘stable’ modern award system (s.134(1)(g)). A ‘stable’ modern award system
implies that the variation of a modern award be supported by a merit argument. The extent of
the argument required will depend on the circumstances. This issue was the subject of some
debate in the proceedings which led to the Preliminary Jurisdictional Issues decision. In that
decision the Full Bench said:
‘The Commission is obliged to ensure that modern awards, together with the NES, provide a
fair and relevant minimum safety net taking into account, among other things, the need to
ensure a ‘stable’ modern award system (s.134(1)(g)). The need for a ‘stable’ modern award
system suggests that a party seeking to vary a modern award in the context of the Review must
advance a merit argument in support of the proposed variation. The extent of such an argument
will depend on the circumstances. We agree with ABI’s submission that some proposed
changes may be self evident and can be determined with little formality. However, where a
significant change is proposed it must be supported by a submission which addresses the
relevant legislative provisions and be accompanied by probative evidence properly directed to
demonstrating the facts supporting the proposed variation.
In conducting the Review the Commission will also have regard to the historical context
applicable to each modern award. Awards made as a result of the award modernisation process
conducted by the former Australian Industrial Relations Commission (the AIRC) under Part
10A of the Workplace Relations Act 1996 (Cth) were deemed to be modern awards for the
purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Act). Implicit in this is a
legislative acceptance that at the time they were made the modern awards now being reviewed
were consistent with the modern awards objective. The considerations specified in the
legislative test applied by the AIRC in the Part 10A process is, in a number of important
respects, identical or similar to the modern awards objective in s.134 of the FW Act.
132
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 that it was made.
Although the Commission is not bound by principles of stare decisis it has generally followed
previous Full Bench decisions. In another context three members of the High Court observed
in Nguyen v Nguyen:
‘Where a court of appeal holds itself free to depart from an earlier decision it should
do so cautiously and only when compelled to the conclusion that the earlier decision is
wrong. The occasion upon which the departure from previous authority is warranted
are infrequent and exceptional and pose no real threat to the doctrine of precedent and
the predictability of the law: see Queensland v The Commonwealth per Aickin J at
620.’
133
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55
While the Commission is not a court, the public interest considerations underlying these
observations have been applied with similar, if not equal, force to appeal proceedings in the
Commission.
134
As a Full Bench of the Australian Industrial Relations Commission observed
in Cetin v Ripon Pty Ltd (T/as Parkview Hotel) (Cetin)
135
:
“Although the Commission is not, as a non-judicial body, bound by principles of stare
decisis, as a matter of policy and sound administration it has generally followed
previous Full Bench decisions relating to the issue to be determined, in the absence of
cogent reasons for not doing so.”136
These policy considerations tell strongly against the proposition that the Review should
proceed in isolation unencumbered by previous Commission decisions. In conducting the
Review it is appropriate that the Commission take into account previous decisions relevant to
any contested issue. The particular context in which those decisions were made will also need
to be considered. Previous Full Bench decisions should generally be followed, in the absence
of cogent reasons for not doing so.’
137
[254] It is apparent from the above extract that the adoption of the prima facie position that
the modern award being reviewed achieved the modern awards objective at the time it was
made is but an example of the general proposition that previous Full Bench decisions should
generally be followed, in the absence of cogent reasons for not doing so.
[255] As observed by the Full Bench in the Preliminary Jurisdictional Issues decision, while
it is appropriate to take account of previous decisions relevant to a contested issue arising in
the Review it is necessary to consider the context in which those decisions were made. The
particular context may be a cogent reason for not following a previous Full Bench decision,
for example:
the legislative context which pertained at that time may be materially different from
the FW Act;
the extent to which the relevant issue was contested and, in particular, the extent of
the evidence and submissions put in the previous proceeding will be relevant to the
weight to be accorded to the previous decision; or
the extent of the previous Full Bench’s consideration of the contested issue. The
absence of detailed reasons in a previous decision may be a factor in considering the
weight to be accorded to the decision.
[256] It is convenient to deal now with the submission that the proposed ‘material change in
circumstances test’ is consistent with the approach articulated in more recent Full Bench
decisions. As mentioned earlier, the Full Bench decisions referred to are Re Security Services
Industry Award 2010
138
and Re Stevedoring Industry Award 2010.
139
[257] The Unions rely upon the two Full Bench decisions mentioned to support the
contention that there must be ‘some material change in circumstances’ from when the award
was made before the Commission’s discretion to vary the award is enlivened. However, no
such requirement is evident from either decision. The Full Bench’s comments in Re Security
Services Industry Award 2010 express no such requirement, rather the decision simply stands
[2017] FWCFB 1001
56
for the proposition that the proponent of an award variation should present a persuasive
evidentiary case. This is apparent from the following extract from the decision:
‘While this may be the first opportunity to seek significant changes to the terms of modem
awards, a substantive case for change is nevertheless required. The more significant the
change, in terms of impact or a lengthy history of particular award provisions, the more
detailed the case must be. Variations to awards have rarely been made merely on the basis of
bare requests or strongly contested submissions. In order to found a case for an award
variation it is usually necessary to advance detailed evidence of the operation of the award, the
impact of the current provisions on employers and employees covered by it and the likely
impact of the proposed changes. Such evidence should be combined with sound and balanced
reasoning supporting a change. Ultimately the Commission must assess the evidence and
submissions against the statutory tests set out above, principally whether the award provides a
fair and relevant minimum safety net of terms and conditions and whether the proposed
variations are necessary to achieve the modern awards objective. These tests encompass many
traditional merit considerations regarding proposed award variations.’
140
(emphasis added)
[258] In that matter the Full Bench declined to vary the definition of ‘permanent night work’
for reason of the lack of an evidentiary case, not because of a failure to show ‘some material
change in circumstance’. In declining that variation the Full Bench said:
‘In our view, a matter such as this should be considered in the light of other award provisions
regarding permanent night shift penalties with appropriate adaptations for the nature of the
industry. If an evidentiary case established that the current provisions were inappropriate and
that the matter cannot be conveniently addressed by way of enterprise agreements or the award
flexibility provision, then a case may exist for an appropriate award variation. However, the
case presented fell well short of the detailed review of circumstances that might warrant a
variation. In our view, the variation should not be made.’
141
(emphasis added)
[259] In Re Stevedoring Industry Award 2010 the majority applied the approach set out in
Re Security Services Industry Award 2010
142
and rejected an employer application to reduce
penalty rates. The basis for the majority’s rejection of that application is set out at paragraphs
[156] and [161] of their decision:
‘… the evidence led by the Applicants is inadequate to justify the significant variations to
penalty rates sought, particularly in circumstances where the evidence supports a finding that
there are factors unique to this industry which are relevant when considering the level of
penalty rates in this Award necessary to meet the modern awards objective…
While it is not disputed that the level of penalty rates in this industry are above those in
comparable industries, we are not satisfied that the Applicants have established the case for
their proposed variation to penalty rates or that the variation is necessary to meet the modern
awards objective. In our view, the evidence before us indicates that there are factors unique to
this industry when compared to other industries that work on a 24/7 basis. However, the
Applicants and other parties who appeared before us failed to go the next step and provide
probative evidence which would have enabled us to determine whether the existing or some
other level of penalty rates was appropriate. On such a significant issue, it is just too simplistic
to argue that the level of penalty rates should be reduced in the absence of such probative
evidence and on the basis that the existing level of penalty rates in the Award are above those
applying in other modern awards. We acknowledge that there is an important issue to be tested
here. However, simply showing that the existing level of penalty rates are above those
applying in comparable awards and industries is in our view insufficient, in the absence of
probative evidence, to satisfy us that the Award needs to be varied to meet the modern awards
[2017] FWCFB 1001
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objective. As discussed earlier, the Award achieved the modern awards objective at the time
that it was made and the Applicants have not established that the Award no longer meets that
objective.’143
[260] It is apparent from the above extract that it was the absence of probative evidence that
led to the rejection of the employer claim, not the failure to establish a material change in
circumstances since the award was made.
[261] For completeness we would note that a proposition similar to that advanced by the
Unions in these proceedings was rejected by the majority in the Restaurants 2014 Penalty
Rates decision. We will deal with this decision in more detail later in our consideration of the
application to vary the Restaurant Industry Award 2010, but it suffices to note here that the
majority concluded that the decision of the Member at first instance was attended by
appealable error because the Deputy President adopted ‘a significant change of
circumstances’ as the apparent criterion for variation. The majority held that the adoption of
such a test was not derived from the relevant statutory provisions and accordingly the exercise
of discretion was artificially confined and thereby miscarried.
144
[262] The SDA
145
and United Voice
146
submit that the Restaurants 2014 Penalty Rates
decision was wrong and should not be followed. Those submissions are predicated upon our
acceptance of the Unions’ argument in support of the ‘material change in circumstances test’.
We do not accept the argument put in respect of the ‘material change in circumstances test’,
nor are we persuaded that the views expressed by the majority in the Restaurants 2014
Penalty Rates decision were wrong.
[263] In our view there is no warrant in the text of the section for the importation of a
material change in circumstances test. The Commission’s approach that prima facie modern
awards achieved the modern awards objective at the time that they were made addresses the
point made in the Preliminary Jurisdictional Issues decision that awards made under Part 10A
of the WR Act were deemed to be modern awards for the purposes of the FW Act (and by
implication, consistent with the modern awards objective at that time). The Unions’
proposition would place a constraint on the discretion conferred by s.156(2)(b)(i) which is not
warranted by the terms of s.156 or the relevant statutory context and purpose. The
Commission must assess the evidence and submissions in support of an award variation
against the statutory tests, principally whether the award provides a fair and relevant
minimum safety net of terms and conditions and whether the proposed variation is necessary
in order for the award to achieve the modern awards objective. The proposition advanced by
the Unions would preclude the Commission from varying a modern award where the
Commission was satisfied that the award was not meeting the modern awards objective,
unless there was a material change in circumstances. This would be inconsistent with s.138 of
the FW Act and could not have been intended.
[264] The adoption of the proposed ‘material change in circumstances test’ would obfuscate
the Commission’s primary task in the Review of determining whether the modern award
achieves the modern awards objective. To adopt such a test would be to add words to the text
of s.156 in circumstances where it is not necessary to do so in order to achieve the legislative
purpose. As the plurality (French CJ, Crennan and Bell JJ) observed in Taylor v Owners –
Strata Plan No 11564:
147
[2017] FWCFB 1001
58
‘The question whether the court is justified in reading a statutory provision as if it contained
additional words or omitted words involves a judgment of matters of degree. That judgment is
readily answered in favour of addition or omission in the case of simple, grammatical, drafting
errors which if uncorrected would defeat the object of the provision. It is answered against a
construction that fills “gaps disclosed in legislation” or makes an insertion which is “too big,
or too much at variance with the language in fact used by the legislature”.’
148
(citations
omitted)
[265] In the present case, there is no basis for the introduction of additional requirements or
conditions on the exercise of the discretion in s.156(2)(b)(i) which might have been, but
which have not been, enacted.
149
[266] The adoption of the proposed test would also be an unwarranted fetter on the exercise
of what the legislature clearly intended would be a discretionary decision. As Bowen LJ
observed in Gardner v Jay
150
:
‘When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any
indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is
a mistake to lay down any rules with a view to indicating the particular grooves in which the
discretion should run, for if the Act or the Rules do not fetter the discretion of the Judge why
should the court so do.’
151
[267] For the same reasons we reject the ‘economic unsustainability test’ advanced by the
ACTU. There is no proper legislative basis for such a test and to adopt it would be an
unwarranted fetter on the discretion conferred by s.156(2)(b)(i).
[268] For completeness we record our agreement with the point advanced by the Australian
Industry Group (Ai Group) in its submission in reply
152
that the variation of a modern award
may be warranted if it was established that there was a ‘material change in circumstances’
since the modern award was made, but the establishment of such a change is not a condition
precedent to the variation of a modern award in the Review.
3.5 Summary
[269] The following general propositions apply to the Commission’s task in the Review:
1. The Commission’s task in the Review is to determine whether a particular
modern award achieves the modern awards objective. If a modern award is not
achieving the modern awards objective then it is to be varied such that it only
includes terms that are ‘necessary to achieve the modern awards objective’
(s.138). In such circumstances regard may be had to the terms of any proposed
variation, but the focal point of the Commission’s consideration is upon the
terms of the modern award, as varied.
2. Variations to modern awards must be justified on their merits. The extent of the
merit argument required will depend on the circumstances. Some proposed
changes are obvious as a matter of industrial merit and in such circumstances it
is unnecessary to advance probative evidence in support of the proposed
variation.
153
Significant changes where merit is reasonably contestable should
[2017] FWCFB 1001
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be supported by an analysis of the relevant legislative provisions and, where
feasible,
154
probative evidence.
3. In conducting the Review it is appropriate that the Commission take into
account previous decisions relevant to any contested issue. For example, 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. The
particular context in which those decisions were made will also need to be
considered.
4. The particular context may be a cogent reason for not following a previous Full
Bench decision, for example:
the legislative context which pertained at that time may be materially
different from the FW Act;
the extent to which the relevant issue was contested and, in particular, the
extent of the evidence and submissions put in the previous proceeding will
bear on the weight to be accorded to the previous decision; or
the extent of the previous Full Bench’s consideration of the contested issue.
The absence of detailed reasons in a previous decision may be a factor in
considering the weight to be accorded to the decision.
[270] We note that the significance of historical context applicable to some of the modern
awards which are the subject of these proceedings is a matter of contention between the
parties. We deal with those disputes later in our decision.
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[2017] FWCFB 1001
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4. Award Modernisation and the Transitional Review
4.1 Overview
[271] As mentioned in Chapter 3, the Commission’s task in the Review is to determine
whether a particular modern award achieves the modern awards objective. In addressing that
task, it is appropriate that we take into account previous decisions relevant to any contested
issue. We proceed on the basis that prima facie the modern awards before us achieved the
modern awards objective at the time they were made. It is in this context that the award
modernisation process and the subsequent Transitional Review assume some significance.
[272] We use the term ‘award modernisation’ to refer to the processes under Part 10A of the
Workplace Relations Act 1996 (the WR Act). The current 122 modern awards were made
during 2008–09 as a consequence of that process and came into operation on 1 January 2010.
The awards were the subject of further variations (in some cases before they commenced
operation) during the award modernisation process and were then reviewed in a ‘Transitional
Review’ commencing in 2012, under the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 (the TPCA Act).
[273] This chapter sets out some background material on the award modernisation process
that led to the making of the current 122 modern awards, including the modern awards which
are the subject of these proceedings. We also set out some material in relation to the
Transitional Review which followed the award modernisation process. The background
relevant to the particular awards that are the subject of this decision are summarised in the
various chapters dealing with those awards.
4.2 Award modernisation
[274] The award modernisation process was initiated by a request by the Minister for
Employment and Workplace Relations on 28 March 2008, pursuant to s.576C(1) of the WR
Act). The Ministerial Request provided the framework and overarching timetable for the
award modernisation process.
[275] Following the Ministerial Request, the then President issued a statement
155
which
attached a ‘Draft List of Priority Industries’ and called for submissions as to which industries
should be dealt with first in the process (the ‘priority industries’). The Award Modernisation
Full Bench comprising seven Members then dealt with all award modernisation matters
between 2008–09. In determining the priority industries the Award Modernisation Full Bench
took a number of factors into consideration, including the size and importance of the industry,
an assessment of the dimensions of the modernisation exercise in each case, the views of the
parties and the desire to include industries from across the spectrum of the economy.
156
The
hospitality and retail industries were included in the list of priority industries.
[276] A further Statement issued on 22 July 2008
157
outlined the proposed approach and
timeline for the award modernisation process which, in accordance with the Ministerial
Request, had to be completed by 31 December 2009.
[277] Commission staff prepared lists of federal awards and Notional agreements preserving
State awards (NAPSAs
158
) (which were federal system instruments derived from awards
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previously operating in State systems) to be considered by the Award Modernisation Full
Bench in the making of the modern award(s) in each industry. A comparison was undertaken
of the range of entitlements under the key federal awards and NAPSAs in each industry. This
analysis was published on the Australian Industrial Relations Commission (AIRC) website
159
in a series of spreadsheets setting out provisions including wage rates, hours of work, penalty
rates and overtime.
[278] After the determination of the priority industries, the remaining industries were
divided into three further tranches and each generally followed a four step process:
(i) parties were invited to make initial written submissions and/or file parties’
draft awards, followed by oral hearings regarding the scope and content of
proposed awards;
(ii) exposure drafts were prepared by the Commission and published for comment;
(iii) further written and oral submissions were made regarding the exposure drafts;
and
(iv) the awards were issued in ‘final form’.
[279] The Ministerial Request stated that one of the objectives of the award modernisation
process was to reduce the number of awards operating in the workplace relations system.
160
Consistent with that objective, the Full Bench initially proposed only one award in the
hospitality industry covering accommodation, hotels, pubs, taverns and gaming (including
casinos); restaurants and catering; and clubs. On 20 June 2008, in response to the parties’
proposals to create four separate modern awards in the hospitality industry, the Award
Modernisation Full Bench stated:
‘… we think the proposals for a split into three or more awards have the potential for significant
overlap and duplication. At the level of the safety net it may be difficult to justify the creation
of four separate modern awards if the peculiar circumstances of each part of the industry could
be dealt with satisfactorily by minor modifications to some of the terms of one industry
award.’
161
[280] A Statement was issued on 12 September 2008
162
by the Award Modernisation Full
Bench which confirmed its intention to create a single Retail award (covering general retail;
fast food; community pharmacies; and hair and beauty), but decided that while the Hospitality
award would cover restaurants it would no longer cover employers and employees in
registered and licensed clubs. The Clubs sector was deferred to Stage 3.
[281] Further submissions were made regarding the exposure drafts for the priority
industries. A decision was issued on 19 December 2008 with a single ‘final’ award for the
hospitality industry (including restaurants), however a later amendment to the Ministerial
Request led to the making of a separate Restaurant Award in Stage 4.
[282] In the 19 December 2008 decision the Award Modernisation Full Bench stated that it
was difficult to address the disparate provisions across the various segments of the retail
industry without significant changes to the safety net
163
(an earlier statement
164
had identified
118 awards operating in the Retail sector across Australia). Accordingly, 4 separate retail
awards were made covering general retail; fast food; pharmacies and hair and beauty. As a
result of the late disaggregation of the proposed general retail award, no exposure drafts were
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published for comment for the separate modern awards covering the fast food and pharmacy
industries. We deal with the background to these modern awards in Chapters 7.5.2 and 8.3.2.
[283] In determining the final provisions in each modern award the Full Bench generally
adopted the terms and conditions in the preponderance of pre-reform instruments:
‘The consolidated request also provides that the process is not intended to disadvantage
employees or increase costs for employers – objectives which are potentially
competing. The content of the awards we have formulated is a combination of existing
terms and conditions in relevant awards and existing community standards. In order to
minimise disadvantage to employees and increases in costs for employers we have
generally adopted terms and conditions which have wide application in the existing
awards in the relevant industry or occupation. However the introduction of modern
awards applying across the private sector in place of the variety of different provisions
in the Federal and State awards inevitably means that some conditions will change in
some States. Some wages and conditions will increase as a result of moving to the
terms which apply elsewhere in the industry. Equally some existing award entitlements
will not be reflected in the applicable modern award because they do not currently
have general application.
The creation of modern awards which will constitute the award elements of the safety
net necessarily involves striking a balance as to appropriate safety net terms and
conditions in light of diverse award arrangements that currently apply. It is in that
context that the formulation of appropriate transitional provisions arises.’
165
[284] To mitigate the impact of modern awards on employers and employees the Award
Modernisation Full Bench determined that modern awards should contain transitional
provisions to phase in changes to minimum wage rates, loadings, penalties and shift
allowances over a period of up to five years. These transitional provisions were outlined in the
decision of 2 September 2009
166
. Broadly speaking, variations to minimum wages, loadings
penalties and allowances were implemented in equal increments between 1 July 2010 and 1
July 2014.
[285] It should be noted that while the introduction of modern awards increased penalty
rates payable by employers in some jurisdictions, for many employers penalty rates remained
constant, and for some the modern award provided lower penalty rates (e.g. Cafes and
Restaurants (South Australia) Award provided a penalty of 200 per cent for working on a
Sunday compared to 150 per cent under the modern award
167
). Further, some modern awards
restrict when penalty rates apply, relative to the position in pre modernisation instruments. For
example, the Cafes and Restaurants (South Australia) Award provided that the 10 per cent
penalty for working in the evening commenced at 6.00 pm rather than 10.00 pm under the
modern award
168
. A comparison of penalty rates in certain pre modernisation instruments with
the terms of the relevant modern awards rates is set out at Attachment C.
4.3 Transitional Review 2012
[286] The TPCA Act required Fair Work Australia (the predecessor tribunal to the
Commission) to conduct a review of all modern awards
169
as soon as practicable after
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1 January 2012 (the Transitional Review). The legislative context for the Transitional Review
is principally set out in Item 6 of Schedule 5 of the TPCA Act:
“6 Review of all modern awards (other than modern enterprise awards and State
reference public sector modern awards) after first 2 years
(1) As soon as practicable after the second anniversary of the FW (safety net provisions)
commencement day, FWA must conduct a review of all modern awards, other than modern
enterprise awards and State reference public sector modern awards.
Note: The review required by this item is in addition to the annual wage reviews and 4 yearly
reviews of modern awards that FWA is required to conduct under the FW Act.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems arising
from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right.
However, this does not prevent FWA from reviewing 2 or more modern awards at the same
time.
(3) FWA may make a determination varying any of the modern awards in any way that
FWA considers appropriate to remedy any issues identified in the review.
Note: Any variation of a modern award must comply with the requirements of the FW Act
relating to the content of modern awards (see Subdivision A of Division 3 of Part 2-3 of the
FW Act).
(4) The modern awards objective applies to FWA making a variation under this item, and
the minimum wages objective also applies if the variation relates to modern award minimum
wages.
(5) FWA may advise persons or bodies about the review in any way FWA considers
appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of functions
and powers of FWA) has effect as if subsection (2) of that section included a reference to
FWA’s powers under subitem (5)”.
[287] Item 6(1) of Schedule 5 to the TPCA Act provides a review must be conducted of all
modern awards (other than modern enterprise awards and State reference public sector
modern awards) as soon as practicable after 1 January 2012 (being the second anniversary of
the Fair Work (Safety Net Provisions) commencement day). Item 6(2) provides that in
conducting the Transitional Review the Tribunal must consider two questions:
(a) whether modern awards achieve the modern awards objective in s.134 of the Fair
Work Act 2009 (the Act); and
(b) whether modern awards are operating effectively, without anomalies or technical
problems arising from the Part 10A award modernisation process.
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[288] The Transitional Review commenced in early 2012 and the scope of that review was
the subject of a Full Bench decision issued on 29 June 2012
170
(Re Modern Awards Review
decision). The Full Bench concluded that the Transitional Review was quite separate from,
and narrower in scope than, the 4 yearly review of modern awards provided for in s.156 of the
FW Act:
‘To summarise, we reject the proposition that the Review involves a fresh assessment of modern
awards unencumbered by previous Tribunal authority. It seems to us that the Review is,
intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act.’
171
[289] Many of the applications made as part of the Transitional Review involved matters
expressly dealt with by the Commission in the award modernisation process. In those
circumstances the need to advance probative evidence in support of an application to vary a
modern award was particularly important as the Transitional Review did not involve a fresh
assessment of modern awards unencumbered by previous Tribunal decisions. The June 2012
decision stated, in the context of the Transitional Review:
‘… the Tribunal is unlikely to revisit issues considered as part of the Part 10A award
modernisation process unless there are cogent reasons for doing so, such as a significant
change in circumstances which warrants a different outcome.’
172
[290] It is important to recognise that the Transitional Review was dealing with a system in
transition. Item 6 of Schedule 5 formed part of transitional legislation, intended to facilitate
the movement from the WR Act to the FW Act. The Transitional Review was a “one off”
process required by the transitional provisions and conducted a relatively short time after the
completion of the award modernisation process. The fact that the transition to modern awards
was taking place at the time of the Transitional Review militated against the adoption of broad
changes to modern awards as part of that review.
[291] During the Transitional Review the Commission considered a number of applications
to vary penalty rates in modern awards, including those that are the subject of the present
proceeding. The decisions arising from those claims are summarised below.
Modern Awards Review 2012—Penalty Rates
173
[292] In March 2012, several parties lodged applications to vary penalty rate provisions
contained in 5 awards. These applications were dealt with by a single Full Bench. The Full
Bench had before it applications from employer organisations, individual employers and the
SDA. The relevant variations sought were as follows
174
:
Fast Food Industry Award 2010 (AM2014/240 and others)
Alter the span of hours for penalty rates applying to evening work from Monday to
Sunday
Delete clauses which provide for penalty rates on the weekend
Vary clause to specify time at which penalty rate ceases
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General Retail Industry Award 2010 (AM2014/177)
Reduce penalty for Sunday from 200% to 150%
Remove the 25% penalty payment for evening work that presently applies to all
non-casual hours
Hospitality Industry (General) Award 2010 (AM2014/204 and others)
Reduce the Sunday penalty from 175% to 150%
On a public holiday, reduce the penalty from 275% to 250%
[293] Although a number of penalty rate provisions were sought to be varied, the major
focus of both the evidence and the submissions was on the penalty for Sunday work in the
Retail Award and on the weekend and other penalties in the Fast Food Award.
175
[294] Other than the applications relating to the proposed reduction in existing penalty rates
in the Retail Award and Fast Food Award, there was little or no probative evidence dealing
with other aspects of the applications before the Commission.
[295] The essence of the employers’ contentions, particularly in the retail sector, was that
the existing penalty rate provisions resulted in employers engaging fewer employees than they
would prefer to employ on a Sunday, and that the mix of employees engaged on a Sunday, in
terms of age and experience, was less than optimal. It was submitted that if the Sunday
penalty rate was reduced employers would be willing to offer more hours of work on Sundays
and the mix of employees engaged would promote more efficient and productive performance
of work.
[296] The Commission decided that while there was some evidence in support of these
submissions, the evidence was far from compelling. In rejecting the substantive claims, the
Full Bench commented that:
‘There is a significant ‘evidentiary gap’ in the cases put. It is particularly telling that there is no
reliable evidence regarding the impact of the differing Sunday (or other) penalties when
applied upon actual employer behaviour and practice. This is a most unfortunate omission
given that the transitional provisions, which rely upon the differing NAPSA entitlements,
provide an opportunity for evidence to be led from employers operating in multiple States to
provide these comparisons. There is also no reliable evidence about the impact of the existing
differential Saturday and Sunday penalties upon employment patterns, operational decisions
and business performance.
We are not persuaded that a sufficient case has been made out to warrant varying the relevant
awards in the manner proposed by the employers. While aspects of the applications before us
are not without merit - particularly the proposals to reassess the Sunday penalty rate in light of
the level applying on Saturdays - the evidentiary case in support of the claims was, at best,
limited.
The 4 yearly review of these awards is to commence in 2014. That review will be broader in
scope than the Transitional review and will provide an opportunity for the issues raised in
these proceedings to be considered in circumstances where the transitional provisions relating
to the relevant awards will have been fully implemented. In the event that the claims before us
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are pressed in the 4 yearly review we would expect them to be supported by cogent evidence.
We would be particularly assisted by evidence regarding the matters referred to above and the
likely impact upon employment levels, the organisation of work and employee welfare of any
change in the penalty rates regimes.’
176
[297] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue. The extent
of the evidence and submissions put in the previous decision may be a factor in considering
the weight to be accorded to that decision.
[298] As noted by the Full Bench in the Modern Awards Review 2012 – Penalty Rates
decision, the evidentiary case presented in support of the various applications before it ‘was,
at best, limited’. Further, the Full Bench expressly indicated that the 4 yearly review would
provide an opportunity for the issues which had been raised in the Transitional Review
proceedings to be considered ‘in circumstances where the transitional provisions relating to
the relevant awards will have been fully implemented’. In these circumstances the Modern
Awards Review 2012 – Penalty Rates decision has limited relevance to the present
proceedings.
[299] In addition to the Modern Awards Review 2012 – Penalty Rates decision an
application by RCI to vary the Restaurant Industry Award 2010 was also considered during
the Transitional Review. RCI’s application was rejected at first instance.
177
Permission to
appeal was granted and, by majority, the Appeal bench decided to reduce the Sunday penalty
rates for casual employees engaged at classification levels 1 and 2, from 175 per cent to 150
per cent (including the 25 per cent casual loading). The essence of the majority’s reasons for
providing for differential Sunday penalty rates is set out at paragraph 154 of the decision:
‘Although a 50% Sunday penalty rate is generally appropriate for employees under the
Restaurant Award, for transient and lower-skilled casual employees working mainly on
weekends, who are primarily younger workers, the superimposition of the casual loading of
25% in addition to the 50% penalty tends to overcompensate them for working on Sundays and
is more than is required to attract them for work on that day. In that respect, the Restaurant
Award is not meeting the modern awards objective in s.134 of the FW Act.’
178
[300] We deal with the Restaurants 2014 Penalty Rates decision in more detail in Chapter
7.4.5.
[301] The significance of the historical context applicable to some of the modern awards
which are the subject of these proceedings is a matter of contention between the parties. We
deal with the relevant background to the modern awards before us at Chapters 7.2.2, 7.3.2,
7.4.2, 7.5.2, 8.2.2 and 8.3.2.
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5. Submissions: Overview
5.1 Principal parties
[302] This section briefly describes the principal parties in these proceedings. For this
purpose we have characterised an employer association as a ‘principal party’ if they have
made an application to vary one or of the more modern awards before us. Tables 1 and 74 set
out the various claims before us. The principal employer parties were:
the Australian Hotels Association and the Accommodation Association of Australia
(the Hospitality Employers);
Clubs Australia Industrial (CAI);
Australian Business Industrial and the New South Wales Business Chamber
(jointly, ABI);
Restaurant and Catering Industry Australia (RCI);
the Australian Industry Group (Ai Group);
the Australian Retailers Association (ARA), the National Retail Association (NRA)
and the Master Grocers Association (MGA) (collectively, the Retail Employers);
and
the Pharmacy Guild of Australia (PGA).
[303] The NRA was party to both a joint application with the other Retail Employers, to
vary the General Retail Industry Award 2010 and made a separate application to vary the Fast
Food Industry Award 2010. We only refer to the NRA in instances where it was acting
separately, rather than in concert with the other Retail Employers. Some uncertainty remains
as to the exact nature of the NRA’s role in these proceedings. While the NRA filed a draft
determination on 13 February 2015 outlining the changes it sought to the Fast Food Award,
179
its final written submissions noted that:
‘At the outset of these proceedings, the National Retail Association (“NRA”) sought to vary
the weekend and public holiday penalty rates in relation to the Fast Food Industry Award 2010
(“Fast Food Award”). However, because of similar claims having also been filed by other
employer parties and in order to avoid duplication, the NRA determined that it would be more
practical for it to adopt a supporting role in relation to the claims for the reduction of Sunday
penalties in the Fast Food Award and to act as an interested party in these proceedings.’
180
[304] The Commission published a draft summary of the claims before the Full Bench and
directed that corrections or amendments to that summary be filed in the Commission’s
registry.
181
The draft summary included the NRA’s proposal, and the NRA did not advise the
Commission that this was incorrect. A final version of the summary of claims was
subsequently published by the Commission.
182
[305] As it is unclear exactly what the NRA means when it states that its role will be ‘to act
as an interested party’ and, given the NRA did not dispute the accuracy of the Commission’s
summary, we have proceeded on the basis that the NRA is still an active party to these
proceedings and is seeking the variations outlined in the summary of claims published by the
Commission.
[306] We also note that ACCI supported the applications advanced by ABI and joined in
ABI’s submissions.
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[307] The claims of the principal employer parties were opposed by the Shop, Distributive
and Allied Employees Association (SDA) and United Voice. The Association of Professional
Engineers, Scientists and Managers, Australia (APESMA) and the Australian Council of
Trade Unions (ACTU) made submissions in support of the positions put by the SDA and
United Voice. APESMA called one lay witness in relation to the Pharmacy Industry Award
2010, and the ACTU called one expert witness, Professor Markey
183
to give evidence in
response to the expert evidence by Ms Lynne Pezzullo.
184
5.2 Productivity Commission Inquiry Report: Workplace Relations Framework
5.2.1 Admissibility and Overview
[308] The Productivity Commission Inquiry Report: Workplace Relations Framework (the
PC Final Report) was published by the Productivity Commission on 30 November 2015
following an inquiry into the ‘Workplace Relations Framework’ arising from a request made
by the Commonwealth Government pursuant to Parts 2 and 3 of the Productivity Commission
Act 1998 (Cth). The terms of reference for the Productivity Commission inquiry are set out at
Attachment D.
[309] Ai Group sought to tender the PC Final Report in totality, for completeness, but only
sought to rely on Chapters 9, 10, 11, 12, 13, 14 and 15 and Appendix F of that report. These
Chapters and the Appendix deal with, among other things, penalty rates for ‘long hours and
night work’ and the ‘level of weekend penalty rates’. They also include data and information
about Australia’s social, working and consumer demographics, as well as expressing views
about the appropriate level of penalty rates in Australian workplaces. Ai Group’s application
was supported by a number of other employer parties (RCI, PGA, ARA, NRA, MGA and
ABI) and opposed by the SDA and United Voice.
[310] In a decision
185
issued on 12 February 2016 we admitted Chapters 9, 10, 11, 12, 13, 14
and 15 and Appendix F of the PC Final Report as part of the common evidence in these
proceedings, noting that:
‘The PC Final Report contains information and discussion that is properly regarded as
evidentiary in nature and some elements that should properly be considered as submissions. It
contains considerable factual material based upon sources that are also set out in the report.
These matters are relevant to the factual context for this Review. The report also contains the
views of the Productivity Commission, including specific recommendations that it makes to
the Commonwealth Government. To the extent that the Productivity Commission comments
upon some of the evidence that has been presented us as part of this Review and expresses its
views about what we should do as a result of this Review these observations are in the nature
of submissions, rather than evidence, and will be considered as such by us. We note that to the
extent that the PC Final Report considers the expert evidence given in these proceedings the
employer parties place no reliance on such consideration.’
186
[311] Four points may be made about the basis upon which the PC Final Report has been
admitted:
(i) The Employer parties did not seek to have the PC Final Report treated as expert
opinion evidence and accordingly it was not admitted on that basis.
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(ii) The Employer parties place no reliance on those aspects of the PC Final Report which
considers the expert evidence given in these proceedings.
(iii) The opinions expressed by the Productivity Commission as to the appropriateness of
current penalty rates will be treated as submissions, not evidence.
(iv) The PC Final Report contains factual material and data that is relevant to the review of
penalty rates in the awards before us. We refer to this material in more detail in
Chapter 6.
[312] Penalty rates for long hours and night work are considered in Chapter 9 and weekend
penalty rates are considered in Chapters 10, 13, 14, 15 and Appendix F of the report. Chapters
11 and 12 dealt with the shift to a 7 day consumer economy and the social effects of weekend
work.
[313] The consideration of penalty rates in the PC Final Report was limited to penalty rates
that apply to the hospitality, entertainment, retail, restaurant and café industries, referred to as
the HERRC industries in the report. While acknowledging that there are good reasons to take
different approaches to different industries, the Productivity Commission report suggested
that the HERRC industries have some distinctive features in terms of their business
environments, labour market and employees. The Productivity Commission explains the
rationale for focussing on the HERRC industries, as follows:
‘… the appropriate level for regulated penalty rates for weekend work — particularly on
Sundays in a number of discretionary consumer service industries — has become a highly
contested and controversial issue. The industries of greatest concern are hospitality,
entertainment, retail, restaurants and cafes (HERRC). These are industries where consumer
expectations of access to services has expanded over time so that the costs of penalty rates
affect consumer amenity in ways they did not when penalty rates were first introduced. Such
industries are also important sources of entry-level jobs for, among others, relatively unskilled
casual employees and young people (particularly students) needing flexible working
arrangements. The provision of discretionary, and therefore demand responsive, services on
weekends is less frequent in most other industries, which is a key (but not only) rationale for a
focus of concerns on the HERRC industries. It is notable that the FWC is currently also
considering appropriate penalty rates in awards, and that their focus almost exactly matches
the group of industries that the Productivity Commission has identified as the most relevant.’
187
(footnotes omitted)
[314] The modern awards considered by the Productivity Commission to be applicable to the
HERRC industries are:
Restaurant Industry Award 2010;
Registered and Licensed Clubs Award 2010;
General Retail Industry Award 2010;
Hospitality Industry (General) Award 2010;
Amusement, Events and Recreation Award 2010;
Fast Food Industry Award 2010;
Pharmacy Industry Award 2010; and
Hair and Beauty Industry Award 2010.
188
[315] In this part of our decision we consider those aspects of the PC Final Report dealing
with weekend penalty rates, public holidays and penalty rates for night work. As mentioned,
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Chapters 11 and 12 of the PC Final Report deal with the shift to a 7 day consumer economy
and the social effects of weekend work. We refer to some of that material in Chapter 6 of this
decision.
5.2.2 Weekend penalty rates
[316] In relation to weekend penalty rates the central recommendation in the PC Final
Report (Recommendation 15.1) is that the Fair Work Commission should, as part of its
current award review process:
set Sunday penalty rates that are not part of overtime or shiftwork at the higher rate
of 125 per cent and the existing Saturday award rate for permanent employees in the
hospitality, entertainment, retail, restaurant and café industries;
set weekend penalty rates to achieve greater consistency between the above
industries, but without the expectation of a single rate across all of them; and
investigate whether weekend penalty rates for casuals in these industries should be
set so that casual penalty rates on weekends would be the sum of the casual loading
and the revised penalty rates applying to permanent employees, with the principle
being that there should be a clear rationale for departing from this.
189
[317] The PC Final Report concluded that penalty rates for weekend work that does not
involve shift or overtime work are justified and ‘a legitimate and continuing feature of the
safety net for all non-standard hours across all industries’.
190
[318] We deal with each of the proposed changes below.
(i) Reduced rates for Sunday work
[319] It is important to appreciate that the Productivity Commission’s recommendations in
respect of the reduction of Sunday penalty rates are confined to the HERRC industries. In
particular the PC Final Report states:
‘There is no case for common penalty rates across all industries The Commission is not
recommending a reduction in the Sunday penalty rates beyond HERRC. Regulated penalty
rates as currently constructed for essential services and many other industries are justifiable.
The original justifications have not altered materially: they align with working arrangements
that often involve rotating shifts across the whole week, are not likely to reduce service
availability meaningfully, are commensurate with the skills of the employees, and are unlikely
to lead to job losses.’
191
[320] The arguments advanced in the PC Final Report in support of the reduction of Sunday
penalty rates in the HERRC industries fall into three broad categories:
the asocial impacts of Sunday work are similar to working on Saturdays;
consumer benefits; and
employment effects.
[321] The Productivity Commission acknowledges that lower Sunday penalty rates will
reduce the income of existing employees in the HERRC industries.
192
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[322] We deal with each of these matters below.
(a) Sunday vs Saturday work
[323] In Chapter 13 of the PC Final Report, the Productivity Commission deals with the
level of weekend penalty rates and observes that:
‘The present Sunday rates for these industries seem to be much less clearly justified either on
economic grounds or according to community norms compared with other working times …
the social disabilities associated with weekend work — for which there is sound evidence
(chapter 12) — does not strongly support the large gap between penalty rates on Saturdays and
Sundays.’
193
[324] The social effects of weekend work are dealt with in Chapter 12 of the PC Final
Report and we refer to some of that material in Chapter 6 of this decision.
(b) Consumer benefits194
[325] The Productivity Commission contends that consumers (including tourists) would be
major beneficiaries for the proposed reduction in Sunday penalty rates in the HERRC
industries:
‘With lower Sunday penalty rates, consumers would gain access to more services for longer
hours and with higher staffing ratios. Sunday surcharges would be likely to disappear, and
average prices for consumer services throughout the week would be likely to be a little
lower.’
195
[326] The Productivity Commission also notes that there would be potential productivity
improvements from reform:
‘… as the fixed costs of running a business would be spread over greater opening times and
demand … [and that] [b]etter capital utilisation would put further downward pressure on
average unit costs and prices. Moreover, the lower labour costs associated with reduced
penalty rates may permit the payment of targeted incentive based payments that motivate staff
and enhance productivity… All of these will benefit consumers.’
196
(c) Employment effects197
[327] The Productivity Commission concludes that there would be significant employment
effects associated with its proposed reduction in Sunday penalty rates:
‘Given the characteristics of the demand for HERRC goods and services, and the high labour
shares in these industries (chapter 11 and table 15.1 in chapter 15), it seems very likely that
there would be considerable growth in hours worked and, to a lesser extent, employment on
Sundays from lowering penalty rates on these days. If a labour demand elasticity for Sunday of
-0.6 (a hypothetical, but probably conservative estimate) were to apply, the anticipated
increase in hours from say a 33 per cent reduction in wage rates would be around 27 per cent.
The change would also be likely to reduce the trend towards capital substitution in the relevant
industries (noting that the scope for automation and self-service is rising). A shift in total hours
of this magnitude would take the form of greater hours for existing staff and hiring of new
employees. The mix is unclear and would depend on the characteristics of labour supply and
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demand for would-be employees and existing employees in each sub-market.’
198
(footnotes
omitted)
(d) The impact on the earnings of existing employees199
[328] The Productivity Commission observes that the degree to which the labour earnings
change for people currently employed on Sundays depends on the:
new regulated Sunday penalty rate for each relevant award;
extent to which some negotiated weekend wages might lie above a new lower
penalty rate for Sundays;
timing of new enterprise agreements, as any penalty rates in existing agreements
would continue to apply;
relative proportion of an employee’s time spent working on Sundays; and
extent to which lower wage rates induced greater demand for labour on Sundays.
200
[329] As to the last point, the Productivity Commission concludes that, in general, most
existing employees would probably face reduced earnings as it is improbable that, as a group,
existing workers’ hours on Sundays would rise sufficiently to offset the income effects of
penalty rate reductions.
201
[330] While acknowledging that lower Sunday penalty rates will reduce the income of
existing employees in the HERRC industries, the Productivity Commission notes that:
only the minority of HERRC employees work only on weekends, which reduces the
importance of lower wage rates on Sundays;
the reduction in wage rates for casual employees is less than for permanent
employees because of existing anomalies in the interaction of casual loadings and
premium rates for Sunday work;
the net effect would be lower given offsets through the tax and transfer system; and
many HERRC employees do not come from low paid households. Many are in
households with two other income earners.
202
(ii) Greater consistency in weekend penalty rates
[331] There is a wide disparity in the weekend penalty rates in the HERRC industries, as the
Productivity Commission notes in Table 10.1 (reproduced below as Table 4).
203
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Table 4
Penalty rate arrangements for selected modern awards
Permanent
Casual
Percentage of permanent
base rate
Percentage of permanent
base rate
Award applying in
2015
Base
rate
Sat Sun Base
rate
Sat Sun
% % % % % %
Restaurant Industry 100 125 150 125 150 150
(175)
Registered and
Licensed Clubs
100 150 175 125 150 175
General Retail Industry 100 125 200 125 135 200
Hospitality Industry
(General)
100 125 175 125 150 175
Amusement Events and
Recreation
100 100 150 125 125 175
Fast Food Industry 100 125 150 125 150 175
Pharmacy Award 100 125, 150
200
200 125 150
175, 225
225
Hair and Beauty 100 133 200 125 133 200
[332] The Productivity Commission states that there are grounds for greater consistency
(short of uniformity) between penalty rates across the HERRC industries, noting that
‘Differences in rates create compliance costs and uncertainty for employers and
employees’.
204
(iii) Weekend penalty rates for casuals
[333] The PC Final Report made reference to the interaction of penalty rates and casual
loadings and concluded:
‘In some awards, penalty rates for casual employees fail to take into account the casual loading,
which distorts the relative wage cost of casuals over permanent employees on weekends (and
particularly Sundays). The wage regulator should reassess casual penalty rates on weekends,
with the goal of delivering full cost neutrality between permanent and casual rates on
weekends, unless clearly adverse outcomes can be demonstrated. This would imply that casual
penalty rates on weekends would be the sum of the casual loading and the penalty rates
applying to permanent employees.’
205
[334] The Productivity Commission recommended that modern awards be amended to
ensure that casual loadings are applied to penalty rates in the same way across all awards. It
stated:
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‘For neutrality of treatment, the casual loading should be added to the penalty rate of a
permanent employee when calculating the premium rate of pay over the basic wage rate for
weekend work. This would make an employer indifferent, at the margin, between hiring a
permanent employee over a casual employee. It would also be consistent with the desirability
of ‘equal pay for equal’ work.’
206
[335] The PC Final Report sets out the three methods currently used for determining the rate
of pay for casual employees in the modern awards relevant to the penalty rates case. Each
method arrives at a different rate of pay for casual employees during times when weekend
penalty rates apply. The methods are set out below.
the ‘default’ approach where the casual loading is always set as a percentage of the
ordinary/base wage (and not the ordinary wage plus the penalty rate). The rate of
pay for a casual employee is therefore always 25 percentage points above the rate of
pay for non-casual employees;
casual loading applies to the rate of pay once penalty rates are applied to the
ordinary/base wage; and
in some instances, casual employees do not receive a loading as well as the penalty
rate, so their rate of pay on weekends is the same as permanent employees.
[336] The casual loading for weekend work for the modern awards relevant to the penalty
rates case is determined using different methods across the modern awards and, in some
cases, different methods within the same modern award. These are described below:
Fast Food Industry Award 2010: the casual loading applies to the rate of pay once
penalty rates are applied on Saturdays. The casual loading is applied as per the
‘default’ method on Sundays.
Restaurant Industry Award 2010: the casual loading is applied as per the ‘default’
method on Saturdays and Levels 3 to 6 on both Saturdays and Sundays; there is no
casual loading for Levels 1 and 2 on Sundays (the penalty rate is inclusive of casual
loading).
General Retail Industry Award 2010:
207
a casual loading of 10 per cent is applied
per the default approach on Saturdays. No casual loading applies on Sundays (the
penalty rate is inclusive of casual loading).
Registered and Licensed Clubs Award 2010: no casual loading applies on weekends
(the penalty rate is inclusive of casual loading).
Hospitality Industry (General) Award 2010: a casual loading is applied on
Saturdays as per the ‘default’ approach. No casual loading applies on Sundays (the
penalty rate is inclusive of casual loading).
Pharmacy Industry Award 2010: the casual loading is applied as per the ‘default’
approach on both Saturdays and Sundays.
[337] The PC Final Report argued that, in order for employers to be indifferent or neutral (at
the margin) in choosing between a permanent and casual employee,
208
the ‘default’ method
should be preferred. As we observe later, the casual loading is paid to compensate casual
employees for the nature of their employment and the fact that they do not receive the range
of entitlements provided to full-time and part-time employees, such as annual leave,
personal/carer’s leave, notice of termination and redundancy benefits.
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[338] For our part we would observe that the ‘default’ approach is also consistent with one
of the considerations we are required to take into account in determining whether a modern
award satisfies the modern awards objective, in that it provides a casual loading that is simple
and easy to understand, consistent with s.134(1)(g) of the FW Act.
5.2.3 Penalty rates for long hours and night work
[339] Chapter 9 of the PC Final Report focuses on penalty rates for long hours and night
(and associated shift) work. The Productivity Commission’s observations about night work
penalties are relevant to the current proceedings as there are applications to vary the late night
penalties in a number of the modern awards before us.
[340] In 2013–14 almost 1.2 million Australian employees (about 11 per cent of employees)
reported working schedules likely to involve night work (including regular night shifts and
rotating shifts).
209
The incidence of night work varies substantially across industries ranging
from 38.8 per cent in Accommodation and food services and 21.1 per cent in Retail trade to
5.3 per cent in Financial and insurance services.
210
[341] The Productivity Commission comments on the adverse health effects of night
work,
211
and concludes:
‘There is strong evidence that night work has adverse health costs. Moreover, these
costs are unlikely to be factored into freely negotiated wages given the imbalance of
market power between many employers and employees. Given that night shift loadings
likely reduce the incidence of night work, and compensate employees for the
additional costs associated with working these hours, there is a case for a regulated
wage premium associated with night work.’
212
5.2.4 Public holiday penalty rates
[342] The Productivity Commission recommended that: ‘The Fair Work Commission should
not reduce penalty rates for existing public holidays’,
213
noting that, by definition:
‘… genuine public holidays are intended to serve a special community role and, as such,
there are strong grounds to limit the expectation that they are for working. In that
sense, the original concept of deterrence continues to have relevance’.
214
5.2.5 Conclusion
[343] The PC Final Report contains useful references and research material that is of
assistance to us in our present task.
[344] We observe that the Productivity Commission considered reports and materials
authored by some of the expert witnesses who gave evidence in this matter. However, unlike
the Productivity Commission, the Commission has had the benefit of having that material
challenged through the process of expert witnesses giving evidence and being subject to
cross-examination. Further, the expert witnesses have also given direct evidence in response
to contrary views and this has permitted us to fully consider the competing assumptions and
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approaches underpinning that material. We have also heard the direct evidence of many
business proprietors and employees as part of this Review.
[345] Further, whilst the Productivity Commission assessed various considerations, it was
not required to apply the particular statutory considerations which we are obliged to apply in
the Review. The Productivity Commission’s role in the present context was substantially to
inquire and make policy recommendations to Government
215
and this is to be contrasted with
the determinative role of this Commission. In that regard, in our earlier decision concerning
this matter we noted that the PC Final Report was not advanced by the employer parties as
expert evidence.
216
This does not mean that the Productivity Commission is not comprised of
experts, rather, the authors of the PC Final Report were not called to give evidence in relation
to the matters before us and the parties advancing the report as part of their respective cases
did not do so on that basis.
[346] In sum, we have had regard to the relevant material and propositions published by the
Productivity Commission as part of the PC Final Report in reaching our findings in these
matters, subject to the evidence before the Commission and the statutory considerations
bearing upon our present task.
[347] For reasons outlined in Chapter 9 of our decision, we do not consider that the
observations of the Productivity Commission regarding public holidays take account of the
impact of s.114 of the FW Act upon the operation of public holidays under the relevant
modern awards.
[348] We also note that the Productivity Commission treated all of the industries under its
HERRC grouping on a common basis. As would be clear from our decision, whilst we have
grouped the modern awards in the hospitality and retail industries together for convenience,
we have considered each of the awards in their own right, consistent with the statutory
directive in s.156(5) of the FW Act,
217
and found that there are some differentiating factors
that bear upon the current issues. These include the composition of the workforce and the
context in which some of the modern awards operate.
5.3 Other Submissions
[349] Some 36 submissions were filed by a range of organisations, community groups, State
and Territory Governments, and other entities. These submissions can be characterised as
either supporting or opposing the claims advanced by the principal employer parties.
5.3.1 Submissions supporting Employer claims
[350] A number of state-based employer associations provided submissions in support of the
claims advanced by the principal employer parties. These associations were: the Chamber of
Commerce and Industry of Western Australia (CCIWA); Chamber of Commerce and Industry
of Queensland (CCIQ) Victorian Chamber of Commerce and Industry (VECCI) and the South
Australian Employers Chamber of Commerce and Industry Inc T/A Business SA (BSA).
[351] CCIWA supports the employer applications to reduce penalty rates in the modern
awards before us. In summary terms CCIWA submits:
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‘… the current penalty rates for Sunday work reflect out-dated cultural norms which
contemplate Sunday as a day of rest and for religious observance, in which work was to be
discouraged.
However, cultural norms have since changed across the bulk of Australian society. While for
large parts of the workforce “Saturdays and Sundays remain a focal point for community and
family interactions”, there is no longer any significant distinction between the way people treat
and view Sundays as opposed to Saturdays.
The changing way in which people spend their leisure time has also increased the demand for
retail and hospitality services on Sundays and public holidays…
the current regime of high penalties for work performed on Sundays and public holidays is
limiting the number of jobs because of the impact it has on the operation of many retail and
hospitality businesses…
For those businesses which do trade, it also impacts upon staffing levels: with many
businesses rostering fewer staff; utilising cheaper less experienced junior staff; choosing to
work the hours themselves; or enlisting the support of family members.
CCIWA members in the retail and hospitality industry have identified that a reduction in these
penalty rates will have a positive impact on their employment decisions, both in term of how
many people they employ and the number of hours offered to staff.’218 (footnotes omitted)
[352] In support of its submissions CCIWA relied extensively on the Productivity
Commission Inquiry Report: Workplace Relations Framework. We deal with that report in
Chapter 5.2.
[353] CCIWA also relies on a survey of its retail and hospitality members. The survey was
undertaken for the purpose of establishing the views of businesses on the impact of penalty
rates. An overview of the survey and the survey results are set out at Appendices A, B and C
to the CCIWA submission. A summary of the survey results is set out at paragraphs 48–58
and 63 of the submission.
[354] As to the impact of a reduction in Sunday penalty rates, CCIWA submits that the
survey results reveal that:
‘If Sunday penalty rates were reduced to the levels sought in these applications 10.5 per cent of
respondents in the retail sector would choose open on Sunday and 31.5 per cent would open
for more hours. In the case of hospitality employers, 15.8 per cent would choose to open and
26.3 per cent would open for more hours on a Sunday.
The respondents also identified that this would generally have a positive impact upon their
employment decisions. Of the retail members, 36.8 per cent identified that they would employ
more staff whilst 21 per cent would opt to roster a staff member instead of working
themselves. Similar level of response was also recorded for hospitality members, with 37.9 per
cent indicating that they would employ more staff, whilst 31 per cent would roster a staff
member instead of themselves.’219
[355] We note that the figures quoted above in respect of the responses of the hospitality
employers are incorrect. The references to 15.8 per cent and 26.3 per cent footnote the
responses to questions 17, 21 and 25 from Appendix C. Survey Question 17 asks: ‘If penalty
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rates were reduced to base rate + 25 % loading on Sundays, what impact would that have on
your opening hours on that day?’ It will be recalled that the extract from CCIWA’s
submissions set out above is prefaced with the words ‘If Sunday penalty rates were reduced to
the levels sought in these applications…’. Contrary to what is suggested in Survey Question
17, in these proceedings the Hospitality Employers are seeking to reduce the Sunday penalty
rate in the Hospitality Industry (General) Award 2010 from 175 per cent to 150 per cent, for
all employees.
[356] The relevant responses are those made to Survey Question 21, which asks: ‘If penalty
rates were reduced to base rate + 50 % loading on Sundays, what impact would this have on
your opening hours on that day?’. There were only 34 responses to this question, as set out
below:
Responses
No. %
Would open Sunday 4 11.76
Would close Sunday 1 2.94
Open for more hours on Sunday 5 14.71
Open for less hours on Sunday 1 2.94
No influence 20 58.82
Other 5 14.71
[357] These results are somewhat curious. For example, 2 of the 34 employers who
responded say that they would close or open for less hours on Sunday if penalty rates were
reduced. Four of the respondents say they would open on Sundays if penalty rates were
reduced. This too is curious, given that of the 49 Hospitality Employers who responded to the
survey, 46 said that they currently regularly trade on Sunday.
220
[358] Almost 60 per cent of the Hospitality Employers who responded to this question said
that the reduction in Sunday penalty rates sought by the Hospitality Employers would have no
influence on Sunday opening hours in their business.
[359] It is not apparent to us how CCIWA arrived at the figures in respect of the responses
from hospitality employers which are in the extract from its submission set out at [354] above.
[360] The SDA submits that we should not consider the survey material contained in
CCIWA’s submission, essentially on the basis that it had not been tendered as evidence and
hence they have not had the opportunity to test it.
221
[361] We note from CCIWA’s written submission of 8 February 2016, and its reply
submission of 1 May 2016, that the survey material was not submitted as evidence: ‘Rather, it
is provided as indicative data on the views and experience of Western Australian employers in
these industries’.
222
[362] Contrary to the SDA’s submission, we propose to consider the CCIWA survey
material, but for the reasons which follow, the survey data is of limited assistance.
[363] The CCIWA survey was conducted online through ‘Survey Monkey’ and sent to 8,500
WA businesses via CCIWA’s weekly e-newsletter. CCIWA only analysed complete
responses from respondents who identified themselves as being in either the retail or
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hospitality industry – there were only 50 such responses from retail businesses and 49 from
hospitality businesses. No information is provided as to the survey response rate among retail
and hospitality businesses.
[364] Given the small number of respondents to the relevant survey questions and the
limited information provided in relation to the survey methodology, response rates and
results, the CCIWA survey data is of limited assistance. It may be regarded as providing some
indicative anecdotal data, rather than anything that can be said to be representative of the
views of retail and hospitality businesses in WA.
[365] The Busselton Chamber of Commerce and Industry (BCCI) made a submission
supporting the submission advanced by CCIWA regarding the impact of the current weekend
and public holiday penalty rates on regional tourism. BCCI submits:
‘In many instances the significant costs associated with engaging staff on Sundays and public
holidays makes it unviable for local businesses to operate on these days. In this situation the
business simply closes. Not only does this negatively impact on the revenue for the business
concerned, but it also translates to reduced employment opportunities for the local
community…
Weekend and public holiday penalty rates currently act as a brake on the development of the
local tourism industry, and in doing so limits employment opportunities for the local
community.’223
[366] The BCCI submission also set out some comments by local businesses about the
impact of the current Sunday and public holiday penalty rates.
224
These businesses are only
identified in a generic way, ‘a café restaurant’, ‘a clothing retailer’ etc., rather than identifying
the specific business. BCCI submits that this material ‘is not intended as evidence, but is
reflective of the general views of many of our members on the impact of weekend and public
holiday penalty rates on local businesses, employees and the broader community’.
[367] We have had regard to this material but accord it little weight as the relevant
businesses were not identified and hence there was no opportunity to test the views expressed.
[368] CCIQ filed 2 submissions, dated 29 June 2015 and 9 November 2015. The June 2015
submission is said to ‘provide high level commentary on the impact of penalty rates on the
hospitality and retail sectors in Queensland’.
225
CCIQ submits that ‘penalty rates need to be
more pragmatic in order to effectively deal with emerging economic, social and demographic
trends facing Australia’s working landscape’.
226
In support of its submission, CCIQ relies on a
survey of Queensland businesses conducted between 11 February and 13 March 2015, ‘to
assess the impact of the FW Act, including penalty rates provisions’ (the CCIQ March 2015
Survey). In addition to the CCIQ March 2015 Survey, CCIQ hosted an ‘Industry Roundtable’
and several consultative forums across regional Queensland, though little detail was provided
in respect of this qualitative material.
[369] CCIQ also relied on the CCIQ March 2015 Survey data in its final submission of
9 November 2015. We summarise that data below.
[370] Around 58 per cent of businesses who responded to the survey said that penalty rates
and public holiday entitlements are a major or critical concern.
227
A higher proportion of retail
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businesses (17 per cent) reported that penalty rates and overtime increased substantially as a
result of the creation of modern awards compared with businesses in other industries (6 per
cent).
228
The majority of responses in retail and other industries reported reduced employment
or operating hours, particularly employment hours.
229
This was more evident among small
retail businesses, while a higher proportion of small hospitality businesses reduced both
employment and opening hours.
230
[371] When asked about reforms to penalty rates, 80 per cent of the responses from
businesses in the hospitality sector and 70 per cent of businesses in retail sector supported the
continued regulation of penalty rates but with reduced loadings.
231
[372] The CCIQ March 2015 Survey reports on the 1,038 responses received and provides a
breakdown by business size and industry. But no information is provided about the number of
businesses contacted to undertake the survey or how the survey sample was constructed. As a
consequence, response rates cannot be calculated and nor can we reach any sensible
conclusions about the representativeness of the survey results. We also note that small
business respondents to the survey appear to have included non-employing businesses.
[373] CCIQ conducted another survey in September 2015 ‘to assess the adequacy of a
number of the proposed recommendations, particularly regarding penalty rates in the retail
and hospitality sectors’ from the Productivity Commission Draft Report. CCIQ reported that
around 28 per cent of those who responded to that survey were from the HERRC industries.
232
Over one quarter of these businesses did not open on Sundays, with the majority (71 per cent)
responding that it was due to the level of penalty rates.
233
[374] Some 62 per cent of the responses from businesses in HERRC industries that already
opened on Sundays said that they would increase their staffing levels if Sunday penalty rates
were reduced to the Saturday rate.
234
[375] The CCIQ September 2015 Survey has the same limitations as the CCIQ March 2015
Survey. Given these limitations, we propose to treat the results as indicative or anecdotal in
character.
[376] We would also observe that the September 2015 survey poses questions predicated on
the equalisation of Saturday and Sunday penalty rates, as proposed by the Productivity
Commission. Yet the claims in respect of the General Retail Industry Award 2010 and the
Hospitality Industry General Award 2010 propose a reduction in Sunday penalty rates, short
of equalisation with the penalty rate for Saturday work.
[377] VECCI and BSA
235
also made submissions supporting the claims filed by ABI in these
proceedings. In addition, VECCI submits:
‘Furthermore, the Victorian Chamber has advocated strongly on behalf of Victorian business
regarding the deleterious effect of State governments gazetting further public holidays which
impose significant additional costs to Victorian business for negligible economic benefit or
productivity gains. As we submitted to the Productivity Commission in the recent review of
the Workplace Relations framework, the cost to pay many of Victoria’s almost 2 million full
time employees not to come to work on the ‘Friday before Grand Final public holiday’ could
reach $543 million.’
236
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[378] A number of regional chambers of commerce and individual businesses also made
submissions in support of ABI’s claims in these proceedings: Bangalow Chamber of
Commerce; Coffs Harbour Deep Sea Fishing Club; Coopers Surf Australia; eGoli Day Spa;
Gosford City Chamber; Mayfield Business Association; the Moonee Beach Tavern & Bottle
Shop and the Yamba District Chamber of Commerce. These submissions, and those made by
VECCI and BSA, have a certain template character in that they all include the following
statement:
‘We have reviewed the written submissions filed on behalf of Australian Chamber of
Commerce and Industry (ACCI), the New South Wales Business Chamber (NSWBC) and
Australian Business Industrial (ABI) in the above proceedings on 2 February 2016.
We understand that ABI and NSWBC have filed claims seeking:
1. to reduce the public holiday penalty rate for full-time and part-time employees
employed under the Restaurant Industry Award 2010 (Restaurant Award) and the
General Retail Industry Award 2010 (Retail Award) from 250% to 200%;
2. to reduce the public holiday penalty rate for casual employees employed under the
Restaurant Award and the Retail Award from 250% to 125% (including the casual
loading);
3. to reduce the Sunday penalty rate for all employees employed under the Retail Award
from 200% to 150% (inclusive of casual loading for casual employees); and
4. to vary the relevant pay rates for employees who receive time off in lieu when they
work a public holiday under the Restaurant Award so that employees would receive
100% of their ordinary pay for working the public holiday, whilst also receiving time
off in lieu.
We support all of these claims.
Based on feedback from our membership, [name of organisation making the submission] has
become aware that the present regime of penalty rates is currently constraining:
(a) the number of hours that our members open;
(b) the number of trading days that our members operate;
(c) the number of employees that our members can hire and keep employed;
(d) the number of hours that our members can offer their employees to work; and
(e) the revenue and profit generated by our members.
If the NSWBC and ABI claims are granted, we envisage that the adverse effects discussed
above would be lessened.’237
[379] The template character of these submissions reduces the weight we attach to them.
[380] The Federal Member for Durack, Ms Melissa Price MP, also made a short submissions
in which she says:
‘I met with some small business owners from Geraldton to discuss issues they face and
a common concern was the complex penalty rate system for employees…
I found that many businesses in the retail and hospitality industries simply do not open
on a Sunday or public holiday due to increased wage costs. This is a concern to me as
I believe in Durack, Sunday and Public Holiday trading is desired by the
constituents.’
238
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[381] The submission refers to a proposal put by a small business owner in Geraldton
involving ‘a change from the current multi-tiered penalty rate system to a two-tiered penalty
rate system one rate for normal hours … then a rate for non-standard hours, including public
holidays’. Ms Price asks that we consider this proposal as part of these proceedings and
submits that the proposal ‘has merit and would result in an increase in business opening hours
and therefore employment in Durack’.
239
[382] No details were provided as to the particular penalties that would operate in the
proposed ‘two-tiered penalty rate system’. Further, to the extent that the proposal seeks a
common penalty rate for all work performed on Saturdays, Sundays and public holidays, that
is not a proposal being advanced by any of the principal employer parties in these
proceedings.
[383] As to the expressed concern about the complexity of the current penalty rate system,
that is a matter we deal with in Chapter 12: Next Steps.
5.3.2 Submissions opposing Employer claims
[384] Some 22 submissions were received in opposition to a reduction in Sunday penalty
rates sought by the principal employer parties. These submissions may be categorised into the
following broad groups:
State and Territory governments;
Church based organisations;
Political entities;
Women’s organisations; and
Other organisations.
(i) State and Territory Governments
[385] The Governments of Victoria, Queensland, South Australia and the ACT all oppose
the reduction of penalty rates.
[386] The Victorian Government submits that:
‘… a change to penalty rates, while providing some financial benefit to business, comes at too
high a price. Many employees face the prospect of losing a significant proportion of their
income. The businesses that will benefit from a lower wages bill may find that people have
less discretionary income to spend on their products. A long-term implication is that further
pressure may be placed on the social security system as low paid workers seek assistance from
the government to make up for their lost wages.’
240
[387] The Appendix to the Victorian Government’s submission contains material about the
impact of the proposed reductions in penalty rates on employees covered by the General
Retail Industry Award 2010; the Restaurant Industry Award 2010; the Fast Food Industry
Award 2010 and the Hospitality Industry (General) Award 2010 (also see Figure 3 on p. 26 of
the submission).
[388] The Queensland Government submits:
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‘Workers in the Hospitality, Restaurant, Retail and related industries are some of the lowest paid
in Australia. These workers rely upon penalty rates to provide the basics for their families and
themselves. The hours they work on evenings, weekends and public holidays have a significant
impact on them and their family. Existing penalty rates go some way to compensate these
workers for giving up this valuable time with their family and friends. This is time the rest of
the community accepts as the norm.
Reducing penalty rates may also have a negative impact on the economy with low income
earners more likely to spend a far greater proportion of their income – including that derived
from penalty rate – on local goods and services. Any reduction in spending in local
Queensland economies – especially in regional communities where businesses are doing it
tough – would have a negative impact.’241
[389] The South Australian Government submits:
‘Penalty rates play a critical role in compensating employees working long or unsociable hours.
Thousands of South Australians rely on penalty rates to make ends meet. Removing or
reducing penalty rates will have a negative impact on South Australian workers and their
families.
It is vitally important that penalty rates are upheld to maintain workers’ take home pay. Many
of those paid penalty rates rely on them financially – to pay their bills, put food on their tables
or pay for theirs or their children’s education. Reducing penalty rates will have the effect of
increasing inequity in Australian society.
Further, reducing penalty rates is likely to have a negative impact on South Australia’s
economy. Our economy is in a state of transition and we face challenges ahead. To reduce the
pay of many South Australians will reduce consumption and serve to exacerbate those
challenges.’242
[390] The ACT Government opposed changing the penalty rate arrangements in the modern
awards under review:
‘Penalty rates have an important and legitimate role in compensating employees and should be
maintained for those working long hours or at unsociable times…
A reduction in penalty rates is effectively asking some of the lowest paid and most vulnerable
workers in our community to take a pay cut.’243
(ii) Church based organisations
[391] The Anglican Church Diocese of Melbourne expresses concern about the proposal to
cut Sunday penalty rates to the level of those applying to Saturday work noting that weekend
penalty rates are a significant part of the income of low paid workers and that Sundays remain
days of special significance:
‘Sunday is a time when we can slow down to the pace of the very young, old, and disabled.
Sunday is most often the day when these vulnerable people are paid attention or are visited or
called. It is a day that resists today’s pervasive fragmentation and social erosion…
Sunday is not just a day for the devout – it’s a day for rest, families, friends, young and old.
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Sunday penalty rates recognise the special nature of Sunday as a shared day of rest for what
should be kept as a minority who miss out for emergency work or economic necessity.’244
[392] A similar submission is made by the Social Issues Committee of the Anglican Church
Diocese of Sydney.
[393] Baptist Churches NSW-ACT, said to represent over 100,000 people, also affirmed its
support for the existing Sunday penalty rates regime:
‘In Australian culture, Sundays are a day for rest, worship, family and community…
Reductions in Sunday penalty rates will increase both time and financial pressure on low-paid
households…
Sunday penalty rates in low-skilled industries such as hospitality and retail allow students,
immigrants, low-paid workers, and people trying to escape poverty to accumulate some
savings or make ends meet. Reducing Sunday penalty rates leaves marginal households more
precarious and makes it harder for people to escape or stay out of poverty…
We do not support any action which increases Sunday trading beyond the current levels.
Despite the employer group rhetoric, plenty of businesses currently open on Sunday.
Reductions in penalty rates will simply transfer wealth from the have nots to the haves.’245
[394] The Burwood-Croydon Uniting Church and the Leichardt Uniting Church also made
submissions supporting the existing Sunday penalty rates regime.
246
[395] The Uniting Church Synod of NSW & ACT calls on the Commission ‘to maintain the
current Australian tradition of compensating workers for being available on Sundays’ and ‘do
not support any action which increases Sunday trading beyond the current levels’.
247
[396] The Justice and Peace Office of the Catholic Archdiocese of Sydney strongly oppose
the Productivity Commission’s recommendation to reduce Sunday penalty rates in the retail
and hospitality industries and submit:
‘We are concerned that the recommendation does not provide a proper balance between the
rights of employers and the rights of employees in several respects. As Christians we are also
troubled by the effort to encroach further on time with family and communities as well as time
for rest, recreation and worship on Sundays…
Reducing penalty rates will punish some of Australia’s already most vulnerable and low-paid
workers.’248
[397] The Justice, Peace and Integrity Creation Commission of the Australia Timor Leste
Carmelite Order, a religious order within the Catholic Church, opposes reduction in Sunday
penalty rates , for similar reasons to those set out above and submits:
‘Sunday, a day of rest and recreation, does remain important for a wholesome social life and
builds on community cohesion. The vast majority of the Australian community spends time
with friends or in community groups. We believe that this day is a day made for the good of all
people, not just a select few who do not enjoy higher economic comfort’
249
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[398] The Bosco Social Justice Group, mainly compromising of parishioners of St John
Bosco Parish, Engadine NSW, also oppose the reduction of penalty rates for Sunday work for
both social justice and religious reasons.
250
(iii) Political Entities
[399] The Federal Opposition and the State Labor Oppositions in NSW, Tasmania and WA,
oppose the employer applications before us.
[400] The Federal Opposition notes that changes to penalty rates:
‘… will represent significant changes to the total earnings and income of workers in hospitality
and retail industries that have a higher prevalence of casualisation, and accordingly impact on
fairness across our society and the performance of the Australian economy…
In short, there is clear and well-founded evidence that reducing the take home pay of low paid
Australian workers will have a negative impact on domestic consumption. At the same time, it
is highly unlikely that the benefits claimed by individual businesses will be seen across the
aggregate economy.’251
[401] The Federal Opposition also submits that:
‘Penalty rates continue to be a fundamental part of a strong safety net for Australia workers,
enabling low income workers and workers in highly casualised industries to share in the
nation’s economic prosperity…[and] in the context of current economic circumstances and in
the interests of supporting inclusive and fair growth, any changes to the modern awards should
not cut the take home pay of affected workers.’
252
[402] We deal with the potential use of ‘take home pay orders’ in Chapter 11, Transitional
Arrangements.
(iv) Women’s organisations
[403] Asian Women at Work Inc (AW@W) is a community organisation which provides
assistance and support to over 2,000 low paid Asian women in precarious employment.
AW@W supports the retention of weekend penalty rates and opposes the reduction or
abolition of those rates. It submits:
‘Migrant women workers in low paid and precarious employment are already very vulnerable
and are under considerable financial stress. They do not need more stresses that can worsen
their situations in the workplaces, bring about more family tension, drive them into poverty,
impact on their health.’
253
[404] The National Foundation for Australian Women (NFAW) submits that there are no
grounds for changing existing penalty rates in the modern awards before us.
254
The NFAW
advances a number of points in support of its central contention that the PC Final Report does
not provide a sufficient basis for change, in particular it submits:
the Productivity Commission is not bound to take into account the full range of
considerations set out in the modern awards objective and it has not done so in
reaching its recommendations;
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women would be disproportionately affected by a reduction in Sunday penalty rates
in the HERRC industries; and
the Productivity Commission contention that the negative impact of working on
Sundays is no different to that associated with Saturday work is wrong (citing
Skinner and Pocock
255
and the Expert Report of Professor Sara Charlesworth and
Dr Fiona Macdonald in these proceedings.
256
(v) Other organisations
[405] The National Union of Students (NUS) supports the retention of the existing
regulatory arrangements regarding penalty rates. The submission focuses on the impact of a
reduction in penalty rates on students and provides information about the interaction between
student employment income and various student income support programs. The NUS submits:
‘Hundreds of thousands of university students are juggling work and study commitments to the
point where their academic performance is being adversely affected. A loss or reduction in
penalty rates will mean that students will have to work longer hours to maintain current
income levels [which]… will exacerbate existing problems with student academic performance
and campus engagement. It is also likely to lead to an increase in student
withdrawal/deferment from university study as the knife-edge juggle being paying bills and
study gets too hard.’
257
[406] The Curtin Student Guild raised similar concerns and contended that there was a
relationship between the cost of living, income from employment and student attrition
rates.
258
[407] The Queensland Police Union of Employees (QPU) submits that:
‘… any proposal to reduce penalty rates is nothing more than an unfair and unjust money grab
that will disadvantage the employees most deserving of just recompense for the impact
shiftwork has on their health and lifestyle.’
259
[408] The QPU expresses its concern that a reduction in penalty rates arising from these
proceedings will flow on to police officers – ‘thereby affecting their income and negatively
impacting on the efficient operation of the Queensland Police Service’.
260
5.4 Public contributions
[409] On 15 January 2016
261
we issued directions which provided that:
‘Any interested person who is not a party to the proceedings may put forward a position (and
file material in support of their position) in relation to varying the penalty rate provisions in the
above awards by no later than 4.00pm Wednesday 17 February 2016.’
[410] The above direction was advertised in major newspapers nationally on 20 January
2016
262
, as set out below:
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4 yearly review of modern awards – Penalty rates
Since January 2014, the Fair Work Commission has been conducting a four yearly review of
all modern awards in accordance with s.156 of the Fair Work Act 2009.
Following the publication of an Issues Paper in January 2014 and a public conference, any
interested persons were invited to make submissions relating to the conduct of the review
including any claims which affected multiple modern awards.
One of the common issues identified as a result of the consultation process involved
applications by a number of organisations to vary penalty rates in certain awards.
As a result, the Commission is currently reviewing penalty rates in the following awards:
Hospitality group Retail group
- Hospitality Industry (General) Award 2010 - Fast Food Industry Award 2010
- Registered and Licensed Clubs Award 2010 - General Retail Industry Award 2010
- Restaurant Industry Award 2010 - Hair and Beauty Industry Award 2010
- Pharmacy Industry Award 2010
All directions for filing and the schedule of hearings have been published on a dedicated
Penalty Rates page on the Commission’s website [www.fwc.gov.au]. Material filed by
interested parties has also been made publically available on this webpage.
The Penalty Rates Review is nearing completion and directions have been issued for the filing
of final submissions. There is a further opportunity for any interested person who is not a
party to the proceedings to put forward a position (and file material in support of their
position) in relation to varying the penalty rate provisions in the above awards in accordance
with those directions.
Material is to be filed electronically by email to amod@fwc.gov.au
Those persons wishing to put forward a position are encouraged to view the Commission’s
website for further information.
[411] In response to the invitation to make submissions, some 5,960 public contributions
from individual employees and employers were received and 5,845 published on the
Commission’s website. The remaining 115 contributions were confidential
263
and were
provided to the principal parties (in redacted form) but not published.
[412] ABI and a number of employer parties
264
undertook a review of the public
contributions and filed a joint submission.
265
Attached to the submission was a spreadsheet
outlining their analysis. The review assessed the public contributions available for review
266
against the following questions:
Is it impossible to identify what industry the contribution relates to?
http://www.fwc.gov.au/
mailto:amod@fwc.gov.au
[2017] FWCFB 1001
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If it is possible to identify the relevant industry, what industry does the contribution
relate to?
Is the identified industry relevant to the present proceedings?
Is the identified industry relevant to the restaurant and retail industries?
Does the contribution seek to oppose the abolition of penalty rates?
Does the contribution seek to oppose the reduction of penalty rates?
Does the contribution differentiate between Saturdays and Sundays?
Does the contribution refer to church or religious observance?
Does the contribution identify that the author works Sundays?
[413] On the basis of their joint review, the employer parties submit:
(i) The clear majority of contributions reviewed (3513 out of 5873 or just under
60 per cent) do not indicate the industry to which the contribution relates.
(ii) Of those contributions that do indicate the industry referred to, approximately
45 per cent do not relate to the industries affected by these proceedings.
(iii) Accordingly, in total, only 1291 of 5873 contributions reviewed
(approximately 22 per cent) actually relate to the industries affected by the
present proceedings.
(iv) Of the 1291 contributions which actually relate to the industries affected by the
present proceedings, 682 (approximately 53 per cent) appear to assume that the
employer claims include a proposal to abolish penalty rates, rather than
reducing penalty rates.
(v) Once all contributions that are not identifiably relevant to the current
proceedings are removed including those which misunderstand the employer
party claims, only 823 of the 5873 contributions (approximately 14 per cent)
have potential relevance to the proceedings.
[414] The employer parties also submit that none of the 823 contributions of potential
relevance are supported by evidence.
[415] Ai Group (which was one of the employer groups who undertook the review of the
public contributions) filed a separate submission in which it observed that the contributions
were general in nature, lacked supporting evidence and ‘in some cases are quite emotive
rather than considered’.
267
[416] United Voice
268
and the SDA
269
conducted their own analysis of the public
contributions and commented on the review undertaken by the employer parties.
[417] United Voice submit that the review conducted by the employer parties demonstrates
systematic errors and mischaracterisations.
270
It submits that the employer parties sought to
artificially limit the number of contributions that are relevant (in particular by disregarding
those where the industry of the individual had not been identified), inappropriately relied
[2017] FWCFB 1001
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upon redactions and mischaracterised the contributions on the basis of whether the
contribution opposes the abolition or reduction of penalty rates. United Voice submits that the
employer parties’ adopted a systematically inaccurate approach to the characterisation of the
public contributions such as to render the employer review ‘unreliable and lacking
credibility’.
271
[418] We accept that the approach adopted in employer review of the public contributions
may have excluded some relevant contributions. The analysis appears to disregard those
contributions which do not identify the industry in which the individual concerned works.
While one cannot presume that all of these individuals are employed in the hospitality or retail
sectors, it is reasonable to presume that at least some of them are. Such a presumption is
reasonable having regard to both the size of these sectors (in terms of persons employed) and
the fact that the contributions were made in response to an advertisement which specified the
modern awards which are the subject of these proceedings.
[419] But it seems to us that undertaking a further review of these contributions for the
purpose of determining the precise number which are of direct relevance to these proceedings
would be an arid exercise. We accept the submission advanced by the SDA in this regard:
‘… the SDA has endeavoured to ensure that the analysis undertaken reflects the contributions,
the SDA accepts that its analysis will contain errors just as there are errors in the Joint
Employers’ submissions. The Commission should view the analysis of the Union parties and
the Employer parties as providing a broad overview or impression of some of the sentiments
expressed’.272
[420] In particular we accept that a broad, impressionistic, view of this material is
appropriate. In that regard we note that the overwhelming majority of the contributions
received opposed the reduction or abolition of penalty rates.
273
[421] As acknowledged by all parties, the public contributions do not constitute evidence
and, importantly, the views expressed have not been tested in cross-examination. These
considerations are relevant to the weight we attach to this material and, plainly, we attach less
weight to these contributions than we give to the evidence advanced in the proceedings. But
we do not propose to simply disregard the views expressed.
[422] Those who responded to the public call for submissions provided various reasons for
opposing cuts to penalty rates. In its submission the SDA summarises these views and in
doing so limited its analysis to those contributions which can be attributed to one of the
modern awards which are the subject of these proceedings. Based on its analysis the SDA
submits:
‘The broad themes which emerge from this material are that the contributors express that there
are real disabilities associated with working on Sundays and the loss of opportunities to spend
time with family, to socialise and to relax, and that there are real concerns about the financial
impact upon them of cuts to penalty rate entitlements in their work.’274
[423] The themes identified by the SDA as emerging from the public contributions form part
of the broad context of the proceedings and can be said to provide some support for the
evidence before us about the disability of working at times when penalty rates apply and
about the financial impact upon individual workers of reducing those penalty rates.
[2017] FWCFB 1001
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6. Weekend work
6.1 Overview of data and evidence
[424] Parties called a number of witnesses and referred to several reports when discussing
social changes in Australia across, and in particular, the incidence and effects of weekend
work. Data and evidence in this section are drawn from the following:
Fair Work Commission, Changing work patterns, material to assist the
AM2014/305 Penalty rates case (Changing work patterns Report).
Exhibit ABI 3: Professor Lewis, Penalty rates and the retail and café restaurant;
and hairdressing and beauty industries, a report prepared for ABI (Lewis Report).
Exhibit UV 25: Professor Borland, Report by Professor Jeff Borland, (Borland
Report).
Exhibit ABI 1: Professor Rose, Value of Time and Value of Work Time during
Public Holidays (Rose Report).
Common Exhibit 1: Productivity Commission Inquiry Report: Workplace Relations
Framework – Chapters 9, 10, 11, 12, 13, 14, 15 and Appendix F (PC Final Report).
Exhibit Retail 2; Dr Sean Sands, Retail award research report, (Sands Report).
Bittman M (2005), ‘Sunday working and family time’, Labour & Industry, Vol. 16,
No. 1, pp. 59–81.
Exhibit ABI 13; Craig L and Brown JE (2014), Weekend work and leisure time
with family and friends: who misses out?, Journal of Marriage and Family, Vol.
76, pp. 710–727.
Exhibit Ai Group 26: ABS, Australian Social Trends, Nov 2013: Losing my
religion, Catalogue No. 4102.0.
Exhibit SDA 36: Dr Ian Watson and Professor David Peetz, Characteristics of the
workforce in the national retail industry: with regard to age, weekend work and
student status.
[425] The Commission’s Changing work patterns Report
275
was published to assist the
parties and present data on changes in the labour market, work arrangements and preferences,
and how people spend their time when not working. Data were sourced from the ABS and the
Household, Income and Labour Dynamics in Australia (HILDA) survey.
[426] The HILDA Survey is a longitudinal household-based panel study that collects
information on economic and subjective well-being, labour market dynamics and family
dynamics. Interviews are conducted annually with all adult members of each household who
are followed over time. The survey began in 2001 and includes 15 waves of data that cover
the period from 2001 to 2015.
[427] The Changing work patterns Report
276
was first published in December 2015 and
updated with new data in January, March, September and October 2016. The Report was
updated for the most recent wave of the HILDA survey in January 2017 and that update
included additional data from the ABS. Parties were invited to make submissions on this
[2017] FWCFB 1001
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report in late October 2016 and were also given an opportunity to comment on additional data
which was included in the report in January 2017.
6.1.1 Trends in the labour market
[428] Labour market indicators were presented in the Commission’s Changing work
patterns Report and in the Lewis Report. The first two parts of the Lewis Report provided an
overview of the trends in the Australian labour market and the economic environment in
which the retail, cafe and restaurant industries operate. This material is largely uncontentious.
The contentious part of the Lewis Report is that part dealing with the employment effects of
introducing penalty rates on Sundays and public holidays. We deal with that aspect of the
Lewis Report in Chapter 6.3.1.
[429] The data from the Lewis Report is sourced from the ABS. In some instances, the data
presented in the Lewis Report captured trends over a longer period to show how much the
labour market has changed since the late 1970s.
277
[430] The composition of the labour market has changed significantly over the last 25 years
or so and this has contributed to the changing nature of weekend work. Between 1978 and
2016, the participation rate for females increased by around 15 percentage points, while the
participation rate for males decreased by around 8 percentage points (Chart 1).
Chart 1
278
:
Participation rate—male and female, per cent, 1978–2016
[431] The increase in the female participation rate has been associated with changes in the
composition of employment and, in particular, a rise in part-time employment (Chart 2). The
Lewis Report notes that there has been a substitution of female employment, particularly
part-time, for male full-time employment.
279
Lewis added that flexibility in hours worked is
required to meet peaks in demand in the services sector which is facilitated by part-time
employees.
280
40
45
50
55
60
65
70
75
80
85
Feb-78 Feb-82 Feb-86 Feb-90 Feb-94 Feb-98 Feb-02 Feb-06 Feb-10 Feb-14
Per cent
Participation rate—Males Participation rate—Females
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[432] Part-time employment is defined as those who usually worked less than 35 hours a
week (in all jobs) and either did so during the reference week, or did not work in the reference
week.
281
The ABS define full-time employment as those who usually work 35 hours or more a
week (in all jobs) and those who, although usually working less than 35 hours a week, worked
35 hours or more during the reference week.
[433] Chart 2 shows that male full-time employment decreased from 61.5 per cent of total
employment in February 1978 to 43.5 per cent in August 2016. This decrease was offset by an
increase in male part-time employment (from 3.2 per cent to 10.1 per cent) and female
part-time employment (from 11.9 per cent to 21.7 per cent). Female full-time employment
remained relatively steady over the period at around 25 per cent of total employment.
Chart 2
282
:
Composition of employment, per cent of total employed, 1978–2016
[434] The Lewis Report explains that the more recent increase in part-time employment for
males is likely to be due to the effects of the global financial crisis, as businesses preferred to
reduce hours worked rather than the number of employees.
283
The increase in part-time
employment has contributed to a fall in average hours worked per month from a peak of 150.3
hours in December 1999 to 138.5 hours worked per month in August 2016 (Chart 3).
[435] The most recent labour force data released by the ABS shows that strong growth in
part-time work continues, increasing by 3.5 per cent over the year to January 2017, while
full-time employment fell by 0.5 per cent.
284
0
10
20
30
40
50
60
70
Feb-78 Feb-82 Feb-86 Feb-90 Feb-94 Feb-98 Feb-02 Feb-06 Feb-10 Feb-14
Per cent
Males FT Males PT Females FT Females PT
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Chart 3
285
:
Proportion of employment by full-time and part-time status and average monthly hours
worked, August 1991 to August 2016
[436] There have also been changes over time in the status of employment categories
considered by the ABS and whether employees have paid sick and/or holiday leave
entitlements.
[437] The ABS categorises employed persons into employment types according to the
reported employment relationship or contract. The categories separate employed people who
operate their own business into owner managers of incorporated enterprises (OMIEs) or
owner managers of unincorporated enterprises (OMUEs).
286
OMIEs are people who operate
an incorporated enterprise, which is a business entity registered as a separate legal entity to its
members or owners. OMUEs are people who operate an unincorporated enterprise, which is a
business entity in which the owner and the business are legally inseparable and includes those
engaged independently in a profession or trade.
287
The remaining workers are made up of
employees who are grouped into whether they have sick and/or holiday leave entitlements
(i.e. permanent employees) or not (i.e. casual employees). This group is reported separately to
full-time and part-time employment.
[438] In 2015, over 60 per cent of employed persons were employed on a permanent basis,
around 20 per cent were casual, 7 per cent were OMIEs and 11 per cent were OMUEs (Chart
4). Between August 1995 and August 2015 the proportion of casual employees had increased
more than other employment types with most of the increase in the first half of the period.
137
139
141
143
145
147
149
151
153
10
20
30
40
50
60
70
80
90
Aug-91 Aug-96 Aug-01 Aug-06 Aug-11 Aug-16
Hours per month Per cent
Full-time employment Part-time employment Average hours worked per month (RHS)
[2017] FWCFB 1001
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Chart 4
288
:
Proportion of total employment by employment type, 1995, 2005 and 2015
Note: Estimates are for August of each year. OMIEs are people who work in their own incorporated enterprises, that is, a
business entity which is registered as a separate legal entity to its members or owners. OMUEs are persons who operate their
own unincorporated enterprise or engage independently in a profession or trade.
[439] Chart 5 reproduces and updates Figure 4 from the Lewis Report and shows the
proportion of employees working on a casual basis from 1985 to 2015. It shows that casuals
increased from over 15 per cent of all employees in 1985 to about 25 per cent in 2000 and has
remained relatively stable since.
289
Chart 5
290
:
Casual employment, per cent of employees
0
10
20
30
40
50
60
70
Permanent Casual OMIEs OMUEs
Per cent
1995 2005 2015
0
5
10
15
20
25
30
1985 1990 1995 2000 2005 2010 2014 2015
Per cent
[2017] FWCFB 1001
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[440] Much of the demand for part-time and casual employment has come from the services
sector. The services sector comprises the remaining industries not specifically identified in
Chart 6: Wholesale trade; Retail trade; Accommodation and food services; Financial and
insurance services; Rental, hiring and real estate services; Professional, scientific and
technical services; Administrative and support services; Public administration and safety;
Education and training; Health care and social assistance; Arts and recreation services; and
Other services.
[441] The Lewis Report shows that employment in the services sector increased from around
50 per cent of total employment in 1975 to over 70 per cent of total employment in 2014
(Chart 6).
291
Chart 6
292
:
Proportion of total employment by industry, 1975 to 2014
[442] Chart 7 presents a separate breakdown of industries to show the growth in the services
sector. It shows that Household services increased from around 27 per cent of total
employment in 1990–91 to around one third of total employment in 2015–16, while Business
services rose from over 15 per cent in 1990–91 to around 19 per cent in 2015–16 (Chart 7).
80 Ag/mining 70 60 50 Manufacturing 40 30 Utilities, Construction, 20 Transport, Commmunications 10 Services 1975 1985 1995 2010 2014
[2017] FWCFB 1001
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Chart 7
293
:
Proportion of total employment by industry, 1990–91, 2000–01 and 2015–16
Note: Total employment and employment for each industry is calculated by taking the average of the four quarters over the
year. Business services are Information media and telecommunications; Financial and insurance services; Rental, hiring and
real estate services; Professional, scientific and technical services and Administrative and support services. Household
services are Accommodation and food services; Education and training; Health care and social assistance; Arts and recreation
services and Other services.
[443] The above data provides an indication of the extent of change in the Australian labour
market. These changes have occurred in response to shifts in consumer demand and
preferences for goods and services (largely confined to the hospitality and retail sectors), that
are often accessed on weekends, as discussed in the overview of the hospitality sector at
Chapter 7.1 and the retail sector at Chapter 8.1.
6.1.2 Changing nature of weekend work
[444] The PC Final Report presented data showing that the proportion of employees working
weekends has increased over the period between 1993 and 2013 (Chart 8 below).
294
0
5
10
15
20
25
30
35
1990–91 2000–01 2015–16
Per cent
Agriculture/Manufacturing Mining/Construction/Utilities Business services
Wholesale/Retail/Transport Household services Public administration
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Chart 8
295
:
Patterns of working weekends over time, employees
a
, 1993 to 2013
Note: a) While substantially overlapping, the surveys employ different definitions for employees and jobs, which should be
noted. Survey 1 is the ABS Forms of Employment survey and only covers people employed as wage and salary earners under
a contract of service (an employment contract). The data relate to people categorised as such employees in their main job, but
includes periods of work in all their jobs if they are multiple jobholders. Survey 2 is the Working Time Arrangements survey
(WTA), and includes owner managers of incorporated enterprises as ‘employees’. As for survey 1, the data cover people
working in single and multiple jobs. Survey 3 is the Working Arrangements survey, the predecessor to the WTA, and uses the
same definition of employees, but only relates to periods of work in the employee’s main job.
[445] Similar data in the Changing work patterns Report analysed changes in work
arrangements and the prevalence of weekend work. Analysis of ABS data on days of the week
and number of days worked showed that the majority of employees worked Monday to Friday
and that this had remained constant over recent times, as shown in Table 5 below.
Table 5
296
:
Days of the week and number of days worked in all jobs, employees, November 2008,
November 2013, and August 2015
November
2008
November
2013
*August
2015
(%) (%) (%)
Days of the week usually worked in all jobs^
Monday to Friday 64.8 63.2 61.7
Monday 9.6 13.5 10.1
Tuesday 10.9 14.7 11.3
Wednesday 11.3 15.0 11.6
Thursday 12.0 15.0 12.0
Friday 10.0 13.0 10.2
Saturday 15.3 15.3 15.4
Sunday 8.8 9.8 9.8
Days varied 14.7 16.0 17.1
26
27
28
29
30
31
32
33
1993 1996 1999 2002 2005 2008 2011
Survey 1 Survey 2 Survey 3
Share working weekends (per cent)
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November
2008
November
2013
*August
2015
(%) (%) (%)
Whether worked weekdays and/or weekends in all jobs
Weekdays only 69.6 68.2 73.7
Weekends only 1.7 1.6 2.7
Both weekdays and weekends 28.7 30.2 23.5
Total 100 100 100
Note: For multiple jobholders, the responses refer to their total pattern of work in all their jobs. ^Refers to the days of the
week people usually worked, therefore people may appear in more than one category. People who reported that they worked
from Monday to Friday inclusive were categorised as working Monday to Friday. These people may have reported that they
also worked on Saturday and Sunday in the job/s. People who reported that the usual days of the week worked varied were
categorised only to days varied. A response of days varied could not be provided with any other response. For multiple
jobholders, the responses refer to their total pattern of work in all their jobs. *The status of employment categories for August
2015 are different to the previous years.
[446] The PC Final Report also presented the same data from the ABS, but included and
combined all other non-employee categories (independent contractors and other business
operators) to compare the days of the week worked. This appears as Figure F.1 in the PC
Final Report and is reproduced below as Chart 9.
[447] Chart 9 shows that the share of employed persons that work on weekends is far below
the share of employed persons who work on weekdays, while the share that work on
Saturdays is also higher than the share that work on Sundays. The figure also shows that,
compared with non-employees, employees are less likely to work across each day,
particularly on weekends.
Chart 9
297
:
Patterns of work by the day, share of the employed working on given days, per cent,
November 2013
76.7 77.8 78.2 78.2 76.1
15.3
9.8
16.0
84.9 86.2 86.9 86.6 85.3
32.9
18.7 17.8
0
20
40
60
80
100
Mon Tue Wed Thu Fri Sat Sun Varies
Employees Non-employees
Share of employees (%)
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[448] Further evidence showing that employees are less likely to work on weekends
compared with non-employees is provided in Table 6, which is reproduced from Table F.1 in
the PC Final Report. The data from November 2013 shows that employees are more likely to
work Monday to Friday only, while non-employees are more likely to work 5 weekdays and
1–2 weekend days than other periods.
Table 6
298
:
Who works on weekends?, November 2013
Period working
Employees Independent
contractors
Other business
operators
Share of group in each working time arrangement
% % %
Worked Monday to Friday only 54.8 44.5 35.3
Worked between 1 and 4 days
weekdays only
13.4 11.6 9.4
People who only worked weekends 1.6 0.4 0.7
People who worked 5 weekdays and
1–2 weekend days
8.3 22.6 35.2
People who worked 4 or less
weekdays and 1–2 weekend days
21.9 20.9 19.4
Total 100.0 100.0 100.0
Worked Saturdays 15.3 25.3 40.3
Worked Sundays 9.8 12.7 24.4
Note: The data relate to the nature of working in a reference week.
[449] Providing a comparison between 2008 and 2013, the PC Final Report presented the
change in the total numbers of employees on Saturdays and Sundays with all workers. Chart
10 shows that over the period, the number of employees increased by around 11 per cent, as
did the increase in employees working on Saturdays. However, the percentage increase in the
number of employees on Sundays was twice as much, at almost 24 per cent.
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Chart 10
299
:
Relative growth in Saturday and Sunday work, percentage change in numbers
employed, 2008 to 2013
Note: In some cases, people said that their days of work varied, in which case they could not be identified as usually working
on Sundays, and are therefore excluded from the calculations for Sundays.
[450] In an ABS article, data from the Forms of Employment Survey 2008 showed that
casual employees were more likely to work on weekends than other employees, who were
more likely to work on weekdays.
300
However, no more recent data has been published on
casual employees working weekends by the ABS.
[451] The Changing work patterns Report also presented data from the HILDA survey on
the nature of weekend work. From a series of questions asked in the survey, employed
persons could be classified by whether they usually worked weekends or whether they worked
weekdays only. Changes in the proportions of these two groups are presented in the following
tables.
[452] Table 7 shows that around one in three employed persons usually worked weekends in
both 2006 and 2015.
Table 7
301
:
Whether usually worked weekends, all employed persons
2006 2015
(%) (%)
Worked weekdays only 66.5 66.8
Usually worked weekends 33.5 33.2
Total 100 100
Note: The data in this table are for all employed persons.
[453] Table 8 shows that, overall, around half of employed persons worked Monday to
Friday, around one in three employed persons worked other regular days, and the remaining
10.8
23.8
11.1
-9.8
-1.3
2.0
-6.8
-1.9
-4.8
4.2
15.3
8.7
-15
-5
5
15
25
Saturday Sunday All work
Growth rate (%)
Employees Independent contractors Other business operators Total employed
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employed persons working days varied. Between 2006 and 2015, the proportion of employed
persons whose working days varied increased while the proportion who worked other regular
days (that were not Monday to Friday) decreased.
[454] The data shows that around three-quarters of employed persons who worked weekdays
only worked from Monday to Friday and, of the remaining employed persons, around three
times as many worked other regular days than varied days.
[455] Most employed persons who usually worked weekends worked on regular days.
However, this proportion decreased between 2006 and 2015 and the proportion for those
whose working days varied increased. Employed persons who worked on weekends were
relatively more likely to have their work days vary than those who worked weekdays only.
Table 8
302
:
Type of work schedule
Worked weekdays
only
Usually worked
weekends
Total
2006 2015 2006 2015 2006 2015
(%) (%) (%) (%) (%) (%)
Monday to Friday 76.6 76.3 – – 50.9 51.0
Days vary 5.8 5.5 29.4 38.8 13.7 16.5
Other regular days 17.6 18.3 70.6 61.2 35.3 32.5
Total 100 100 100 100 100 100
Note: ‘Days vary’ refers to responses ‘nine day fortnight’, ‘days vary from week to week’ and ‘day vary from month to
month’.
[456] Table 9 shows the proportion of employees that work on weekends from 2002 to 2016
by industry, comparing the first half of the period with the second. The table ranks the
industries by the proportion of employees that usually worked weekends in the second period.
The table shows that across all industries at least one in four employees work on weekends,
with a slight increase between the two periods.
[457] The highest proportion of employees that work on weekends was in Accommodation
and food services and Retail trade, with a slight increase for both industries between the two
periods.
Table 9
303
:
Proportion of employees who work on weekends, by industry
Industry 2002–2008 2009–2016
Accommodation and food services 58.6 60.8
Retail trade 44.4 47.6
Mining 34.9 46.9
Arts and recreation services 44.1 45.1
Agriculture, forestry and fishing 32.0 35.2
Other services 31.9 30.9
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Industry 2002–2008 2009–2016
Rental, hiring and real estate services 35.5 30.7
Transport, postal and warehousing 28.0 30.1
Health care and social assistance 25.3 27.8
Construction 24.3 23.8
Administrative and support services 21.0 19.9
Information media and telecommunications 18.5 19.6
Manufacturing 19.2 18.4
Electricity, gas, water and waste services 18.5 18.1
Public administration and safety 13.4 16.9
Wholesale trade 16.2 15.6
Education and training 11.4 12.9
Professional, scientific and technical services 10.9 11.7
Financial and insurance services 7.5 8.6
All employees 25.9 27.5
[458] Using the HILDA survey, both the Changing work patterns Report and research
undertaken by Dr Ian Watson in his report with Professor David Peetz (Characteristics of the
Workforce in the National Retail Industry with regard to age, weekend work and student
status) showed that at least 60 per cent of employees in Retail trade usually worked
weekends.
304
[459] A paper
305
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the Australian and New Zealand Standard Industrial Classification (ANZSIC).
[460] More detailed data for some industries that have been mapped to the relevant modern
awards are shown in Table 10. For most of these industries, over half of employees work on
weekends and, for all of them, the proportion increased between the two periods.
306
Table 10
307
:
Proportion of employees who work on weekends, by selected industry subdivisions and
groups
Industry 2002–2008 2009–2016
Industry subdivisions
Food retailing 50.6 54.3
Other store-based retailing 43.5 46.4
Industry groups
Pharmaceuticals and other store-based retailing 39.5 42.1
Accommodation 52.8 53.8
Cafes, restaurants and take away food services 57.4 59.9
Pubs, taverns and bars 67.6 68.9
Clubs (hospitality) 63.7 67.1
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[461] Overall, the data show that employees in the industries that align most with the
hospitality and retail group of awards are more likely to work on weekends than other
industries, suggesting that weekend work is more common in these industries. In many of
these industries, more than half of employees work on weekends.
[462] Although weekend work has increased over recent times, the number of employees
working on weekends is still far below the number of employees that work on weekdays, and
working on Saturdays is still more common than working on Sundays.
6.1.3 Shifts in consumer demand and preferences
[463] We set out material on trends in consumer preferences in relation to the Retail sector
in Chapter 8, which incorporates data from the PC Final Report and the Sands Report.
[464] The PC Final Report highlighted that employment on weekends has increased with the
rise in consumer demand, with a greater share of the workforce working on weekends and a
“non-trivial” share only working on weekends.
308
The PC Final Report stated that
employment patterns in the HERRC industries have developed with the shift in consumer
demand, noting that:
“… the customer is buying convenience and variety as much as the good itself, and cost
increases frustrate the extent to which those consumer preferences can be met by
businesses.”
309
[465] Data from the ABS presented in the PC Final Report compared the share of weekly
retail sales by each day of the week (Chart 57 at [1589]) and which suggested that although
consumer demand for shopping on Sundays has increased significantly since the early 1980s,
the preference to shop still remains higher on Saturdays than Sundays.
[466] In further analysis, the PC Final Report showed that growth in average daily foot
traffic in shopping centres between 2009 and 2014 was greatest for Sunday. Data on shopping
by days of the week as measured by supermarket trips and transactions provided similar
results to the ABS data in Chart 58. Although transaction values were greater on Sunday than
Monday and Tuesday, they were lower than on Saturday
310
(see below at [1590]).
6.1.4 Changing role of weekends
[467] This section considers the time use surveys undertaken by the ABS and analysed in
academic papers, the Lewis Report and the PC Final Report as well as additional evidence
provided in the Rose Report. Fair Work Commission staff published a Research reference list
of academic papers cited in the expert evidence and the submissions (set out in Attachment
D).
[468] An important consideration is not just the days of the week that people work but also
the differences in the activities that are performed on weekdays and weekends and how this
has changed over time. This assists in determining the importance of weekends and is relevant
to the assessment of the appropriate compensation for working on weekends.
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[469] Time use surveys collect information on the daily activities of people to determine
how they allocate time. They are able to provide data on the patterns of paid work, as well as
unpaid household and community work, and the way people balance work and family
obligations. Time use surveys rely on respondents completing diaries which record their
activities in five-minute intervals (including the nature, timing and duration) over particular
days. Other information collected include for whom the activity was done, who else was
present and where the activity took place.
311
[470] The ABS has conducted three time use surveys—in 1992, 1997 and 2006. Changes
were made between the 1992 and 1997 surveys and the 1997 and 2006 surveys, although the
ABS considered the 2006 survey to be highly comparable with the 1997 survey.
Unfortunately these data have not been updated in the last ten years.
[471] Two Australian studies which utilised the Time Use Survey, Bittman
312
and Craig and
Brown,
313
found that more time was allocated to leisure and family on weekends than
weekdays, demonstrating the continuing importance of weekends and how activities
undertaken on weekends differ from those undertaken on weekdays.
[472] Bittman found that, over time, there was a gradual increase in the proportion of
Sunday workers, although the chance of working on a Sunday was much lower than a
weekday. Sunday was found to be the day on which the most time was allocated to personal
care activities, recreation and leisure, and the most critical day for families to spend time
together.
314
In the first model, Bittman found that those who worked at least 2 hours on
Sundays had fewer opportunities for family time and social contacts than those who did not
work on Sundays.
315
In the second model, Bittman tested whether those who worked on
Sundays made up family time and social contacts relative to those who only worked on
weekdays. After controlling for a number of factors, Bittman found that, compared with those
that work on weekdays, ‘Sunday workers miss out on key types of social participation and
have less opportunity to balance the demands of work and family’.
316
[473] Craig and Brown (2014)
317
incorporated the more recent 2006 Time Use Survey to
assess total daily minutes spent on social and community interaction as well as recreation and
leisure while in the company of others among different household types.
[474] Craig and Brown found that weekend work was negatively associated with shared
leisure activities on weekdays across all household types. However, for couples and singles
without children, no significant differences were found between Saturdays and Sundays in
terms of displacing shared leisure time, while for couples with children, Sunday work was
associated with more displaced leisure time than Saturdays:
‘For parents only, Sunday work had an extra negative association, beyond that of Saturday. The
forms of shared leisure most displaced on Sundays were with spouse and children. We also
found that, on average, less Sunday leisure time was spent with friends, so the results
confirmed our expectation that the two days have a different flavor and that Sunday in
particular is a day for sharing leisure time with family.’
318
[475] Overall, Craig and Brown did not find large differences in time allocation between
Saturdays and Sundays. Craig and Brown concluded that making up shared leisure time is
also contingent on other people’s schedules and there are limited opportunities to make up
this time if others are not available on weekdays.
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[476] United Voice called Dr Olav Muurlink to provide expert evidence on the impact of
weekend and public holiday work. Dr Muurlink provided a report: ‘The impact of weekend
work: consecutivity, overload, uncontrollability, unpredictability, asynchronicity and
arrhythmia’ (‘the Muurlink Report’). Dr Muurlink claimed that the Craig and Brown paper:
‘… strongly suggests that Saturday and Sunday work reduces the time spent with children and
on social activities, and workers are not able to ‘make up’ the time during the working week in
the way that those who work purely Monday to Friday ‘make up’ time with their children on
the weekends’.
319
[477] However, as Dr Muurlink acknowledged in cross examination, in two of the three
family types examined, Craig and Brown did not find differences between Saturdays and
Sundays.
320
[478] SDA and United Voice cautioned against relying on the Bittman and Craig and Brown
papers. They argued that Dr Bittman did not focus on the overall equivalence between
Saturdays and Sundays, while Craig and Brown provides commentary and not analysis of the
disability experienced by weekend workers.
321
[479] Dr Bittman’s study is of limited assistance as it refers to data from 1997. In addition,
as noted by the SDA,
322
the main focus of the paper is on the impact of working on Sundays,
not on a comparison between Saturdays and Sundays.
[480] Craig and Brown used more recent data and considered whether individuals worked on
Saturday or Sunday. It is limited in that it considered only one aspect of weekend work,
whether shared leisure time is made up during the week, for certain household types. While it
did not find large differences between Saturday and Sunday work, this is only one aspect of
time allocation for weekend workers.
[481] In his analysis of the 2006 Time Use Survey, Professor Lewis claimed that the amount
of time spent on sport and outdoor activity increased by only 17 minutes per day on the
weekend for men and by only five minutes per day for women
323
compared with during the
week. Professor Lewis argued that “for most working on weekends [it] would not
significantly impose on their time spent on sport and outdoor activities.”
324
[482] Table 11 is reproduced from the Lewis Report.
325
It shows that total free time spent on
leisure activities increased by 133 minutes (49 per cent) on weekends for males and 87
minutes (34 per cent) for females. In fact, the time spent on all leisure activities, except for
community participation, is higher on weekends compared with weekdays.
[483] Professor Jeff Borland from the Department of Economics, The University of
Melbourne, provided a response to the Lewis Report: ‘Report by Professor Jeff Borland’ (‘the
Borland Report’).
326
He claimed that expressing the differences in activities in minutes rather
than percentages obscures the actual extent of differences in activities between weekdays and
weekends.
327
Professor Borland also suggested that any judgement about how extra work on
weekends affects recreation and leisure activities requires individual-level data rather than
averages.
328
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Table 11
329
:
Average time spent on leisure activities, 2006, minutes per day
Males Females
Weekday Weekend Weekday Weekend
Socialising 6 20 7 19
Visiting entertainment venues (a) 2 8 4 8
Attendance at sports event *1 6 – 4
Religious activities (b) *2 8 4 10
Community participation 8 7 11 9
Associated travel 7 22 9 21
Social and community interaction (c) 27 71 35 73
Sport and outdoor activity 20 37 16 21
Games, hobbies, arts, crafts 13 18 11 15
Reading 19 25 23 29
Audio/visual media 144 181 117 134
Other free time 20 29 16 24
Talking and correspondence (d) 21 31 34 43
Associated travel 5 10 4 6
Recreation and Leisure (c) 243 332 223 273
Total free time 270 403 259 346
Note: *estimate has a relative standard error of 25 per cent to 50 per cent and should be used with caution. – nil or rounded to
zero (including null cells). (a) includes cultural venues. (b) includes ritual ceremonies. (c) includes additional activities not
separately included. (d) includes talking on phone or reading/writing own correspondence.
[484] The conclusions that Professor Lewis draws from this table are not unexpected as
weekends are meant for social and leisure activities. Using an approach similar to that
suggested by Professor Borland, the PC Final Report provided charts showing the difference
in the number of hours spent on weekend days compared with average weekdays for time
spent with different categories of people and different activities.
330
[485] However, the tables in the Lewis Report and the charts from the PC Final Report both
present data that refer to all people and not only those who work on weekends
331
and therefore
should be considered as a guide to understanding the types of activities undertaken across the
entire community rather than for weekend workers.
[486] Chart 11 shows that more time is spent with friends and family on weekends than
weekdays, with more time spent with friends on Saturday. More time is spent with shop
personnel and services providers on Saturdays and less on Sundays. Chart 12 shows that more
time is spent on social and community interaction on weekends and less time on employment
and education. More time is spent purchasing goods and services on Saturdays than
weekdays, whereas less time is spent doing this on Sundays than weekdays.
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Chart 11
332
:
Who do people spend time with, deviation of hours per day on weekend from the
average weekday, per cent
Chart 12
333
:
What do people do with their time, deviation of hours per day on weekend from the
average weekday, per cent
[487] The SDA submits that the assertions made in the PC Final Report that ‘there is very
little difference in the degree to which people engage in social activities between Saturdays
and Sundays (compared to weekdays)’ and ‘the largest deviation in social activities between
weekdays and weekends – “social and community interaction” – is actually higher on
Saturdays’ say nothing ‘about the level of disamenity experienced by employees who work on
Sundays’ and note, correctly, that the data in Chart 12 above ‘shows that the largest deviation
in “recreation and leisure” between weekdays and weekends is higher on Sundays than
Saturdays’.
334
24.0
11.7
71.2
104.6
-65.3
13.8
28.4
-16.1
35.6
21.1
76.9
78.2
-75.7
-24.1
-13.6
-20.6
-80 -40 0 40 80
Partner
Family in household (excluding partner)
Family living elsewhere
Friends
Colleagues, neighbours, acquaintances
Shop personnel, service providers
Crowd or unknown others
No one
Deviation from weekdays in hours per day (%)
Saturday
Sunday
5.8
-63.6
-67.6
20.2
-2.5
34.8
34.8
138.7
26.6
12.7
-75.2
-64.9
22.6
-2.5
-19.6
17.4
125.8
33.0
-100 -50 0 50 100 150
Personal care
Employment related
Education
Domestic activities
Child care
Purchasing goods and services
Voluntary work and care
Social and community interaction
Recreation and leisure
Deviation from weekdays in hours per day (%)
Saturday
Sunday
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[488] We accept that this is so, but the differences are not large. The difference between
Saturdays and Sundays is generally smaller than between weekends and the average weekday.
In addition, as we have explained above, the usefulness of the data are limited as the sample is
not restricted to people who work on weekends or even to employed persons, so the SDA is
correct to highlight that Sunday workers are not identified in the data.
[489] ABI and the NSWBC called Professor John Rose, Institute for Choice, University of
South Australia who provided a report Value of Time and Value of Work Time during Public
Holidays (Rose Report).
335
The first part of the Rose Report sought to determine the
importance of times of the day and days of the week. Survey respondents filled in an activity
diary that captured information related to the activities they undertook during the week prior
to the survey and were required to indicate the importance of the activity. Importance was
defined as “an ability or desire to change that activity should a conflicting event, such as a
work shift, arise at the time of the activity”.
336
[490] The Rose Report activity diary results showed little variation across days of the week
and greater variation within days. Thursday was rated the most important day, while Sunday
was found to be marginally less important than Saturday.
337
In our view these data do not
provide a basis for the fixation on penalty rates. Indeed if the data were used for that purpose
then pay rates would vary for different times on each day. Nor does the diary data sit
conformably with the choice experiment data in that report. The remaining part of the Rose
Report is discussed in Chapter 6.2.2.
[491] As an explanation for the finding that weekend days are not the most important days,
Bittman and Craig and Brown found that more time is spent with friends and family on
weekends and hence such activities may be more amenable to change to suit work
requirements. This may result in a lower importance being attributed to weekends than is
actually the case. Whether an activity can be changed does not directly indicate the
importance of an activity, although it is clearly a relevant consideration.
[492] While the evidence referred to in this section is not without limitations, it points to a
clear difference of time use between weekdays and weekends. However, based on limited data
before us, it is difficult to discern the differences in time use between Saturdays and Sundays
for weekend workers compared with other workers.
6.1.5 Religious observance
[493] This section uses data drawn from the ABS, the Lewis Report, the Changing work
patterns Report and the National Church Life Survey to assess changes in religious
observance over time.
[494] The ABS explains that the number of people reporting “no religion” has “increased
substantially over the past hundred years, from one in 250 people to one in five.”
338
Data from
the ABS Census of Population and Housing (Census) shows that since the 1971 Census
(which first included the specific instruction “no religion, write none”), the proportion of
people reporting no religion increased from 6.7 per cent to 22 per cent in 2011. The greatest
increase of 6.8 percentage points was reported between 2001 and 2011.
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[495] Although a majority of people report a religious affiliation and most of them Christian,
the ABS contend that “a religious affiliation is not the same as actively participating in
religious activities.”
339
Data from the National Church Life Survey (NCLS)
340
shows that the
proportion of the population attending “church regularly” has fallen over time, from 44 per
cent in 1950 to 17 per cent in 2007 (Chart 13).
341
Chart 13
342
:
Regular church attenders, per cent of population
[496] Chart 13 is consistent with data presented in the Changing work patterns Report, using
the HILDA survey, which demonstrates that a majority of Australians attended church as
rarely as once a year or less,
343
with almost half of respondents reporting “never” in 2014
(Table 12). However, we acknowledge the point made by United Voice that these data do not
identify whether attendance is on Saturday, Sunday or another day.
344
Table 12
345
:
Frequency of attendance at religious services
2004 2014
(%) (%)
Never 44.9 49.5
Less than once a year 13.0 12.4
About once a year 10.8 9.5
Several times a year 11.4 10.5
About once a month 3.1 3.0
2 or 3 times a month 3.0 3.2
About once a week 10.2 9.0
Several times a week 3.3 2.4
Every day 0.4 0.5
Total 100 100
45 40 35 30 25 20 15 1950 1960 1961 1967 1970 1972 1976 1979 1980 1990 1998 2003 2007 1983/84
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[497] Analysis undertaken using the ABS Time Use Survey in the Lewis Report also
showed that the average time spent on religious activities was minor compared with time
spent on activities such as “Audio visual and media” and “Talking and correspondence”,
which occupied most time spent on weekdays and weekends for both males and females.
346
[498] Census data provides evidence that “the rising trend of reporting no religion is driven
by younger people.”
347
Chart 14 shows that people aged between 15 to 34 years reported a
significant increase in “no religion” in 2011. The ABS note that the proportion of 20–24 year
olds with no religion in 2011 was nearly 11 percentage points higher than the proportion of
15–19 year olds in 2006.
348
Chart 14
349
:
Change in proportion of people reporting no religion between 2006 and 2011 by age
group in 2011
Note: Percentage of people that reported no religion in 2006 compared with percentage of people with no religion in the age
cohort they would be part of in 2011. Negative numbers mean a decrease of reporting no religion between 2006 and 2011,
positive numbers mean an increase. Excludes people who were not residents in Australia in 2006.
[499] This was also evident in data obtained from the NCLS 2010 which found that a small
percentage of young people aged 15–19 years and 20–29 attended church, less than 6 and 9
per cent, respectively.
350
[500] The evidence suggests that there is a decline in religious observance. The cohort
driving this trend are young people aged between 15 to 34 years, which comprise a significant
proportion of those employed in the Retail trade and Accommodation and food services
industries and covered by the modern awards which are the subject of these proceedings.
[501] While the data also show that a majority of the population continue to report a
religious affiliation, most of them Christian, it is likely that only a minority of this group
consider attending church an important activity. For this group, weekend work may interfere
with their religious observance.
12,5 10.0 - 7.5 5.0 2.5 0 -2.5 5-9 15-19 25-29 35-39 45-49 55-59 65-69 75-79 85-89 10-14 20-24 30-34 40-44 50-54 60-64 70-74 80-84 90+ Age group (years)
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6.1.6 Summary
[502] The Australian labour market has changed markedly over the last 40 years. These
changes have been dominated by an increase in female and part-time employment and an
increase in employment in the services industries.
[503] The data has also shown that the number of employees working on weekends is still
far below the number of employees that work on weekdays, and working on Saturdays is still
more common than working on Sundays.
[504] Data from the ABS and the HILDA survey show that employees in the industries that
align most with the Hospitality and Retail awards are more likely to work on weekends than
employees in other industries. More than half of employees in Accommodation and food
services usually work on weekends, the highest of all the industries, and almost half of Retail
trade employees usually work on weekends, the second highest proportion of all the industries
in recent time. Further, weekend work appears to have increased in these industries more than
many other industries.
[505] In part, these changes have occurred in the context of shifts in consumer demand and
preferences for goods and services (largely confined to the hospitality and retail sectors) that
are often accessed on weekends, as presented in the PC Final Report and discussed in detail in
Chapter 8. The share of weekly retail sales and supermarket trips and transactions on Sunday
are comparable to that of Monday and Tuesday, although still below Saturday. The share of
weekly retail sales on Sunday has more than doubled over the last few decades. This suggests
that while consumer demand for retail shopping on Sundays has increased over time, there
remains a preference to do so on Saturdays than Sundays. As a result, weekend work is more
prevalent in these industries.
[506] In relation to religious activities, the data suggests that the decline in religious
observance has been driven by young people aged between 15 to 34 years who are more
likely to work in the retail and hospitality sectors and are amenable to working on weekends.
Nonetheless, a majority of the population continue to report faith in a religion most of them
Christian,
351
although it is likely that only a minority of this group attend church regularly, it
is for this group that weekend work may interfere with their religious observance.
[507] The data and evidence on time use presented in the PC Final Report and the papers by
Bittman and Craig and Brown indicate that work and leisure activities remain largely
separated between weekdays and weekends. Further, while the differences between Saturdays
and Sundays have converged over time, there remain significant differences in the activities
performed on these days. Sunday is more reserved for family time than Saturdays, when
spending time with friends and shopping is preferred to Sundays. The nature and role of
Sundays therefore makes it a day that remains unique to Saturdays. However, the lack of
information in regards to weekend workers means it is difficult to discern how they would use
their time on Saturdays and Sundays differently to the remainder of the population.
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6.2 Expert evidence
[508] Parties called a number of expert witnesses to provide reports on weekend work. This
section discusses the following expert evidence and responses:
Ms Margaret Lynne Pezzullo, Lead Partner and Director, Health Economic and
Social Policy, Deloitte Access Economics, provided a report titled The modern face
of weekend work: survey results and analysis (the Pezzullo Weekend Work
Report).
352
Responses to the Pezzullo Weekend Work Report were received from:
o Professor Raymond Markey, Director, Centre for Workforce Futures,
Faculty of Business and Economics, Macquarie University, who
provided a response called The continuing importance of penalty rates
for weekend work: a review of the evidence.
353
o Ms Helen Bartley of Bartley Consulting (the Bartley Report)
354
o Professor Sara Charlesworth, Centre for Sustainable Organisations &
Work, RMIT University. (Ms Pezzullo also responded to the expert
reports which critiqued the Pezzullo Weekend Work Report).
355
Professor John Rose, Institute for Choice, University of South Australia who
provided a report Value of Time and Value of Work Time during Public Holidays
(Rose Report).
356
Responses to the Rose Report were received from:
o Professor Morris Altman, Dean and Head, Newcastle Business School
and Professor of Behavioural & Institutional Economics, University of
Newcastle.
357
Professor Rose also provided a comment on Professor Altman’s response.
358
Professor Sara Charlesworth and Dr Fiona Macdonald of RMIT University
provided a report to the SDA.
359
Dr Olav Muurlink, senior research fellow (adjunct) at Griffith University and senior
lecturer in organisational behaviour at Central Queensland University, provided a
report The impact of weekend work: consecutivity, overload, uncontrollability,
unpredictability, asynchronicity and arrhythmia.
360
6.2.1 The Pezzullo Weekend Work Report
[509] In support of their applications to reduce Sunday penalty rates, ABI, the Retail
Employers and others rely on the report by Ms Lynne Pezzullo : The Modern Face of Weekend
Work: Survey Results and Analysis (the Pezzullo Weekend Work Report)
361. Ms Pezzullo is
the Lead Partner, Health Economics and Social Policy with Deloitte Access Economics
(Deloittes). Deloittes was engaged by the PGA to produce the Pezzullo Weekend Work
Report for use in these proceedings.
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[510] The Pezzullo Weekend Report is comprised of a literature review and the results of two
surveys. On the basis of that material, the report draws various conclusions and expresses
opinions about matters including time use patterns, preferences, characteristics and consumer
behaviour of weekend and non-weekend workers.
[511] The literature review was limited and added little to the material already before us –
either in primary sources or referred to in submissions.
[512] The first survey collected information from 1000 weekend workers to understand their
time use patterns, the frequency and duration of their weekend work and their attitudes to
working on weekends. The second survey used a sample of 1100, drawn from non-weekend
workers and asked a series of questions related to their time use and their use of services
undertaken by the relevant industries as well as their preferred time for accessing these
services.
362
A sample of 500 weekend workers also participated in the second survey for
comparative purposes.
[513] The survey sample was obtained from approximately 282,000 members of an online
survey population. The report explains that the survey was emailed to 18,312 people, of
whom 5375 (29 per cent) participated and 3154 completed the survey.
363
[514] ABI, the Retail Employers and others rely extensively on the weekend worker survey,
but place no reliance on the survey of non-weekend workers.
[515] The weekend worker survey found that around one-third of weekend workers had “no
real problem” working on either Saturday or Sunday, with more responses having “no real
problem” on Saturdays than Sundays. The respondent’s main concerns with working on
weekends were that it “interferes with socialising or spending time with friends or family”
and that “it makes it hard to maintain work/life balance”.
364
[516] For those that had “some problem working on the weekend”, the following reasons
were listed, in order of number of respondents:
interferes with socialising or spending time with friends or family;
interferes with responsibilities or activities outside of work (e.g. sport);
makes it hard to maintain work/life balance;
interferes with religious observance; and
none of the above.
[517] The results were similar between Saturdays and Sundays for the number of
respondents reporting a problem, although there was a higher number reporting that it
interferes with religious observance on Sundays.
[518] Over half of casual workers reported “no real problem” with Saturday work and half
reported “no real problem” with Sunday work, while over two in five part-time workers
reported “no real problem” with Saturday or Sunday work.
365
[519] The report concludes that a large percentage of weekend workers were untroubled by
weekend work even when specifically prompted to list their difficulties with their work
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schedules.
366
When including responses of “minor”, this resulted in over half of weekend
workers reporting either no or minor difficulties working on Saturdays or Sundays.
[520] Weekend workers were also asked their reasons for working on weekends. Over half
of respondents answered that they were required to by their employer or there is an
expectation of weekend work in their industry. The next most common responses were higher
hourly pay (just over one quarter) and to earn additional disposable income (around one
quarter). Fewer than one in five reported they worked weekends to cover expenses.
367
[521] The report concludes that “most weekend workers do not choose to work weekends
primarily on the basis of penalty rates” and that “casual workers were even less concerned
about penalty rates than other weekend workers”.
368
[522] Respondents were also asked which day of the weekend was more important to keep
mostly free from work. These data are set out in Table 4.4 of the Pezzullo Weekend Work
report, reproduced below as Table 13.
Table 13
369
Most valuable weekend day – all weekend workers
Day Total No. %
Saturday 139 13.9%
Sunday 309 30.9%
Both equal 552 55.2%
[523] The report also found some evidence that the amount of staff on weekends did not
align with workloads and concluded that penalty rates may have an impact on labour
demand.
370
[524] As to the proper process for survey data collection, and the conduct of surveys more
generally, the SDA and United Voice relied upon the expert evidence of Ms Helen Bartley
371
(the Bartley Report). Ms Bartley contended that because the survey participants were required
to be an internet user, individuals who did not have internet access were excluded, which
could lead to biased results.
372
Ms Bartley also explained that registered members of the
online survey are paid to complete surveys and can choose how often they participate in a
survey, introducing sampling bias that could also affect the reliability of the results.
373
[525] Ms Bartley concluded that she could not be confident that the weekend worker survey
in the Pezzullo Weekend Work Report was a representative sample and considered the
response rate to be low such that the responses by individuals who did not participate in the
survey could potentially be different to those that did participate.
374
[526] We deal later with the Bartley report in more detail ([1091]–[1097]) but it suffices to
note here that the Productivity Commission characterises the reliability test proposed by
Bartley as ‘overly stringent’. We agree with that observation and as we note in our
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consideration of the RCI survey evidence in Chapter 7.4.4, most survey evidence has
methodological limitations, the central issue is the extent to which those limitations impact on
the reliability of the results and the weight to be attributed to the survey data.
[527] As mentioned above, United Voice called Dr Olav Muurlink to provide evidence on
the impact of weekend work, in particular Sundays. Dr Muurlink was also asked to comment
on the Pezzullo Weekend Work report.
375
[528] Dr Muurlink considered the age demographic of the sample to be a “major limitation”
as the dataset is not representative of 15–18 year olds who account for over one-fifth of the
target population
376
despite the sample size being “more than adequate”.
377
We deal later with
some other aspects of the Muurlink Report.
[529] The central problem with the weekend worker survey is that it is plainly not
representative of the views of the employees covered by the modern awards which are the
subject of these proceedings. This is made clear from Chart 4.2 on page 44 of Exhibit PG 34 –
almost two thirds (64.3 per cent) of the employee respondents to the weekend worker survey
work in ‘other’ industries, that is, industries which are not covered by the modern awards
before us. Ms Pezzullo accepted that only 357 of the 1000 weekend workers were from the
hotels, cafes, fast food, retail or pharmacy industries.
378
[530] While the Pezzullo Weekend Work survey has its limitations, its findings support
other studies which have found that while differences between Saturdays and Sundays are not
as large as they once were, there are still differences in the activities undertaken on Sundays.
[531] The report also attempted to determine indirectly labour demand issues by assessing
how staffing levels, workloads and operating hours on weekends compared with weekdays.
However, the information obtained from workers is only about their perceptions of labour
demand and should be interpreted with caution as the data are subjective and collected from a
secondary source. This was highlighted in the Markey Report which noted the higher non-
response rate for this question.
379
Data on business operations are generally more reliable if
obtained from employers.
[532] It is convenient to now return to the Muurlink Report.
[533] The Muurlink Report examined the impact, if any, on the physical, psychological and
social well-being of a person who works on Saturdays, Sundays or public holidays and
whether people are able to recover, mitigate or compensate for any negative impact
identified.
380
The report is an extensive but not exhaustive
381
literature review that contains
numerous Australian and international studies.
[534] The Muurlink Report focused on six characteristics that relate to weekend work:
consecutivity, overload, uncontrollability, unpredictability, synchronicity and arrhythmia and
suggests that the impact of weekend work effects such workers through a range of factors
including:
working patterns being out of step with the majority of society;
lower predictability in the working week;
lower sense of control, or actual control, over working hours;
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increased chance of working more than five consecutive days in a row; and
increased chance of working more than 40 hours a week.
382
[535] United Voice relied on the Muurlink Report to support the following propositions:
“(i) Working on weekends is associated with…negative health …The presence of these
factors also spill over into a negative impact on the wellbeing, social life, and
relationships of the worker.
(ii) Weekend work disrupts social patterns, because the majority of social and leisure
activity takes place on weekends, and particularly on Sundays. Research shows that
Sunday is traditionally reserved to a degree greater than Saturday to rest and family
activities and there are elevated well-being consequences that are particular to Sunday.
The negative impact of weekend work on the employee also has a secondary impact
on the partner and/or the children of the worker.
(iii) Weekend workers are not able to fully off-set or mitigate the negative effects of
weekend work by reshuffling activities usually done on weekends done on other days.
Sunday workers in particular lose even more recreation time relative to standard
workers.”
383
[536] Dr Muurlink was cross-examined about a number of the international studies referred
to in his report and conceded that the following matters would be different in other countries
to Australia:
labour laws or employment conditions;
cultural or societal values;
wage rates;
unemployment rates;
social welfare systems; and
occupational health and safety laws.
384
[537] Dr Muurlink also agreed that the studies in his report do not separately identify the
four industries in which he was asked to report on although, where possible, he included
research related to industries that “heavily overlap” with the four industries
385
and he was
“very confident” that his conclusion is representative of the target populations and relevant
industries.
386
[538] SDA and United Voice submitted that the general principles in the Muurlink Report
have broad application and that there is no evidence that the consequences of weekend work
would be different across occupations or that only Australian studies are relevant.
387
[539] In this context, United Voice submit that the choice to work weekends is illusory as it
fails to recognise that many hospitality employees work on weekends because that is when
they are available in light of their other commitments and because the weekends are when
work is available.
388
We have considered these submissions and agree that employees
exercising a ‘choice’ to work on weekends are likely not doing so free of other considerations,
including their availability. However, the fact that availability, or any other factor, is a
consideration or a ‘fetter’ in exercising the choice to work on a weekend, does not alter the
fact that employees are exercising a choice, albeit one that is constrained by other
considerations.
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[540] Ai Group made a number of submissions about the limitations of the Muurlink Report.
These included that the information in the Muurlink Report:
is not related to employees in an industry, particularly the fast food industry;
focuses on association and does not establish causation between weekend work and
adverse health consequences;
assumes that weekend workers undertake long hours and work during abnormal
hours;
is premised on weekend workers being overworked or overloaded; and
is premised on weekend workers being subject to night work.
389
[541] The Hospitality Employers submit that the Muurlink Report is general in nature and
does not address the claims proposed.
390
[542] ABI submit that it is the six characteristics examined in the Muurlink Report that
cause adverse health consequences, not Saturday or Sunday work, as these characteristics
would affect all of their days of work and not only weekends.
391
[543] The issues canvassed by the papers in the Muurlink report do not focus on the effects
of weekend work in the relevant industries. As conceded by Dr Muurlink:
“… to be quite clear weekends and public holidays do not magically cause negative effects. The
body does not somehow sniff that it's Saturday.”
392
[544] We therefore agree with the critique from ABI that all that we can take from the report
is that it is the six characteristics examined that cause adverse health consequences, rather
than Saturday or Sunday work of itself.
393
The report’s relevance to the matters before us is
limited as it does not focus on weekend work in the relevant industries.
6.2.2 Rose Report
[545] In essence the Rose Report seeks to:
‘… examine the importance and value employees covered by the Restaurant Industry Award
2010 and the General Retail Industry Award 2010, place on time. Of particular interest is the
importance and value employees covered by these two awards have for working ‘unsocial
hours’, with particular emphasis on working on a public holiday.’
394
[546] ABI, the Retail Employers and others rely on the Rose Report to support their claims
for a reduction in the Sunday and public holiday penalty rates under, in particular, the
Pharmacy, Retail and Restaurants Awards. In this section we focus on those aspects of the
Rose Report relevant to Sunday penalty rates. In Chapter 9 we deal with those parts of the
Rose Report which deal with public holidays.
[547] On the basis of the conclusions in the Rose Report, the various employer interests
contend that employees do wish to be paid a premium to work Sundays, however the
premiums sought by employees are lower than the premiums presently imposed by the Retail
Award and that the disability associated with working on Saturdays is the same or
substantially similar to the disability associated with working on Sundays.
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[548] These contentions primarily rest on the following conclusion from the Rose Report:
‘The results of this modelling exercise suggest that the average threshold value of hourly pay at
which they would elect to work is actually the average level of pay currently being paid to the
sample. This suggests that the employees value their time at precisely their current wage rate.
Also based on the model results, it was found that on average, respondents value working on
Saturdays as being somewhere between 106 to 135 per cent of their current normal hourly pay,
and for working on Sundays somewhere between 126 and 165 per cent of the average current
normal hourly pay rate. The hourly rate for working on a public holiday was valued as being
between 124 and 224 per cent of the average current normal hourly pay rate, with the later
higher value being for working on a Public holiday that falls on a Sunday.’
395
[549] The above conclusion is based on survey data from 443 respondents. The
‘centrepiece’
396
of the survey data upon which the Rose Report conclusions rest consisted of
two discrete choice experiments designed to recover the hourly pay rate for which employees
were willing to work during both a normal work week and during a week in which one or
more public holidays fall.397
[550] The Rose Report attempts to estimate, through a set of questions put to a sample of
employees covered by the Restaurants and Retail Awards, the lowest wage that an individual
is willing to accept for a job and the value that an individual attaches to the labour she or he
supplies. The Rose Report assumes that the willingness to accept (WTA) is identical to the
value that an individual places on work time.
[551] As noted above the average threshold value of hourly pay at which the respondents
would be willing to work on Saturdays is ‘somewhere between 106 per cent to 135 per cent of
the average current normal hourly pay rate’, and for working on Sundays, ‘somewhere
between 126 and 165 per cent of the average current normal hourly pay rate’. The various
employer interests latch onto this finding to support their contention that the existing Sunday
penalty rates in the Restaurants and Retail Awards are too high. As ABI puts it:
‘The inference that arises from the above analysis is that employees do wish to be paid a
premium for working on Sundays as compared to their weekday pay. However, the value of
the premium sought by employees is substantially less than the premium presently applicable
under the Retail Award, where the penalty for Sunday work amounts to 200 per cent of the
normal weekly rate of pay.
398
[552] We note that ABI focuses on a comparison between the Rose Report results and the
current Sunday penalty rate in the Retail Award. The same comparison in respect of the
Restaurants Award does not yield the same conclusion. In fact, for Restaurant employees the
value of the premium sought by the Rose Report sample closely equates to the current Sunday
penalty rate in the Restaurants Award for most employees (that is, 150 per cent).
399
Indeed if
one were to mechanistically apply the Rose Report results to the fixation of Sunday penalty
rates then the Sunday rates for level 1 and 2 casuals in the Restaurants Award would need to
increase.
[553] In any event there are a number of reasons for treating the conclusions in the Rose
Report with caution.
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[554] As mentioned above, the Rose Report was critiqued by Professor Altman (the Altman
Report)
400
and referred to by Professor Borland in the course of his reply evidence to that of
Professor Lewis
401
. The various criticisms are extensively canvassed in the SDA and United
Voice written submissions. We only propose to mention two matters. The first concerns the
survey sample and questions.
[555] The socio-demographic characteristics of the Rose Report survey sample are set out
in Table 5 of the report. We note that just over 10 per cent of the survey respondents (45 out
of the 437 who disclose their income) had an income in excess of $52,000 which is not
representative of the earnings distribution of Hospitality and Retail employees (see
particularly (Charts 22 and 52 of this decision). On any view of it the sample in the Rose
Report survey cannot be said to be representative of employees covered by the Retail and
Restaurants Awards.
[556] In addition, the sample of respondents across the States and Territories does not appear
to be representative. For example, there were more respondents from both Western Australia
and Queensland, than from Victoria. Professor Rose considered that the survey was not
representative of the States and Territories when the issue was put to him in cross-
examination.
402
The gender characteristics also differed from employees covered by the
Restaurant and Retail Awards, as presented later in Tables 41 and 67.
[557] There are also a number of issues which arise from how the survey questions were
structured and contextualised. These issues are canvassed in the Altman Report, relevantly
Professor Altman concludes:
‘The reference points used in the Rose report would be expected to generate relatively low
WTA values’.
403
[558] Survey responses are influenced by the reference points contained in the survey and
how the survey questions are structured and framed. During the course of cross examination
Professor Rose acknowledged that if survey participants were presented with a question that
asked if they would work for a rate lower than the rate in the relevant modern award then their
analysis ‘would have definitely generated different results’.
404
[559] The second substantive limitation on the conclusions reached in the Rose Report is
that it reports on the average value the respondent employees place on their time on,
relevantly, Saturdays and Sundays. Importantly, the Rose Report does not report the actual
value the respondents place on their time and, as such, the values reported are less than the
actual range. As noted in the Altman Report:
‘…amongst the key findings of the Rose Report based on the survey population, Sunday work is
valued between 126 and 165 per cent of the average current normal (normal weekday) hourly
penalty rate… This range of values is not the actual range of values of work time across the
sample population. It is rather the range of highly likely ‘averages’ across this sample
population. But it is the range of actual values that is of critical importance here, where the
upper band of this range would be much greater than the range of averages’.
405
[560] Similarly, the Rose Report itself notes that the range of actual values differ from the
average values:
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‘The above discussion has been limited to an explanation of the average marginal rates of
substitution (MRS) obtained from the models. It is noteworthy however that the standard
derivation parameters associated with the various normally distributed MRS, are all
statistically significant suggesting that there exists significant heterogeneity in the results. This
suggests that not all employees share the same remuneration preferences, with some desiring
more pay, whilst others would accept less’.
406
(emphasis added)
[561] Further, evidence of this issue is that, while the average WTA presented in the results
suggest a WTA of between 126 per cent to 165 per cent for Sunday, the range of responses, as
measured by the 95 per cent confidence intervals, are likely to be much greater, highlighting
the difficulties in interpreting these results with any precision.
[562] There are plainly limitations to the Rose Report and the modelling results should not
be mechanistically applied as a means of fixing an appropriate penalty rate. But the results do
provide an insight into the relative disutility of Saturday, Sunday and public holiday work.
Relevantly, the value the employee respondents place on their time on a Sunday (126 – 165
per cent) is significantly higher than the value attributed to Saturday (106 – 135 per cent). The
Rose Report suggests differences in the disutility of Saturday and Sunday work, a point
acknowledged in a number of employer submissions.
[563] The results of the Rose Report provide indicative evidence of the relative disutility of
weekend work of Sundays compared to Saturdays.
6.2.3 Charlesworth and Macdonald reports (Australian Work and Life Index)
[564] The SDA called Professor Sara Charlesworth and Dr Fiona Macdonald of RMIT
University who provided a report to the SDA
407
(the Charlesworth/Macdonald Report). The
report examines the relative impact of working on Sundays compared to Saturdays on the
work-life interference experienced by employees.
408
[565] The report is divided in two parts, both focusing on retail employees. The first part,
undertaken by Professor Charlesworth, provides an analysis of the 2014 Australian Work and
Life Index (AWALI) survey which uses a measure of work-life interference developed by
Professor Barbara Pocock, Dr Philippa Williams and Dr Natalie Skinner at the Centre for
Work & Life, University of South Australia.
409
The second part, undertaken by Dr
Macdonald, is a qualitative study that draws on follow-up telephone interviews with 25
employee respondents to the 2014 AWALI survey that reported working in the retail industry
and indicated that they sometimes, often or always worked on Sundays.
410
[566] The AWALI is an annual survey that began in 2007 to provide a ‘snapshot’ of the
major influences and consequences of work-life interaction. The AWALI defines ‘work’ as
paid work and ‘life’ as the activities outside of paid work.
411
[567] The survey is a nationally random stratified sample of Australian households for
persons aged 18 years or older. Respondents to the AWALI survey are different each year. In
2014, the AWALI sample comprised 2690 workers, of which 2279 were employees and 411
self-employed persons, surveyed over four weekends in March. The survey was conducted
using a computer-assisted telephone interview (CATI) whereby household telephone numbers
were selected using random digit dialling and then a random selection of individuals in each
[2017] FWCFB 1001
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household were chosen to participate in the survey.
412
During her oral evidence, Professor
Charlesworth explained that the survey was run over Fridays, Saturdays and Sundays.
413
[568] In cross examination, Professor Charlesworth conceded that, being a telephone survey,
the AWALI is biased against young people who are unlikely to have landlines and more likely
to have mobile phones.
414
[569] The AWALI survey contains the perceptions of the following five measures of work-
life interference that form the index:
‘general interference’ (i.e. the frequency that work interferes with responsibilities or
activities outside of work);
‘time strain’ (i.e. the frequency that work restricts time with family or friends);
‘work-to-community interference’ (i.e. the frequency that work affects workers’
ability to develop or maintain connections and friendships in their local
community);
satisfaction with overall ‘work-life balance’; and
frequency of ‘feeling rushed or pressed for time’.
415
[570] To create one score for the index, responses to the five measures were averaged and
standardised. A score of 0 for the index indicates the lowest work-life interference and the
maximum score of 100 indicates the highest work-life interference. The average score for the
index in 2014 was 42.1 and the median was 40 (the middle score whereby half of respondents
had higher scores and another half had lower scores).
416
[571] Analysis of the 2014 AWALI survey was also provided in a report by Dr Skinner and
Professor Pocock of the Centre for Work + Life, University of South Australia.
417
The report
found that 62 per cent of respondents worked standard hours (weekdays before 9pm), 30 per
cent worked ‘often’ or ‘almost always’ on Saturdays and 18 per cent worked ‘often’ or
‘almost always’ on Sundays.
418
[572] Skinner and Pocock investigated if any particular day of the weekend was associated
with greater work-life interference across all employees and found that regular (that is, ‘often’
or ‘almost always’) working on Sundays is “clearly associated” with greater work-life
interference, whether employees also work on Saturdays or not. Work-life interference was
lower for employees who work regular Saturdays and not regular Sundays and lowest for
employees who do not work regular Saturdays or Sundays.
419
[573] Professor Charlesworth explained that weighted estimates of the 2014 AWALI survey
contained 223 employees in the retail industry of which 127 worked ‘sometimes’, ‘often’ or
‘almost always’ on Saturdays and 103 worked ‘sometimes’, ‘often’ or ‘almost always’ on
Sundays.
420
Professor Charlesworth found that retail employees who ‘sometimes’, ‘often’ or
‘almost always’ worked on Sundays reported a higher average AWALI score than those who
‘rarely’ or ‘never’ worked on Sundays, and this difference was statistically significant.
421
[574] That is, retail employees that work on Sundays were found to have greater work-life
interference than retail employees who ‘never’ or ‘rarely’ work on Sundays.
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[575] While employees who ‘sometimes’, ‘often’ or ‘almost always’ worked on Saturdays
also reported a higher average AWALI score than those who ‘rarely’ or ‘never’ worked on
Saturdays, this difference was not found to be statistically significant.
422
[576] Professor Charlesworth suggested that the number of hours worked can impact on
work-life interference.
423
After controlling for hours worked, working ‘sometimes’, ‘often’ or
‘almost always’ on either Saturdays or Sundays was found to be associated with higher
AWALI scores, and therefore greater work-life interference, than ‘never’ or ‘rarely’ working
on these days.
424
[577] Professor Charlesworth found that the average AWALI scores for retail employees
were not significantly different from the average AWALI scores for all employees and
concluded that the influence of working on Saturdays or Sundays was not affected by working
in the retail industry.
425
[578] In summarising the data, Professor Charlesworth concluded that employees who
‘sometimes’, ‘often’ or ‘almost always’ worked on Saturdays or Sundays experienced greater
work-life interference than employees who ‘rarely’ or ‘never’ worked on these days.
426
The
data for Sundays are presented in Table 14. Although data are presented on employees
working in retail, it should be noted that the AWALI survey is not designed to be
representative at the industry level.
427
This means that the survey was not designed to be
representative of employees working in the retail industry.
428
Table 14
429
:
AWALI scores and Sunday work, all and retail employees
All employees Retail employees
Mean Number Std dev. Mean Number Std dev.
Never/rarely 37.6908 1522 20.51435 34.4397 120 20.60154
Sometimes, often,
almost always
50.0403 772 21.75977 45.2990 102 22.73461
Total 41.8474 2294 21.73544 39.4368 222 22.23156
[579] The SDA and United Voice submit that the Commission should consider the following
findings from the 2014 AWALI survey:
‘(a) Employees sometimes, often or almost always working on Saturdays or on Sundays
experience worse work-life interference than employees who rarely or never work these
hours.
(b) Employees sometimes, often or almost always working Sundays alone or in combination
with working Saturdays experience worse work-life interference than employees who
sometimes, often, almost always work Saturdays alone.
(c) There is no significant difference between retail and non-retail employees in the impact of
working on Saturdays or on Sundays; retail employees have similar work-life interference
patterns in respect of Saturday and Sunday work as non-retail employees.
(d) There is no significant difference between work-life interference in 2008 and 2014 for
employees working sometimes, often or almost always on the weekend.’
430
[580] In its final submission, the Retail Employers submit that the evidence provided by
Professor Charlesworth shows that:
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‘Significantly fewer retail industry employees who sometimes, often or almost always work on
Sundays than employees generally who sometimes, often or almost always work on Sundays,
report…
(a) work interferes with activities outside work sometimes, often or almost always (56.8%
for retail employees compared to 70% for all employees);
(b) work keeps them from spending the amount of time they would like with family and
friends sometimes, often or almost always (41.9% for retail employees compared to
69.9% for all employees);
(c) work interferes with their ability to develop or maintain friendships in their
community sometimes, often or almost always (47.1% compared to 56.9% for all
employees); and
(d) they feel rushed or pressed for time sometimes, often or almost always (82.3%
compared to 85.6% for all employees).’
431
[581] The Retail Employers submit that retail employees had lower AWALI scores in
relation to weekend work when compared with all employees.
432
However, the SDA referred
to Professor Charlesworth’s evidence that the influence of working on Saturdays or Sundays
on work-life interference was not affected by working in the retail sector
433
and that
measuring each of the five measures of work-life interference was not possible for retail
employees due to small sample sizes.
434
[582] ABI identified the following issues with the AWALI survey:
there was no information provided on the non-work activities being interfered with
or the importance of these activities;
there was no information on whether employees who worked weekends also
worked during the week;
no indication was provided on how much non-working time is interfered with, only
how often work interfered with non-work activities; and
no data was provided on the positive aspects of work.
435
[583] The PGA submit that the analysis did not include relevant findings for the retail
industry, particularly due to a small sample size.
436
Further, that the regression analysis by
Professor Charlesworth suggests there are other factors affecting work-life interference which
are not reflected in the AWALI scores, such as caring responsibilities, commuting times, local
economic and social conditions and combining education and work.
437
[584] The PGA also commented on the survey design and composition of the AWALI and
submitted that:
it is biased against young people:
o who use mobile telephones;
o who may not be home on weekends, possibly because they are working;
o as it excludes those under 18 years;
o who are a key group that are more likely to work on weekends;
it is biased against weekend workers who are likely to be busier or feel more
stressed working on weekends;
it is biased against unemployed people who are excluded;
the questions had a tendency to elicit a negative response;
438
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the AWALI measures only negative outcomes associated with work when it is
appropriate to balance both positive and negative impacts of weekend work, while
positive impacts are not measured;
439
it does not take into account any compensatory strategies that weekend workers
may adopt;
440
and
it does not measure work-life interference during different times of the day or
relative to other days of the week.
441
[585] The 2014 AWALI survey and its findings were discussed in the PC Final Report.
442
In
discussing the development of the index, the Productivity Commission noted that using an
unweighted sum of the five measures is problematic as it was not clear that each would have
an equal impact on work-life interference. However, the Productivity Commission did note
that the index is less subjective than anecdotal evidence and conjecture.
443
[586] The Productivity Commission undertook its own analysis of the 2014 AWALI survey.
The results did not often accord with those of Professor Charlesworth and found that most
people did not experience major problems with their work-life interactions except for feeling
rushed. In this analysis, those who responded that they ‘sometimes’ experienced interference
were grouped with those who ‘never’ or ‘rarely’ experienced interference.
444
[587] The Productivity Commission modelled the outcomes ‘never’, ‘rarely’, ‘sometimes’,
‘often’ or ‘almost always’ while controlling for a series of factors including hours worked,
industry, single status, gender, age, and the presence of young children. This was used to
estimate the likelihood of an employee experiencing some impact for the five dimensions of
the AWALI if they worked at unsocial times (Saturday, Sunday or evening) compared with
standard times (Monday to Friday and not evenings). The PC Final Report highlighted that for
two of the five dimensions, regular Sunday work had less impacts than regular Saturday work.
In fact, higher dissatisfaction was found for working regularly on evenings.
445
These results
are presented in Chart 15.
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Chart 15
446
:
Degree to which employees ‘often’ or ‘almost always’ experience impacts work
Note: Outcomes relative to standard hours. These results are estimates from an ordered logit of the various measures of work
impacts against a series of independent variables, including whether a person works mostly (often or almost always) on
Saturdays, on Sundays or on evenings. Other regressors included gender, age and whether an employee had young children.
Each of the dependent variables were based on a Likert scale of never, rarely, sometimes, often or almost always (or in life
balance terms, a satisfaction measure from very satisfied to not at all satisfied). The logit regression was used to estimate the
likelihood that an employee was often or almost always experiencing some impact if they worked at a non-standard time
compared with a standard time (Mondays to Fridays). For example, there was around a 4 percentage point difference between
the share of people feeling often or almost always rushed for time if they worked on a Saturday (but not a Sunday or evening)
compared with those working at standard times.
[588] The SDA contended that “the Commission should not place any weight on the
Productivity Commission’s analysis of the AWALI data in making findings about the
disability experienced by weekend workers in Australia”.
447
The SDA argued that the most
accurate approach is to use the comprehensive AWALI measure and to control for the number
of hours worked,
448
as undertaken by Professor Charlesworth. We note that even on the
approach taken by the Productivity Commission, the relative disutility of Sunday work
(compared to Saturday work) is still greater on 3 out of the 5 measures.
[589] The qualitative study by Dr Macdonald involved telephone interviews with 25 retail
employees who regularly worked on Sundays to investigate the nature of any work-life
interference experienced by retail employees. These employees were randomly selected from
the 81 out of 102 retail employees who responded that they ‘sometimes’, ‘often’ or ‘almost
always’ work on Sundays and provided contact details.
449
[590] Dr Macdonald found that higher pay on Sundays is important to employees and was
considered to be the most positive aspect of working on Sundays. Employees discussed that
they worked on Sundays as it was a requirement of their employer to work weekends or
because of study or family commitments during the week.
450
Others preferred the higher pay
to working on Saturdays, including some young people who were combining work and study
who also reported less work-life interference from Sunday work than other employees.
451
Attitudes towards working on weekends were also dependent on whether employees had any
4
2.8 2.5
4.6
2.5
-2.9
10.9
1.7
8.2
7.4
6.3
13.2
6.2
12.9 12.9
-4
0
4
8
12
16
Feels rushed Interferes with
outside activities
Adversely affects
life balance
Interferes with
family/friends
Interferes in
maintaining
community
connections
Saturday Sunday Evening
Percentage points difference
from standard hours
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flexibility with their working time, their co-workers and how hard they were required to
work.
452
[591] Sunday was considered to be different to other days as employees felt excluded and
missed out on socialising and relaxing with friends and family on a day when people get
together. Dr Macdonald concluded that Sundays were viewed as not being a regular work day,
were different to Saturdays, and had a more negative effect on work-life balance.
453
[592] The SDA submit that Dr Macdonald’s qualitative survey used a ‘grounded’ approach
to obtaining themes to discuss with interviewees. The SDA explained that this process
‘minimises the risk of selectivity or omission in reporting upon the key themes’ and that the
sample of 25 retail employees was large enough to reach “saturation” point whereby
collecting further data would not add new information.
454
The SDA also argue that the
sampling framework was representative of retail employees in the AWALI survey who
responded that they worked ‘sometimes’, ‘often’ or ‘almost always’ on weekends by way of
sex, age and employment status.
455
[593] According to the SDA, the main themes from the interviews of employees who work
‘sometimes’, ‘often’ or ‘almost always’ on weekends, were that:
Sunday is different to other days and is not a regular work day;
Sunday is different from Saturday;
working on Sundays is more negative in its effect on work-life interaction than
working on Saturdays because:
o for most of the community, Sunday is a day off, a “free” day and/or a
“family and friends” day;
o Sunday work is perceived by retail employees as interfering with
relaxation and as isolating or excluding them from “life”; and
work-life interference experienced by retail and other employees from working on
Sundays has ripple effects beyond the employee concerned, impacting adversely on
families and on relationships with friends.
456
[594] The Retail Employers commented that the findings in Dr Macdonald’s Report showed
that retail employees considered that working on Sunday does not ‘often’ interfere with
family responsibilities; social interactions; or recreational and community activities.
457
They
also added that many retail employees choose, or are happy, to work on Sundays;
458
that retail
employees view Saturdays and Sundays as similar or in equal in terms of work-life
interference;
459
and that retail employees will continue to work on Sundays if the penalty rate
is reduced to 50 per cent.
460
In terms of the work, the Retail Employers commented that a
number of retail employees view Sunday as more relaxed than Saturday
461
and that retail
employees that work on Sundays experience difficulties due to a limited number of staff.
462
[595] ABI and the PGA submit that the findings from Dr Macdonald are unreliable because:
as it is a qualitative study, the findings cannot represent the whole population and
the only conclusion is that the issues reported are the types of issues affecting
employees in the retail industry
463
;
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respondents were asked leading questions, which were biased towards the premise
that Sunday work interferes with other activities more than Saturdays;
464
the interview transcripts show there was no difference in the disability associated
with Saturday and Sunday work;
465
comments which viewed Saturdays and Sundays as similar or equivalent were not
reported by Dr Macdonald;
466
the order and number of questions about Sundays were likely to produce answers
about the negative impact of Sunday work;
467
and
the evidence provided by Dr Macdonald is highly selective and not a true
representation of the views of the interviewees.
468
6.2.4 Conclusions on the Expert Evidence
[596] As shown in the overview of data, changes in the composition of employment have
been dominated by an increase in female and part-time employment and an increase in
employment in the services industries. These changes have in part occurred in response to
shifts in consumer demand and preferences for goods and services that are often accessed on
weekends, particularly in the retail and hospitality sectors. Together with the data showing
that employees in these industries are more likely to work on weekends, it follows that
weekend work is relatively important in these industries.
[597] With regard to the importance of spending time on work and leisure activities, the data
and evidence presented before us which refer to time use surveys (the PC Final Report, the
Lewis Report and the papers by Bittman and Craig and Brown) indicate that work and leisure
activities remain largely separated between weekdays and weekends. Further, while the
differences between Saturdays and Sundays have converged over time, there remain
differences in the activities performed on each of these days. Sundays is more reserved for
family time than Saturdays, when consumer preference to shop is still higher. However, based
on the limitations with these data it is difficult to discern the differences in time use between
Saturdays and Sundays for weekend workers compared with others.
[598] While Sunday was traditionally regarded as a day of rest and for attending church, the
data shows that the proportion of the population that attend church regularly has significantly
declined over time. The decline in religious observance has largely been driven by young
people.
[599] However, the data also show that a majority of the population report faith in a religion,
most of them Christian. Although it is likely that only a minority of this group attend church
regularly, it is for this group that weekend work will likely interfere with religious practice.
[600] The expert evidence presented in the Pezzullo Weekend Work Report and Rose
Reports, as well as the analysis of the AWALI survey, provided recent information on the
attitudes towards Saturdays and Sundays. This evidence, together with the overview of the
data in the first part of this chapter that provides information over a longer period, highlighted
that employment on weekends has increased with the rise in consumer demand. However,
most of the evidence before us shows that there continues to be greater relative disutility with
work on Sundays than Saturdays.
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[601] We also note the following findings from the Sands report online survey of retail
employees:
The ‘vast majority’ of employees that do not work on Sundays state that nothing
will motivate them to work on a Sunday;
469
The main difficulty with Sunday work is the impact on the ability to spend time
with family/friends;
470
86 per cent of Sunday employees hardly ever or never are able to make up time to
attend community, sporting or cultural events during the week;
471
and
29 per cent of Sunday employees with children believe that Sunday work has an
adverse impact on the health and development of their children.
472
[602] We now turn to our conclusions in respect of the Charlesworth/Macdonald Report.
[603] Using the AWALI survey, Charlesworth and Macdonald undertake an analysis on the
effects of working on Sundays compared with Saturdays on the work-life interference
experienced by employees.
[604] A number of issues have been raised with the methodology used to capture the
experiences of employees working in retail. With just over 100 employees reporting that they
‘sometimes’, ‘often’ or ‘almost always’ work on Sundays, the sample of Sunday workers is
relatively small and unlikely to be representative of employees working within the industry.
[605] Further, the survey may be omitting critical information related to the experience of
those working on weekends, particularly in retail. This is because the survey is conducted on
weekends when weekend workers are likely to be engaged at work and excludes workers aged
below 18 years.
[606] However, as noted by SDA and United Voice, the AWALI survey is one of the few
pieces of evidence put before us that examines the effect of unsociable working hours on
work-life interference. Thus, while the results suggest that there is no significant difference on
the impact of working on Saturdays or Sundays between retail and non-retail employees, the
analysis put forward by Professor Charlesworth and also the analysis presented in the PC
Final Report suggests that, for some measures of work-life interference, there may be some
additional disutility associated with working on Sundays compared with Saturdays.
[607] The analysis in the PC Final Report of the likelihood that an employee experiences
some impact from work at unsocial times controlled for a number of characteristics than just
the number of hours worked as undertaken by Professor Charlesworth. This appears to be a
sensible approach. However, this method still showed that for three of the five AWALI
measures, the degree to which employees ‘often’ or ‘almost always’ experience impacts from
work is higher on Sundays than Saturdays, and substantially so.
[608] As we note at [1599] and [1609], the Sands Report is also relevant in addressing the
relative disutility of Sunday work compared with Saturday in the retail sector. The Sands
Report found that the main difficulty with working on Sunday is the ability to spend time with
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family/friends, while a majority hardly ever or never are able to make up time for outside
activities such as community, sporting or cultural events.
[609] As to Dr Macdonald’s qualitative study, although it was undertaken to provide greater
context surrounding the experiences of retail employees working on weekends, the subjective
nature of the study suggests it is not an accurate representation of weekend workers. As
argued by the employer groups, the selective nature of the report did not provide a true
representation of the survey participants, which would have showed relatively little difference
in disutility between Saturdays and Sundays.
[610] An extensive amount of data, research and literature has been put before us describing
the nature of work and non-week activities in relation to weekends. The evidence points
towards a marked shift in the attitudes and nature of work on weekends, in particular Sundays.
6.3 Employment effects of changes to penalty rates
[611] A number of expert witnesses gave evidence in relation to the employment effects of
penalty rates.
[612] ABI and others called Professor Phil Lewis, Director, Centre for Labour Market
Research and Professor of Economics at the University of Canberra who provided a report on
penalty rates in the retail, café and restaurant and hairdressing and beauty industries (the
Lewis Report).
473
[613] The SDA and United Voice called expert evidence in response to the Lewis Report,
from Professor John Quiggin, University of Queensland
474
(the Quiggin Report) and Professor
Jeff Borland, Department of Economics, The University of Melbourne
475
(the Borland
Report). Professor Lewis also provided a report in response to these expert reports.
476
[614] The replies and submissions responding to the Lewis Report focused on the studies
cited by Lewis and the five assumptions which inform the modelling of the employment
effects of penalty rates.
[615] SDA also called Dr Serena Yu, Senior Research Fellow, Centre for Health Economic
Research and Evaluation at the University of Technology, Sydney, Business School, who
provided a report Evaluating the impact of Sunday penalty rates in the NSW Retail industry
(the Yu Report). The Retail Employers called Lynne Pezzullo, who provided a report Four
Yearly Review of Modern Awards Penalty Rates Review
477
in response to the Yu Report.
6.3.1 The Lewis Report
[616] This section deals with the final part of the Lewis Report, involving a simulation
model of the effects of introducing penalty rates on Sundays and public holidays on the
demand for labour. We have dealt earlier with the other, less contentious aspects of the Lewis
Report.
[617] The model considered the impact of a 1 per cent increase in real wages on the demand
for labour, that is the elasticity of demand for labour. This was reflected in the model by the
degree to which labour can be replaced by other inputs (known as the elasticity of
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substitution), labour’s share of total costs and how responsive demand is to changes in prices
(known as the elasticity of demand for goods and services).
478
Professor Lewis estimated the
long run elasticity of demand, whereby firms can vary all of their inputs, including capital,
and the short run elasticity of demand, when capital is fixed, for both permanent and casual
employees.
[618] Several assumptions underpin the model, including the degree of substitution between
employees and the elasticity of demand for output. The model included a range of estimates
on the elasticity of substitution of labour from previous Australian studies that examined
labour’s response to changes in minimum or aggregate wages.
479
[619] The Lewis Report notes that there is little evidence for the magnitude of the elasticity
of demand for output of the relevant industries (that is, the retail, café and restaurant,
hairdressing and beauty industries). In discussing the different sub-sectors that form the retail
sector—from areas such as groceries which is likely to be less responsive to price changes
compared with demand for electronic goods, as well as the consideration that eating out is a
“luxury good”— Professor Lewis considered a range of elasticities of demand for output
which varied from –0.1 to –3.0.
480
[620] Tables 4a and 4b on pp. 29-30 of the Lewis Report present the range of assumptions
and the results from the modelling in the Lewis Report. It shows that, with an elasticity of
substitution of labour of 0.5 and an elasticity of output of –0.1, penalty rates on Sunday would
reduce demand for hired labour in retail of permanent employees to 87 per cent of the level
without penalty rates in the short run, when capital is fixed, and 78 per cent in the long run,
when firms have time to adjust capital. Under the same assumptions, the demand for
permanent employees on public holidays in retail would be 80 per cent of the level without
penalty rates in the short run and 66 per cent in the long run. The full range of estimates is not
presented as Professor Lewis found that in some scenarios firms would not choose to employ
hired labour.
[621] The Lewis Report concluded that the effect of penalty rates is that employment would
be lower for both permanent and casual employees than if there were no penalty rates.
481
[622] Professors Quiggin
482
and Borland
483
both responded that the studies cited in the
Lewis Report were either misleading or of limited value.
484
In reference to Professor
Borland’s arguments, SDA and United Voice submit that applying the elasticity of labour
from minimum and aggregate wage studies to the analysis of penalty rates does not account
for the differences between the two types of wage payments.
485
This is said to be so because
the population that receives penalty rates is different to the population that receives the
minimum wage, and that penalty rates are payable at different times and days.
486
[623] SDA and United Voice contend that the studies referred to by Professor Lewis
provided ‘no useful insight into the appropriate elasticities to apply when performing penalty
rate elasticity modelling’.
487
[624] ABI relied on Professor Lewis’ response, namely that he adopted the findings of the
impact of minimum wages on employment ‘to simply establish the principle that there is
substitution between hired labour and other inputs in response to wage rates’.
488
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[625] The difficulty with the proposition advanced by ABI (and other employer
organisations) is that during the course of his cross-examination Lewis agreed ‘the elasticity
of employment with respect to the minimum wage … [is clearly] not relevant to this penalty
rate case’ and that he relies on ‘the elasticities of substitution, some of which are a by-product
of the minimum wage studies’.
489
[626] In reference to the elasticities of substitution used in the Lewis Report, ABI notes that
Professor Lewis argued that the elasticities he adopted ‘fall within the range of estimates
contained in the Australian literature’.
490
[627] However, as the SDA and United Voice submit, some of the elasticities used by
Professor Lewis were unconvincing and in the PC Final Report the Productivity Commission
regarded a labour demand elasticity of –3, as derived from a previous paper by Professor
Lewis, to be “unrealistic”.
491
[628] SDA and United Voice criticised the five assumptions that “underpin” the modelling
by Professor Lewis and which Professor Borland suggests ‘are so flawed as to render his
modelling unreliable and not demonstrative of any negative effect on employment caused by
penalty rates’.
492
[629] During the course of his evidence Professor Lewis acknowledged
493
that the
conceptual basis for his conclusions is represented in the chart
494
below.
A model of the scale effect
[630] SDA and United Voice criticised Professor Lewis’ model for assuming perfect
competition. This impacts the scale effect, or the size of the pass-through effect of a reduction
in penalty rates on product prices.
1. Wages (penalty rates)
are reduced
2. Decreasing the cost
of production (labour)
3. Allowing
for prices to
be reduced
4. Resulting
in greater
demand
(sales)
5. Increasing
profits
6. Which can be
spent on additional
labour
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[631] We note that during the course of cross examination Professor Lewis conceded that
the markets for hospitality and retail are not perfectly competitive and but have a high degree
of competition. On this basis it is reasonable to conclude that the projected decrease in prices
will be less than claimed in the Lewis Report.
495
[632] It is also relevant to observe that the conceptual basis for Professor Lewis’ model
(lower wage costs → lower prices → increased demand → increased labour) was not
supported by any of the employer lay evidence in the proceedings. The lay witnesses spoke of
responding to penalty rate reductions by improving the range and level of services but not one
suggested that prices would fall if penalty rates were reduced.
[633] Professor Lewis stated that his simulation modelling contains a range of estimates that
‘represent a very conservative scenario’ and that whichever estimates are adopted, ‘the
employment effects of penalty rates are significant’.
496
However, SDA and United Voice
claimed that in cross-examination Professor Lewis accepted that the estimates were “probably
unduly biased upward”
497
and therefore likely to overstate any employment response.
Professor Quiggin discussed a number of Australian and international studies on minimum
wages which provided lower estimates of the elasticity of labour demand than those cited by
Lewis. This also supports the argument that the Lewis model overstates any employment
effects.
498
[634] Professor Borland argued that Professor Lewis did not consider how a reduction in
penalty rates would affect the demand for output (and employment) across other industries
using a general equilibrium model.
499
Professor Borland commented that a reduction in
employment in other industries would occur if there was an increase in employment in the
restaurant industry.
500
[635] SDA and United Voice submit that a general equilibrium model is more appropriate as
it ‘says that if demand, and therefore employment, increases in one area, such as restaurants,
then it must decrease in another, such as supermarkets’.
501
[636] Professor Lewis acknowledged that “some ‘demand shifting’ of output takes place to
weekdays and away from Sundays and public holiday demand by consumers”, although
“there are little available data on this and so it is difficult to predict what the effect of
‘demand shifting’ is on employment.”
502
[637] We note that the minimum wage studies referred to estimate wage changes that are
different to penalty rates and also to a group of workers not identical to those receiving
penalty rates. Although workers receiving penalty rates or modern award minimum wages are
more likely to be comparable as they tend to be employed in similar industries, minimum
wage adjustments are very different to changes in penalty rates. Penalty rates are a form of
extra payment received for working specific hours or days of the week, while minimum
wages are not confined to these restrictions and must be paid on all days.
[638] The Lewis Report considered the effects of introducing penalty rates and thereby
increasing wages. It is assumed that stemming from his results, Professor Lewis would
conclude that any effects following a reduction in penalty rates would be of the same
magnitude as his current findings, albeit in the opposite direction. However, as explained by
Professors Borland and Professor Quiggin, and conceded by Professor Lewis, employers may
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need to provide additional remuneration to attract weekend workers, so that the effects of a
reduction in penalty rates may not result in the suggested findings.
[639] Finally, as noted in the PC Final Report, the demand for goods and services on any
day are partial substitutes for goods and services on other days so that, for example,
consumers who shift their shopping or dining patterns to Sundays may reduce this on other
days.
503
[640] SDA and United Voice referred to Professor Quiggin’s evidence “that if there is an
increase in the number of establishments opening on Sunday or public holidays, any increase
in consumer spending on such days would likely come at the expense of other times”.
504
[641] Professor Borland also commented that the model does not allow for consumers who
were not able to buy from the firm on a particular day to shift their demand to the same firm
on another day or to an alternative firm open on that particular day. Professor Borland stated
that “if … a firm opens for an extra day, all of the consumers who now buy from it on that
day previously bought from another firm on that day, then there is a zero net effect on
employment.”
505
6.3.2 The Yu Report
[642] The Yu Report uses two empirical models to determine if there was any impact from
the changes in Sunday penalty rates on employment and hours worked in the New South
Wales (NSW) Retail trade industry.
[643] As a result of the award modernisation process, employees in Retail trade in NSW
moved from the Shop Employees Award to the General Retail Industry Award 2010.
Transitional arrangements were provided to employers in NSW so that the increase in the
penalty rates could be phased in through five incremental annual instalments of 10 percentage
points beginning 1 July 2010 and ending on 1 July 2014.
[644] Dr Yu examined the effect of an increase in penalty rates on employment by
comparing outcomes in the NSW Retail trade industry (where Sunday penalty rates increased
from 150 per cent to 200 per cent) with the Victorian Retail trade industry (where Sunday
penalty rates remained unchanged). From this analysis, Dr Yu concluded that there was no
systematic evidence of an adverse effect on employment following the transitional increases
in the Sunday penalty rates in the NSW Retail trade industry.
[645] Using the ABS Labour Force Survey, the difference-in-difference method was applied
to determine if there were any effects on aggregate employment or hours worked from the
changes in Sunday penalty rates between two periods—February 2000 and June 2009 (pre
penalty rate increase) and August 2010 and February 2015 (post penalty rate increase).
[646] This method compares the employment outcomes of a group of workers affected by
the penalty rate increase (defined as the treatment group) with an otherwise comparable group
of workers that are unaffected by the penalty rate increase (defined as the control group). The
difference in outcomes between these two groups is used to determine the employment effect
of an increase in penalty rates.
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[647] The treatment group comprised Retail trade workers in NSW and the control group
comprised Retail trade workers in Victoria. Victoria was selected as a control group because
there was no change to penalty rates in this State for Sunday.
[648] To test the comparability of the treatment and control groups, Dr Yu used quarterly
data from the ABS Labour Force Survey to compare trends in employment levels and both
full-time and part-time hours worked between August 1991 and May 2010 (i.e. before the
penalty rate increase). Dr Yu concluded that the two groups shared common trends and were
therefore comparable.
[649] The model’s key assumption is that employment trends would be the same for both
groups of employees in the absence of an increase in penalty rates after controlling for a
number of factors.
506
Dr Yu also noted that “[w]hile the analysis is unable to isolate the effect
of the Sunday penalty rates from other changes [in the award]… changes in other entitlements
were relatively small or zero”.
507
[650] Dr Yu found a negative employment effect in the first year of transitioning to modern
awards while the effects in subsequent years were found to be inconsistent, contradictory, and
not statistically different from zero. The total effect of the five increases was statistically
insignificant.
508
Yu acknowledged that an employment effect may have occurred though it
could be too small and therefore would not be statistically significant.
509
[651] A second analysis was also performed using HILDA survey data to determine if
employment shifted away from Sundays to other days of the week. If both analyses found an
effect then that would be evidence that there were employment effects arising from the
increases to Sunday penalty rates. If only one analysis found an effect then Dr Yu argued that
this may be due to other factors or that any effects did not cause a net welfare loss.
510
[652] The second model used the HILDA Survey to take advantage of its longitudinal nature
and also applied the difference-in-difference method to analyse the change in the probability
of working on Sundays following each of the Sunday penalty rate increases between 2010 and
2013 arising from the transitional arrangements between NSW and Victorian retail
employees. It also controlled for differences in demographic characteristics between the two
states.
[653] In the second model, effects on employment were determined by analysing the period
between 2008 – 2009 (pre penalty rate increase) and 2010-2013 (post penalty rate increase).
[654] Results were compared between different groups of employees: full-time and part-
time employees, employees in large businesses and those in small to medium businesses, and
adult and junior employees. Dr Yu did not find a shift away from employment on Sundays.
511
Although Dr Yu found a ‘large positive effect’ for junior workers, this was only for 2012, and
Dr Yu also found that “there was no commensurate decline in non-junior employees working
on Sundays”
512
and argued that “other factors are motivating these preferences for deploying
junior employees on Sunday.”
513
[655] Overall, Dr Yu concluded that “the research showed no systematic evidence of an
adverse effect on employment following the transitional increases in the Sunday penalty rates
in the NSW retail industry”.
514
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[656] The main contention among parties was the issue of comparability between the
treatment and control groups.
[657] In reply, Ms Pezzullo argued that the two groups did not share common trends and that
Victoria was not an appropriate control group.
515
Ms Pezzullo presented data on employment
and hours worked from February 2000 to February 2015 and instead argued that employment
trends between Victoria and NSW were “diverging”.
516
Ms Pezzullo also found that her
analysis of the employment trends “strongly” suggested that there was “a break in the trend, at
around the end of 2007” to provide further evidence that employment trends were not
comparable.
517
[658] In response to Ms Pezzullo, Dr Yu revised her first model
518
and found a larger
statistically significant negative effect of an increase in penalty rates on employment
outcomes in NSW in the first year, and a “weakly significant positive effect” in the second
year.
519
Other than these differences, Dr Yu noted that the revised estimates were consistent
with the original analysis.
520
[659] ABI submits that using Retail trade employment in Victoria as a control group was
“fundamentally flawed”
521
as the analysis demonstrated marked differences in employment
trends before 2010”.
522
Ai Group referred to evidence from Ms Pezzullo on the “diverging
trend” between the two states between February 2009 and May 2010, and that there were two
structural changes in 2008 and 2010 in Victoria that were not replicated in New South
Wales.
523
[660] ABI also submits that even if employment trends between NSW and Victoria were
comparable before 2010, differences remained between the two states after 2010 that were not
controlled for in the analysis
524
and that “any number of factors could have influenced
employment in New South Wales post-2010 and countered some of the dis-employment
affect associated with the increasing penalty rates during the same period”.
525
[661] Ai Group also argued that Dr Yu did not consider other factors relevant to assessing
whether Victoria was an appropriate control group, such as demand-side factors, the location
of employees between metropolitan and regional areas, profit margins and operating profits of
businesses, and employee productivity.
526
[662] In contrast, SDA argued that the various differences referred to were “not relevant to
the methodology” as the model requires only comparable or similar trends and not precisely
the same trends.
527
However, Dr Yu conceded that factors raised by the employer parties may
have affected employment trends post this period.
528
[663] SDA argued that ABI failed to show any evidence of differences in economic
conditions or in relation to differences in workers’ compensation premiums and changes in
payroll tax arrangements between the two states. SDA contended that “[i]t is entirely
speculative that any of these changes would have affected employment outcomes in the NSW
retail industry.”
529
[664] Ms Pezzullo undertakes her own difference-in-difference model designed to address
the issues with Dr Yu’s first model and contended that her analysis revealed “a statistically
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significant and enduring reduction in both employment and hours worked resulting from the
Award changes”.
530
However, SDA submitted Dr Yu’s argument that Ms Pezzullo’s model
was “unable to establish a statistically significant difference between retail employment in
NSW and Victoria post-2010”.
531
[665] Ai Group submitted that the ANZSIC Retail trade division reflects different businesses
covered by the General Retail Industry Award, and argued that “conclusions in the Yu Report
are based on non-consistent data groups”.
532
Ai Group further commented that conclusions
stemming from the Yu Report were “industry specific, State specific and time specific” and
that there was “no evidence that the same conclusions would be reached if the experiment was
applied to the fast food industry”.
[666] Identifying an appropriate control group that is comparable to the treatment group is
important as it is the basis for the counterfactual—what would have happened in the absence
of the policy change.
[667] In our view the divergent employment trends between NSW and Victorian Retail trade
make it challenging to use a difference-in-difference methodology in such a context, as the
methodology requires both groups to be comparable.
[668] Another limitation to Dr Yu’s model is that it uses the ABS Labour Force Survey,
which cannot identify those award-reliant workers in the NSW retail industry that are affected
by the increase in penalty rates or work on Sundays and their Victorian counterparts.
533
[669] Therefore, Dr Yu’s analysis would also capture workers not affected by the penalty
rate increase. Despite her argument that all employees should be included—as she notes that
changes in awards may flow on to collective and individual agreements
534
—not identifying
award-reliant workers would result in people allocated to the treatment group who are not
affected by penalty rate changes. For example, these people may not be paid penalty rates,
and/or work on Sundays.
6.3.3 Conclusion on Employment Effects
[670] At the outset it is important to note that both the Lewis and Yu Reports examine the
employment effects from an increase in penalty rates, whereas the claims before us are for a
decrease in penalty rates.
[671] As Professor Borland explained, for large changes in wages, the same absolute change
can produce different percentage changes in employment when modelling an increase or
decrease in wages.
535
This led Professor Borland to conclude that the approach by Professor
Lewis provides an upper bound estimate of changes to employment due to penalty rates.
536
[672] Professor Borland added that “[e]ven critics of penalty rates acknowledge that some
part of penalty rates is a compensating differential for the disutility of working on weekends
or public holidays which is necessary in order to induce sufficient labour supply on those
days.”
537
That is, “prior to the imposition of penalty rates, the wage rate on weekends and
public holidays would already need to be above the base weekday wage rate”
538
and therefore
“labour costs would not increase by the whole amount of the difference between the regulated
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penalty rate and the base weekday wage rate” which would overestimate the effect of penalty
rates on labour costs from Professor Lewis’ model.
539
[673] Professor Lewis acknowledged the point made by Professor Borland and responded
that “[t]o the extent that the actual market rates of pay, as determined by supply and demand,
for work on Sundays and public holidays might be somewhat greater than the market rate for
work in non-penalty time then the estimates are biased upwards”.
540
[674] As to the Lewis Report more generally, it seems to us that there is limited utility in
applying aggregate elasticities to an assessment of the employment effects of reducing penalty
rates which only apply to a segment of the workforce.
[675] The Lewis Report referred to estimates of the elasticity of labour demand with respect
to aggregate wages and minimum wages which are in themselves drawn from two different
populations and likely to cover industries that may not be relevant to this case. Further, the
types of workers that receive penalty rates are different to the types of workers considered in
the studies of aggregate wages and minimum wages, as penalty rates are payable at different
times and days.
[676] Professor Quiggin argued that the studies relied upon by Professor Lewis produced
relatively high estimates of the elasticity of labour demand with respect to wages and that the
studies selected represented “a minority view and should not be regarded as an appropriate
basis for wages policy”. The Productivity Commission agreed that a labour demand elasticity
of –3, as assumed by Professor Lewis, would imply a very substantial and “unrealistic”
increase in weekend employment.
[677] We also note that under cross-examination Professor Quiggin agreed that his criticism
of Professor Lewis was that he had overstated the impact of minimum wages on labour
demand and said that the dominant view is that there is a small impact and some mainstream
studies maintain that there is no impact.
541
Professor Quiggin also agreed that the setting of
wages levels can give different effects with respect to the impact on employment and there is
a level of minimum wages at which increases have a substantial effect.
542
[678] Professor Quiggin also agreed that there is a substantial difference in the penalty rates
prescribed for Saturday and Sunday work in the Retail and Hairdressing Awards respectively
and in response to the proposition that such a difference may have a substantial dis-
employment effect said that there would be substantial lower employment on Sunday
consistent with the intention of penalty rates to set aside Sunday in particular as a day when
people are not expected to work. However, Professor Quiggin maintained that nearly all of
this employment loss would be made up on other days of the week.
543
[679] In response to the proposition that if there is a substantial increase in the wage then it
is likely that there would be a dis-employment effect that would be more than small, Professor
Borland said that this depended on the wage elasticity. If there is a bigger wage change there
will be a bigger change in employment and whether that is substantial or not depends on the
elasticity.
544
[680] The Lewis Report is further limited due to several of the assumptions that underpin the
model, each of which are likely to overstate any employment effects. Further, the employer
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lay evidence before us suggests that past penalty rate adjustments (up or down) have not had
significant employment effects.
[681] As we note at [773]–[775] a number of the lay witnesses called by the Hospitality
Employers were cross examined about the transitional provisions in respect of loadings an
penalty rates for casual employees in South Australia (the effect of the S.A. transitional
arrangements was that employers employing casuals may have had reduced labour costs as a
result of the implementation of the modern award). As we observe at [775], that evidence may
cast some doubt on the proposition that a reduction in weekend penalty rates will have a
positive impact on employment.
[682] Indeed, some of the employer lay evidence suggests that, in the past, factors other than
changes in weekend penalty rates must have had a greater impact on the demand for labour.
For example, Mr Barron points to the fact that the allocated labour hours to Sundays for
Sussan and Sportsgirl stores in NSW and Victoria fell between 2010/11 and 2014/15. The
percentage fall in Sunday hours was higher in Victoria than in the NSW despite that fact that
Sunday penalty rates have increased in NSW and had remained unchanged in Victoria. No
satisfactory explanation is provided for this evident anomaly (see [1508]–[1509]).
[683] However the employer lay evidence also supports the general proposition that the
current level of Sunday penalty rates has led employers to take measures to reduce the labour
costs associated with trading on Sunday and that a lower Sunday penalty rate would increase
service levels with a subsequent increase in employment (in terms of hours worked by
existing employees or the engagement of new employees).
[684] In its consideration of changes to employment from reducing Sunday penalty rates to
Saturday penalty rates, the PC Final Report concluded that there “are likely [to] be some
positive employment impacts, though less than those sometimes claimed by the proponents of
reduced penalty rates”.
545
We agree with that assessment, though it is difficult to quantify the
precise effect.
[685] Further, as we have mentioned, in the context of minimum wages Professors Borland
and Quiggin both conceded that there is greater potential of an employment effect from a
larger or more substantive increase.
546
These conclusions support the view of the Expert
Panel, stated in the Annual Wage Review 2015–16 decision, that “modest and regular
increases in minimum wages have a small or even zero impact on employment”.
547
[686] While we believe that the relevance of the Lewis Report to the matters before us is
limited, due to, among other things the nature of the assumptions that underpin the model
used, each of which are likely to overstate any employment effects, we are of the view that
overall, there may be some modest gains in employment as a consequence of a reduction in
penalty rates. Although as noted in the PC Final Report, the employment effects are likely to
be less than estimates such as those suggested in the Lewis Report. However the magnitude of
the employment effect is difficult to quantify as a result of the competing substitution effects
described in the PC Final Report.
[687] Further, we agree with the view expressed by Professor Quiggin that many other
factors affect employment, such as economic conditions.
548
Professor Lewis accepted that
“[i]solating the impacts of changes in award wages are fraught with difficulty and is largely
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responsible for the lack of consensus on the employment impacts of changes to imposed
wages such as awards, including minimum wages”.
549
[688] On the basis of the evidence before us, we have concluded that reducing penalty rates
may have a modest positive effect on employment.
6.4 Summary
[689] The following propositions emerge from the evidence before us:
1. There is a disutility associated with weekend work, above that applicable to work
performed from Monday to Friday. Generally speaking, for many workers Sunday
work has a higher level of disutility than Saturday work, though the extent of the
disutility is much less than in times past.
2. We agree with the assessment in the PC Final Report that there are likely to be some
positive employment effects from a reduction in penalty rates, though it is difficult
to quantify the precise effect. Any potential positive employment effects from a
reduction in penalty rates are likely to be reduced due to substitution and other
effects.
[690] As to proposition 1, we are aware that our conclusion is different to that in the PC
Final Report. However, in the proceedings before us we have had the opportunity to consider
evidence not available to the Productivity Commission, such as the Pezzullo Weekend Work
Report, the Rose Report and the Sands Report, in addition to a substantial amount of lay
employer and employee evidence. None of the above Reports concluded that the activities
conducted on, and attitudes towards, Saturdays and Sundays were identical.
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7. The Hospitality Sector
7.1 Overview
[691] This section presents data on the Hospitality group of modern awards, that is:
Hospitality Industry (General) Award 2010;
Registered and Licensed Clubs Award 2010;
Restaurant Industry Award 2010; and
Fast Food Industry Award 2010.
550
[692] The data are collected from five sources: the ABS, the Fair Work Commission’s
AWRS and the Fair Work Commission’s Award Reliance Survey (ARS), the HILDA Survey
and the Department of Employment’s Workplace Agreements Database (WAD). The ABS
contains a number of surveys on the performance, structure and characteristics of industries.
The AWRS, ARS and HILDA are large-scale quantitative surveys that collectively provide
information on enterprises, employees and households. HILDA has the added advantage of
presenting information over time. The WAD is a database that contains information of all
Australian enterprise agreements. Further information on the Commission’s data sources is
located on its website.
551
[693] A paper
552
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the Australian and New Zealand Standard Industrial Classification (ANZSIC).
[694] There are 4 levels within the ANZSIC structure: division, subdivision, group and
class. The most detailed level is the class (or 4 digit level) but data at this level is limited. The
most readily available data is at the division level (or 1 digit level). In this instance, the
relevant division of ANZSIC is Division H: Accommodation and food services. For
convenience we refer to this collection of industries as ‘the Hospitality sector’. The
subdivisions, groups and classes within Accommodation and food services are set out below:
44 Accommodation
o 440 Accommodation
4400 Accommodation
45 Food and beverage services
o 451 Cafes, Restaurants and Takeaway Food Services
4511 Cafes and restaurants
4512 Takeaway food services
4513 Catering services
o 452 Pubs, Taverns and Bars
4520 Pubs, Taverns and Bars
o 453 Clubs (Hospitality)
4530 Clubs (Hospitality)
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[695] Table 15 shows how the modern awards in the Hospitality group ‘map’ with the
relevant industry class.
Table 15
553
Modern awards ‘mapped’ to ANZSIC class
Hospitality group
modern award
ANZSIC class within accommodation and
food services
Hospitality Industry
(General)
4400 – Accommodation
4511 – Cafes and restaurants
4513 – Catering services
4520 – Pubs, taverns and bars
Registered and Licensed
Clubs
4530 – Clubs (Hospitality)
Restaurant Industry 4511 – Cafés and restaurants
Fast Food Industry 4512 – Takeaway food services
[696] We propose to first set out the data relating to the Hospitality sector and the employers
who operate within it, before turning to the characteristics of employees in the sector. It
should be noted that the data in some of the tables presented in this chapter may not add up to
100, due to rounding.
7.1.1 Features of the Hospitality Sector
(i) General economic indicators
[697] Key economic indicators of the Hospitality sector are presented in Table 16. The data
show that the sector accounted for:
over $80 billion of sales and 2.5 per cent of value added to the economy;
7 per cent of employment, almost 6 per cent of actual hours worked per week in all
jobs and over 4 per cent of wages;
around 4 per cent of all businesses and 14 per cent of all award-reliant non-
managerial employees;
1 per cent of investment;
around 16 per cent of total underemployment; and
around $6.6 billion in company gross operating profit.
Table 16
554
Economic indicators of Hospitality sector
Hospitality sector Percentage of all
industries
Industry value added ($m) (June 2016)
a
39 006 2.5
Sales ($m) (June 2016)
a,c
84 799 3.3
Employment (‘000s) (August 2016)
b
838 7.0
Actual hours worked per week in all jobs (‘000s)
(August 2016)
b 22 509 5.6
Company gross operating profit ($m) (June 2016)
a,c
6570 2.6
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Hospitality sector Percentage of all
industries
Wages ($m) (June 2016)
a,d
22 527 4.4
Gross fixed capital formation ($m) (June 2015)
a
3990 1.0
Businesses (June 2015)
e
87 555 4.1
Award-reliant non-managerial employees (‘000s)
(May 2016)
d
317 13.9
Underemployment (‘000s) (August 2016)
b
172 16.1
Note: (a) sum of four quarters; (b) average over the four quarters; (c) All industries excluding Agriculture, forestry and
fishing, Education and training, Health care and social assistance and some subdivisions of Finance and insurance services;
(d) all industries excluding Agriculture, forestry and fishing; (e) All industries excluding the public sector.
Industry value added and sales are seasonally adjusted and expressed in real terms from chain volume estimates. Employment
is expressed in seasonally adjusted terms. Actual hours worked per week in all jobs and underemployment are expressed in
original terms. Company gross operating profits and wages are seasonally adjusted from current price estimates. Gross fixed
capital formation is expressed in original and real terms, from chain volume estimates.
(ii) Business size
[698] As shown in Table 17, businesses in the Hospitality sector were predominantly small
and non-employing businesses businesses and more likely to be employing businesses
compared with businesses across all industries.
Table 17
555
Percentage of businesses by business size, June 2015
Hospitality sector All industries
(%) (%)
All businesses
Non-employing 27.1 60.6
Small 64.5 36.9
Medium 8.0 2.4
Large 0.4 0.2
100.0 100.0
Employing businesses
Small 88.5 93.5
Medium 11.0 6.1
Large 0.5 0.4
100.0 100.0
Note: Small businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and large businesses
employ 200 or more persons. The publication only includes actively trading businesses in the market sector and hence
excludes entities that are in the public sector.
[699] In June 2015, small businesses accounted for almost two-thirds of all businesses in the
Hospitality sector. Small and medium businesses comprised a higher proportion of businesses
in this sector than across all industries. Non-employing businesses comprised around 60 per
cent of businesses across all industries and less than 30 per cent in the Hospitality sector.
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(iii) Industry concentration and competition
[700] Industry concentration refers to the degree with which a small number of firms
provide a major proportion of total production within an industry and provides a measure of
competition within an industry.
[701] As shown in Table 18, in the Hospitality sector, small and medium businesses
accounted for similar proportions of wages and salaries, sales and service income and industry
value added, ranging between 36 to 40 per cent. Both small and non-employing businesses
and medium businesses accounted for a higher proportion than large businesses across each of
these measures.
[702] Relative to total selected industries (i.e. all industries except for Financial and
insurance services), small and non-employing businesses and medium businesses in the
Hospitality sector accounted for higher proportions across each of these measures, while large
businesses accounted for lower proportions.
Table 18
556
Wages and salaries, sales and service income, and industry value added by business size,
2014–15
Percentage of industry total
Wages and
salaries
Sales and service
income
Industry value
added
(%) (%) (%)
Hospitality sector
Small and non-employing 36.1 39.8 37.8
Medium 37.6 37.3 36.7
Large 26.3 22.9 25.6
100.0 100.0 100.0
Total selected industries
Small and non-employing 28.2 35.3 35.6
Medium 26.8 22.3 21.5
Large 44.9 42.4 43.0
100.0 100.0 100.0
Note: Small businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and large businesses
employ 200 or more persons. Total selected industries exclude Financial and insurance services as businesses in this industry
were not in the scope of the survey. Small and non-employing businesses cannot be disaggregated.
[703] Table 19 provides information on the nature of the market and measures of
competition for enterprises in the Hospitality sector and across all industries in 2014.
Subjective measures of market and competition include the number of direct competitors and
the degree of competition observed for their major products and/or services during the last
financial year.
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Table 19
557
Market and competition, 2014
Hospitality sector All industries
(%) (%)
Nature of market
Domestic only 97.9 83.6
Domestic with some export 2.0 14.6
Export with some domestic np 1.4
Export only – 0.5
100.0 100.0
Market focus
Immediate local area only 76.1 44.0
Intrastate 9.2 19.5
Interstate 2.7 9.1
Australia wide 12.0 27.4
Other – np
100.0 100.0
Number of direct competitors
1–4 22.9 21.7
5–9 24.0 23.6
10–19 22.5 18.9
20–49 12.7 12.8
50 or more 15.0 16.4
None/captive market/no effective competition 2.8 6.6
100.0 100.0
Degree of competition
Intense competition 28.9 29.6
Strong competition 46.4 42.3
Moderate competition 22.2 21.6
Limited competition 2.5 6.5
100.0 100.0
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
[704] Most enterprises in the Hospitality sector operated in a domestic market only and a
lower proportion operated in a market with exports compared with all industries. The market
focus for most enterprises in the Hospitality sector was the immediate local area only and a
lower proportion focused outside this area compared with all industries.
[705] The highest proportion of enterprises in the Hospitality sector and across all industries
reported that the number of direct competitors was five to nine, while enterprises in the
Hospitality sector were less likely to report no direct competitors. Further, while most
enterprises reported strong or intense competition, enterprises in the Hospitality sector were
less likely to report limited competition.
(iv) Award reliance
[706] The most common method of setting pay in the Hospitality sector is awards. In the
Hospitality sector, 42.7 per cent of non-managerial employees were reliant on award wages.
In contrast, only 24.5 per cent of non-managerial employees were reliant on award wages in
all industries.
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[707] Relative to all industries, this sector has a significantly higher proportion of non-
managerial employees paid at the award rate, offset by lower proportions of non-managerial
employees on collective agreements and individual arrangements (Table 20).
Table 20
558
Methods of setting pay, non-managerial employees, May 2016
Hospitality sector All industries
(%) (%)
Award only 42.7 24.5
Collective agreement 35.7 38.9
Individual arrangement 21.7 36.6
100.0 100.0
Note: Data may not sum to 100 due to rounding.
[708] The Commission’s Award Reliance Survey collected data on the number of
organisations that use each modern award. The most common modern award used by
award-reliant organisations within the Hospitality sector in 2013 was the Hospitality Industry
(General) Award 2010 (Table 21). This was used by more than six in 10 award-reliant
organisations. It was also the third most common modern award used by award-reliant
organisations across all industries.
Table 21
559
Top 10 modern awards used in Accommodation and food services,
percentage of award-reliant organisations, 2013
Accommodation
and food services
All
industries
(%) (%)
Hospitality Industry (General) Award 2010 64.2 13.3
Restaurant Industry Award 2010 17.8 3.7
Fast Food Industry Award 2010 8.1 1.8
Registered and Licensed Clubs Award 2010 3.4 1.4
Cleaning Services Award 2010 3.1 3.9
General Retail Industry Award 2010 2.0 15.1
Clerks—Private Sector Award 2010 2.0 16.0
Food, Beverage and Tobacco Manufacturing Award 2010 1.1 1.2
Road Transport and Distribution Award 2010 0.6 2.3
Social, Community, Home Care and Disability Services
Industry Award 2010
0.4 1.2
Note: An award-reliant organisation has at least one employee that receives the exact award rate of pay.
(v) Profitability
[709] Profit margins are operating profits before tax as a percentage of income received.
Profit margins provide an indicator of profitability in an industry and may indicate the level of
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competition within an industry. Profit margins may also demonstrate the level of capital
intensity.
[710] The profit margins of the Hospitality sector were lower than total selected industries
for the period 2012–13 to 2014–15 (Chart 17). Profit margins in the Hospitality sector were
around 8–9 per cent compared with around 11 per cent for total selected industries.
Chart 17
560
Profit margins, 2012–13 to 2014–15
Note: Profit margins are calculated as the percentage of sales and service income available as operating profit before tax.
Total selected industries exclude Financial and insurance services as businesses in this industry were not in the scope of the
survey.
(vi) Wages and salaries
[711] Wages and salaries as a percentage of total expenses for the Hospitality sector and all
industries for the years 2012–13 to 2014–15 are presented in Chart 18. In 2014–15, wages and
salaries as a percentage of total expenses were 8.2 percentage points higher in the Hospitality
sector (26.9 per cent) than total selected industries (18.7 per cent).
0
2
4
6
8
10
12
Hospitality sector Total selected industries
Per cent
2012–13 2013–14 2014–15
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Chart 18
561
Wages and salaries as a percentage of total expenses, 2012–13 to 2014–15
Note: Total selected industries exclude Financial and insurance services as businesses in this industry were not in the scope
of the survey.
(vii) Productivity
[712] Average annual growth in productivity is presented for both labour and multifactor
productivity over the two most recent productivity cycles, 2003–04 to 2007–08 and 2007–08
to 2014–15 (Chart 19). This follows a common approach to measuring productivity by
comparing average annual rates of growth in the market sector
562
between peaks in the
productivity cycle (as identified by the ABS) rather than focusing on short-run (quarterly and
annual) trends.
[713] The data show that average annual growth of both labour and multifactor productivity
were higher in the Hospitality sector compared with the market sector for the productivity
cycle 2003–04 to 2007–08. In the most recent productivity cycle between 2007–08 and 2014–
15, average annual growth in labour productivity in the Hospitality sector was lower than the
market sector, while average annual growth in multifactor productivity was higher.
0
5
10
15
20
25
30
Hospitality sector Total selected industries
Per cent
2012–13 2013–14 2014–15
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Chart 19
563
Average annual growth rates of labour and multifactor productivity, 2003–04 to 2014–
15
Note: The 2007–08 to 2014–15 growth cycle is incomplete. Labour productivity measures the amount of output per unit of
labour which is measured in terms of gross value added per hour worked on a quality adjusted hours basis. Multifactor
productivity measures the ratio of growth in output to growth in two or more factor inputs and represents that part of the
change in output that cannot be explained by changes in the inputs. Multifactor productivity, in this case, is based on the
gross value added of capital and labour in production and is measured on a quality adjusted hours basis. The total market
sector comprises all industries except for Public administration and safety, Education and training and Health care and social
assistance.
(viii) Business viability
[714] Chart 20 shows the survival rates in June 2015 of businesses that were operating in
June 2011 by business size. By business size, survival rates increased with business size in the
Hospitality sector and for all industries. However, survival rates in the Hospitality sector were
lower than all industries across all business sizes except for large businesses.
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Labour productivity Multifactor
productivity
Labour productivity Multifactor
productivity
2003–04 to 2007–08 2007–08 to 2014–15
Per cent
Hospitality sector Market sector
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Chart 20
564
Business survival rates, by employment size, June 2011 to June 2015
Note: Survival rates in June 2015 of businesses that were operating in June 2011. The publication only includes actively
trading businesses in the market sector and hence excludes entities that are in the public sector.
(ix) Enterprise characteristics
[715] Most enterprises in the Hospitality sector operated 7 days per week, while across all
industries only about 3 out of every 10 enterprises operated 7 days per week and almost half
of all industries operated on weekdays only (table 22).
Table 22
565
Structure and operations, 2014
Hospitality sector All industries
(%) (%)
Operating days
Weekdays only 8.6 48.8
Weekdays and Saturday 5.3 17.5
Some weekdays and weekend 5.4 2.3
Operating 7 days 80.5 31.1
Other np 0.4
100.0 100.0
Average number of operating days per week 6.7 5.8
Average years of operation under current ownership 15.6 18.5
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
0 20 40 60 80 100
Non-employing
Small
Medium
Large
Total
Per cent
Hospitality sector All industries
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(x) Labour market trends
[716] Table 23 shows how employment in the Hospitality sector industry groups changed
between August 2011 and August 2016. Over the period, employment in the Hospitality
sector increased by more than the total workforce, especially full-time employment.
Table 23
566
Average annual growth rate of employed persons, by full/part-time status,
August 2011 to August 2016
Industry group Full-time Part-time Total
(%) (%) (%)
Hospitality sector 1.1 2.6 2.0
All industries 0.7 2.7 1.3
Note: All data are expressed in original terms.
7.1.2 Hospitality sector employees
(i) Composition of employment
[717] Employment in the Hospitality sector comprised around 7 per cent of total
employment, in August 2016. As shown in Table 24, more than half of the workforce was
female and employed part-time, which is above the proportions reported across all industries.
Over one third of employees (35.7 per cent) were female and employed part-time, compared
with 21.8 per cent of employees across all industries.
Table 24
567
Composition of employed persons, August 2016
Total
employment
Percentage of total employment
Male Female Total Total
Full
time
Part
time
Full
time
Part
time
Male Female
Full
time
Part
time
(‘000s) (%) (%) (%) (%) (%) (%) (%) (%)
Hospitality sector 841.3 23.3 23.3 17.7 35.7 46.6 53.4 41.0 59.0
All industries 11 869.1 43.5 10.1 24.6 21.8 53.6 46.4 68.1 31.9
Note: Data may not sum to 100 due to rounding. All data are expressed in original terms.
[718] As shown in Table 25, young people aged between 15 and 24 years were more likely
to be employed in the Hospitality sector, comprising almost half of employed persons,
compared with around 1 in 6 employed persons across all industries.
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Table 25
568
Employed persons by age, August 2016
Age Hospitality sector All industries
(Years)
No. (‘000s)
Percentage of industry
employment
Percentage of total
employment
15–19 211.7 25.2 5.3
20–24 160.0 19.0 9.7
25–34 185.5 22.0 23.5
35–44 109.1 13.0 21.8
45–54 96.5 11.5 21.2
55–59 38.9 4.6 8.7
60–64 23.2 2.8 5.9
65 and over 16.4 1.9 3.8
Total 841.3 100.0 100.0
Note: All data are expressed in original terms.
(ii) Average hours worked
[719] Table 26 shows that the average hours actually worked per week in all jobs in August
2016 were lower for the Hospitality sector than across all industries.
[720] Full-time workers in the Hospitality sector worked longer hours per week on average
than the total workforce; however, part-time workers worked fewer hours per week on
average than the total workforce.
Table 26
569
Average hours actually worked in all jobs, by full/part-time status, August 2016
Industry group Average hours actually worked in all jobs
Full-time Part-time Total
Hospitality sector 44.2 15.3 27.1
All industries 40.6 17.4 33.2
Note: Actual hours of work refers to the hours actually worked during normal periods of work (including overtime) over a
specified reference week. It excludes meal breaks, paid/unpaid time ‘on call’, commuting time and time off during work
hours to attend educational activities not connected to the job. The actual hours of work over a specified period may be
affected if the person took personal/annual leave, went on strike, changed job, or similar reasons.
(iii) Forms and conditions of employment
[721] Compared to all industries, a higher proportion of employees in the Hospitality sector
did not have paid leave entitlements (Table 27).
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Table 27
570
Employed persons by employment type in main job, August 2016
Hospitality sector All industries
No. (‘000s)
Percentage of
employment
Percentage of
employment
Employee 742.5 88.3 82.7
With paid leave entitlements 255.9 30.4 62.0
Without paid leave entitlements 486.7 57.9 20.8
Owner manager of enterprise with employees 69.1 8.2 6.2
Owner manager of enterprise without employees 26.6 3.2 10.9
Contributing family worker 3.1 0.4 0.2
Total 841.3 100.0 100.0
Note: All data are expressed in original terms.
[722] About 7 out of 10 full-time employees and over 1 in 7 part-time employees in the
Hospitality sector had paid leave entitlements. Relative to all industries, both full-time and
part-time employees in the Hospitality sector were more likely to be employed without paid
leave entitlements (Table 28).
Table 28
571
Employees with and without paid leave, August 2016
Full-time Part-time All employees
With paid
leave
Without paid
leave
With paid
leave
Without paid
leave
With paid
leave
Without paid
leave
(%) (%) (%) (%) (%) (%)
Hospitality sector 68.8 31.2 15.0 85.0 34.5 65.5
All industries 88.3 11.7 46.1 53.9 74.9 25.1
[723] An absence of paid leave entitlements is an indication of casual employment. It
follows there are a higher proportion of casual employees in the Hospitality sector than in all
industries.
(iv) Employment tenure
[724] Workers in the Hospitality sector were more likely to experience a shorter duration of
employment with an employer/business than workers across all industries. Chart 21 shows
that almost 3 in 10 workers in the Hospitality sector had been with their current
employer/business for ‘1–2 years’, while almost 1 in 3 workers had been with their
employer/business for less than 12 months.
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Chart 21
572
Duration of employment with current employer/business in Accommodation and food
services, February 2015
Note: The duration categories have changed since the last version for the new ABS publication.
(v) Work schedule
[725] Table 29 shows the prevalence and types of shiftwork arrangements used in
enterprises in the Hospitality sector and across all industries, in 2014. Over half of enterprises
in the sector used shiftwork arrangements compared with less than one quarter across all
industries. The most common shiftwork arrangements among enterprises in the Hospitality
sector were evening and night shifts, short shifts of four hours or less, afternoon shifts and
eight-hour shifts. Across all industries, the most common shiftwork arrangements were eight-
hour shifts and set rosters.
Table 29
573
Prevalence and types of shiftwork arrangements, 2014
Hospitality sector All industries
(%) (%)
Uses shiftwork arrangements 58.7 23.8
Types of shiftwork arrangements
Rotating rosters 74.0 57.1
Set rosters 73.1 77.6
Early morning shifts 58.7 62.2
Afternoon shifts 83.8 71.9
Evening and night shifts 87.5 70.8
Standard business hours 48.5 69.7
Split/broken shifts 60.5 36.1
Standby/on call 31.8 39.8
8-hour shifts 80.0 80.3
0
5
10
15
20
25
30
3 months 3 and 6
months
6 and 12
months
1–2 years 3–5 years 6–9 years 10–19 years 20 years or
more
Per cent
Hospitality sector All industries
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Hospitality sector All industries
(%) (%)
12-hour shifts 21.0 27.8
Short shifts of 4 hours or less 86.0 53.7
Other 0.1 3.6
[726] Using the HILDA survey, Table 30 shows the current work schedule for employed
persons in their main job in 2015. The most common schedule for employees in the
Hospitality sector was a regular daytime schedule, although this proportion was less than for
employed persons across all industries. Employed persons in the Hospitality sector were more
likely to work a regular evening, night or rotating shift, or an irregular schedule compared
with employed persons across all industries.
Table 30
574
Current work schedule in main job, employed persons, 2015
Hospitality sector All industries
(%) (%)
A regular daytime schedule 39.1 75.5
A regular evening shift 19.7 3.7
A regular night shift 6.0 1.7
A rotating shift (changes from days to evenings
to nights)
18.4 9.4
Split shift (two distinct periods each day) 5.9 1.4
On call 1.8 1.1
Irregular schedule 9.1 6.9
Other 0.0 0.2
Total 100.0 100.0
(vi) Earnings
[727] Most employees in the Hospitality sector received the adult rate of pay; however, the
proportion was less than for all industries. Around one quarter of employees in the Hospitality
sector were paid a junior rate of pay (Table 31).
Table 31
575
Employees by rate of pay, May 2016
Hospitality sector All industries
(%) (%)
Adult rate of pay 75.5 94.0
Junior rate of pay 23.3 4.1
Apprentice or trainee np 1.9
Disability rate np 0.1
All rates of pay 100.0 100.0
Note: np = not published but included in totals.
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[728] Average weekly earnings of employees in the Hospitality sector were lower than for
all industries across each measure set out in Table 32. While average weekly earnings were
less than half of average weekly earnings across employees in all industries, this increased to
around 70 per cent for full-time adult employees.
Table 32
576
Average weekly earnings, May 2016
Hospitality sector
All
industries
Ratio of
Accommodation
and food services
relative to all
industries
($) ($) (%)
Average weekly earnings, all employees 541.20 1160.90 46.6
Average weekly earnings, full-time adult
employees
1079.50 1573.30 68.6
Average weekly ordinary time earnings,
full-time adult employees
1069.80 1516.00 70.6
Average weekly ordinary time earnings,
full-time adult male employees
1112.50 1613.50 68.9
Average weekly ordinary time earnings,
full-time adult female employees
999.60 1352.10 73.9
Note: All data are expressed in original terms.
[729] Lower average hourly total cash earnings for adult employees in the Hospitality sector
are also evident by the distribution shown in Chart 22. The distribution of hourly total cash
earnings for adult employees in the sector are much more concentrated toward the lower end
of the wage distribution than the earnings of adult employees as a whole. Relative to all
industries, the Hospitality sector had a higher concentration of employees earning up to $23
per hour.
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Chart 22
577
Distribution of hourly total cash earnings, adult employees, May 2014
Note: Earnings are calculated at $1 intervals up to and including the amount presented (e.g. $17 includes amounts over $16
per hour and up to and including $17 per hour) for adult employees in the federal jurisdiction. Earnings are discounted to take
account of casual loading.
[730] Wages growth in the Hospitality sector has been lower than wages growth across all
industries for most of the period between the June quarter 2011 and the June quarter 2016.
However, since the September quarter 2014, wages growth in the Hospitality sector has
mostly been higher than wages growth across all industries (see Chart 23 below).
Chart 23
578
Annual growth in Wage Price Index, June quarter 2011 to June quarter 2016
Note: All data are expressed in original terms.
0
2
4
6
8
10
12
14
16
15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 60
Per cent
Hospitality sector All industries
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Per cent
Hospitality sector All industries
[2017] FWCFB 1001
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(vii) Penalty payments
[731] The Commission’s AWRS collected detailed data on employees’ wages and can
identify employees that received penalty rates. A higher proportion of employees working in
the Hospitality sector received penalty rates compared with employees across all industries
(see Table 33 below).
Table 33
579
Percentage of employees who receive penalty rates, by method of setting pay, 2014
Hospitality sector All industries
(%) (%)
Award 28.5 22.0
Other methods 3.7 6.2
All employees 19.1 10.6
Note: ‘Other methods’ of setting pay include enterprise agreements and individual arrangements. The sample analysed was
restricted to employees that reported working for businesses that either operated 6 or 7 days in a week, operated on weekends
or used shiftwork arrangements. ‘Penalty rates’ are collected in the AWRS by asking participants for the gross (before-tax)
amount received for penalty payments (for work performed outside standard hours).
(viii) ‘Low paid’ employees in the Hospitality sector
[732] As mentioned earlier, a threshold of two-thirds of median full-time wages provides ‘a
suitable and operational benchmark for identifying who is low paid’, within the meaning of
s.134(1)(a) (see [165]–[168] above).
[733] The most recent data for median earnings is for May 2016 from the ABS EEH Survey.
Data on median earnings are also available from the CoE survey in August 2015.
[734] The following charts present the minimum weekly wages of each classification in the
Hospitality Industry (General) Award 2010, Registered and Licensed Clubs Award 2010,
Restaurant Industry Award 2010, and Fast Food Industry Award 2010, and compare them
with two-thirds of full-time median earnings. The minimum weekly wages presented from
these awards are those determined from the Annual Wage Review 2014–15 on 2 June 2015.
[735] Chart 24 shows that the full-time weekly wage for each classification in the
Hospitality Industry (General) Award 2010 was below the EEH measure of two-thirds of
median full-time earnings. However, the full-time weekly wage for the Level 6 classification
was above the CoE measure of two-thirds of median full-time earnings.
[2017] FWCFB 1001
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Chart 24
580
Comparison of minimum weekly wages in the Hospitality Industry (General) Award 2010
and two-thirds of median full-time earnings
Note: Weekly earnings from the CoE survey are earnings in the main job for full-time employees. Weekly earnings from the
EEH survey are weekly total cash earnings for full-time adult non-managerial employees.
[736] Chart 25 shows that the full-time weekly wages for classifications between
Introductory and Level 5 in the Registered and Licensed Clubs Award 2010 were below both
the CoE and EEH measure of two-thirds of median full-time earnings. The full-time weekly
wages for classifications between Level 6 and Level 9 were below the EEH measure of two-
thirds of median full-time earnings.
656.90 675.90 701.80
725.90 764.90
812.80 834.60 818.67
917.33
0
100
200
300
400
500
600
700
800
900
1000
Introductory Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 2/3 median
full-time
earnings
(CoE)
2/3 median
full-time
earnings
(EEH)
$ per week
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Chart 25
581
Comparison of minimum weekly wages in the Registered and Licensed Clubs Award 2010
and two-thirds of median full-time earnings
Note: Weekly earnings from the CoE survey are earnings in the main job for full-time employees. Weekly earnings from the
EEH survey are weekly total cash earnings for full-time adult non-managerial employees.
[737] Chart 26 shows that the full-time weekly wages for each classification in the
Restaurant Industry Award 2010 were below the EEH measure of two-thirds of median full-
time earnings. However, the full-time weekly wage for the Level 6 classification was above
the CoE measure of two-thirds of median full-time earnings.
656.90 675.90 701.80
725.90 764.90
812.80
834.60 855.60
891.80 903.60
936.70 971.00
1032.40
1052.50
818.67
917.33
0
200
400
600
800
1000
1200
$ per week
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Chart 26
582
Comparison of minimum weekly wages in the Restaurant Industry Award 2010 and
two-thirds of median full-time earnings
Note: Weekly earnings from the CoE survey are earnings in the main job for full-time employees. Weekly earnings from the
EEH survey are weekly total cash earnings for full-time adult non-managerial employees.
[738] Chart 27 shows that the full-time weekly wage for each classification in the Fast Food
Industry Award 2010 was below both measures of two-thirds of median full-time earnings.
Chart 27
583
Comparison of minimum weekly wages in the Fast Food Industry Award 2010 and two-
thirds of median full-time earnings
Note: Weekly earnings from the CoE survey are earnings in the main job for full-time employees. Weekly earnings from the
EEH survey are weekly total cash earnings for full-time adult non-managerial employees.
656.90 675.90 701.80
725.90 764.90
812.80 834.60 818.67
917.33
0
100
200
300
400
500
600
700
800
900
1000
Introductory
level
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 2/3 median
full-time
earnings
(CoE)
2/3 median
full-time
earnings
(EEH)
$ per week
721.50
764.90 776.70 786.10 818.67
917.33
0
100
200
300
400
500
600
700
800
900
1000
Level 1 Level 2 Level 3
—In charge of
one or no
persons
Level 3
—In charge of
two or more
persons
2/3 median full-
time earnings
(CoE)
2/3 median full-
time earnings
(EEH)
$ per week
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(ix) Bargaining
[739] The WAD contains information on the average annualised wage increases (AAWIs)
negotiated under enterprise agreements in each quarter. Some of this data are also published
in the Trends in Federal Enterprise Bargaining quarterly report.
[740] AAWIs negotiated under enterprise agreements and approved in each quarter for the
Hospitality sector between the June quarter 2011 and the June quarter 2016 were generally
lower than across all industries (see Chart 28 below).
Chart 28
584
Average annualised wage increases for federal enterprise agreements approved in the
quarter, June quarter 2011 to June quarter 2016
7.1.3 Summary
[741] The Hospitality sector’s contribution to aggregate output, sales, profits and wages is
relatively small, while its contribution to employment and hours worked is a little higher, and
the sector is more likely to contain award-reliant employees.
[742] Key findings within this sector are that employers were relatively more likely to be
characterised by:
small and medium businesses;
lower profit margins;
higher wages and salaries as a proportion of total expenses;
lower survival rates;
strong or intense competition; and
operating 7 days a week.
[743] Key findings within this sector are that employees were relatively more likely to be:
0
1
2
3
4
5
Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Per cent
Hospitality sector All industries
[2017] FWCFB 1001
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female;
part-time and casual workers;
award-reliant;
using shiftwork arrangements;
receiving penalty rates;
low-paid (based on two-thirds of median full-time earnings); and
employed by the same business for a shorter duration of time.
[744] We now turn to deal with the particular awards in the Hospitality sector.
7.2 Hospitality Industry (General) Award 2010
7.2.1 The Claims
[745] The Australian Hotels Association and the Accommodation Association of Australia
(the Hospitality Employers) seek to vary the terms of the Hospitality Industry (General)
Award 2010 (the Hospitality Award) in relation to the penalty rates payable for work
performed by employees on Sundays and public holidays.
[746] The Hospitality Employers propose that the penalty rate for work performed on a
Sunday be reduced from 175 per cent to 150 per cent for all employees (inclusive of the
25 per cent loading for casual employees).
[747] The Hospitality Employers also seek to introduce a two-tiered regime in respect of
public holiday penalty rates under which higher penalty rates are prescribed for work
performed on the public holidays specified under s.115(1)(a) of the FW Act, than the penalty
rates prescribed for work performed on public holidays which are declared or prescribed by or
under a law of a State or Territory (under s.115(1)(b)).
[748] Further, the Hospitality Employers propose that the references to ‘penalty’ and
‘penalty rates’ in clause 32, including the clause title, be amended to expressions related to
‘additional remuneration’. The changes sought are set out below, in a marked up version of
clause 32.1.
32.1 An employee performing work on the following days will be paid the
following percentage of the minimum hourly wage rate in clause 20—Minimum
wages for the relevant classification:
Monday to
Friday
%
Saturday
%
Sunday
%
Public
holiday
%
Additional
holiday
%
Full-time and
part-time
100 125 175 150 250 225 250 200
Casual (inclusive
of the 25% casual
loading)
125 150 175 150 275 175 125
[749] We deal later with the proposed changes to public holiday penalty rates.
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7.2.2 Background to the Hospitality Award
[750] After an initial period of consultation, the Award Modernisation Full Bench
determined that the ‘Catering industry, Liquor & accommodation industry, Restaurants
(including Clubs)’ would be a priority industry in the award modernisation process.
585
In its
decision of 19 December 2008 the Award Modernisation Full Bench decided to make a single
modern award for the hospitality industry, (excluding Clubs), noting that:
‘[117] We have considered the further submissions of Restaurant and Catering Australia,
HMAA and other organisations involved in the consultations and decided to make a single
modern award for the hospitality industry, as proposed in the exposure draft.
[118] We accept that there are some differences in trading and staffing arrangements between
various sectors within the hospitality industry. Equally, however, there is some commonality
between the sectors. It is also significant that there is a level of diversity in the operations of
various businesses within sectors of the industry.
[119] There is also some diversity in terms and conditions in federal awards and NAPSAs
operating within the hospitality industry, as defined in the exposure draft. However, such
differences apply equally across awards within the smaller sectors proposed as they do across
sectors. There is a high level of commonality in federal award provisions covering the hotel,
accommodation and restaurant sectors and some but less commonality in the relevant
NAPSAs.’
586
[751] Despite RCI calling for a separate restaurant industry award, the Commission initially
resolved to make a single modern award for the broader hospitality sector.
587
A separate
Restaurant Award was later created following an amendment to the Ministerial Request (see
Chapter 7.4.3).
[752] In submissions filed on 1 August 2008, the AHA and the Liquor, Hospitality and
Miscellaneous Union (LHMU), (now United Voice), outlined their respective proposals for
the content of the proposed Hospitality modern award. In relation to penalty rates for weekend
and public holiday work, both the AHA and LHMU submitted that penalty rates under the
Hospitality Award should be set as follows:
Permanent employees:
o Saturday—125 per cent;
o Sunday—175 per cent;
o Public holidays—250 per cent,
Casual employees:
o Saturday—150 per cent;
o Sunday—175 per cent
o Public holidays—275 per cent.
588
[753] The rates proposed by the AHA and LHMU reflected those that existed in the main
federal award which provided that basis for the main terms of the modern award (The
Hospitality Industry - Accommodation, Hotels, Resorts and Gaming Award 1998
589
) (the
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‘1998 Award’). The penalty rate conditions in the 1998 Award derive from the 1993 decision
of Commissioner Gay in relation to the Hotels, Resorts and Hospitality Industry Award
1992
590
. We return to that decision in Chapter 7.2.6.
[754] The first exposure draft of the modern Hospitality Award was published on
12 September 2008.
591
While the Commission generally agreed with the submissions of AHA
and the LHMU concerning weekend penalties and in respect of the penalties for full-time and
part-time employees working on public holidays, the rates for casual employees performing
work on public holidays were set at 175 per cent, rather than the rate of 275 per cent penalty
rate in the 1998 Award.
592
[755] After the publication of the exposure draft, the AHA expressed concern that the
Sunday penalty of 175 per cent was too high, especially when viewed in light of an existing
rate of 150 per cent under pre-reform awards in Queensland and Western Australia.
593
[756] The exposure draft was republished in its final form by the AIRC in December 2008.
The penalty rates remained unchanged from the earlier exposure draft, except the rate for
casual employees working on public holidays which was increased to 275 per cent, in line
with the proposals of LHMU and AHA.
594
The accompanying Decision did not specify the
rationale for the increase in the rate as between the exposure draft and the final version of the
modern award.
595
[757] In submissions filed in the current matter, the Hospitality Employers sought to
emphasise that the award modernisation process was consultative, rather than adversarial in
nature and that the Full Bench was principally informed by the parties’ submissions, rather
than by witness evidence. Further, to the extent witness statements were relied upon by the
parties, the Full Bench treated these witness statements as submissions rather than
evidence.
596
[758] United Voice draws the Commission’s attention to the fact that, at the time of making
the modern award, the AHA and LHMU proposed the same penalty rates
597
and to the
following comment made by Mr Clarke, acting for the AHA, at a public hearing on 22 June
2008:
‘…restaurants must not obtain better award conditions by having lower penalty rates or
entitlements in the proposed modern Hospitality Award. Hotels have considerable investment
within their operations such as investment in training and development of staff compared to
restaurant and café businesses. Restaurants will have an unfair advantage and lower wage costs
to service the same types of clients as hotels. Hotel meals will be more expensive resulting in
loss of trade therefore unfair additional costs placed on hotels.’
598
[759] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue and will
proceed on the basis that prima facie the modern award being reviewed achieved the modern
awards objective at the time it was made. The extent of a previous Full Bench’s consideration
of a contested issue is relevant to assessing the weight to be attributed to that decision. The
relevant award modernisation decisions show that in setting the penalty rates in the
Hospitality Award the Award Modernisation Full Bench considered whether the modern
award provisions reflected the existing penalty rates in the most widely-used pre-reform
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instruments, rather than undertaking a detailed or considered review of the appropriate penalty
rates for the industry.
7.2.3 The Hospitality Industry
[760] The ABS data of direct relevance to the Hospitality Award are limited.
[761] A paper
599
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework, the Hospitality Award is mapped to six
separate ANZSIC industry classes:
4400—Accommodation;
4511—Cafes and restaurants;
4513—Catering services;
4520—Pubs, taverns and bars;
9201—Casino operation; and
4123—Liquor retailing.
[762] The aggregation of these industry classes will be referred to as the Hospitality industry
(general).
[763] The Census is the only data source that contains all of the employment characteristics
in Table 34 for the Hospitality industry (general). The most recent Census data is from August
2011.
[764] The August 2011 Census data shows that there were around 360 000 employees in the
Hospitality industry (general). Table 34 compares certain characteristics of employees in the
Hospitality industry (general), with employees in ‘all industries’.
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Table 34
600
Labour force characteristics of the Hospitality industry (general),
ABS Census 9 August 2011
Hospitality Industry (General) All industries
(No.) (%) (No.) (%)
Gender
Male 155 034 43.0 4 207 586 50.8
Female 205 212 57.0 4 082 662 49.2
Total 360 246 100.0 8 290 248 100.0
Full-time/part-time status
Full-time 152 882 44.9 5 279 853 67.8
Part-time 187 564 55.1 2 507 786 32.2
Total 340 446 100.0 7 787 639 100.0
Highest year of school completed
Year 12 or equivalent 222 519 63.0 5 098 228 62.6
Year 11 or equivalent 39 529 11.2 885 404 10.9
Year 10 or equivalent 66 974 19.0 1 687 055 20.7
Year 9 or equivalent 15 373 4.4 317 447 3.9
Year 8 or below 7380 2.1 141 973 1.7
Did not go to school 1412 0.4 20 158 0.2
Total 353 187 100.0 8 150 265 100.0
Student status
Full-time student 75 836 21.3 612 990 7.5
Part-time student 20 529 5.8 506 120 6.2
Not attending 259 698 72.9 7 084 360 86.4
Total 356 063 100.0 8 203 470 100.0
Age (5 year groups)
15–19 years 51 749 14.4 547 666 6.6
20–24 years 78 271 21.7 927 865 11.2
25–29 years 54 235 15.1 1 020 678 12.3
30–34 years 37 534 10.4 933 827 11.3
35–39 years 30 150 8.4 934 448 11.3
40–44 years 27 323 7.6 938 386 11.3
45–49 years 25 876 7.2 911 739 11
50–54 years 23 037 6.4 848 223 10.2
55–59 years 16 966 4.7 652 190 7.9
60–64 years 10 695 3.0 404 470 4.9
65 years and over 4409 1.2 170 718 2.1
Total 360 245 100.0 8 290 210 100.0
Average age 33.0 38.8
Hours worked
1–15 hours 80 606 23.7 875 554 11.2
16–24 hours 56 808 16.7 792 539 10.2
25–34 hours 50 152 14.7 839 694 10.8
35–39 hours 50 173 14.7 1 676 920 21.5
40 hours 37 912 11.1 1 555 620 20
41–48 hours 27 166 8.0 895 619 11.5
49 hours and over 37 629 11.1 1 151 693 14.8
Total 340 446 100.0 7 787 639 100.0
Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
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[765] The profile of the Hospitality industry (general) employees differs from the profile of
employees in ‘All industries’ in four important respects:
(i) over half (55.1 per cent) of Hospitality industry (general) employees are
employed on a part-time basis (i.e. less than 35 hours per week
601
), compared
with only 32.2 per cent of all employees;
(ii) around 4 in 10 (40.4 per cent) of Hospitality industry (general) employees
work 1–24 hours per week compared with only 21.4 per cent of all employees;
(iii) over one-third (36.1 per cent) of Hospitality industry (general) employees are
aged between 15 and 24 years compared with only 17.8 per cent of all
employees; and
(iv) over one quarter (27.1 per cent) of Hospitality industry (general) employees are
students (21.3 per cent are full-time students and 5.8 per cent study part-time)
compared with 13.7 per cent of all employees.
7.2.4 The Evidence
(i) The Hospitality Employers
[766] The Hospitality Employers rely on the evidence of 41 lay witnesses, who gave
evidence during the proceedings:
Vanessa Anderson, human resources manager at the Pacific Hotel in Cairns,
Queensland;
602
Graham Annovazzi, owner of the Capertee Royal Hotel in Capertee, NSW;
603
Timothy Bilston, General Manager of the Amora Hotel Riverwalk in Melbourne,
Victoria;
604
Joanne Lesley Blair, Director of Zamovisa Pty Ltd which owns The Milestone
Hotels in Dubbo, Leichhardt and Kingswood, NSW;
605
Jackie Booth, Chief Operating Officer of Zagame Corporation;
606
Darren Lea Brown, manager of the Shoreline Hotel in Howrah, Tasmania;
607
Andrew Bullock, CEO of 1834 Hotels;
608
Michael Burke, part-owner of the Malvern Hotel in Malvern, Victoria;
609
Tony Cakmar, General Manager of Clarion Suites Gateway in Melbourne,
Victoria;
610
Susan Cameron, owner of the Lord Roberts Hotel in Sydney, NSW;
611
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Will Cordwell, owner of the Ascot Hotel in North Rockhampton, Queensland;
612
Daniel Cronin, part-owner of The Western Hotel in Ballarat, Victoria;
613
John Andrew Dowd, owner of Lightning Ridge Outback Resort & Caravan Park in
Lightning Ridge, NSW;
614
Kasie Ferguson, owner and manager of the Railway Hotel in Parkes, NSW;
615
Patrick Gallagher, owner of the Gallagher Group of Hotels;
616
David Gibson, owner of the Westcourt Tavern in Westcourt, Queensland;
617
Ian Green, owner of the Courthouse Hotel in Mudgee, NSW;
618
Darren Gunn, owner and manager of the Crescent Head Tavern in Crescent Head,
NSW;
619
Albert Hakfoort, CEO of the Hakfoort Group;
620
Colin Johnson, owner of the Prince Alfred Hotel in Booval, Queensland;
621
Peter Johnston, owner of the Ulster Hotel in Ipswich, Queensland;
622
Michael Kearney, owner of Bar Petite in Newcastle, NSW;
623
Richard Lovell, owner of the Marryatville Hotel in Kensington, South Australia;
624
Dennis Madden, director and manager of Madden’s Commercial Hotel in
Camperdown, Victoria;
625
Keith McCallum, owner and manager of the Lonsdale Hotel in Lonsdale, South
Australia;
626
Fiona McDonald, accounts manager at the Timber Creek Hotel in Timber Creek,
Northern Territory;
627
Samuel McInnes, General Manager of the Hurley Hotel Group;
628
Sue Mitchell, owner of the Victoria Tavern in Rockhampton, Queensland
629
Michelle Morrow, Financial Controller and Human Resources Manager of Hunter
Management Services.
630
David Ovenden, Group Operations Manager of the Glen Hotel in Eight Mile Plains,
Queensland;
631
Jim Ryan, owner and manager of The Gippsland Hotel in Sale, Victoria;
632
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Helen Sergi, owner of the Steam Packet Hotel in Nelligen, NSW;
633
Peter Sullivan, owner of the Queensland Hotel Goondiwindi in Goondiwindi,
Queensland;
634
Mel Tait, General Manager of the Murrumba Downs Tavern in Murrumba Downs,
Queensland;
635
Dean Trengove, owner and manager of the Mulga Hill Tavern in Broken Hill,
NSW;
636
Philip Tudor, owner of the Hotel Canobolas in Orange, NSW;
637
Belinda Usher, owner and manager of The Fitzroy Beer Garden in Fitzroy,
Victoria;
638
Samantha Walder, Director of Human Resources at the InterContinental Sydney
Double Bay in Sydney, NSW;
639
Colin Waller, owner and licensee of The Heads Hotel in Shoalhaven Heads,
NSW;
640
Peter Williams, owner and manager of San Remo Hotel in San Remo, Victoria;
641
and
Ashleigh Winn, manager of Halikos Hospitality Pty Ltd, which owns H Hotel,
Frontier Hotel and H 105 Mitchell Hotel and Apartments in Darwin, Northern
Territory.
642
[767] The Hospitality Employers’ witnesses gave evidence in respect of a diverse range of
enterprises covered by the Hospitality Award. Evidence was given about enterprises in most
States and Territories, as well as from a range of rural, regional and capital city locations (as
shown in Chart 29 below).
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Chart 29
Hospitality Employers’ evidence – size of enterprises by location
[768] There was also considerable diversity in respect of the size of the enterprises (in terms
of numbers of employees) which were the subject of the Hospitality Employers lay evidence.
Chart 30 shows the number of employees per establishment for each of these witnesses. The
evidence related to 80 establishments employing 3161 employees in total, ranging from 5 to
120 employees with an average of approximately 40 employees per establishment
(39.5125).
643
Queensland Pacific Hotel in Cairns, QLD Glen Hotel in Eight Mile Plains, QLD Murrumba Downs Tavern in Murrumba Downs, QLD Victoria Tavern in Rockhampton, QLD Ascot Hotel in North Rockhampton, QLD Prince Alfred Hotel in Booval, QLD Ulster Hotel in Ipswich, QLD Queensland Hotel Goondiwindi in New South Wales Goondiwindi, QLD Hakfoort Group in Toowoomba, Mount Isa Railway Hotel in Parkes, NSW and Gladstone Q LD Hotel Canobolas in Orange, NSW Westcourt Tavern in Westcourt, QLD Shoalhaven Heads, NSW Lord Roberts Hotel in Sydney, NSW Northern Territory Steam Packet Hotel in Nelligen, NSW Mulga Hill Tavern in Broken Hill, NSW The Milestone Hotels in Dubbo, Timber Creek Hotel in Timber Creek, NT Leichhardt and Kingswood, NSW Halikos Hospitality Pty Ltd in Darwin, NT InterContinental Sydney Double Day in Sydney, NSW Lightning Ridge Outback Resort & Caravan Park in Lightning Ridge, NSW Capertee Royal Hotel in Capertee, NSW Courthouse Hotel in Mudgee, NSW Bar Petite in Newcastle, NSW Western Australia Crescent Head Tavern in Crescent Head, NSW Gallagher Group of Hotels; Sydney NSW Australian Capital Territory Victoria The Western Hotel in Ballarat, VIC South Australia Madden's Commercial hotel in Camperdown, VIC Amora Hotel Riverwalk in Melbourne, VIC Harryatville Hotel in Kensington; SA Tasmania Malvern Hotel in Malvern, VIC 1834 Hotels in Adelaide, SA Clarion Suites Gateway in Melbourne, VIC Lonsdale Hotel in Lonsdale, SA Shoreline Hotel in Howrah, TAS Gippsland Hotel in Sale, VIC Hurley Hotel Group in Mannum, SA San Remo Hotel in San Remo, VIC The Fitzroy Beer Garden in Fitzroy, VIC Hunter Management Services in Gladstone Park, Sunshine and Sunbury, VIC Zagame Corporation in Ballarat and Melbourne, VIC
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Chart 30
644
[769] The vast majority of the Hospitality Employers lay witnesses had considerable
experience in the hospitality sector. Chart 31 sets out the years of experience in the hospitality
industry of each of the Australian Hotels Association witnesses. Of the 41 witnesses, only 5
did not give evidence about their experience.
[770] The level of experience of the remaining 36 witnesses ranged from 3 years to 49 years,
with an average of just over 21 years’ experience in the hospitality industry.
645
Chart 31
646
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Hospitality Employers' Witnesses: Employees per establishment
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1
Hospitality Employers' Witnesses: Years of experience
[2017] FWCFB 1001
175
[771] Under cross-examination most of the lay witnesses called by the Hospitality
Employers conceded that they had not undertaken specific calculations as to the precise
monetary value of the proposed reduction in penalty rates. It was generally conceded that they
had not undertaken any sort of cost-benefit analysis associated with increasing the level and
range of their services and employing additional staff (or offering existing staff more hours),
in the event the Sunday penalty rate was reduced. It was also generally conceded that the level
of penalty rates is only one factor among a range of factors which affect the ability of their
business to employ additional labour or offer more services to their customers. In light of the
concessions made, we accept that much of the evidence of the lay witnesses may be regarded
as speculative in nature. But this is necessarily the case. Evidence about intentions in light of
proposed changes is necessarily hypothetical and speculative. Hospitality is a dynamic sector,
subject to constant change, in response to changes in consumer preferences. It would be
difficult to predict, with certainty, what precise actions would be taken in response to a
particular change.
[772] However it is important to acknowledge that the evidence was given by experienced
operators in the Hospitality sector about their intentions in the event that the Sunday penalty
was reduced from 175 per cent to 150 per cent. It is also apparent that the witnesses make
decisions about whether or not to open and how many staff to engage on a particular day, on a
day-to-day basis.
[773] We also note that a number of the lay witnesses called by the Hospitality Employers
were cross-examined in relation to the impact of Schedule B of the Hospitality Award, which
provided transitional provisions in respect of loadings and penalty rates for casual employees
in South Australia.
[774] The effect of the South Australian transitional arrangement was that employers with a
casual workforce, which works across seven days of the week, may have a reduced labour
cost as of 1 January 2015. During the transitional period between 1 July 2010 and
31 December 2014 the employer was required to pay their casual employees 150 per cent for
each day of the week. However, during that period, the casual employees were not entitled to
additional payments including with respect to weekend and public holiday work. After
1 January 2015, the employer was required to pay casual employees who worked Monday to
Friday 125 per cent, casual employees who worked on a Saturday 150 per cent and casual
employees who worked on a Sunday 175 per cent. If, as a result of that change, an employer’s
total labour cost had reduced, it may provide some information about the potential
employment effects of such a reduction in labour cost.
[775] Three of the lay witnesses were cross-examined as to the effect of the transitional
arrangements: Mr Bullock;
647
Mr McCallum,
648
and Mr Lovell
649
. The evidence from these
witnesses suggests that despite the fall in the casual loading on Monday to Friday (from 150
per cent to 125 per cent) no additional employees had been employed to work on weekdays.
This evidence may cast some doubt on the proposition that a reduction in weekend penalty
rates would have a positive impact on employment. But it also needs to be put into context – it
only reflects the experience of 3 hospitality employers in South Australia over a limited
period since the end of the transitional period. Further, there may have been a range of other
factors which contributed to the static employment levels in these businesses, including
weaker demand (perhaps as a result of increased competition or changes in consumer
[2017] FWCFB 1001
176
preferences); increases in other business expenses (such as rent or utilities) or higher labour
costs due to the increase in the public holiday penalty rate and casuals Sunday rate.
[776] The diversity of the enterprises referred to in the Hospitality Employers lay evidence
and the considerable experience of the lay witnesses are relevant to the weight to be attributed
to this evidence. While the Hospitality Employers lay evidence cannot be said to be
statistically representative of the employers covered by the Hospitality Award, the evidence is
cogent, relevant and persuasive.
[777] It follows that we reject the United Voice submission that:
‘None of that evidence [i.e. the Hospitality Employers lay evidence] supports the contention that
cuts to penalty rates will have any impact on employment…
The AHA did not present any credible evidence that employers are making decisions to
restrict trade or services on Sundays because of penalty rates.’650
[778] The incidence of owner operators performing work on Sundays (instead of employing
other labour) was particularly common in small and medium sized businesses. For example
the owners of small and medium sized businesses gave the following evidence:
Ms Ferguson, Owner/Manager of the Railway Hotel, Parkes, NSW (13 employees)
said that the hotel does not roster ‘many casual employees to work on a Sunday’
651
and the owners worked on weekends.
652
Ms Ferguson and a supervising manager
work on Sundays, assisted by one casual employee whereas on Saturdays 6 casual
employees are rostered.
Ms McDonald, Accounts Manager of the Timber Creek Hotel, Northern Territory
(14 employees) said that on Sundays in the wet season ‘the owner of the Hotel will
work in the kitchen which reduced the need for a cook position’.
653
Ms Mitchell, Owner of the Victoria Tavern, Rockhampton, Queensland
(18 employees) said that as a result of penalty rates fewer award staff are hired on
Sundays and public holidays ‘even though the Hotel receives business that would
justify the contrary’
654
and that ‘in lieu of rostering more staff’ she will ‘typically
work on Sundays and public holidays to ensure adequate staff numbers’.
655
Mr Trengove, Owner andManager of the Mulga Hill Tavern, Broken Hill, NSW
(33 employees) said that the hotel is run with ‘skeleton staff on Sundays and public
holidays’
656
and he will personally ‘cover certain shifts on those days as a measure
to cut costs’.
657
Mr Waller, Owner and Licensee of The Heads Hotel, Shoalhaven Heads, NSW
658
(28 employees) said that he works weekends ‘to save costs’
659
and ‘would prefer
to allocate that work to 2 casual staff members in his place’.
660
Ms Sergi, Owner of the Steam Packet Hotel, Nelligan, NSW (11 employees) and
her husband work on Sundays and public holidays to reduce the cost of labour on
those days.
661
[2017] FWCFB 1001
177
Mr McCallum, Owner of the Lonsdale Hotel, South Australia (42 employees),
works public holidays alongside his wife, son and daughter, so that not as many
staff members are required.
662
Mr Dowd, Owner of the Lightning Ridge Outback Resort & Caravan Park, NSW
(12 employees) works 12 to 14 hours per day as a cost saving measure in lieu of
rostering staff and also rosters family members to work with him on public
holidays.
663
Mr Annovazzi, Owner of the Capertee Hotel, Capertee, NSW (6 employees) does
not roster any staff on public holidays and instead works on those days with his
wife.
664
Mr Green, Owner of the Courthouse Hotel, Mudgee, NSW (7 employees) works on
public holidays with the co-owner of the Hotel in the bar and the kitchen.
665
Mr Cordwell, Owner of the Ascot Hotel, Rockhampton, Queensland (5 employees)
is usually the only person who works at the Hotel on Sundays and public holidays
and operates the kitchen and bar.
666
Mr Sullivan, Owner of the Queensland Hotel, Goondiwindi, Queensland (24
employees) reduces staffing levels on Sundays and on public holidays Mr Sullivan
and his wife also work.
667
Mr Gibson, Owner of the Westcourt Tavern Westcourt, Queensland (25 employees)
works on public holidays and rosters only salaried employees in an effort to save
costs.
668
Mr Burke, Owner of the Malvern Hotel, Malvern ,Victoria and Belgian Beer Café,
Southbank, Victoria (54 employees) works on Sundays and public holidays with
other owners and family.
669
Mr Ryan, Owner of the Gippsland Hotel, Sale, Victoria (23 employees) works on
public holidays with his wife and managers and does not roster any casual staff.
670
Mr Williams, Owner of the San Remo Hotel, Victoria (24 employees) works on
public holidays and rosters managerial staff to work instead of casual employees.
671
[779] The evidence also discloses that a range of operational limitations are imposed on
Sundays, in order to reduce labour costs. These limitations broadly fall into three categories
and are evident across small, medium and large sized businesses:
(i) Restricting trading hours
Mr Bullock, Chief Executive Officer of 1834 Hotels in Adelaide, South Australia
(which manages over 16 individually owned hotels employing 500 employees) said
that because of penalty rates there are reduced trading hours on Sundays.
672
[2017] FWCFB 1001
178
Mr Dowd, Owner of Lightning Ridge Outback Resort Caravan Park in Lightning
Ridge, NSW) (12 employees) said that trading hours are reduced and live music is
no longer offered on Sundays.
673
Ms Mitchell, Owner of the Victoria Tavern in Rockhampton, Queensland
(18 employees) said that trading hours are reduced on Sundays so that the hotel
does not operate at night.
674
Ms Cameron, Owner of the Lord Roberts Hotel, Sydney, NSW (19 employees) has
reduced trading hours on Sundays so that the Hotel opens at 12.00 midday instead
of 10.00 am and closes at 10.00 pm rather than midnight.
675
(ii) Lower staffing levels
Mr Bilston, General Manager of the Amora Hotel Riverwalk in Melbourne, Victoria
(89 employees) said that ‘skeleton staff are utilised in the restaurant on Sundays to
reduce the cost of wages due to penalty rates’.
676
Ms Cameron, Owner of the Lord Roberts Hotel in Sydney, NSW (19 employees)
said that the penalty rate on Sunday ‘is too great’ and so the hotel reduced operating
hours on Sunday.
677
Mr Cronin, part Owner and Manager of The Western Hotel in Ballarat, Victoria (27
employees) said that although 70 per cent of the Hotel’s revenue is related to
weekend trade ‘due to the penalty rates that are incurred’ the hotel operates ‘at
lower staffing levels’ on these days and rosters management and salaried staff to
work on Sundays.
678
Mr Winn, Hotel Manager of Halikos Hospitality Pty Ltd, Darwin, Northern
Territory (133 employees) said that the Company’s 3 hotels in Darwin operate on a
skeleton staff on Sundays and public holidays.
679
Generally staff levels on those
days are 60 per cent of levels on other days.
680
Mr Bullock, Chief Executive Officer of 1834 Hotels, South Australia and Northern
Territory (which manages over 16 individually owned hotels employing 500
employees)has reduced staff numbers on weekends and public holidays by reducing
trading hours and limiting menus in order to reduce costs.
681
Casual staff are also
replaced with salaried staff on those days whenever possible.
682
Mr Ovenden, Group Operations Manager of The Glen Hotel, Eight Mile Plains,
Queensland
683
(120 employees) said that the hotel does not operate with a
receptionist on Sunday and this is the only day of the week ‘we have no one on the
phones because of the costs associated with that’.
684
Mr Hakfoort Chief Executive Officer of the Hakfoort Group, Queensland (231
employees) has reduced the numbers of casual staff rostered on Sundays and public
holidays and instead rosters salaried employees to work on those days and uses
casual employees to fill gaps.
685
[2017] FWCFB 1001
179
Mr Tony Cakmar General Manager of Clarion Suites Gateway, Melbourne,
Victoria (70 employees) said that the Hotel operates on a skeleton staff on Sundays
and public holidays and where possible casual employees are not rostered on those
days.
686
(iii) Restrictions on the type and range of services provided
Mr Annovazzi (Owner of the Capertee Royal Hotel in Capertee, NSW–
6 employees) said that as a result of current penalty rates, rooms are not made up on
Sundays or public holidays and there is no entertainment on Sundays and higher
prices due to a 10% surcharge.
687
Mr Bilston (General Manager of the Amora Hotel Riverwalk in Melbourne,
Victoria – 89 employees) said that on Sundays the Lobby bar is closed
688
, the
restaurant operates with a skeleton staff
689
,
room cleaning is delayed
690
and there is
no turndown service.
691
Mr Bullock (Chief Executive Officer of the 1834 Hotels in Adelaide, South
Australia– managers of over 16 individually owned hotels employing
500 employees) said that because of penalty rates lower-priced carvery meals are no
longer offered at a number of hotels on Sundays.
692
Mr Cakmar (General Manager of the Clarion Suites Gateway in Melbourne,
Victoria– 70 employees) said that the hotel restaurant is closed for Sunday dinner
due to penalty rates.
693
Mr Dowd (Owner of the Lightning Ridge Outback Resort & Caravan Park in
Lightning Ridge, NSW- 12 employees) said that due to penalty rates, trading hours
are reduced and live music is no longer offered on Sundays.
694
Mr Gallagher (Owner of the Gallagher Group of Hotels in Sydney, NSW-
182 employees) said that the upstairs area of Jacksons is closed on Sundays in an
attempt to reduce wage costs.
695
Mr Hakfoort (Chief Executive Officer of the Hakfoort Group in Queensland–
231 employees) said that the following restrictions are placed on services at
establishments within the Group to reduce the cost of penalty rates on Sundays and
public holidays:
The restaurant area of the Burke & Wills Hotel is closed on Sundays and
public holidays;
The hours for breakfast service have been reduced at the Conservatory
Restaurant at the Burke & Wills Hotel;
The dinner service at Albert’s Restaurant at the Burke & Wills Hotel has been
reduced;
[2017] FWCFB 1001
180
Rooms in accommodation Hotels in the group are not cleaned on Sundays or
public holidays unless necessary and only refreshment of rooms and the
delivery of breakfast is provided.
696
Ms Mitchell (Owner of the Victoria Tavern in Rockhampton, Queensland
Queensland – 18 employees) said that due to penalty rates a breakfast service is not
viable on Sundays and public holidays.
697
Ms Morrow (Human Resources Manager of the Hunter Management Services,
Victoria– owner of four hotels and employer of 329 persons) said that sections of
the hotels are closed on some public holidays including TAB and bistro, and the
making up rooms is delayed on Sundays if possible.
698
Mr Trengove (Owner of the Mulga Hill Tavern in Broken Hill, NSW – 33
employees) said that ‘as a result of having to pay the current penalty rates’ the
dining service is closed for lunch on Sunday
699
and promotions, live entertainment
are not offered on Sundays.
700
.
Ms Sergi (Owner of the Steam Packet Hotel, Nelligan, NSW– 11 employees) closes
the Hotel Bistro on Sunday evenings during winter (other than in school holiday
periods). The Hotel stays open because of customer expectations, based on the
Hotel being the only one in Nelligan.
701
Mr Burke (Part Owner of the Malvern Hotel Malvern Victoria and Belgian Beer
Café Southbank Melbourne Victoria– 29 employees) closes the Hotel restaurant on
Sundays and reduces the number of staff and therefore service provided on public
holidays where the restaurant is open (3 of 11 public holidays per year). The
Belgian Beer Café is busy on Sundays but the upstairs restaurant is not opened
because of the cost of penalty rates.
702
Mr Tudor (Owner of the Hotel Canobolas in Orange, NSW– 55 employees) said
that the hotel does not provide live music or provide a cheaper food promotion such
as Sunday roast ‘due to the amount we spend on wages.’
703
Ms Walder (Director of Human Resources of the InterContinental Sydney Double
Bay in Sydney, NSW– 105 employees) also said that the rooftop area of the hotel is
closed on public holidays when there is not strong occupancy and where possible
the servicing of accommodation rooms was ‘rolled over’ from Sunday to Monday
‘to avoid paying housekeeping staff on Sunday’.
704
Mr Williams (Owner of the San Remo Hotel in San Remo, Victoria– 24 employees)
said that accommodation rooms were not serviced on Sunday unless booked.
705
Ms Anderson (Human Resources Manager Pacific Hotel, Cairns, Queensland –
105 employees) said that as a result of penalty rates the Hotel’s restaurant is closed
on Sundays for four months of the year between March and June. The restaurant is
also closed and no room service is offered on nine out of 11 public holidays during
the year.
706
[2017] FWCFB 1001
181
Mr Lovell (Owner of the Marryatville Hotel Kensington South Australia – 28
employees) has ceased offering bistro meals on public holidays and altered the
terms of the Hotel’s licence to remove the obligation to provide full meal service on
public holidays.
707
Mr Kearney (Owner of Bar Petite Newcastle, NSW – 7 employees) reduces staff on
Sundays and has cut lunch service to three days a week, closing the bar between
12.00 midday to 3.00 pm, Monday to Thursday.
708
Mr Gallagher (Owner of the Gallagher Group of Hotels, Sydney, NSW – 182
employees) reduces services across weekends and public holidays in all Hotels in
the Group including closing particular areas, splitting the gaming room, restricting
entertainment by not providing live music, and reducing staff numbers on public
holidays.
709
Mr Cronin (Owner of the Western Hotel Ballarat Victoria – 27 employees) offers
reduced services on Sundays and public holidays or closes, does not make rooms up
on those days.
710
Mr Burke (Owner of the Malvern Hotel, Malvern,Victoria and Belgian Beer Café
Southbank, Melbourne, Victoria – 54 employees) closes the Hotel restaurant on
Sundays and does not open the upstairs section of the Belgian Beer Café on
Sundays despite it being busy.
711
Ms Mitchell (Owner of the Victoria Tavern Rockhampton Queensland –
18 employees) does not serve breakfast on Sundays or public holidays as penalty
rates mean it is not economically viable.
712
Mr Sullivan (Owner of the Queensland Hotel Goondiwindi, Queensland –
24 employees) closes the bar on Sunday if there are less than six patrons and does
not open the dining room for Sunday lunch. A trial of offering a lunch time Sunday
roast to minimise the requirement on the kitchen to prepare full meals, was
abandoned because the cost of penalty rates for one extra staff member to work was
not worth the amount of money the Hotel made.
713
Mr Sullivan also gave an
example of a Sunday night when the kitchen was open with three staff working and
the Hotel suffered a loss of $100 as the labour costs associated with penalty rates
were so high.
714
Mr Brown (Manager of the Shoreline Hotel, Howrah, Tasmania – 56 employees)
offers services on Sundays and public holidays for reduced hours including not
cleaning accommodation rooms on those days and is considering further reducing
the Hotel’s services by closing the bistro (the largest loss making area) in order to
concentrate on gaming, the bottle shop and reduced bar services.
715
Mr Williams (Owner San Remo Hotel, Victoria – 24 employees). Rooms are not
made up on Sundays unless they are booked the next day which means patrons who
arrive without a booking cannot be accommodated.
716
[2017] FWCFB 1001
182
Ms Usher (Owner Fitzroy Beer Garden Fitzroy Victoria – 12 employees) opens on
Sundays but closes on Mondays and Tuesdays to save costs. Only one bar is open
on Sundays and public holidays.
717
[780] The Hospitality Employers lay witnesses also gave evidence about the likely impact of
a reduction in the Sunday penalty rate (from 175 per cent to 150 per cent) on employment
levels and service.
[781] In terms of the likely employment effect, a number of owner operators of small to
medium hospitality enterprises expressed a willingness to provide more hours of work to
Hospitality Award covered employees on Sundays, rather than doing the work themselves.
For example:
Ms Ferguson (Owner and Manager of the Railway Hotel in Parkes, NSW–
13 employees) said that there would be the potential to engage an additional casual
so that she would not to have to work Sundays and public holidays.
718
Ms Sergi (Owner of the Steam Packet Hotel in Nelligen, NSW– 11 employees) said
that she could provide existing casual staff with between 3–8 hours’ work on public
holidays
719
and this would allow her and her husband to have time off.
720
Ms Usher (Owner and Manager of the Fitzroy Beer Garden in Fitzroy, Victoria– 12
employees) said that she expects that the 6 hour shifts currently worked by either
herself or her husband would be taken by one of the existing casuals.
721
Mr Waller (Owner of the Heads Hotel in Shoalhaven Heads, NSW- 28 employees)
said that he estimates work for two additional casuals at 3 to 4 hours each, possibly
up to 5 hours
722
and he would rather engage casuals to work weekends so that he
does not have to.
723
Mr Williams (Owner and Manager of the San Remo Hotel in San Remo, Victoria–
24 employees) said that by reducing the number of hours that he works, there would
be more hours available for staff.
724
[782] There was also evidence that there would be additional hours of work offered to either
existing or new employees in small to medium sized enterprises. For example:
Mr Burke (Owner of the Malvern Hotel, Malvern, Victoria and Belgian Beer Café
Southbank, Melbourne, Victoria – 54 employees) said that the Hotel would offer an
additional 16 Sunday hours for casual employees and would engage apprentices to
work at the Malvern Hotel and the Belgian Beer Café and a trainee would also be
engaged for the Café. This works out at around 120 additional hours for casual
employees as well as the hours worked by apprentices and the trainee.
725
Mr Cordwell (Owner of the Ascot Hotel Rockhampton Queensland – 5 employees)
would keep the Hotel open later on Sundays and public holidays if the AHA
proposal to reduce penalty rates was granted and would roster staff to work an extra
2 shifts of 5 hours. If employees worked on Sundays then more people could be
employed to work during the week.
726
[2017] FWCFB 1001
183
Mr Williams (Owner of the San Remo Hotel, Victoria – 24 employees) would roster
more casual employees for, collectively, an additional 23 hours on public holidays
to offer usual services including regular operating hours and housekeeping
services.
727
Mr Ovenden (Glen Hotel in Eight Mile Plains, Queensland – 120 employees) said
that there would be opportunity to offer additional hours to casual employees on
Sundays and to engage a receptionist on Sundays.
728
Ms Tait (Murrumba Downs Tavern Queensland – 32 employees) would have longer
shifts for existing permanent employees and employ more permanent and casual
employees.
729
[783] The evidence of the Hospitality Employers lay witnesses supports the proposition that
a lower Sunday penalty rate would increase the level and range of services offered, with a
consequent increase in employment (in terms of hours worked by existing employees or the
engagement of new employees). The types of suggested changes to the level and range of
services are summarised below.
(i) Extend operating hours
Ms Cameron (Lord Roberts Hotel in Sydney, NSW) said that there would be the
potential to open the hotel on Sunday mornings with consequential increase in
availability of casual hours.
730
Mr Hakfoort (Hakfoort Group; Queensland) said that trading hours could be
extended.
731
Ms Blair (Milestone Hotels Dubbo, Leichhardt and Kingswood New South Wales)
said that the Sydney Hotels would trade for longer on Sundays if penalty rates were
reduced.
732
Mr Gallagher (Gallagher Group of Hotels) said that if the AHA proposal was
granted he would open hotels for longer hours and consider offering more work to
staff on public holidays and Sundays.
733
Ms Usher (Fitzroy Beer Garden Fitzroy Victoria) would offer usual services on
Sundays and public holidays and would open the business on Tuesdays when it is
currently closed and would split the Sunday and Tuesday shifts between salaried
and casual staff creating more work for casual staff.
734
(ii) Provide additional meal services
Ms Anderson (Pacific Hotel in Cairns, Queensland) said that there would be the
possibility to open the restaurant on every Sunday.
735
Ms Blair (The Milestone Hotels in Dubbo, Leichhardt and Kingswood, NSW) said
that bistro opening hours would be extended at the Sydney hotels.
736
[2017] FWCFB 1001
184
Mr Cakmar (Clarion Suites Gateway in Melbourne, Victoria) said that the hotel
may be able to open the restaurant for lunch on Sundays
737
and that the restaurant
would open all Sundays, as opposed to the current arrangement where the restaurant
is open on some Sundays.
738
Mr Hakfoort (Hakfoort Group; Queensland) said that he would extend the food
service periods.
739
Mr Sullivan (Queensland Hotel Goondiwindi in Goondiwindi, Queensland) said
that he would improve customer service by providing Sunday lunch.
740
Mr Bullock (1834 Hotels South Australia and Northern Territory) said that it may
be possible to offer customers a full service at all times including opening all
departments of the Hotels in the Group during normal trading hours and offering
full menus.
741
Ms Cameron (Lord Roberts Hotel in Sydney, NSW)
742
said that she would consider
offering Sunday brunch at her hotel on the basis that her loss would be reduced to a
more acceptable level and with the intention of making a profit by increasing
volume.
743
Mr Kearney (Bar Petite Newcastle, NSW) would reinstate the lunch service he has
cut on Monday to Thursday.
744
(iii) Provide live entertainment
Mr Trengove (Mulga Hill Tavern in Broken Hill, NSW) said that it might be
possible to provide a full dining service on Sundays and to provide live
entertainment.
745
Ms Blair (The Milestone Hotels in Dubbo, Leichhardt and Kingswood, NSW)
said that live music would be possible on Sundays with the engagement of a
solo guitarist.
746
Mr Ovenden (Glen Hotel in Eight Mile Plains, Queensland) said that there
would be opportunity for engagement of a receptionist and live music on
Sunday.
747
Mr Trengove (Mulga Hill Tavern in Broken Hill, NSW) said that it might be
possible to provide a full dining service on Sundays and to provide live
entertainment.
748
Ms Cameron (Lord Roberts Hotel, Sydney New South Wales) would have a
DJ playing at the Hotel on a regular basis and would also offer trivia
nights.
749
Mr Darren Gun (Crescent Head Tavern New South Wales) would consider
providing live entertainment on Sundays and public holidays.
750
[2017] FWCFB 1001
185
Ms Tait (Murrumba Downs Hotel Queensland) would have live entertainment
on public holidays or events such as an Easter egg hunt for families.
751
(iv) Invest in infrastructure to provide an improved level of service to customers
Mr Gunn (Crescent Head Tavern in Crescent Head, NSW) said that there
would be opportunity for investment in child friendly areas.
752
Ms McDonald (Timber Creek Hotel in Timber Creek, Northern Territory)
spoke of the opportunity to improve the quality of services through improved
toilet and shower facilities in the caravan park.
753
Mr McInnes (Hurley Hotel Group – Pretoria and Hackney Hotels in South
Australia) would consider undertaking renovations at the Hackney Hotel by
providing a larger combined bar area with an open roof.
754
Ms Mitchell (Victoria Tavern Rockhampton Queensland) would like to make
the Hotel more family friendly by investing in a playground facility
755
Mr Johnston (Ulster Hotel Ipswich Queensland) said that an extra day of
trading could provide sufficient funds to renovate the Hotel kitchen and
improve the variety of meals served to patrons.
756
(v) Provide cleaning services for accommodation facilities
Mr Cronin (The Western Hotel in Ballarat, Victoria) said that accommodation
rooms would be serviced on Sundays.
757
Mr Hakfoort (Hakfoort Group; Queensland) said that cleaning services could
be provided for all accommodation facilities on Sundays and public
holidays.
758
Mr Hakfoort would also like to offer in-house laundry services
for accommodation guests but has contracted this out due to the cost of
penalty rates. If the AHA proposal was granted Mr Hakfoort would consider
employing staff directly to offer this service.
759
(ii) United Voice
[784] In opposing the variation of the Hospitality Award, United Voice relied on the
evidence of 7 lay witnesses:
Sean Davis, casual Duty Manager at the Grange Hotel;
760
Steven Petrov, gaming supervisor at a hotel with gaming facilities at Zagames
Ballarat Hotel;
761
Andrew Sanders, casual Food and Beverage Attendant at Peter Rowland
Catering;
762
Jan Syrek, security officer at Crown Perth;
763
[2017] FWCFB 1001
186
Carol Gordon, casual receptionist at a hospitality establishment at Elphin Villas;
764
Amit Gounder, housekeeping employee at Sheraton on the Park Hotel; and
765
Rachel-Lee Zwarts, apprentice chef at the Torrens Arms Hotel.
766
[785] Only Andrew Sanders and Sean Davis were required for cross-examination.
Sean Davis
[786] Mr Davis has worked in the hospitality industry for 30 years in a range of roles and
since April 2015 has been employed as a casual duty manager at an Adelaide hotel. At the
time he made his witness statement Mr Davis worked an average of 35 hours per week and
usually works Wednesday to Saturdays from 5.00 pm to close (usually around 1.30 am–
2.00 am). As to Sunday work, at that time, Mr Davis’ evidence was:
‘I am not on the roster regularly on a Sunday, however I am often called in when other staff are
sick. I estimate I work two or three Sundays out of every month.’767
[787] By the time Mr Davis came to give oral evidence in the proceedings, his roster had
changed such that he is rostered on Wednesday, Thursday and Sunday.
768
[788] As to the impact of working on weekends Mr Davis says:
‘I have always worked weekends and public holidays. I try to get these shifts because of the
penalty rates I am paid on these days. These are also the busiest days at the hotels.
The penalty rates mean I earn more money each week. If penalty rates were changed I, of
course, would earn less. I am only just getting by on my current wage.
Although I receive penalty rates for working weekends and public holidays, working these
shifts comes at a huge cost to me and my family. As I work in hospitality I cannot really refuse
to work on the weekends or public holidays as these are the busiest periods for the industry. If
the rates were changed I would be working the same hours for less money. This might cause
me to seriously consider training for a different industry with the view to changing my career.
The cost to my family of working weekends and evenings is that I am rarely am (sic) able to
spend quality time with them. I am usually working when the children are home from school
in the afternoons and evenings. On my days off earlier in the week I am often very fatigued
and tired and try and catch up on sleep. It is not unusual that I work till well after midnight, get
home even later, and then get up by 7.30am to help get the children to school.
I am often unable to take the children to their sporting activities on the weekend such as soccer
or netball as I am working. The responsibility of running around four children to different
sports then falls solely upon my wife.
I rarely am able to attend any family gatherings or functions, including my own children’s
birthday parties as these are usually held on weekends or evenings when I am working.
[2017] FWCFB 1001
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As a result of working Weekends I have absolutely no social life and find it very difficult to
maintain my friendships as I am unable to catch up with them on weekends because I am
working.
Working weekend and evenings over a significant period of time can become very mentally
debilitating and physically taxing on my body. On occasions I have felt depressed as a result
of being isolated from my family and friends and have sometimes found it difficult to cope
with the day to day pressures of life.’
769
[789] At paragraphs 34–41 of his statement Mr Davis sets out the impact upon him of a
reduction in penalty rates as sought by the Hospitality Employers, in particular:
‘I already have to make hard choices about my spending. My family currently cannot afford to
indulge in luxuries. If my penalty rates are reduced this will mean that my spending choices
become harder.’
770
[790] The Hospitality Employers contend that insofar as Mr Davis’ evidence is relied upon to
illustrate the effect on earnings of the variation to the Sunday penalty rate, that evidence will
not provide any meaningful assistance because there is no recurring pattern to Mr Davis’
Sunday work and therefore a reliable comparative evaluation cannot be made about the effect
upon his weekly earnings of a change in the Sunday rate. We disagree. As Mr Davis said in
cross-examination, he is currently rostered on Sundays.
[791] The Hospitality Employers also contend that Mr Davis is available and willing to work
on Sundays. Mr Davis’ willingness and availability for weekend work is said to emerge from
the following passage in his cross-examination:
‘Yes. And in the course of that interview I take it you were asked about your availability for
work during the week?---Yes.
And did you indicate you were available – were there any days that you were not available?-
--Tuesdays.
That was the only day you were unavailable?---Yes. And you don’t work Tuesdays do you?---
Not so far, no.
So you were available to work any day other than Tuesday, including the weekends?---If
I want a job then, yes.
Yes. And you’ve always worked the weekends according to your statement?---Generally, yes.
Mostly, yes.’
771
[792] Further, Mr Davis agreed that he has been available to work weekends and that he has
not declined work on either a Saturday or a Sunday:
‘You’ve been available to work the weekends?---Well, you have to. You haven’t got a
choice.
You’ve been available to work those weekends?---Well, yes, absolutely. Yes. So in your
current position at the Grange, have there been occasions where you have declined to
work, say, a Saturday?---No, absolutely not. It pays better.
And have there been occasions where you have declined to work a
Sunday?---No.’
772
[793] The passages from Mr Davis’ evidence which are relied on by the Hospitality
Employers need to be seen in context. It is clear from his evidence as a whole that it is not Mr
[2017] FWCFB 1001
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Davis’ preference to work on weekends, rather it is an economic necessity. The following
passages from his cross-examination support this conclusion:
‘It’s also the case you’ve tried to get those weekend shifts at other establishments in the past?---
Well, it’s not so much as trying to get the shifts. It’s you make yourself available for them so
that you get the job. Because they need people to work weekends because no one wants to
work weekends or nights.
So you tell the managers that you’re available to work those times?---Well, if I want the job I
have to. I have no choice.’
773
Steven Petrov
[794] Mr Petrov has worked in the hospitality sector since 1998 and is currently a gaming
supervisor at a hospitality establishment in Victoria. He is employed under the Hospitality
Award and paid an annual salary (a loading of about 25 per cent on the award minimum rate)
instead of weekend, shift or public holiday penalty rates. Mr Petrov’s current working
arrangements are detailed at paragraph 15 and 16 of his statement:
‘I work Monday, Friday, Saturday and Sunday, from 6pm until close. Close time can vary but
on average, if it all goes well, on Monday, Friday and Saturday the venue closes at 3.00am and
we work until about 4.30am. On Sunday the venue closes at 3.00am but we normally finish at
5.00am because we have to balance the financial week. We physically have to weigh the coin
hoppers so the financial records for the week can be balanced. Once my meal breaks are
removed, I work approximately 40 hours per week, but I am usually at work for about 11 hours
each shift.
One consequence of my roster is that I work nearly every public holiday because I always
work Monday, Friday, Saturday and Sunday.’
774
[795] As to the impact of weekend and public holiday work Mr Petrov says:
‘Because I work on Monday, Friday, Saturday and Sunday I cannot attend any family events
because they are held on weekends and I am excluded from them because of the hours I am
rostered to work.
A good example is the birthday parties of my grandchildren. They are held on the weekend so
that most people can attend. I can’t participate in any of these events because I have to work.
Lots of other people enjoy the weekend because they are out partying and enjoying themselves
but I can’t participate in that stuff. Even things that people take for granted like going to the
footy - I can’t do that because of the hours I have to work in the hospitality industry.
I used to be involved in a lot of things - karate, gym work with training partners, squash - but
that all had to go very early in my career because I couldn’t commit to things on the weekend
which is the most convenient time for everyone else, because the work always has to come
first.
I have worked nearly every Christmas Day in the last 15 years. I do a rushed mini version of
Christmas at home and then take off. This makes me feel like I’m missing out. I also carry the
burden of letting people down. The best word for it is ‘guilt’. It makes me feel guilty that I
have to rush Christmas.
[2017] FWCFB 1001
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The good thing about working on the weekend is the weekend penalty rate. Basically I work
weekends in order to obtain a higher rate of pay. My annual salary is based on the Award and
the penalty rates in it. Other than that, there is nothing good about working weekends.’
775
[796] At paragraphs 31–38 of his statement, Mr Petrov sets out the impact upon him of a
reduction in penalty rates as sought by the Hospitality Employers, in particular:
‘Under the Award, my annual salary cannot be less than what I would earn if I was paid the
minimum hourly rates in the Award. If the proposed cut to the Sunday penalty rate is made by
the Commission the base that my annual salary is calculated from will be reduced by 52 weeks
multiplied by $58.74 which equals a total yearly reduction of $3,054.48.
If this happens, then the loss of Income will mean that everything becomes more difficult.
When I took out a mortgage, I didn’t do so on the basis that penalty rates would be reduced. I
would need to cut back across the board. This would also affect Betty because we are both in
the same industry and our household will cop it doubly if penalty rates are cut.’776
Andrew Sanders
[797] Mr Sanders is a student and works for a catering business on a casual basis mainly as a
waiter and a bartender. He is employed under the Hospitality Award and classified as a Level
2 Food and Beverage Attendant, grade 2.
[798] At the time he made his statement Mr Sanders worked an average of 18 hours per
week, but his hours were highly variable.
777
[799] Mr Sanders does not work every Sunday but expects he will have to work regular
Sundays in the future.
778
[800] As to the impact of weekend work Mr Sanders says:
‘I find that people don’t understand what it is like to work on the weekends. My friends will ask
me why I can’t take time off, or why I cannot work another night. I miss out on so many of the
things my friends do. The nights I work are the nights people do things like go out to dinner,
see movies, and have parties. When they go out, I am working. I do not get to go to birthdays.
When I started it was worse, because I was invited to more events, but now people have
stopped asking me to things.
Because I work late at night, I have to sleep late the next day to get enough sleep. If I have
worked Friday or Saturday night then I lose half the next day because I am asleep. I then get
up and go to work again. I regularly miss out on the things people do on the weekend. If I do
not sleep in, I am too tired to really enjoy what I am doing.
My grandmother died recently, and it has been hard on my family. She held us together and
we have to work on seeing each other. Every so often we will hold a family get together on a
weekend, and I will usually have to forego this for work. I do not get to see my family
otherwise. I would like to be able to see them more.’
779
[801] Mr Sanders estimates that if the Sunday and public holiday penalty rates in the
Hospitality Award were reduced as proposed by the Hospitality Employers then he would lose
about $40 on a 9 hour Sunday shift:
[2017] FWCFB 1001
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‘I have calculated to earn back that $40, I would have to work an extra 1.5 hours on Saturday or
an extra two hours on Thursday or Friday.
While I would be able to work those additional hours, it would cause problems with my study
and my social life. I would miss out on more social and family events, and my grades would
suffer. I know this because in the second semester of 2014 I was doing three subjects while
working the same number of hours. I am expected to commit 27 hours each week to my
course, including class time, class preparation, and homework. I feel that my grades suffered
because I don’t have enough time. I am reducing my course-load to two subjects in the second
semester of 2015; I hope that this will balance better with my work.
…
Even if I am available to work additional hours, I do not know if I will be offered additional
hours by my employer. The National Gallery of Victoria can only host so many events, and
that decides how many shifts I work. I have asked for work at other venues that have contracts
with my employer, but they say that they prefer to keep the same people working at the same
places.’
780
[802] We note that Sunday work is not a regular feature of Mr Sanders’ work and, that when
he is rostered on a Sunday, no typical pattern emerges from the number of hours he works.
781
Jan Syrek
[803] Mr Syrek is a full-time security officer at a casino in Perth and is employed under an
enterprise agreement, the Hospitality Sector WA United Voice – Crown Enterprise Agreement
2013 (the Crown Agreement)
782
and, consequently, the Hospitality Award currently has no
direct application to him.
[804] Mr Syrek gives evidence about the impact of work on weekends and public
holidays,
783
particularly on his capacity to engage in social activities with his family:
‘The biggest impact of working weekends has been on [his fiancé] because she usually works
Monday to Friday, so we often do not see each other all week. We have not made many friends
together as a couple, so she usually just spends time with her mum or brother when I am
working on a weekend.’784
[805] At paragraphs 42–48 of his statement Mr Syrek sets out the impact upon him of a
reduction in penalty rates as sought by the Hospitality Employers. We note that the base
hourly rate of $24.99 used by Mr Syrek in the illustrative calculations
785
derives from the
Crown Agreement. At that time the applicable award rate was $19.10 per hour. We attach
little weight to this aspect of Mr Syrek’s evidence. While the Crown Agreement remains in
operation any variation to the Hospitality Award as a result of these proceedings would have
no impact upon him.
Carol Gordon
[806] Ms Gordon has worked in the hospitality sector since March 2014 as a casual
receptionist (classified as a Level 2, Front Office Grade 1 under the Hospitality Award).
[2017] FWCFB 1001
191
[807] Ms Gordon’s evidence as to the adverse impact of weekend and public holiday work is
set out at paragraphs 22–26 of her statement. Working at these times impacts on Ms Gordon’s
care for her foster child, who has serious medical issues, and on her social life:
‘Working on weekends has had a negative impact on my social life. For example, I have a group
of friends who meet up for a meal every month or so, generally lunch on Saturday or Sunday
or dinner on Saturday. Everyone else works Monday to Friday. Our meals are now fitted
around my roster. I can only go out with my friends on a free weekend, because Riley wants
me to spend my free night with him on weekends I am rostered to work.’786
[808] At paragraphs 35–40 of her statement, Ms Gordon sets out the impact upon her of a
reduction in penalty rates as sought by the Hospitality Employers. We return to this aspect of
Ms Gordon’s evidence shortly.
Amit Gounder
[809] Ms Gounder commenced employment in the housekeeping department at the
‘Sheraton on the Park’ hotel in Sydney in 2001. Upon returning for parental leave in 2010 Ms
Gounder has been a part-time employee working 24 hours per week, from 7.00 am to 3.00 pm
on Saturday, Sunday and Monday each week (including public holidays).
787
At the time she
made her statement Ms Gounder was classified as a Guest Services Employee Grade 2 and
paid $18.47 per hour.
[810] As to the impact of weekend and public holiday work Ms Gounder says:
‘I work on weekends because my husband’s work means he is only available to take care of our
seven year old son on weekends. The penalty rates I am paid on weekends help to balance the
loss of family time. I would prefer to be able to spend the weekends with my family but the
costs of before and after school care for my son on weekdays would mean that a large chunk of
my wages would go straight to child care expenses. I’d also have to work more days to earn
the same amount if I didn’t get weekend rates.
I sometimes miss out on family events including weddings and birthday parties because I have
to work on weekends. The only way I can attend these weekend events is if I take annual
leave. My employer is co-operative in letting me have short periods of annual leave but that
still means I have less annual leave to take as a block if we go away for holidays.’
788
[811] It appears from Ms Gounder’s evidence that while weekend and public holiday work
adversely impacts on the time spent with family, working at such times suits her personal
circumstances as that is the time when her husband is available to care for their son.
[812] Ms Gounder earns $1,137.01 per fortnight, and if Sunday penalty rates in the
Hospitality Award were reduced in the manner sought by Hospitality Employers she would
lose $73.88 per fortnight:
‘the loss of income will mean we have less choice about our spending. It will be harder to pay
off our mortgage and maintain the standard of living we are used to. We might have to cut out
the karate sessions my sons participates in, and paying my daughter’s university fees.’789
[2017] FWCFB 1001
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Rachel-Lee Louise Zwarts
[813] Ms Zwarts has worked in the hospitality industry since about 2010, and has been an
apprentice chef since September 2013.
790
In May 2015 she started as a full-time apprentice
chef at the Torrens Arms Hotel. Ms Zwarts works split shifts on various days and regularly
works on weekends and public holidays:
‘I usually work the public holidays and I like to get the extra money that comes from penalty
rates on Sundays and public holidays. The extra money makes up for the difficulty of working
those days.
Weekends and public holidays are the times I get paid the most so I try to work these days.’
791
[814] As to the impact of working on Sundays Ms Zwarts’ evidence is as follows:
‘I am religious and working Sundays makes it really difficult to get to Church.
The main services are on Sunday morning. I usually work quite late in Saturday night and if I
have to work on Sunday my shift starts at 10.00am so I can’t get to the Sunday morning
service.
I try to attend evening services when I can but it isn’t the same. There are less people and it is
not as much of a community. My family is not there at the evening services.
I don’t get to see much of my family because by the time I get up after working late the night
before they have gone to work. When I get home it is pretty late, well after 10.30pm, and they
are in bed.’
792
[815] Ms Zwarts deals with the impact of a reduction in penalty rates as proposed by the
Hospitality Employers at paragraphs 24–32 of her statement, in particular:
‘On a nine and a half hour shift work on Sunday I would lose $26.32 if the changes to the
penalties were put in place. I am only paid a base rate of $11.07 per hour. This means I would
be working effectively two hours for no pay.
If the changes happen to the penalties it will really affect me because I don’t get paid very
much at the moment because I am an apprentice. Any reduction in pay will make it even
harder for me to pay my bills and try to save.
I only have around $50.00 to spend after my bills now. With my expenses and the pay I
receive I struggle to save at all even though I still live at home. Without the penalty rates I will
have hardly anything to spend or save; it doesn’t seem fair because I work really hard.’793
7.2.5 Consideration
[816] We propose to deal with the s.134 considerations first.
[817] Section 134(1)(a) of the FW Act requires that we take into account ‘relative living
standards and the needs of the low paid’. A threshold of two-thirds of median full-time wages
provides a suitable benchmark for identifying who is ‘low paid’, within the meaning of
s.134(1)(a). As shown in Chart 24 (see paragraph [735]) a substantial proportion of award-
reliant employees covered by the Hospitality Award are ‘low paid’.
[2017] FWCFB 1001
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[818] As stated in the PC Final Report, a reduction in Sunday penalty rates will have an
adverse impact on the earnings of those hospitality industry employees who usually work on a
Sunday. It is likely to reduce the earnings of those employees, who are already low paid, and
to have a negative effect on their relative living standards and on their capacity to meet their
needs.
[819] The evidence of the United Voice lay witnesses puts a human face on the data and
provides an individual perspective on the impact of the proposed changes. Many of these
employees earn just enough to cover their weekly living expenses. Saving money is difficult.
Unexpected expenses such as school trips, illness, or repairs, can produce considerable
financial stress. As United Voice submits:
‘The prospect of reductions in income has already caused anxiety. Many workers are unable to
work extra hours to make up for lost income without making significant changes to their lives,
such as reducing or stopping study, or finding substitute childcare. There is genuine
uncertainty about whether employers would actually be in a position to offer additional hours
work to make up for the lost income.’
794
[820] Ms Gordon’s evidence
795
is illustrative in this regard. In the weeks she worked on
weekends she earned between $357.90 and $362.50. The proposed cuts to penalty rates, if
made, would reduce her income by between $25 and $40 per week. She manages her
spending carefully, and any reduction would mean she has ‘little margin for error in her
spending’.
796
[821] Ms Gordon’s evidence was that she is unlikely to be offered additional hours because
the work is highly seasonal, and even if she was offered additional hours, her ability to accept
those hours was limited by her responsibilities as primary caregiver for her nephew.
797
[822] The extent to which lower wages induce a greater demand for labour on Sundays (and
hence more hours for low-paid employees) will somewhat ameliorate the reduction in income,
albeit by working more hours. We note the Productivity Commission’s conclusion that, in
general, most existing employees would probably face reduced earnings as it is improbable
that, as a group, existing workers’ hours on Sundays would rise sufficiently to offset the
income effects of the penalty rate reduction.
[823] The ‘needs of the low paid’ is a consideration which weighs against a reduction in
Sunday penalty rates. But it needs to be borne in mind that the primary purpose of such
penalty rates is to compensate employees for the disutility associated with working on
Sundays rather than to address the needs of the low paid. The needs of the low paid are best
addressed by the setting and adjustment of modern award minimum rates of pay (independent
of penalty rates).
[824] We are conscious of the adverse impact of a reduction in Sunday penalty rates on the
earnings of hospitality workers who work on Sundays and this will be particularly relevant to
our consideration of the transitional arrangements associated with any such reduction.
[825] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’. A reduction in penalty rates is likely to increase the incentive for employees to
bargain, but may also create a disincentive for employers to bargain. It is also likely that
[2017] FWCFB 1001
194
employee and employer decision-making about whether or not to bargain is influenced by a
complex mix of factors, not just the level of penalty rates in the relevant modern award.
[826] The Hospitality Employers submit that s.134(1)(b) is a ‘neutral’ consideration as ‘The
evidence does not establish that the current level of penalty rate encourages or discourages
collective bargaining’.
798
[827] It is important to appreciate that s.134(1)(b) speaks of ‘the need to encourage
collective bargaining’. As we are not persuaded that a reduction in penalty rates would
‘encourage collective bargaining’ it follows that this consideration does not provide any
support for a change to Sunday penalty rates.
[828] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. Obtaining employment is the focus of
s.134(1)(c).
[829] On the basis of the common evidence we conclude that a reduction in the Sunday
penalty rate in the Hospitality Award is likely to lead to some additional employment. We are
fortified in that conclusion by the evidence of the lay witnesses called by the Hospitality
Employers. As mentioned earlier, that evidence supports the following propositions:
some owner operators of small to medium hospitality enterprises will provide
additional hours to Hospitality Award covered employees on Sundays, rather than
doing the work themselves; and
a lower Sunday penalty rate would increase the level and range of services offered
by some hospitality enterprises, with a consequent increase in employment (in terms
of hours worked by existing employees or the engagement of new employees).
[830] We reject United Voice’s submission that the lay evidence led by the Hospitality
Employers is simply conjecture and speculation, and that ‘None of that evidence supports the
contention that cuts to penalty rates will have any impact on employment’.
799
[831] United Voice also submits
800
that it is significant that none of the employers have
produced any ‘natural experiments’ evidence to support their contention that cutting penalty
rates will increase employment. Further, it submits that the ‘employment effect’ is a critical
part of the employer’s case and accordingly:
‘It is proper to expect that they would have sought to provide available empirical information to
explain that effect. Given such evidence was available, and had been identified to the
employers, it is reasonable to draw an inference that such evidence was not relied upon
because it would not have assisted the employer parties.’
801
[832] United Voice rely on Jones v Dunkel
802
in support of the proposition that we should
draw the suggested inference from the absence of any ‘natural experiment’ evidence.
[833] Some of the principles in relation to what is commonly termed ‘the rule in Jones v
Dunkel’ are as follows:
[2017] FWCFB 1001
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1. The unexplained failure by a party to give evidence, to call witnesses, or to tender
documents or some other evidence may in appropriate circumstances lead to an
inference that the uncalled evidence would not have assisted the party’s case. The rule
provides that an inference may be drawn in certain circumstances not that such an
inference must be drawn.
803
2. The rule permits an inference that the untendered evidence would not have helped
the party who failed to tender it and entitles the Commission to more readily draw any
inference fairly drawn from the other evidence. But the rule does not permit an
inference that the untendered evidence would in fact have been damaging to the party
not tendering it. The rule cannot be employed to fill gaps in evidence, or to convert
conjecture and suspicion into inference.
804
3. The rule only applies where a party is ‘required to explain or contradict’ something
and this depends on the issues thrown up by the evidence in a particular case.
805
[834] We accept that there have been a number of occasions in the past two decades where
penalty rates or minimum wages have been reduced in the Accommodation and food services
sector and that such occasions provide an opportunity for a ‘natural experiment’ to discern the
employment effects of such a change. As the Full Bench observed in the Restaurants 2014
Penalty Rates decision:
‘There are clear examples in the history of industrial regulation of the restaurant industry in
which weekend penalty rates have been abolished or reduced, but no evidence was
forthcoming to demonstrate that this had discernibly positive effects in terms of turnover and
employment. The Deputy President, correctly in our view, pointed to the period 2006 to 2010
in Victoria when restaurant operators not bound by the then-applicable federal award were not
required to pay any penalty rates at all as providing an opportunity to test empirically what the
business and employment effects of a removal of penalty rates would be. However, no
evidence was called at first instance from any restaurant operator in Victoria, and the evidence
did not otherwise touch upon this period. There was another historical opportunity which we
can identify. Prior to the Work Choices period commencing in 2006, restaurants in New South
Wales were largely regulated by an award of the Industrial Relations Commission of New
South Wales, the Restaurant &c., Employees (State) Award. In 1996, the NSW Commission
(Marks J) heard and determined various applications, including an application from the
Restaurant and Catering Association of NSW and other employers, in respect of that award.
The employers’ application sought amongst other things a reduction in weekly penalty rates. In
the Commission’s decision issued on 23 August 1996, it was determined that the Saturday
penalty rate should be reduced from 50% to 25% and the Sunday penalty rate reduced from
75% to 50% (with casual employees receiving casual loadings in addition). On the employers’
case presented before the Deputy President, that change should have increased turnover and
employment in the NSW restaurant industry. But there was no evidence that was actually the
case.’
806
[835] Further, as pointed out by United Voice, the transitional arrangements in respect of
penalty rates for casual employees in South Australia covered by the Hospitality Industry
(General) Award 2010 provide a further opportunity for a ‘natural experiment’.
[836] We are not persuaded that the rule in Jones v Dunkel
807
is applicable in the context of
these proceedings, for 3 reasons.
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196
[837] First, as mentioned in Chapter 3 (at [110]), the Review is to be distinguished from
inter parties proceedings of the type to which Jones v Dunkel
808
is apposite.
[838] Second, the application of the rule is dependent on the issues thrown up in the
particular case. Contrary to United Voice’s contention, the Hospitality Employers and the RCI
do not advance the bold proposition that cutting penalty rates will increase employment. The
positions advanced are more nuanced. At paragraph [35] of their reply submission the
Hospitality Employers made it clear that:
‘… the Associates do not advance the broad proposition that any reduction in any
loading/penalty will necessarily have a consequential employment effect.’
[839] In its final written submission at paragraph [97], the RCI advances the following
argument in relation to the consideration at s.134(1)(c) (which is directed to employment):
‘… Having regard to the evidence, it is apparent that the current level of penalty rates,
particularly on Sundays, is having a detrimental effect on trading and employment
opportunities.’
[840] Further, in its reply submission, at paragraph [25], the RCI states:
‘The point of RCI’s submissions has never been about advocating that certain positive
outcomes will be achieved as a matter of fact but rather the importance of removing
disincentives and barriers which exist.’
[841] Third, Jones v Dunkel
809
is directed at the unexplained failure by a party to call a
witness or to tender documents. It seems to us that United Voice is seeking to extend the rule
such that a party would be required to create evidence – in the form of a report documenting
the effects of a ‘natural experiment’. No authority was advanced in support of such a
proposition.
[842] If we are wrong about the application of the rule in Jones v Dunkel
810
in the present
context we would exercise our discretion not to draw the inference sought. In doing so we
have had regard to the issues raised above and to the inherent difficulty of undertaking
research of this nature.
[843] In the context of labour market studies, Card (1992)
811
first used the natural
experiment approach to assess changes in employment in California with a group of
neighbouring locations that, although similar to California, made no adjustment to their
minimum wage. Although this methodology has continued to influence research in this field,
it is difficult to apply this technique to labour market research in Australia.
[844] Credible Australian research which quantitatively analyses the impact of changes in
the national minimum wage and award rates of pay on employment and hours worked would
be relevant to the conduct of annual wage reviews.
812
Accordingly, as part of its medium-term
research program, the Commission commenced a competitive open tender process for this
research in September 2014. The tender sought to elicit research which could quantify the
impact of changes in national minimum wage and award rates of pay on employment and
hours worked in Australia through methods other than Computable General Equilibrium
modelling. As noted in the tender:
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‘…[r]esearch that empirically estimates the employment effects of minimum wages adjustments
in an Australian context has been limited. This is due to the specific nature of the research,
which draws on an in-depth understanding of Australia’s industrial relations system and the
limitations posed by data collected in Australia.’
813
[845] To elicit as many quality tenders as possible, the Commission undertook a shortlisting
process which included providing a nominal fee to successful shortlisted tenderers to further
develop their proposals. The Commission also sought the services of expert academics to
provide comments on de-identified tender proposals which were incorporated into the
Commission’s tender evaluation process. Unfortunately, despite this process the Commission
was unable to award a contract due to the lack of reliable data.
[846] Several reasons make natural experiments for changes in penalty rates more difficult
to analyse than changes in minimum wages. In particular, there is no data source that
regularly identifies workers receiving penalty rates, thus making it more difficult to identify
an appropriate group of workers that form a comparator group (one that shares the same
characteristics as people affected by the adjustment but do not benefit from the adjustment).
[847] In addition to this, longitudinal data that can identify the affected workers and track
their labour market movements over time is required and this also does not currently exist in
Australia. Again, data sources of this nature are strongly featured throughout the international
evidence.
[848] Contrary to United Voice’s submission the consideration in s.134(1)(c) lends support
to a reduction in Sunday penalty rates.
[849] It is convenient to deal with the considerations s.134(1)(d) and (f) together.
[850] Section 134(1)(d) requires that we take into account ‘the need to promote flexible
modern work practices and the efficient and productive performance of work’.
[851] Section 134(1)(f) requires that we take into account ‘the likely impact of any exercise
of modern award powers on business, including on productivity, employment costs and the
regulatory burden’.
[852] It is self-evident that if the Sunday penalty rate was reduced then employment costs
would reduce. It was not contended that a reduction in the Sunday penalty rate would impact
on productivity or regulatory burden. This consideration supports a reduction in the Sunday
penalty rate. As we have mentioned, s.134(1)(f) is not confined to a consideration of the
impact of the exercise of modern award powers on ‘productivity, employment costs and the
regulatory burden’. It is concerned with the impact of the exercise of those powers ‘on
business’. In addition to the impact on employment costs it is also apparent that a reduction in
the Sunday penalty rate would have other positive effects on business.
[853] The evidence of the lay witnesses called by the Hospitality Employers supports the
proposition that the current level of Sunday penalty rates has led employers to reduce labour
costs associated with Sunday trading by restricting the availability of services. The range of
such operational limitations broadly fall into 3 categories:
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restricting trading hours;
lower staffing levels; and
restrictions on the type and range of services provided.
[854] The evidence of the Hospitality Employers’ lay witnesses also supports the
proposition that a lower Sunday penalty rate would increase the level and range of services
offered on a Sunday. The type of changes suggested in the lay witness evidence are:
extended operating hours;
providing additional meal services;
providing live entertainment;
investing in infrastructure to provide services; and
provide cleaning services for accommodation facilities.
[855] On this basis, it may be said that a reduction in penalty rates will promote flexible
modern work practices. This consideration lends support to a reduction in Sunday penalty
rates.
[856] Section 134(1)(da) requires that we take into account the ‘need to provide additional
remuneration’ for, relevantly, ‘employees working on weekends’. As mentioned earlier, an
assessment of ‘the need to provide additional remuneration’ to employees working in the
circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a range
of matters, including:
(i) the impact of working at such times or on such days on the employees
concerned (i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g.
through ‘loaded’ minimum rates or the payment of an industry allowance
which is intended to compensate employees for the requirement to work at
such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[857] It is convenient to deal with matters (ii) and (iii) first.
[858] As to matter (ii), the minimum wage rates in the Hospitality Award do not already
compensate employees for working on weekends. We note that the Hospitality Award makes
provision for annualised salary arrangements under which an employee is paid at least 25 per
cent above their minimum weekly wage rate instead of, among other things, penalty rates for
weekend work, provided such an agreement does not disadvantage the employee concerned
(see clause 27.1 of the Hospitality Award). But such arrangements are not the focus of matter
(ii).
[859] In relation to matter (iii), weekend work is a feature of the Hospitality sector. As
mentioned earlier (see [715]), most enterprises in the Hospitality sector operate 7 days a week
compared to 31.1 per cent of enterprises across all industries (80.5 per cent). Almost half of
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all enterprises only operate on weekdays. This feature of the Hospitality sector was confirmed
by the lay witnesses called by the Hospitality Employers and United Voice.
[860] We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In
addition to the findings set out in Chapter 6, the lay witness evidence led by United Voice
spoke to the adverse impact of weekend work on the ability of hospitality sector employees to
engage in social and familial activities. While for some of those witnesses Sunday work had a
particularly adverse impact, most simply referred to the impact of weekend work and did not
distinguish between Saturday and Sunday work.
[861] We note that in the event Sunday penalty rates were reduced (but not removed
entirely) employees working on Sundays would still receive ‘additional remuneration’.
[862] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’. Any reduction in Sunday penalty rates
would apply equally to men and women workers. For the reasons given earlier we regard
s.134(1)(e) as neutral to our consideration of the claims before us.
[863] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’. We regard s.134(1)(g) as neutral to our consideration
of the claims before us. No party contended to the contrary.
[864] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’.
[865] The Hospitality Employers note that the evidence presented has been addressed to the
hospitality industry and that: ‘It is not suggested that it would allow for an informed
consideration of the economy wide effects of the current Award’.
814
We agree with the
submission put. A detailed assessment of the impact of a reduction in Sunday penalty rates in
the Hospitality Award on the national economy is not feasible on the basis of the limited
material before us.
[866] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’, taking into account
the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into
account those considerations insofar as they are relevant to the matter before us.
[867] The central issue in these proceedings is whether the existing Sunday penalty rate
provides a ‘fair and relevant minimum safety net’.
[868] The Hospitality Employers’ principal contention is that the existing penalty rate acts as
a deterrent to employment and as such the current penalty rates are neither fair nor relevant. In
short, the existing Sunday penalty rate is not ‘proportional to the disability’. In this context the
Hospitality Employers point to the fact that the existing Sunday loading (75 per cent) is three
times the loading for Saturday work (25 per cent).
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[869] As set out earlier, the Hospitality Employers propose that the Sunday penalty rate be
reduced from 175 per cent to 150 per cent for all employees (inclusive of the 25 per cent
loading for casual employees). No change is proposed to Saturday penalty rates.
[870] The change proposed by the Hospitality Employers is said to be fair and relevant for
the contemporary hospitality industry, having regard to the following matters:
(a) the availability of labour;
(b) the willingness of employees to work and a preference for Sunday, especially
from amongst casual employees;
(c) consumer activity on weekends;
(d) workforce composition;
(e) hospitality industry business trading hours; and
(f) the frequency of work on weekends and public holidays.
[871] In opposing the changes sought by the Hospitality Employers, United Voice contends
that a reduction in penalty rates will not result in any measurable impact, other than the
employer cash flow and profits.
815
[872] As to the proposition that (in essence) a reduction in penalty rates will only increase
employer cashflow and profits, we note that this submission is put by United Voice in respect
of each of the employer applications in which it has an interest (namely, the Hospitality
Award, the Restaurant Award and the Fast Food Award). A similar submission is advanced
by the SDA, in relation to the Pharmacy Award, it submits:
‘It can be anticipated that, in some material proportion, any reduction in labour costs will be
absorbed as profit rather than applied to increasing the hours of work (whether by existing or
new employees).’
816
[873] It is convenient to deal with these submissions here, rather than simply repeat the point
in the sections dealing with each of the modern awards.
[874] As observed in the PC Final Report, in examining this issue it is important to
distinguish between short-run and long-run impacts:
‘Any changes in the cost of any inputs — up or down — must have at least short-term impacts
on the profitability of the relevant businesses as they do not usually instantaneously alter their
input mix, drop prices or adapt in other ways. So the imposition of higher penalty rates
resulting from award modernisation in some industries and jurisdictions would have had short-
term adverse effects on profitability, while the reduction of penalty rates, as recommended in
this inquiry, would also provide short-term additional profits to businesses. The duration of
these profitability effects will depend on the specific circumstances of the market…
However, long run profitability is unlikely to be affected by penalty rate levels. Effects on
profits are not enduring at the industry level because two processes tend to restore normal
levels of profitability. Higher rates of return on capital attract entry in industries, such as those
in the HERRC, that do not face substantial business entry and exit costs. (Exit and entry rates
are high in most industries, and especially so in restaurants, catering, takeaways and cafes —
figure 14.2 and table 14.2.) This spreads existing customers among a larger number of
businesses, and tends to lower returns.
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Equally, in a workably competitive market (as is clearly the case in the HERRC industries),
existing businesses facing competition tend to lower average prices or increase the quality of
the product to consumers by opening longer, increasing staff-to-customer ratios, or employing
better qualified staff. Their business strategy will depend on market conditions. But, whether it
is through price or quality effects, increased profits are ultimately transferred to consumers.
The converse process applies when a regulatory shock adversely affects profits, with the
failure of some businesses and the adaptation by others (such as by opening for reduced hours
on Sundays).’
817
[875] The Productivity Commission goes on to observe that there is ‘little evidence to
suggest that measures of profits have any particular trend reflecting penalty rates (table 14.3)’.
Table 14.3 from the PC Final Report is reproduced below as Table 35.
Table 35
Profits and losses in selected industries
2006-07 to 2013-14a
2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14
Index of profit margin (2006-07=100)
Index Index Index Index Index Index Index Index
Total retail trade 100.0 91.4 93.7 98.3 98.8 95.1 94.3 97.6
Accommodation 100.0 80.5 126.3 102.3 72.3 111.8 105.0 91.7
Food and beverage
services 100.0 64.7 98.7 125.2 98.6 102.8 103.5 102.8
Total arts and
recreation services 100.0 104.5 106.9 117.1 102.5 100.3 99.8 98.4
All industries 100.0 93.9 85.7 95.6 103.5 100.6 87.6 90.1
Share of enterprises making a loss
% % % % % % % %
Total retail trade 20.7 26.2 24.9 28.4 30.9 27.6 26.2 24.3
Accommodation 26.4 26.0 25.3 23.8 .. 19.4 19.4 19.6
Food and beverage
services 22.5 33.2 34.8 30.7 .. 23.4 22.9 25.6
Total arts and
recreation services 29.9 27.6 28.2 30.6 34.6 19.3 20.2 24.7
All industries 23.5 23.7 24.8 25.4 25.4 21.4 20.8 20.0
a Profit margins (operating profits as a share of revenue) vary from industry to industry because they have varying
levels of capital. For example, an industry may have a high profit margin because it is a capital intensive industry,
though its return on capital may be equivalent to another business with a lower profit margin. Accordingly,
normalising the initial profit margin to 100 provides a better way of comparing the measures over time.
Source: ABS (various issues), Australian Industry, Cat. no. 8155.0.
[876] Given the matters referred to in the PC Final Report, we reject the United Voice and
SDA contention that a reduction in penalty rates will only increase employer cashflow and
profit. While such changes will have a short term impact on the cashflow and profitability of
the relevant businesses, long run profitability is unlikely to be affected by a reduction in
penalty rates.
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[877] Returning to the submissions advanced by the Hospitality Employers we note at the
outset that they are not proposing that the Sunday penalty rate be reduced to the Saturday
penalty rate. The Hospitality Employers also accept that there is disability associated with
Sunday work and that there is a need to compensate for that disability. As stated in their
written submissions:
‘… the Associations accept that there is disability associated with working on Sundays. The
Associations accept the need for additional remuneration on Sundays in order to compensate
employees for the disability and to attract labour to work on that day. In accepting the
existence of disability and a need to compensate, the Associations also say that the Award
should meet that need in a way that is fair and balanced. Importantly, the Award should not
penalise the hospitality employer or deter employment.’
818
[878] It is implicit in the claim advanced that the Hospitality Employers accept the
proposition that the disutility associated with Sunday work is higher than the disutility
associated with Saturday work. If this was not the case then they would have proposed that
the penalty rates for Sunday and Saturday work be the same.
[879] We note that the Hospitality Employers also submit that the Sunday penalty rate
should be set having regard to the need to attract labour. We do not accept that submission.
Modern awards provide a minimum safety net of terms and conditions. A modern award
penalty rate must be ‘fair and relevant’ and set having regard to the applicable provisions in
the FW Act. Considerations associated with the need to attract labour are best addressed
through collective bargaining or the payment of overaward wages.
[880] We note that the PC Final Report recommended that for full-time and part-time
employees the Sunday penalty rates be set at the higher rate of 125 per cent and the existing
Saturday penalty rate.
[881] In the Hospitality Award the existing Saturday penalty rate for full-time and part-time
employees is 125 per cent. Hence, if adopted the Productivity Commission recommendation
would result in the reduction of the Sunday penalty rate for full-time and part-time employees
from 175 per cent to 125 per cent.
[882] As mentioned earlier, in the Review the Commission is not constrained by the terms of
a particular application, it may vary a modern award in whatever terms it considers
appropriate, subject to procedural fairness considerations. Accordingly, if we were satisfied of
the merit of doing so, it would be open to us to adopt the recommendation in the PC Final
Report (and reduce the Saturday penalty rate to 125 per cent) or indeed to go further and
reduce the Sunday penalty rate. But as we are not satisfied of the merit of doing so, we have
decided not to adopt that course.
[883] As set out in Chapter 6, there is a disutility associated with weekend work, above that
applicable to work performed from Monday to Friday. Further, generally speaking, for many
workers Sunday work has a higher level of disutility than Saturday work, though the extent of
that disutility is much less than in times past.
[884] We are satisfied that the existing Saturday penalty rates in the Hospitality Award
achieve the modern awards objective – they provide a fair and relevant minimum safety net.
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7.2.6 Conclusion
[885] For the reasons given we have concluded that the existing Sunday penalty rate is
neither fair nor relevant. As mentioned earlier, fairness in this context is to be assessed from
the perspective of the employees and employers covered by the modern award in question.
The word ‘relevant’, in the context of s.134(1), is intended to convey that a modern award
should be suited to contemporary circumstances.
[886] Based on the evidence before us and taking into account the particular considerations
identified in paragraphs 134(1)(a) to (h), insofar as they are relevant, we have decided to
reduce the Sunday penalty rate for full-time and part-time employees, from 175 per cent to
150 per cent.
[887] We now turn to the application of weekend penalty rates in the Hospitality Award to
casual employees. The Hospitality Award provides that casual employees are paid a casual
loading of 25 per cent.
[888] Casuals are currently paid 150 per cent of the applicable minimum hourly rate for
Saturday work, that is, the 125 per cent Saturday penalty rate plus the 25 per cent casual
loading. Yet, curiously, the Sunday rate for casuals is 175 per cent (inclusive of the 25 per
cent casual loading), which is the same as the Sunday rate for full-time and part-time
employees.
[889] As we have mentioned, the PC Final Report makes reference to the interaction of
penalty rates and casual loadings and concludes that:
‘For neutrality of treatment, the casual loading should be added to the penalty rate of a
permanent employee when calculating the premium rate of pay over the basic wage rate for
weekend work.’
819
[890] There is considerable force in the Productivity Commission’s conclusion.
[891] Casual loadings and weekend penalty rates are separate and distinct forms of
compensation for different disabilities. Penalty rates compensate for the disability (or
disutility) associated with the time at which work is performed.
[892] The Hospitality Employers acknowledge the distinct purpose of penalty rates, when
they submit:
‘… penalty rates can be distinguished from other terms and conditions such as minimum wages
by virtue of penalty rates being compensation for the disability associated with the time at
which work is performed. Penalty rates do not compensate for the nature of the work or the
skills and attributes required to perform it – those being the purpose of minimum wages.’820
[893] The different treatment for casuals who work on Sundays (as opposed to Saturdays)
may be traced back to a decision by Commissioner Gay, on 6 May 1993, to vary the Hotels,
Restaurants and Hospitality Industry Award 1992 (a precursor award to the Hospitality
Award).
821
Prior to that decision weekend penalty rates for casual employees were 75 per cent
of the ordinary rate for work on Saturdays (175 per cent) and 100 per cent on Sundays (200
[2017] FWCFB 1001
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per cent) . The Commissioner fixed a Saturday penalty rate of 25 per cent on Saturdays and a
Sunday penalty rate of 75 per cent for all employees (i.e. full-time, part-time and casuals).
The effect was that the Saturday rate for casuals was reduced from 175 per cent to 150 per
cent and the Sunday rate for casuals from 200 per cent to 175 per cent, inclusive of casual
loading. The Commissioner’s reasons for adopting that course are not immediately apparent
from his decision. We note that the Commissioner expressed the view that the Sunday penalty
rate should be less than the overtime rate but appreciably more than the Saturday penalty rate.
[894] The Commissioner’s decision also predates the Casual Loading Test Case Decision, in
December 2000.
822
In that matter the Full Bench increased the casual loading in the Metal
Industries Award 1998, to 25 per cent, and said:
‘… we are satisfied that paid leave; long service leave; and a component covering differential
entitlement to notice of termination of employment and employment by the hour effects,
should constitute the main components to be assessed in determining casual loading…’
823
[895] The distinct purpose of the casual loading is made clear from clause 13.1 of the
Hospitality Award:
‘The casual loading is paid as compensation for annual leave, personal/carer’s leave, notice of
termination, redundancy benefits and other entitlements of full-time or part-time employment’
[896] Importantly, the casual loading is not intended to compensate employees for the
disutility of working on Sundays.
[897] In our view, the casual loading should be added to the Sunday penalty rate when
calculating the Sunday rate for casual employees. We propose to adopt the Productivity
Commission’s ‘default’ method. Accordingly, the Sunday rate for casual employees in the
Hospitality Award will be 25 + 150 = 175 per cent.
[898] We note that this is the rate currently prescribed in clause 32.1 for casuals and hence
we do not propose to change that rate. The Sunday rate for full-time and part-time employees
will be reduced to 150 per cent.
[899] We deal with the transitional arrangements associated with the reduction in the
Hospitality Award Sunday penalty rate (for full-time and part-time employees) in Chapter 13
of our decision.
[900] For the reasons given earlier, we are satisfied that the existing Saturday penalty rates
in the Hospitality Award provide a fair and relevant minimum safety net and accordingly, they
achieve the modern awards objective. Accordingly, we do not propose to vary the existing
Saturday penalty rates.
[901] Finally, we turn to the proposal by the Hospitality Employers to remove the reference
to ‘penalty’ and ‘penalty rates’ in clause 32 of the Hospitality Award and to insert references
to ‘additional remuneration’. We note that a similar variation is proposed by the Pharmacy
Guild of Australia in respect of the Pharmacy Industry Award 2010.
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[902] No particular submission was advanced in support of the proposal to change the
terminology in the Hospitality Award, by either the Hospitality Employers or any other party
and it is opposed by United Voice.
824
[903] We assume that the change proposed is sought on the basis that s.134(1)(da)(iii) of the
FW Act speaks of ‘the need to provide additional remuneration for … employees working on
weekends’. The change proposed would also be consistent with the contemporary purpose of
‘penalty rates’. As mentioned in Chapter 3, deterrence is no longer a relevant consideration in
setting weekend penalty rates. The purpose of such rates is not to penalise employers for
rostering employees to work at such times, it is to compensate employees for the disutility of
working on weekends. These considerations favour the change in terminology proposed by
the Hospitality Employers.
[904] However, as United Voice submits, such a change may create uncertainty and
confusion amongst the employers and employees to whom the Hospitality Award applies. The
expression ‘penalty rates’ is commonly understood and is used in the FW Act. Indeed
s.139(1), which deals with what type of terms may be included in a modern award, refers to:
‘penalty rates for … employees working on weekends’.
[905] Further, the change in terminology proposed is only advanced in respect of 2 modern
awards. The introduction of different expressions (which have the same meaning) in different
modern awards is apt to confuse. Such an outcome would not be consistent with ‘the need to
ensure a simple, easy to understand … modern award system’ (s.134(1)(g)). If changes of the
type proposed were to be made then, prima facie, they should be made in all modern awards
which currently provide for ‘penalty rates’.
[906] The submissions in respect of this issue were very limited. We propose to provide a
further opportunity for interested parties to express a view about the proposed change in
terminology. We deal with the process for doing so in Chapter 12: Next Steps.
7.3 Registered and Licensed Clubs Award 2010
7.3.1 The Claims
[907] CAI seeks to vary clause 29 – Penalty Rates of the Registered and Licensed Clubs
Award 2010 (the Clubs Award) by reducing the penalty rates for Saturday work, from 150 per
cent to 125 per cent, and for Sunday work, from 175 per cent to 150 per cent. The changes
sought are set out below, in a marked up version of clause 29.1:
29.1 An employee other than a maintenance and horticultural employee performing work
on the following days will be paid the following percentage of the minimum wage rate in
clause 17—Minimum wages for the relevant classification:
Monday
to Friday
Saturday Sunday
Public
holiday
% % % %
Full-time and part-time 100 150 125 175 150 250 200
Casual (inclusive of the
25% casual loading)
125 150 175 150 250 200
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[908] If granted, CAI’s proposed variation to clause 29.1 would:
reduce the penalty rates paid to full-time and part-time employees for work
performed on a Saturday from 150 per cent of their minimum rate of pay to 125 per
cent;
reduce the penalty rates paid to all employees for work performed on a Sunday from
175 per cent of their minimum rate of pay to 150 per cent;
[909] CAI also seek reductions in the public holiday penalty rate. We deal later with that
aspect of CAI’s claim.
7.3.2 Background to the Clubs Award
[910] In the award modernisation process, the Award Modernisation Full Bench initially
drafted and published a single exposure draft for the hospitality industry. At that stage the Full
Bench said:
‘We have decided to defer consideration of award coverage for the licensed and registered club
sector. It may be that the sector could be included in the proposed hospitality industry modern
award, with or without some special conditions and/or appropriate transitional provisions. The
different types of clubs within the sector, and the different activities undertaken by them, raise
issued of potential overlap with events staged by clubs and grounds management and
maintenance. This matter requires further consideration in Stage 3.’
825
[911] The Full Bench confirmed its commitment to this approach later in 2008:
‘In our statement of 12 September 2008, which accompanied the exposure drafts, we expressed
a provisional view that the nature of work in the hospitality industry and the terms and
conditions of employment in federal awards and NAPSAs were such that a single modern
award could be made in respect of the hospitality industry, although consideration of the clubs
and off-shore resorts sectors were deferred until Stage 3.’
826
[912] The issue of a separate clubs award was considered during the Stage 3 award
modernisation proceedings. At that time CAI submitted that ‘a national Club Industry Award
should be made, that is separate and distinct from any other rationalised hospitality industry
award that may be made as part of this process’.
827
CAI contended that the clubs industry ‘is a
separate and distinct industry from most other industries in the hospitality sector’, based on
the following:
Clubs are not-for-profit organisations;
Clubs are community based and community run organisations;
Clubs are established on the basis of interest mutuality;
Clubs are subject to separate and distinct regulations and regulatory framework;
They are required to adopt a set of rules (a constitution) subject to the provisions of
the applicable regulatory framework;
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They are subject to control by members and only members and bona-fide visitors
can avail themselves of the facilities;
They do not pay a dividend to their members so any excess funds are channeled
back into the community;
Each club is committed to maximizing local support and offering affordable social
opportunities in a fun, safe and friendly environment in order to raise funds in
furtherance of their community objectives;
Employees of Clubs provide a service to their members which goes beyond the
service provided in a commercial establishment;
In many Regional Areas employees of Community Clubs are multi-skilled in that
they perform work across a range of functions such as Clerical, greenkeeping and
counter service;
Clubs offer a variety of sports, activities and entertainment for its patrons and
members that are not normally offered at other hospitality venues.
[913] The Full Bench dealt with this issue during the Stage 3 proceedings as follows:
‘The question of award coverage for licensed and registered clubs first arose in the priority stage
of award modernisation. We deferred a final conclusion, noting that it might be possible to
include the sector in the Hospitality Modern Award and the potential overlap in relation to
events staged by clubs and grounds management and maintenance.
There is general support amongst employer and employee associations in the industry for a
separate licensed and registered clubs modern award. While it might be possible to include
clubs within the Hospitality Modern Award, with some sector specific arrangements, we have
decided to make a separate clubs award. We publish a draft Registered and Licensed Clubs
Award 2010. The LHMU and CAI provided a draft award, in a largely agreed form, and we
have used this as the basis of the exposure draft.’828
[914] The Clubs Award was published in final form on 4 September 2009.
829
7.3.3 The Clubs Industry
[915] The ABS data of direct relevance to the Clubs industry is quite limited.
[916] As mentioned earlier, data is collected by the ABS on industry employment using the
ANZSIC. Clubs constitute a class within the Accommodation and food services division.
[917] A paper
830
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework the Clubs Award is ‘mapped’ to the Clubs
(Hospitality) industry class, which is at the ANZSIC 4 digit level.
[918] The Census is the only data source that contains all of the employment characteristics
in Table 36 for Clubs (Hospitality). The most recent Census data is from August 2011.
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[919] The August 2011 Census data shows that there were around 43 000 employees in
Clubs (Hospitality). Table 36 compares certain characteristics of employees in the Clubs
(Hospitality), with employees in ‘all industries’.
Table 36
831
Labour force characteristics of the Clubs (Hospitality) industry class,
ABS Census 9 August 2011
Clubs (Hospitality) All industries
(No.) (%) (No.) (%)
Gender
Male 19 577 45.2 4 207 586 50.8
Female 23 718 54.8 4 082 662 49.2
Total 43 295 100.0 8 290 248 100
Full-time/part-time status
Full-time 18 811 45.8 5 279 853 67.8
Part-time 22 264 54.2 2 507 786 32.2
Total 41 075 100.0 7 787 639 100
Highest year of school completed
Year 12 or equivalent 22 731 53.5 5 098 228 62.6
Year 11 or equivalent 4509 10.6 885 404 10.9
Year 10 or equivalent 11 863 27.9 1 687 055 20.7
Year 9 or equivalent 2332 5.5 317 447 3.9
Year 8 or below 963 2.3 141 973 1.7
Did not go to school 59 0.1 20 158 0.2
Total 42 457 100.0 8 150 265 100
Student status
Full-time student 6170 14.4 612 990 7.5
Part-time student 2502 5.9 506 120 6.2
Not attending 34 095 79.7 7 084 360 86.4
Total 42 767 100.0 8 203 470 100
Age (5 year groups)
15–19 years 4363 10.1 547 666 6.6
20–24 years 7817 18.1 927 865 11.2
25–29 years 4556 10.5 1 020 678 12.3
30–34 years 3749 8.7 933 827 11.3
35–39 years 3771 8.7 934 448 11.3
40–44 years 3800 8.8 938 386 11.3
45–49 years 4050 9.4 911 739 11
50–54 years 4025 9.3 848 223 10.2
55–59 years 3425 7.9 652 190 7.9
60–64 years 2496 5.8 404 470 4.9
65 years and over 1243 2.9 170 718 2.1
Total 43 295 100 8 290 210 100
Average age 37.5 38.8
Hours worked
1–15 hours 7693 18.7 875 554 11.2
16–24 hours 6553 16.0 792 539 10.2
25–34 hours 8018 19.5 839 694 10.8
35–39 hours 7485 18.2 1 676 920 21.5
40 hours 4902 11.9 1 555 620 20
41–48 hours 3296 8.0 895 619 11.5
49 hours and over 3128 7.6 1 151 693 14.8
Total 41 075 100 7 787 639 100
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Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
[920] The profile of Clubs (Hospitality) employees differs from the profile of employees in
‘All industries’ in three important respects:
(i) about 54 per cent of Club employees work part-time (i.e. less than 35 hours per
week
832
), compared with only 32.2 per cent of all employees;
(ii) over one-third (34.7 per cent) of Club employees work 1–24 hours per week,
compared to just over one-fifth (21.4 per cent) of all employees; and
(iii) Club employees are likely to be younger than employees in other industries,
28.2 per cent of Club employees are aged 15–24 years, compared with 17.8 per cent
for all industries.
7.3.4 The Evidence
(i) Clubs Australia
[921] CAI called 5 witnesses in support of its application to vary the Clubs Award:
Richard Tait: Executive Director for CAI and Executive Manager of Workplace
Relations for The Registered Clubs Association of NSW (ClubsNSW);
833
John Dellar: Manager of Club Hawthorn Incorporated, a club in Hawthorn,
Victoria;
834
Gwyn Rees: Deputy Chief Executive of Clubs Australian Capital Territory;
835
Jeffrey Cox: Operations Manager of Coffs Ex Services Club, an Ex Services and
Sports Club that owns two other community clubs in Urunga and Woolgoolga; and
836
Anthony Casu: General Manager of Narooma Sporting & Services Club Ltd.
837
[922] United Voice objected to substantial parts of Mr Tait’s original witness statement.
That objection was largely resolved by agreement, between United Voice and CAI and as a
consequence the most relevant aspects of Mr Tait’s evidence – insofar as it concerns weekend
penalty rates – is set out at Annexure B to Exhibit CAI1.
838
Annexure B to Mr Tait’s
statement is a report by KPMG ‘National Club Census 2011’, dated 2012 (the KPMG Clubs
Report). KPMG was engaged to examine the economic and social contribution of licensed
clubs in Australia. Mr Tait described the KPMG Clubs Report as ‘a lobbying document in
relation to showing the social contribution clubs have to their community and… for the
government to understand that contribution’.
839
The KPMG Clubs Report provides an analysis
of the gross (as distinct from net) benefits of clubs to the Australian economy, as noted at
paragraphs 67–68 of the report:
[2017] FWCFB 1001
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‘It is important to note that the analysis undertaken as part of this project focuses on the gross
benefits of clubs to the Australian economy, as opposed to the net benefits. A gross analysis
differs from a net analysis in the following two ways:
• Firstly, it has been widely acknowledged that problem gambling creates a social cost, or dis-
benefit, driven by addictive behaviour and its subsequent social costs. A net analysis of the
benefits of clubs would measure the benefits of the clubs as the sum of the direct and indirect
economic benefits net of any dis-benefits, including those driven by problem gambling.
• Secondly, gambling involves a transfer of wealth between two parties. In a state or territory
economy, gambling revenue derived from interstate and international tourists represents a net
gain to the local economy. However, gambling losses by local residents only represent a partial
transfer between two sectors of the economy. On this basis, consumer expenditure on
gambling would therefore be substituted elsewhere in the economy if clubs did not operate.
The economic and social benefits driven by these changes in expenditure would potentially be
different to those realised from expenditure at registered clubs. A complete net analysis would
account for these expenditure substitutions and their potential economic and social benefits.’
[923] The KPMG Clubs Report relies on data obtained from individual clubs who responded
to a survey during the course of 2011. A copy of the survey instrument is annexed to the
KPMG Clubs Report.
840
[924] All 6,577 clubs who were licensed with the respective State and Territory licensing
bodies as at May 2011 were invited to participate in the survey. Some 1,015 clubs completed
the survey, a response rate of 15 per cent. To adjust for differences between the average size
and type of clubs who responded to the survey (i.e. the sample of survey respondents) and the
entire industry (i.e. population of licensed clubs in Australia), KPMG stratified both the
sample and population data. The sampling error at a 95 per cent confidence interval was less
than 10 per cent.
841
[925] While the material in the KPMG Clubs Report is somewhat dated (as it relies on
survey data from May 2011) and is of limited direct relevance to the claims before us, it does
provide a useful insight into some important characteristics of the Clubs industry.
KPMG Clubs Report – Gross Economic Benefits – Key Findings
[926] The key findings of the KPMG Clubs Report on this regard are as follows:
The licensed clubs industry is highly fragmented, comprising more than 6,500
individual venues spread across Australia.
Clubs across Australia make a significant contribution to the Australian economy.
In 2011, licensed clubs generated an estimated combined revenue of approximately
$9.6 billion across their operations.
The industry is also a large employer in both metropolitan and regional locations. In
2011, licensed clubs across Australia are estimated to have employed approximately
96,000 people across a variety of roles.
[2017] FWCFB 1001
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54,000 employees are located in metropolitan locations while 39,000 are located in
regional locations (excluding employees in ACT and NT).
Clubs also provide a significant amount of formal training to employees, spending
more than $28 million in 2011.
Licensed clubs also invest heavily in capital assets. In 2011, licensed clubs across
Australia invested an estimated $1.3 billion.
Licensed clubs also generate flow-on impacts to other industries through:
o increased demand for goods and services that support the supply chains
for clubs;
o increased demand for consumer-orientated industries that cater to clubs;
and
o impacts on the cost of business inputs generated by changes in the price
of some goods and services as a result of the operation of clubs.
It is estimated the total (direct and indirect) contribution of the licensed clubs across
Australia to value added (i.e. the value of production less the value of intermediate
goods used in production) was $7.2 billion in 2011.
It is estimated the total (direct and indirect) contribution of licensed clubs across
Australia to employment was almost 75,000 full-time equivalent jobs in 2011.
KPMG Clubs Report – The Clubs
[927] In July 2011 there were about 6,577 licensed clubs in Australia. Some of these clubs
were part of an amalgamated group, where a ‘parent’ club controls the operations of its
‘subsidiary’ clubs. There is a significant variety of licensed clubs in Australia – ranging from
sporting to service clubs, to community and cultural/religious clubs. Sports/recreation clubs
are the most common (1,604 registered in 2011) followed by bowling clubs (1,581 venues),
golf clubs (1,118 venues) and RSL/services clubs (979 venues).
[928] Chart 32 summarises the types of clubs registered in Australia.
842
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Chart 32
Types of clubs in Australia
[929] Licensed clubs operate throughout Australia. While a number of clubs operate in
metropolitan areas, a significant number of smaller clubs operate in regional and rural
locations. Chart 33 summarises the distribution of licensed clubs across Australia.
843
Chart 33
Spread of clubs across Australia
[930] Whilst clubs share a common not-for-profit, members’ led business model they are
highly varied in their purposes. Types of clubs include bowling clubs (which comprise over
1,500 venues), sporting and recreation clubs (over 1,600 venues), returned servicemen clubs
(over 900 venues) and golf clubs (over 1,100 venues).
Bowling 24% 24% Community / Workers Cultural / Religious Golf 4% Leagues / Football 15% 4% Other RSL / Services 3% 17% 9% Sporting / Recreation
Queensland No. of clubs 1,410 No. of clubs per 3.2 Northern Territory 10,000 people New South Wales No. of clubs 65 No. of clubs 1,471 No. of clubs per 2.8 10,000 people No. of clubs per 2.0 10,000 people Western Australia Australian Capital Territory No. of clubs 958 No. of clubs 57 No. of clubs per 4.1 10,000 people No. of clubs per 1.5 10,000 people South Australia Victoria No. of clubs 1,258 No. of clubs 1,197 No. of clubs per 7.7 10,000 people Tasmania No. of clubs per 2.2 No. of clubs 161 10,000 people No. of clubs per 3.1 10,000 people
[2017] FWCFB 1001
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[931] In addition to types, there is also significant variability in terms of the size of clubs in
Australia. The most common way of defining clubs according to their size is with reference to
their total annual Electronic Gaming Machine (EGM) revenues.
[932] Of the 6,577 clubs registered in Australia in 2011, 4,458 had no EGM revenues. These
were followed by 496 clubs that generated annual EGM revenues of less than $200,000, 733
clubs that generated EGM revenues of between $200,000 and $1 million, and 652 clubs that
generated between $1 million and $5 million. At the top end of the market, there were 155
clubs that generated EGM revenues of between $5 million and $10 million, and 83 that were
above this level.
[933] There is significant variability in the size of clubs’ membership bases. Of the clubs
surveyed for this report, the smallest club – an RSL club – reported having 2 members. The
largest on the other hand – an amalgamated leagues club – reported having 110,134 members.
The average number of members across all clubs in Australia is approximately 1,800.
[934] The overall industry is highly reliant on gaming machines for the majority of its
income.
844
[935] The KPMG Clubs Report refers to a 2008 report by the NSW Independent Pricing and
Regulatory Tribunal (IPART).
845
The IPART report is described as a detailed examination of
the financial viability of the NSW registered clubs industry. The IPART Report: Key findings
in respect of financial viability included:
Most clubs in NSW were heavily dependent on gaming machine revenue.
Individual clubs were prospering or declining for a variety of reasons, including:
− access to volunteer labour;
− the skills and effectiveness of its Board and management teams;
− competition within the local community both from other clubs and alternate
forms of entertainment; and
− demographic and social changes within their local communities.
[936] While IPART’s findings and recommendations related to NSW clubs only, the themes
can be applied to licensed clubs nationally, given the similarity in operations and issues faced
between clubs in all states and territories.
846
KPMG Clubs Report – The Employees
[937] The survey responses indicate that clubs in Australia employed approximately 96,000
people in 2011
847
, in full-time, part-time, casual and trainee or apprentice capacities. About 80
per cent of employees are estimated to have been employed in clubs located in the eastern
states of NSW, Queensland and Victoria.
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[938] As shown in Table 37 below, employment in clubs is estimated to comprise of:
27,000 full-time employees (28%);
20,000 part-time employees (21%);
47,000 casual employees (49%); and
2,000 trainees and apprentices (2%).
Table 37
Distribution of employment type
Full-time Part-time Casual Trainee and
apprentice
Total % of
accommodation and
food services
ACT 660 560 1,040 60 2,320 18
NSW 12,290 10,950 17,240 920 41,400 16
NT 260 170 570 20 1,020 14
QLD 5,530 3,750 11,110 520 20,910 13
SA 2,110 1,150 4,960 180 8,400 16
TAS 260 130 610 20 1,020 6
VIC 4,200 2,920 8,200 360 15,680 8
WA 1,470 720 3,310 120 5,620 8
Australia 26,780 20,350 47,040 2200 96,370 12
[939] The average number of employees per club is illustrated in Chart 34.
Chart 34
Average employees per club
45 41 40 37 35 30 28 25 23 20 16 17 15 13 15 14 12 12 12 13 14 15 15 10 9 7 6 5 3 3 2 0 ACT NSW NT QLD SA TAS VIC WA Australia Regional clubs Metropolitan clubs All clubs
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[940] The survey responses suggest that clubs in the ACT and NSW tend to employ a
greater number of people per club than all other jurisdictions. This higher employment is
likely to be driven by the higher proportion of larger clubs in the ACT and NSW compared to
the remainder of Australia.
[941] The age profiles of employees were as follows:
approximately 40% of club employees were aged between 25 years and 44 years;
about the next 30% of employees were aged 24 years and under;
the next 27% were aged between 45 years and 64 years; and
the final 3% were aged 65 years and over.
[942] The survey responses suggest that clubs in Australia consistently employed a greater
proportion of females, with only 46% of the national workforce being male.
[943] Volunteers make an important contribution to the operation of clubs, as the KPMG
Clubs Report notes:
‘Clubs are able to provide low cost facilities and fund local community activities because of
large networks of volunteer labour. Using volunteer labour in the form of directors, and for
trading, sporting and other purposes enables clubs to reduce labour costs and pass on savings
to their members and the community. There was an average of 39 volunteers per club in 2011.
Nationally, there were over 250,000 club volunteers, with approximately half of these
volunteers being involved in the sporting function. Overall, metropolitan clubs had more
volunteers than regional clubs.’
848
[944] Licensed clubs are also highly effective in mustering volunteers in order to assist in
both their operation and the provision of services to members and the community. The
industry is managed by over 54,000 directors (or equivalents), who are mostly engaged on a
voluntary and unpaid basis. The industry also uses more than 123,000 volunteers in the
provision of sporting assistance (including junior sport coaching, refereeing and
management). In total, over 250,000 volunteers are sourced and utilised by the industry.
[945] Clubs are able to provide low cost facilities and fund local community activities
because of large networks of volunteer labour. Using volunteer labour enables clubs to reduce
labour costs and pass on savings to their members and the community. Clubs use volunteers
in many business areas including the management and organisation of club activities and
operations, trading and sporting functions. Volunteers may also gain utility by participation in
the community.
[946] The number of volunteers in each State and Territory is presented in Table 38.
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Table 38
849
Volunteer type
Director Trading Sporting Other Total Average per
club
ACT 460 90 1,660 470 2,680 47
NSW 11,000 2,370 26,050 9,740 49,160 33
NT 540 320 1,230 420 2,510 39
QLD 11,770 7,810 27,310 9,050 55,940 40
SA 10,810 10,250 22,940 7,540 51,540 41
TAS 1,380 1,280 2,850 970 6,480 40
VIC 10,180 8,380 24,580 7,400 50,540 42
WA 8,240 8,060 17,320 5,670 39,290 41
Total 54,380 38,560 123,940 41,260 258,140 39
Average per
club
8 6 19 6 39
Note: Totals may not add due to rounding.
[947] The majority of volunteers were directors or involved in sporting activities. Club
Census 2011 responses suggest that approximately half of all volunteers were involved in
sporting functions in 2011. SA had the largest number of volunteers, closely followed by
Victoria and NSW. On average, ACT clubs have the most volunteers. Clubs in SA, Tasmania,
Victoria, Queensland and WA also had higher averages than the national average of
volunteers per club. NSW is the only State that has a lower average than the national
average.
850
[948] Club volunteers contributed 5,877,500 volunteer hours in 2011.
851
KPMG estimated
the value of volunteer labour to be $2,850 million, in 2011.
852
[949] We now turn to the evidence of Mr Rees, Deputy Chief Executive of Clubs ACT. A
substantial part of Mr Rees’ witness statement
853
was redacted by consent, following an
objection by United Voice. The remainder of Mr Rees’ evidence, though brief, is consistent
with the KPMG Clubs Report. In particular Mr Rees says:
‘Clubs ACT represents 51 of the 54 clubs trading in the ACT and 100% of all clubs holding a
gaming machine licence.
The clubs vary in size but in a similar fashion to other states are varied in their purposes,
examples of which include ethnic, workers and religious types. Clubs also maintain and
operate the vast majority of the ACT’s sport, recreational infrastructure including bowls, golf
and football.’
854
[950] Mr Rees was not required for cross-examination and we accept his evidence.
[951] As a consequence of the concessions made by CAI in respect of the admissibility of
Mr Rees’ evidence there is no evidence before us in respect of any individual club in the
ACT. The absence of such evidence was drawn to the attention of CAI and it was invited to
seek leave to adduce direct evidence from an ACT club if it wished to do so.
855
No such
application was made.
[952] CAI called three witnesses who gave evidence in relation to the operation of particular
clubs.
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[953] Mr Jeffrey Cox gave evidence in relation to the Coffs Ex Services Club, which
operates 3 clubs in the Coffs Habour area in NSW. The principal venue is the Coffs Ex
Services and Sports Club and 2 smaller community clubs at Urunga and Woolgoolga.
[954] The Coffs Ex Services Club employs 163 employees of whom 54 are full-time, 82 are
part-time and 27 are casual employees. A significant part of the club’s business is ‘to provide
lawn bowls, golf, squash and croquet facilities, multiple sub-clubs, free senior entertainment
and promotions’.
856
Sunday trading hours are from 10.00 am to 10.00 pm. Mr Cox’s evidence
is that the Club is unable to trade profitably on Sundays because:
Sunday is generally a ‘low income’ day (average club revenue on a Sunday is
$60,000, compared to $70,000 on Monday to Wednesday); and
it is a high wage expense day.
857
[955] As to the impact of a reduction in penalty rates, Mr Cox’s evidence was a follows:
‘If there was a reduction in the current penalty rates by 25% - 50% for weekends and public
holidays, we would potentially extend our operating hours and then be able to offer more hours
to our part-time and casual employees…
Potentially a reduction in penalty rates would increase our trade revenue as we would be able
to trade longer with longer opening hours. This would translate into the provision of greater
services being made available to our members and guests and investment into community
projects.’
858
(emphasis added)
[956] We would observe that Mr Cox was somewhat equivocal about the employment and
community benefits which may flow from a reduction in penalty rates.
[957] Further, shortly after Mr Cox swore his affidavit the Commission approved the Coffs
Ex Services Memorial and Sporting Club Enterprise Agreement 2015
859
(the Coffs Club
Agreement). Relevantly, the Coffs Clubs Agreement provides higher rates of pay than those
provided in the Clubs Award and provides the same level of penalty rates as currently
provided in the Clubs Award. One of the objectives of the agreement is to ‘Ensure the future
financial sustainability of the Club’.
860
The nominal expiry date of the agreement is 25 August
2018. Any variation to the Clubs Award a result of these proceedings will have no impact on
the Coffs Ex Services Club while the Coffs Club Agreement remains in operation. However,
any variation to the award will underpin any future agreement.
[958] Mr Anthony Casu gave evidence in relation to the Narooma Sporting and Services
Club Limited (the Narooma Club), which operates 2 clubs, Club Narooma and Club Dalmeny,
and employs about 60 employees under the Clubs Award, of whom 18 are full-time, 23 part-
time and 19 are casual employees.
[959] The Narooma Club’s best trading days are on Friday and Saturday (at about $25,000
per day), with Sundays being about 20 per cent lower (or about $20,000). The daily average
revenue for Monday to Thursday is about $13,000.
861
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[960] The Narooma Club conducts a cost-benefit analysis when considering operational
changes to the staffing roster. As to the impact of a reduction in penalty rates (as sought by
CAI), Mr Casu’s evidence was:
‘If there was a reduction in penalty rates, the club would not change current trading hours and it
would be unlikely to increase the levels of revenue on those days, but the club would increase
services during the trading hours. As increase in the provision of member services would mean
we would increase our staff numbers or increase the hours available to existing staff. This
increase would be seen as coming from casual–part-time staffing and could be as high as
another 8 hours per day over the weekends supplying additional servicing to the members.’862
[961] Mr Casu was cross-examined about this aspect of his evidence.
863
[962] In short, Mr Casu’s evidence is that, if CAI’s proposed variation to penalty rates were
adopted then the Narooma Club would increase the service it provides on weekends and as a
consequence the hours worked by its current casual workforce could increase by as much as 8
hours per day on both Saturday and Sunday. In other words the employment impact of
granting the claim could be as much as the equivalent of an additional 8 hour shift on
Saturday and Sunday.
[963] Mr John Dellar gave evidence in relation to Club Hawthorn, a sporting club in
Victoria. The club is centred around the sport of squash and, to a lesser degree snooker, and
has a gaming room with 40 gaming machines.
864
The club employs 9 employees, of whom 2
are full-time and 7 are casual employees.
865
[964] The club’s current trading hours are: Monday–Thursday 10.00 am to 11.00 pm, Friday
and Saturday 10.00 am to 1.00 am and Sunday noon to 9.00 pm. In terms of daily revenue,
Sunday is the least successful trading day generating about 60 per cent of the average revenue
on Monday to Thursday.
866
[965] Mr Dellar indicated that if the penalty rate structure in the Clubs Award was varied as
proposed by Clubs Australia then the Hawthorn Club would trade for an additional 4 hours on
Sunday (that is it would open early, at 9.00 am or 10.00 am and, close later), resulting in
additional hours for the existing staff who work on Sundays or engagement of an additional
staff member to work on Sundays.
867
[966] Mr Dellar also observes that if penalty rates were reduced there would be an overall
reduction in the club’s wages bill which would enable additional hours to be provided to
existing employees during the week:
‘If the reduction in penalty rates occurred it would also be viable to employ additional staff on
all days, not just weekends and public holidays. The flow on affect is that the reduction in total
cost to the bottom line of the wages bill can be invested into more staff mid-week where
currently cost is restraining the number of people actually required for good service.’
868
[967] No specifics were given as to the number of additional hours that would be provided
during the week and Mr Dellar conceded that he had not calculated what the reduction to the
clubs wages bill would be if the penalty rate variations were made.
869
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(ii) United Voice
[968] In opposing the variation of the Clubs Award; United Voice relied on the evidence of
3 lay witnesses:
Mary Quirk: a full-time Bar Manager at Coledale RSL;
870
Wayne Jones: a permanent full-time employee engaged as Purchasing Officer and
Head Cellar man at Bribie Island Bowls Club;
871
and
Damien Cooper: a casual Barman and Courtesy Bus Driver employed at Goodna
Services Club in Goodna, Queensland.
872
Mary Quirk
873
[969] Ms Quirk is a full-time Bar Manager at the Coledale RSL who works Sunday to
Wednesday, from 9.30 am to 7.30 pm. As Ms Quirk is regularly rostered on a Sunday she
receives an additional week’s annual leave each year.
874
[970] Ms Quirk gives evidence about the impact of work on weekends and public holidays:
‘I am a Roman Catholic. I am not deeply devout but it is an important part of my life and I
would attend church occasionally if I were able to do so on Sunday. I do attend mass
occasionally on Saturday evening… Working Sundays has meant I have not been able to be a
part of my church community as I would have liked. Sunday is the day of worship in my
religion, so that is when my family and friends attend church… There are regular religious
family events every year such as first communions, confirmations and christenings. I have
missed out on a lot of these events and this makes me sad.’875
[971] During cross-examination Ms Quirk acknowledged that she could attend the 7.00 am
service on Sunday mornings and still get to work by 9.30 am.
876
[972] At paragraphs 17–20 of her statement Ms Quirk sets out the impact upon her of the
reduction in Sunday penalty rates sought by CAI and notes that she would ‘lose
approximately $52 per week from my weekly take home pay’.
877
Wayne Jones
878
[973] Mr Jones has worked in the hospitality sector for about 30 years. Since 2005 he has
been employed as the Purchasing Officer and Head Cellar man at the Bribie Island Bowls
Club. He is a level 6 Manager under the Clubs Award and works Tuesday to Friday, from
7.00 am to 1.30 pm and on Saturday from 7.00 am to 3.00 pm. He does not usually work on
Sundays or Mondays, unless a stocktake is done on those days. Stocktakes are done on the
first day of each month.
[974] Mr Jones understood that there was an expectation that when you work in the
hospitality industry you have to be prepared to work on weekends and public holidays:
[2017] FWCFB 1001
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‘When I started in the industry, it was made clear to me that unless I was willing to work on
weekends and public holidays I would not be offered a position (including the Bribie Island
Bowls Club). As a manager, I have set this expectation for my own staff.’879
[975] Mr Jones deals with the impact of weekend and public holiday work at paragraph 20–
23 of his statement and says, in particular:
‘When my children were younger, and into their teenage years, I have missed out on weekend
family, social and sporting events because I had to work. Working on weekends means that I
simply do not get to participate in the normal family and social activities that occur during
those times.’880
[976] At paragraphs 27–35 of his statement Mr Jones sets out the impact upon him of the
penalty rate changes sought by CAI:
If my Saturday penalty rates are reduced, then I will lose over $30 per week from my weekly
take home pay. If this happens, then the loss of income will mean that I would find it even
more difficult to cover my family’s living costs. I already have hard choices to make, which
would only get harder. In these circumstances I may not have any money for emergency costs,
such as unexpected car repairs. The only way I could then cover such expenses would be
through a loan, which of course incurs interest and other charges. In order to make up the lost
income, I have calculated that I would have to work an additional 2 to 3 hours per week.
While I would be able to work those additional hours (should they be available), the impact of
doing so would mean that I would spend even less time with my family. Even if I am available
to work additional hours, I do not believe my employer would be in a position to offer
additional hours. I work a 38 hour week, so if I work any additional hours with my employer I
will be paid overtime. It is likely my employer would instead hire more casuals to cover the
shortfall in staff.’881
Damien Cooper
882
[977] Mr Cooper is a casual Barman and Courtesy Bus Driver at the Goodna Services Club,
in Goodna Queensland. He works an average of 40 hours per week (Fridays and Saturdays:
5.00 pm to 2.30 am; Mondays and Thursdays: 4.30 am to 10.30 pm; Sundays: noon to
9.30 pm), and on public holidays as required.
[978] As to the impact of weekend and public holiday work Mr Cooper says that ‘I simply
do not get to participate in normal social activities that occur during weekends… I miss out on
a lot of activities that are meaningful to me’. Mr Cooper makes specific reference to missing
football games he would have attended with his partner and catching up with his daughter,
because of the hours he works.
883
7.3.5 Consideration
[979] As mentioned earlier, CAI proposes a reduction in both the Sunday and Saturday
penalty rates in the Clubs Award. No other employer body is proposing a reduction in
Saturday penalty rates, in either this award or in any of the other modern awards before us.
[980] Two general points may be made in respect of the proposal by CAI and the
submissions advanced in support of that proposal.
[2017] FWCFB 1001
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[981] The first is that there is an inherent contradiction in the position put by CAI. On the
one hand, it is contended that there is no difference between Saturday and Sunday work, yet if
adopted the variations proposed would result in different penalty rates for Saturday and
Sunday (125 per cent and 150 per cent respectively).
[982] This issue was put to counsel for CAI during the course of closing submissions and he
responded as follows:
‘… to align both Saturday and Sunday rates at 125 per cent in Clubs Australia’s view … would
be too large a drop for Sunday rates in one hit, and it really is as logical as that … There is no
necessary science in it and it is not – it certainly would recognise that there be a higher rate of
pay for employees working on a Sunday…
There is no evidence or there is little evidence to say that the persons who work on a Sunday
should receive a greater reduction than 25 per cent from the current rate of pay…
… there is no mathematical recognition within the Clubs Australia’s position that says that the
Sunday rate should necessarily be an additional 25 per cent on top of the Sunday rate. It is
simply because Clubs Australia does not wish to put to the Commission that there should be a
reduction from 175 per cent to 125 per cent for Sunday’.884
[983] The response given speaks of the type of approach taken in times past, namely to
advance a position based on an assessment of what is industrially feasible instead of a detailed
exposition of the merits of the particular proposal. This observation leads us to the second
general point in respect of the position put by CAI.
[984] As mentioned earlier, proposed variations to modern awards must be justified on their
merits. The extent of the merit argument required will depend on the circumstances. On any
view of it the variations proposed by CAI constitute significant changes to the modern award.
Such changes should be supported by an analysis of the relevant legislative provisions and,
where feasible, probative evidence.
[985] The case put on behalf of CAI made only a cursory reference to the relevant s.134
considerations
885
and there was a paucity of evidence advanced in support of the proposed
changes. The submissions put were general in nature and failed to adequately address the
relevant statutory provisions.
[986] It will be recalled that CAI led evidence from only 3 witnesses in relation to the
operation of particular clubs: Messrs Cox, Casu and Dellar.
[987] Mr Cox gave evidence in relation to the Coffs Ex Services Club, which employs 163
employees. CAI submits that Mr Cox’s evidence was that ‘A reduction in penalty rates on
weekends and public holidays would potentially lead to an extension of the club’s operating
hours with consequential additional hours being offered to part-time and casual
employees’.
886
[988] However, Mr Cox was somewhat equivocal about the employment and community
benefits which may flow from a reduction in penalty rates and there was no detail of, or
substantive basis for, these potential outcomes provided.
[2017] FWCFB 1001
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[989] Mr Casu gave evidence in relation to the Narooma Club, which employs about 60
employees. In short, Mr Casu’s evidence was that if CAI’s proposed penalty rate reductions
were implemented then the employment impact could be as much as the equivalent of an
additional 8 hour shift on a Saturday and Sunday. In other words, a very modest employment
impact.
[990] Mr Dellar gave evidence in relation to the Hawthorn Club, which employs 9
employees. Mr Dellar’s evidence was that if the penalty rate regime proposed by CAI was
implemented then the Hawthorn Club would trade for an additional 4 hours on Sunday
resulting in additional hours for existing staff who work on Sundays or the engagement of an
additional staff member to work on Sundays. Mr Dellar also said that if penalty rates were
reduced additional hours would be provided to existing employees during the week, but no
specifics were given as to the number of additional hours and he conceded that he had not
calculated what the reduction to the club’s wages would be if the penalty rate variations were
made.
[991] As we have mentioned, the Clubs industry is highly fragmented, comprising of 6,500
individual venues across Australia. There is a significant variation in the type of clubs and the
size of clubs. The KPMG Clubs Report noted that the types of clubs ranged from sporting to
service clubs, to community and cultural/religious clubs. In relation to the clubs surveyed for
that report, the smallest club reported having 2 members and the largest had 110,134
members.
[992] Given the limitations to Mr Cox’s evidence we are essentially left with evidence from
2 clubs (both ‘sporting’ clubs), one in NSW and the other in Victoria, employing 60 and 9
employees respectively.
[993] While we do not suggest that it is necessary for the proponent of a significant variation
to a modern award to provide evidence in respect of the impact of the proposed variation on
each and every part of the industry covered by the relevant modern award, the evidentiary
case put by CAI was patently inadequate.
7.3.6 Conclusion
[994] On the material presently before us we are not satisfied that the variations proposed
are necessary to ensure that the modern award sought to be varied achieves the modern
awards objective. In short, CAI has not established a merit case sufficient to warrant the
granting of the claim.
[995] If these were simply inter partes proceedings we would dismiss the CAI claim. But
the claim has been made in the context of the Review and s.156 imposes an obligation on the
Commission to review each modern award. There is also, at least on face value, a disconnect
between the present provisions in the Clubs Award and those that will apply within the
hospitality industry more broadly.
[996] We have given consideration to the next steps to be taken in respect of the review of
weekend penalty rates in the Clubs Award. It seems to us that there are 2 options in respect of
the future conduct of this aspect of these proceedings.
[2017] FWCFB 1001
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[997] Option 1: We could make determinations revoking the Clubs Award and varying the
coverage of the Hospitality Award so that it covers the class of employers and employees
presently covered by the Clubs Award. Any such determinations would have to comply with
the statutory provisions relating to changing the coverage of modern awards and to the
revocation of modern awards (ss.163 and 164 respectively). Such a course would obviously
avoid the need to conduct any further Review proceedings in respect of the Clubs Award.
[998] Extending the coverage of the Hospitality Award and revoking the Clubs Award would
also have the desirable outcome of rationalising the awards applying to the hospitality sector
and providing greater consistency in the regulation of penalty rates in the sector. We would
also observe that the ‘merger’ of the Hospitality and Clubs Awards is consistent with the
‘need to ensure a simple, easy to understand… modern award system’, which is one of the
considerations we are required to make into account in determining whether a modern award
meets the modern awards objective’ (s.134(1)(g) of the FW Act).
[999] Option 2: CAI and any other interested party could be provided with a further
opportunity to advance a properly based merit case in support of any changes they propose in
respect of weekend penalty rates.
[1000] It is our provisional view that option 1 has merit and warrants further consideration.
As mentioned earlier, in the award modernisation process there was general support among
employer and employee associations for a separate Clubs Award. The Award Modernisation
Full Bench concluded that while it was possible to include clubs within the Hospitality
Award, with some sector specific arrangements, it decided to make a separate clubs award –
no doubt influenced by the consent position of the interested parties.
[1001] In the present proceedings, CAI sought to rely on Mr Tait’s evidence in order to
distinguish the clubs industry from the rest of the hospitality sector:
‘Clubs, may be distinguished from other hospitality venues such as hotels, in that they are not-
for-profit community based organisations whose central activity is to provide infrastructure
and services for its members and the greater community. Clubs contribute to their local
communities through employment and training, direct cash and in-kind social contributions,
and through the formation of social capital by mobilising volunteers and providing a diverse
and affordable range of services, facilities and goods.’
887
[1002] We acknowledge that clubs have a number of characteristics which may be said to
distinguish them from the types of enterprises covered by the Hospitality Award (such as
hotels), namely:
clubs are not-for-profit community based organisations; and
clubs may be subject to a different regulatory environment in respect of their
operations.
[1003] But while there are a number of differences between clubs and the enterprises
presently covered by the Hospitality Award (such as hotels) we are not presently persuaded
that those differences warrant a separate award. In particular, the fact that clubs are not-for-
profit community based organisations does not mean that they warrant a separate award. A
number of other modern awards cover both not-for-profit and for-profit enterprises, such as
the Clerks – Private Sector Award 2010 and the Aged Care Award 2010.
[2017] FWCFB 1001
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[1004] We would also observe that there is a high degree of commonality in the work
performed by the employees covered by the Clubs Award and the Hospitality Award, as
evidenced by the similarities in the classification levels and rates of pay (see below).
Table 39
Comparison of the Clubs Award and the Hospitality Award’s Classifications
Provisions unique to Clubs shown in PURPLE Provisions unique to Hospitality shown in GREEN
17.2 Club employees
Level Classification Minimum
weekly
wage
Minimum
hourly
w
age
$ $
Introductory 672.70 17.70
Level 1 692.10 18.21
Food and beverage
attendant grade 1
Guest service grade
1
Kitchen attendant
grade 1
Level 2 718.60 18.91
Child care worker
grade 1
Clerical grade 1
Cook grade 1
Doorperson/
Security officer
grade 1
Food and beverage
attendant grade 2
Front office grade 1
Guest service
grade 2
Kitchen attendant
grade 2
Leisure attendant
grade 1
Maintenance and
horticultural
employee level 1
Storeperson grade 1
Level 3 743.30 19.56
Clerical grade 2
Cook grade 2
Food and beverage
and gaming
attendant grade 3
Forklift driver
Level Classification Minimum
weekly
wage
Minimum
hourly
wage
$ $
Introductory 672.70 17.70
Level 1 692.10 18.21
Food and beverage
attendant grade 1
Guest service grade
1
Kitchen attendant
grade 1
Level 2 718.60 18.91
Clerical grade 1
Cook grade 1
Doorperson/
Security officer
grade 1
Food and beverage
attendant grade 2
Front office grade 1
Guest service
grade 2
Kitchen attendant
grade 2
Leisure attendant
grade 1
Gardener grade 1
Storeperson grade 1
Level 3 743.30 19.56
Clerical grade 2
Cook grade 2
Food and beverage
and gaming
attendant grade 3
Forklift driver
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Front office grade 2
Guest service grade
3
Handyperson
Kitchen attendant
grade 3
Leisure attendant
grade 2
Maintenance and
horticultural
employee level 2
Storeperson grade 2
Timekeeper/
Security officer
grade 2
Level 4 783.30 20.61
Clerical grade 3
Cook (tradesperson)
grade 3
Food and beverage
attendant
(tradesperson) grade
4
Front office grade 3
Guest service grade
4
Leisure attendant
grade 3
Maintenance and
horticultural level 3
(tradesperson)
Storeperson grade 3
Level 5 832.30 21.90
Child care worker
grade 2
Clerical supervisor
Cook (tradesperson)
grade 4
Food and beverage
and gaming
attendant grade 5
Front office
supervisor
Guest service
supervisor
Maintenance and
horticultural level 4
Level 6 854.60 22.49
Cook (tradesperson)
grade 5
Club manager of a
club with a gross
annual revenue of
less than $500,000
Front office grade 2
Guest service grade
3
Handyperson
Kitchen attendant
grade 3
Leisure attendant
grade 2
Gardener grade 2
Storeperson grade 2
Timekeeper/
Security officer
grade 2
Level 4 783.30 20.61
Clerical grade 3
Cook (tradesperson)
grade 3
Food and beverage
attendant
(tradesperson) grade
4
Front office grade 3
Guest service grade
4
Leisure attendant
grade 3
Gardener grade 3
(tradesperson)
Storeperson grade 3
Level 5 832.30 21.90
Clerical supervisor
Cook (tradesperson)
grade 4
Food and beverage
supervisor
Front office
supervisor
Guest service
supervisor
Gardener grade 4
(tradesperson)
Level 6 854.60 22.49
Cook (tradesperson)
grade 5
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[1005] We accept that there are differences between the two awards, for example in relation
to annualised salary arrangements, overtime on Saturdays and in both the classification
definitions and the range of classifications covered. But it seems to us that such differences
may be accommodated by either appropriate transitional arrangements or the inclusion of
clubs-specific sector arrangement within the Hospitality Award.
[1006] Option 1 would have the advantage of providing greater consistency between penalty
rates within the hospitality sector. The Productivity Commission report concluded that:
‘There are grounds for greater consistency (short of uniformity) between penalty rates
across the HERRC industries.’
888
[1007] In support of this conclusion the Productivity Commission noted that:
‘Notwithstanding award modernisation, there appears to be many inconsistencies in penalty rate
settings. Wide disparities in rates persist in industries with similar structural characteristics and
employee skill levels…
Differences in rates create compliance costs and uncertainty for employers and employees.’
889
[1008] In Chapter 7.2.6 we set out the changes we propose to make to Sunday penalty rates in
the Hospitality Award. Table 40 below shows the differences between that weekend penalty
rate regime and the current penalty rates in the Clubs Award.
Table 40
Penalty rate arrangements in Hospitality and Clubs Awards
Full-time or part-time employees Casual employees
Percentage of base rate Percentage of base rate
Sat Sun Sat Sun
% % % %
Clubs Award 150 175 150 175
Hospitality Award (proposed) 125 150 150 175
Note: As set out in Chapter 7.2.6 we propose to vary the Hospitality Award to reduce the Sunday penalty rate for
full-time and part-time employees, from 175 per cent to 150 per cent.
[1009] We propose to provide an opportunity for interested parties to express a view as to the
future conduct of this aspect of these proceedings. In particular, we will invite submissions on
the two options set out above. We deal with the process for doing so in Chapter 12, Next
Steps.
Child care worker
grade 3
Note: The Clubs Award provides for an additional 7
classification levels (levels 7-13), which correspond to
various levels of managerial responsibility.
[2017] FWCFB 1001
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7.4 Restaurant Industry Award 2010
7.4.1 The Claims
[1010] Restaurant and Catering Industrial (RCI) and ABI made claims to reduce the penalty
rates contained in clause 34 of the Restaurant Industry Award 2010 (the Restaurant Award).
[1011] RCI proposes to amend clause 34.1 of the Restaurant Award such that full-time and
part-time employees be paid 125 per cent of the minimum rate for work performed on a
Sunday, rather than the current rate of 150 per cent. It also proposes that casuals who are
engaged at Levels 3–6 be paid 150 per cent for work performed on a Sunday rather than 175
per cent as contained in the current award. RCI also seeks the deletion of clause 34.1A—
Special condition regarding existing employees.
[1012] RCI also proposes that the additional payment for ordinary hours of work from 10 pm
to midnight currently provided for at clause 34.2(a)(i) be removed and that the additional
payment in clause 34.2(a)(ii) (for ordinary hours of work between midnight and 7.00 am) be
reduced from 15 per cent to 5 per cent with a change to the span of hours for which the
payment is made (to between midnight and 5.00 am).
[1013] RCI and ABI also seek reductions in the public holiday penalty rate. We deal later
with that aspect of the claims.
[1014] The changes sought by RCI are set out below, in a marked up version of clause 34:
‘34. Penalty rates
34.1 Penalty rates for work on weekends and public holidays
An employee working ordinary time hours on the following days will be paid the following
percentage of the minimum wage in clause 20—Minimum wages for the relevant
classification:
Type of employment
Monday to
Friday
Saturday Sunday
Public
holidays
% % % %
Full-time and part-time 100 125 150 125 250 150
Casual Introductory Level,
Level 1, Level 2
(inclusive of 25% casual loading)
125 150 150 250 150
Casual Level 3 to Level 6
(inclusive of casual 25% loading)
125 150 175 250
34.1A Special condition regarding existing employees
No existing employee classified as Level 3 or above shall be moved down to pay
grade Levels 1 or 2 or be discriminated against in the allocation of work as a result of
[2017] FWCFB 1001
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the variation of clause 34.1 by the Full Bench of the Fair Work Commission in
proceedings number C2013/6610.
34.2 Additional payment for work done between the hours of 10.00 pm to 7.00
am on Monday to Friday
(a) An employee, including a casual, who is required to work any of their ordinary
hours between the hours of 10.00 pm and midnight Monday to Friday
inclusive, or between midnight and 7.00 am Monday to Friday inclusive, must
be paid an additional amount per hour calculated according to the following:
(i) Between 10.00 pm and midnight
For each hour or part of an hour worked during such times—10% of the
standard hourly rate per hour extra.
(ii) Between midnight and 7.00 am
For each hour or part of an hour worked during such times—15% of the
standard hourly rate per hour extra.
(b) For the purposes of this clause midnight will include midnight Sunday.
34.2 Additional payment for work done between the hours of midnight and
5.00 am Monday to Friday
(a) An employee, including a casual, who is required to work any of their ordinary
hours between the hours between midnight and 5.00 am Monday to Friday
inclusive, must be paid an additional shift allowance of 5% per hour worked.
(b) For the purposes of this clause midnight will include midnight Sunday.
[1015] If granted, RCI’s proposed variation to clauses 34.1 and 34.2 would:
reduce the penalty rates paid to full-time and part-time employees for work
performed on a Sunday from 150 per cent of their minimum rate of pay to 125 per
cent;
reduce the penalty rates paid to Casual Level 3 to Level 6 employees from 175 per
cent to 150 per cent;
remove the special conditions applying to existing employees in clause 34.1A;
delete the existing entitlement to a 10 per cent loading within the span of hours
between 10.00 pm and midnight;
adjust the span of hours in respect of which employees currently receive a 15 per
cent loading (the loading would also reduce) from ‘between midnight and 7.00 am’
to ‘the hours between midnight and 5.00 am’; and
[2017] FWCFB 1001
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reduce the existing loading for ordinary hours of work after midnight from 15 per
cent to 5 per cent.
[1016] The RCI and ABI claims are opposed by United Voice.
7.4.2 Background to the Restaurant Award
[1017] The background to the making of the Restaurant Award is extensively canvassed by
the majority in the 2014 Restaurants Penalty Rates decision
890
and need not be repeated here.
We address the 2014 decision later (at [1144]–[1153]).
7.4.3 The Cafes and restaurants industry
[1018] The ABS data of direct relevance to the Cafes and restaurants industry class is quite
limited.
[1019] A paper
891
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework the Restaurant Award 2010 is ‘mapped’ to
the Cafes and restaurants industry class.
[1020] The Census is the only data source that contains all of the employment characteristics
for Clubs (Hospitality). The most recent Census data is from August 2011.
[1021] The August 2011 Census data shows that there were around 144 000 employees in
Cafes and restaurants. Table 41 compares certain characteristics of employees in the Cafes
and restaurants industry class, with employees in ‘all industries’.
[2017] FWCFB 1001
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Table 41
Labour force characteristics of the Cafes and restaurants industry class,
ABS Census 9 August 2011
Cafes and restaurants All industries
(No.) (%) (No.) (%)
Gender
Male 59 509 41.3 4 207 586 50.8
Female 84 466 58.7 4 082 662 49.2
Total 143 975 100.0 8 290 248 100.0
Full-time/part-time status
Full-time 48 301 35.5 5 279 853 67.8
Part-time 87 702 64.5 2 507 786 32.2
Total 136 003 100.0 7 787 639 100.0
Highest year of school completed
Year 12 or equivalent 91 446 64.8 5 098 228 62.6
Year 11 or equivalent 16 387 11.6 885 404 10.9
Year 10 or equivalent 23 162 16.4 1 687 055 20.7
Year 9 or equivalent 6209 4.4 317 447 3.9
Year 8 or below 3025 2.1 141 973 1.7
Did not go to school 938 0.7 20 158 0.2
Total 141 167 100.0 8 150 265 100.0
Student status
Full-time student 45 149 31.7 612 990 7.5
Part-time student 9394 6.6 506 120 6.2
Not attending 87 886 61.7 7 084 360 86.4
Total 142 429 100.0 8 203 470 100.0
Age (5 year groups)
15–19 years 34 237 23.8 547 666 6.6
20–24 years 35 227 24.5 927 865 11.2
25–29 years 22 259 15.5 1 020 678 12.3
30–34 years 13 976 9.7 933 827 11.3
35–39 years 9928 6.9 934 448 11.3
40–44 years 8336 5.8 938 386 11.3
45–49 years 7407 5.1 911 739 11.0
50–54 years 5880 4.1 848 223 10.2
55–59 years 3824 2.7 652 190 7.9
60–64 years 2114 1.5 404 470 4.9
65 years and over 786 0.5 170 718 2.1
Total 143 974 100.0 8 290 210 100.0
Average age 29.0 38.8
Hours worked
1–15 hours 43 323 31.9 875 554 11.2
16–24 hours 25 590 18.8 792 539 10.2
25–34 hours 18 787 13.8 839 694 10.8
35–39 hours 15 581 11.5 1 676 920 21.5
40 hours 11 782 8.7 1 555 620 20.0
41–48 hours 9222 6.8 895 619 11.5
49 hours and over 11 715 8.6 1 151 693 14.8
Total 136 000 100.0 7 787 639 100.0
Source: ABS, Census of Population and Housing, 2011.
Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
[2017] FWCFB 1001
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[1022] The profile of Cafes and restaurants employees differs from the profile of employees
in ‘All industries’ in 4 important respects:
(i) around two-thirds (64.5 per cent) of Cafes and restaurants employees work
part-time (i.e. less than 35 hours per week
892
), compared with only 32.2 per
cent of all employees;
(ii) almost one third (31.9 per cent) of Cafes and restaurants employees work 1–15
hours per week compared with only 11.2 per cent of all employees;
(iii) almost half (48.3 per cent) of Cafes and restaurants employees are aged
between 15 and 24 years compared with only 17.8 per cent of all employees;
and
(iv) almost 4 in 10 Cafes and restaurants employees are students (31.7 per cent are
full-time students and 6.6 per cent study part-time) compared with 13.7 per
cent of all employees.
[1023] The Lewis Report also included data on enterprises and employment in the Cafes and
restaurant industry for 2014–15. Table 42 shows that:
there were over 15 000 enterprises, employing approximately 155 000 people;
casual employees accounted for around half of employees;
wages accounted for 27.9 per cent of total expenses, which is higher than for
Accommodation and food services (26.9 per cent) and all industries (18.7 per
cent);
893
and
the profit margin of 8.6 per cent was the same as Accommodation and food services
and lower than the profit margin for all industries (10.9 per cent).
894
Table 42
895
Cafes and restaurant industry, 2014–15
Enterprises (No.) 15 251
Employment (No.) 154 658
Working proprietors and partners of unincorporated businesses (No.) 10 671
Employees
Salaried directors of incorporated businesses (No.) 11 135
Other
Permanent full-time (No.) 32 633
Permanent part-time (No.) 26 910
Casuals (No.) 73 308
Total (No.) 132 851
Total (No.) 143 987
Revenue ($m) 16 027.7
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Expenses
Rent ($m) 1661.6
Utilities ($m) 326.3
Depreciation ($m) 450.7
Other ($m) 1898.6
Wages ($m) 4089.2
Purchases ($m) 6225.5
Total ($m) 14 649.8
Industry Value Added ($m) 5916.4
Profit ($m) 1377.9
Profit Margin (%) 8.6
Wages (% of expenses) (%) 27.9
Wages (% of value added) (%) 69.1
7.4.4 The Evidence
(i) RCI
[1024] RCI called 5 lay witnesses in support of the application to vary the Restaurant Award.
The names, addresses and workplaces of these witnesses are the subject of a confidentiality
order.
896
We refer to these witnesses as RCI witness 1, RCI witness 2, etc.
[1025] RCI also called 3 witnesses who referred to survey data about the effect of penalty
rates on the restaurant industry:
John Hart: the Chief Executive Officer of RCI;
897
James Parker: Managing Director of Jetty Research;
898
and
Carlita Warren: Policy and Public Affairs Director RCI.
899
[1026] It is convenient to deal first with RCI’s lay evidence.
[1027] As mentioned, RCI led evidence from 5 lay witnesses who operate businesses covered
by the Restaurant Award.
[1028] RCI Witness 1
900
operates a restaurant and wine bar in Melbourne. At the time he
made his supplementary statement the establishment employed 5 full-time and 14 casual
employees. The 14 casual employees are classified as level 1 casuals under the Restaurant
Award
901
and the number of casuals was ‘basically constant’ over the 2014 calendar year.
902
The business trades Monday to Sunday, 11.00 am to 11.00 pm.
[1029] In his witness statement RCI Witness 1 says:
‘10. The business on many occasions has run at a loss on Sundays because of penalty rates
under the Restaurant Award
11. If late night penalties were reduced under the Award we would consider extending our
trading hours.
[2017] FWCFB 1001
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12. We would consider employing more casual staff if penalty rates were reduced on Sundays
and public holidays.’903
[1030] During the course of his cross-examination, RCI Witness 1 withdrew paragraph 11 of
his statement:
‘Now, you say one of the things you describe as a possibility, is extending trading hours. I take
it that- - -?---No, I didn’t want to extend trading hours, I just wanted to have more people to
give better service.
Okay, so the paragraph 11 in your statement, we should remove, should we?---Yes. Yes, I’m
quite happy with that.’904
[1031] RCI Witness 1 also conceded that he had not calculated the extent of the reduction in
wage costs if the RCI’s penalty rate proposal was implemented: ‘No, I didn’t do it, but I could
see the potential of if the penalty rates were reduced, I could extend the facilities to the
public.’
905
The witness also said that a reduction would mean that the business could be run
more economically and that he would like to extend the business’s facilities.
906
[1032] It was also clear from RCI Witness 1’s cross-examination (set out below) that he was
unaware of the fact that the Restaurant Award had been varied in 2014 to reduce the Sunday
penalty for level 1 and 2 casual employees from 175 per cent to 150 per cent:
‘And all of your casuals? Those 14 casuals that are on level 1, yes?---Yes.
Are you aware that the penalty rates in that award were varied for casuals at the introductory
level, level 1 and level 2, as of 1 July of 2014?---Yes.
That went from 175 down to 150, is that right?---I don’t know what it is, I have a bookkeeper,
but we were informed that the rates went up and that was - I left it to her.
The rates went down, Mr XXX---They went down, did they? I just left it to her. To tell you the
truth, I don’t even touch the wages.
So it’s really difficult for you to make an assessment of the impact of penalty rates in that
case?---Of course, up to a point. If there’s penalty rates and you’re struggling in the first place
and it’s going to go up, or if it can come down you have a sort of a rule of thumb that you say,
right, if it comes down, I can do something else. If it goes up, you just don’t do it.
But I think your evidence is that that number of level 1 casuals stayed relatively - basically, I
think you said - basically constant over 2014. That was despite the reduction from 175 to 150,
is that right?---Hang on. What was - 175 to what?
The casual loading went from - in respect of a Sunday - - -?---Sorry. Don’t - don’t draw me
into - into costs, I’m sorry. I’m a rule of thumb person. I leave it to staff to do the other.
…
Yes. To be fair to you, I just want to make it clear what I am talking about in respect of the
change is that as of 1 July 2015 and as the result of the two-year review of the Restaurant
Award, casual loading for casuals at introductory level, level 1 and level 2, inclusive of their
casual loading, on a Sunday, went from 175 to 150. Are you aware of that?---No.’907
[2017] FWCFB 1001
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[1033] In the present proceedings RCI is not proposing any change to the Sunday penalty rate
applicable to level 1 or level 2 casual employees.
[1034] We place very little weight on the witness’s statement that he ‘would consider
employing more casual staff if penalty rates were reduced on Sundays’ given that he was
unaware of the fact that the Sunday penalty rate applicable to level 1 and 2 casual employees
was reduced from 175 per cent to 150 per cent in 2014 and, if implemented, the RCI claim
would not result in a change to Sunday penalty rates for level 1 and 2 casual employees (i.e.
the level of casual employees employed by RCI Witness 1’s business). We also note that RCI
Witness 1 said that despite the reduction in penalty rates in 2014, the number of casual
employees in his establishment remained constant.
908
[1035] RCI Witness 2
909
is the owner of a licensed coffee shop/café in Queensland. At the
time she made her supplementary statement, the business employed 16 casual employees, 14
of whom are level 1 or 2 casuals under the Restaurant Award and the other 2 are employed in
higher classifications.
910
The business does not employ any full-time or part-time employees.
The café is a 7-day-a-week operation, trading 7.30 am to 5.00 pm weekdays and 7.30 am to
5.00 pm on weekends.
[1036] In her witness statement RCI Witness 2 says:
‘The labour costs of running this cafe are high sometimes 45%- totally unsustainable. The cause
-penalty rates over weekends and public holidays. In particular the public holiday penalty rates
make trading totally unprofitable for us.
Closing the business is not an option under the terms of our lease, negotiated prior to penalty
rates being applied under the Restaurant Award. We are finding the current wage terms
unsustainable for us.
These high rates require that I restrict my staff numbers thus staff work really hard to cover
the load and customer service can be compromised.’911
[1037] The statement that the business’ lease was ‘negotiated prior to penalty rates being
applied under the Restaurant Award’ was the subject of cross-examination and the witness
acknowledged that the Restaurant Award took effect on 1 January 2010 and she signed the
lease almost 3 years later, on 4 December 2012. The witness also conceded that she ‘knew
very well what the penalty rate regime was under the Restaurant Award’ when she signed the
lease.
912
[1038] RCI witness 2 was aware of the changes sought by RCI and conceded that she had not
calculated the impact of the proposed reduction in penalty rates.
913
The witness also gave
evidence about the impact of the reduction in penalty rates for level 1 and 2 casual employees
that took effect on 1 July 2014:
‘Just some last questions in relation to those casual employees. If you just concentrate on the 14
of them that are level 1 and level 2, did their penalty rate for a Sunday change on 1 July of last
year, 2014?---Yes, it did.
Is it your understanding that casual employees at level 1 and level 2 inclusive of their casual
loading, their penalty rate on Sunday went from 175 to 150?---Yes, I am.
[2017] FWCFB 1001
235
But I think your evidence is despite that, your workforce was consistent over - the total
numbers of casuals were broadly consistent for the calendar year of 2014. Is that right?---Yes,
correct.’914
[1039] It is notable that RCI Witness 2 gave no evidence as to what the business’ response
would be to a reduction in penalty rates. It was not suggested that there would be any service
improvements or additional staff employed as a consequence of any reduction in penalty
rates. Further, the number of casuals employed in the Café did not change following the
1 July 2014 reduction in Sunday penalty rates.
[1040] RCI Witness 3
915
is the owner of a pizzeria in Canberra which employs 9 casual
employees and trades Tuesday to Friday from noon to 2.00 pm and from 5.30 pm to midnight,
and from 5.30 pm to midnight on a Saturday. It does not trade on Sundays.
[1041] In his witness statement RCI Witness 3 comments on the impact of late night and
Sunday penalty rates. As to the late night penalties he says:
‘The late night penalty of 10% between 10PM and Midnight under the Restaurant Award is a
commercial disincentive for the business to keep additional staff on as it curtails profits during
these hours. If customer demand was present and the 10% late night penalty was abolished we
would extend the hours employed by our staff on weeknights.’
916
(emphasis added)
[1042] During the course of cross-examination the witness conceded that there was less
customer demand after 10.00 pm on Monday to Thursday.
917
[1043] The proposition that the business would offer more hours to its staff if the late night
penalty was abolished is subject to the qualification as to customer demand.
[1044] As to Sunday penalty rates RCI Witness 3 says:
‘We do not currently trade on Sundays, however, if the current penalty rate was reduced to the
Saturday rate for all staff we would consider opening the business for Sunday trading’
918
[1045] As mentioned earlier, the pizzeria employs 9 casuals, no full-time or part-time
employees. Of those 9 employees, 7 are level 1 casuals and the other 2 are level 2 casuals.
919
The number and level of employees has been ‘fairly consistent’ over time, at least since 2014.
[1046] The witness was cross-examined on his statement that he would consider trading on
Sundays if the Sunday penalty rate was reduced to the Saturday rate:
‘And you know, don’t you, Mr XXX, what the penalty rates are on Sundays under the
Restaurants Award?---Yes.
And you know that for level 1 and level 2 casuals they’re actually the same as they are on
Saturday, that’s right, isn’t it?---Yes, I believe that is correct.
So where you say at paragraph 12 of your statement that you don’t currently trade on Sundays
but if the current penalty rate was reduced to Saturday rate for all staff you’d consider opening
on Sundays, you could do that right now, couldn’t you?---I guess the sense of – to answer that
[2017] FWCFB 1001
236
question and the reason for my appearance is that the fact that – well actually let me backtrack
– the rate for Sunday for level 1’s and 2 you’re saying is the same as Saturday?
That’s right.---Because I don’t believe that’s correct.
I asked you just a minute ago if you knew what the rates for Sundays were for casuals - - -?---
Yes, that’s where I’d like to go back. I’d like to go back to that question. So I do believe that
Saturday and Sunday rates differ during the day.
If you’re wrong about that, does that mean that you would withdraw paragraph 12 of your
statement?---Yes, that would be withdrawn, or more accurately it would be re-phrased more
accurately.
I think there’s a limit on re-phrasing, but I’ll let others deal with that.---Yes, well let’s leave it
at – yes, if the Sunday rates are different to Saturday day rates then – which I wasn’t aware of,
that paragraph 12 would be withdrawn.’920
[1047] As a consequence of the concessions made during cross-examination, we place no
weight on that part of the witness’ statement referring to the likelihood of trading on Sunday
if the Sunday penalty rate was reduced.
[1048] RCI Witness 4
921
is the owner of a restaurant in NSW and has worked in the
hospitality industry for 15 years. When it was initially opened the restaurant provided
breakfast, lunch and dinner, 7 days a week. At the time the witness made her statement the
restaurant was open Wednesday to Sunday for lunch and dinner, with breakfast available on
the weekends. The restaurant also caters for ‘high tea, functions and corporate events’. The
restaurant employs 6 full-time employees (5 of whom are on annualised salaries) and 8 casual
employees (6 are level 2 casuals and the other 2 are level 1 casuals). The number of staff
employed had been ‘pretty consistent’ over the 18 months prior to the witness giving
evidence.
922
[1049] At paragraph 6 of her statement, the witness says:
‘The company would be prepared to employ more casual staff on weekends and public holidays
if penalty rates were significantly reduced’(emphasis added)
[1050] The witness was cross-examined as to what she meant by ‘if penalty rates were
significantly reduced’:
‘So my question was then what is the significant reduction to the penalty rates on weekends that
would enable you to make the changes that you say you want to make?---Ideally? Ideally, no
penalty rates would be great.
You know what amendments the Restaurant & Catering Association are seeking?---They’re
seeking for a reduction. I think it’s to have it the same as Saturday rates.’923
[1051] The witness was familiar with the RCI claim and conceded that she had not calculated
the ‘actual dollar figure’ which would result from the reduction in penalty rates sought by
RCI, as the business looks ‘at the percentage of the labour cost to what we are currently
earning’.
924
[2017] FWCFB 1001
237
[1052] The witness was aware of the fact that the Sunday penalty rate for level 1 and 2
casuals had been reduced to 150 per cent (inclusive of the 25 per cent casual loading) on
1 July 2014.
925
But despite the reduction in the Sunday penalty rate the number of casuals
employed on a Sunday (and the hours they work) had not changed.
926
[1053] As to the impact of the current early morning penalty the witness said, at paragraph 7
of her statement:
‘The company would reconsider opening for breakfast Monday to Friday again if the 15%
penalty rate did not apply up to 7am’
[1054] This aspect of the witness’ evidence was not challenged in cross-examination.
[1055] RCI Witness 5
927
operates a café in regional NSW. The café trades 7 days a week,
from 7.00 am to 3.00 pm Monday to Friday and 8.00 am to 2.00 pm on weekends. The café
employs 14 employees, 5 full-time (2 of whom are on salary), 1 part-time and 8 casual
employees (all of whom are either level 1 or 2 casuals).
928
[1056] The witness was aware of the reduction in Sunday penalty rates that took effect on
1 July 2014, but there has been no increase in overall staff numbers since that time.
929
[1057] At paragraphs 10, 12 and 13 of his statement, the witness refers to the impact of
penalty rates on the business:
‘Weekend penalty rates increase the ratio of wages to sales to approximately 60% for those
days, if we employ adult employees, making it necessary to staff weekends with a high
proportion of junior staff.
We currently reduce trading hours on weekends because of the ratio of wages to sales, we are
usually unable to open on public holidays because we are unable to operate profitably after
paying penalty rates.
The excessive wage rates and associated penalties can have a deleterious effect on customer
service, because we are unable to appropriately staff the business during peak period.’930
[1058] The cross-examination of RCI Witness 5 cast some doubt on the accuracy of the 60
per cent figure referred to above,
931
but the essence of his evidence is that the current penalty
rate regime restricts the business’s weekend trading hours and adversely affects customer
service on weekends because a lower than optimal proportion of senior staff are rostered at
that time in order to reduce labour costs.
[1059] We note that RCI Witness 5’s evidence does not particularise the impact of Sunday
penalty rates (referring only to weekend penalty rates) and nor does the evidence canvass the
likely impact of a reduction in the Sunday penalty rate on employment levels and service.
[1060] In summary, 2 of RCI’s 5 lay witnesses were unaware of the fact that on 1 July 2014
the Restaurant Award was varied to reduce the Sunday penalty rate for level 1 and 2 casuals
from 175 per cent to 150 per cent. Both of these witnesses were RCI members and we assume
that RCI informed its members of the award variations.
[2017] FWCFB 1001
238
[1061] Further, none of the RCI lay witnesses suggested that there had been any positive
employment effect (either in overall numbers of employees or in hours worked) as a
consequence of the previous reduction in the Sunday penalty rate.
[1062] There was some evidence as to the impact of existing weekend and public holiday
penalties on operating hours and staffing composition (with a higher than optimal level of
junior staff being rostered on weekends). But there was a paucity of evidence about the likely
impact on employment levels and service of a reduction in the Sunday penalty rate as sought
by RCI.
[1063] We now turn to RCI’s survey evidence. The evidence concerns three surveys:
a survey by Elections Australia Pty Ltd of RCI Members (the EA Survey);
a survey by Jetty Research (the Jetty Survey); and
a restaurant and catering benchmarking survey conducted by RCI in 2014 (the
Benchmarking Survey).
The EA Survey
[1064] Attached to Mr Hart’s statement is a document from Elections Australia Pty Ltd
setting out the results of a survey that the organisation conducted of RCI members in mid-
2015 (the ‘EA Survey’). The survey asked three questions:
1. To the closest whole number, what is the
percentage of total labour costs to revenue
(include all on costs such as payroll tax,
workers compensation and superannuation)
% _______
2. A recent survey found that, on average, an
additional 3 staff would be engaged if
penalty rates on Sunday were lowered. In
order to achieve this outcome what type of
change would you require?
(click on one option)
o a: Reduce Sunday rates to Saturday for all
o b: Reduce Sunday rates to Saturday for
casuals
o c: Extend the 150% rate for casuals for
Sunday to Grade 3 and above
o d: Other please specify below
2d: Other
3. What additional percentage daily
turnover would result from such a
change?
% _______
[1065] The raw data from 335 survey respondents is provided in Attachment A to Mr Hart’s
statement. No analysis of the data is provided.
[1066] In its written submissions RCI concedes that ‘the survey in the form in which it has
been filed, provides no information about the approach and methodology relating to the
survey’ and, ‘for this reason, RCI accepts that the probative value is reduced’. RCI goes on to
submit:
‘However, it is helpful at a more general level in indicating the views of restaurant owners and
managers, particularly to the extent that such views are consistent with the lay evidence and
survey and expert evidence before the Full Bench.
[2017] FWCFB 1001
239
In particular, a focus of the survey was gauging the percentage of total labour costs to revenue.
Based on the responses provided, the average percentage was calculated to be 41.4%. This is
also consistent with the benchmarking survey conducted by Ms Warren of RCI which
indicated labour costs to be 43.7%’
932
[1067] RCI only expressly refer to the responses to survey question 1 (labour costs: revenue
%). We note that the responses to this question vary substantially – from 20 to 95 per cent.
There is also significant variation in the responses to questions 2 and 3. The responses to
question 3 (what additional percentage daily turnover would result from the suggested change
in penalty rates) range from 0 to 115 per cent. A suggested increase in turnover of 115 per
cent frankly lacks credibility and finds no support in the expert evidence, the lay evidence or
other survey evidence.
[1068] As acknowledged by RCI, the EA survey evidence provides no information about the
approach and methodology adopted. We would add that the wording of survey questions 2
and 3 is problematic and there is little or no analysis of the data (in particular, there is no
analysis or interpretation of the responses to questions 2 and 3). Further, and contrary to
RCI’s submission, the evidence is not ‘helpful at a more general level’ as the views presented
in the data in response to questions 2 and 3 are not consistent with the lay evidence.
[1069] As we observe later, the assessment of survey evidence is not necessarily a binary task
(i.e. you either accept or reject the evidence). The methodological problems associated with
some survey evidence may mean that rather than dismissing the evidence the results are
accepted as indicative or anecdotal, rather than definitive. But the EA survey evidence is so
flawed that it is of no assistance.
The Jetty Survey
[1070] RCI commissioned Jetty Research to undertake a random national telephone survey of
1000 restaurant and café owners and managers. The survey respondents were randomly
chosen from a list (supplied by RCI) of 18 268 restaurant and cafes and, while some were
members of RCI, Jetty Research was not informed of which business were members.
933
[1071] The survey was conducted on weekdays between Wednesday 22 April 2015 and
Monday 4 May 2015. Data from the ABS Counts of Australian Businesses survey for June
2014 showed that there were 26 728 restaurants and cafes employing staff.
934
The sample of
1000 respondents was achieved from 67 per cent of businesses contacted and eligible to
participate.
[1072] Around 85 per cent of survey respondents opened on Sundays, increasing to 90 per
cent that opened on Sundays and/or public holidays.
935
[1073] The survey found that the main reasons that businesses opened on Sundays and/or
public holidays were:
to keep customers happy (31 per cent);
busy/busiest days (30 per cent); and
profitable day (23 per cent).
936
[2017] FWCFB 1001
240
[1074] These businesses were also asked if opening on Sundays and/or public holidays make
them more or less profitable overall. Around half (51 per cent) responded that it made them
more profitable, while almost one quarter (24 per cent) responded that it made them less
profitable. Larger businesses (more than 20 employees) were more likely to respond that it
was more profitable than small businesses (fewer than 10 employees).
937
[1075] Businesses that opened on Sundays and/or public holidays were then asked what
changes they would make to their business if penalty rates were reduced. They were provided
with the following four options:
use the savings to improve your business (78 per cent);
use the savings to invest in training (68 per cent);
put on additional staff (52 per cent); and
open for longer hours (41 per cent).
938
[1076] For businesses that did not open on Sundays and/or public holidays, the main reason
given by 70 per cent of respondents was ‘penalty rates/too expensive/can’t make a profit’
939
.
Over half (54 per cent) of these businesses responded that they would be more likely to open
on Sundays and public holidays if penalty rates were reduced.
940
[1077] Combining the responses to both questions, Jetty Research concluded that 52 per cent
of respondents would be likely to take on more staff and 42 per cent would likely open for
longer hours.
941
[1078] Jetty Research used these data to suggest an aggregate estimate of the additional
number of staff and opening hours, based on the questions asking for a “rough estimate” of
the additional staff that these businesses would recruit for a typical Sunday/public holiday and
additional hours they would be open. The survey found an average of an extra 3.15 staff per
day would be employed, with a higher average for larger businesses and businesses not
currently opening on those days.
942
The average number of extra opening hours was 5.07 per
day, with little difference by business size. RCI extrapolated the Jetty Survey results to
contend that reducing penalty rates could result in approximately ‘39,800 extra staff being
employed nationally on any given Sunday or public holiday’.
943
[1079] Mr Parker, the Managing Director of Jetty Research, gave some limited evidence
about the data collection process. We note that Mr Parker is not a qualified practicing market
researcher under the scheme established by the Australian Market and Social Research
Society (AMSRS).
944
[1080] Mr Parker was aware of the Australian standard for market, social and opinion
research (AS ISO 20252), but his evidence was that it was not something he turned his mind
to as part of the conduct of the survey
945
and that the ISO standard was not applied to the Jetty
Survey.
946
Further, the database from which Mr Parker’s sample was selected, was provided
to him by his client, the RCI. He was not responsible for the collection of that database and
was unable to provide any reliable evidence as to its source.
[1081] Mr Parker’s statement attached the results of the Jetty Survey, including (at Appendix
1) the questionnaire used. As submitted by United Voice, the questionnaire has a number of
[2017] FWCFB 1001
241
significant deficiencies when considered in the light of the proposals being advanced by the
RCI in this Review, including:
(i) In relation to a number of the questions it was impossible to disaggregate the
answer. For example when recipients were asked “Why do you choose to trade
on Sundays and/or public holidays?” Mr Parker accepted that it was not
possible to attribute the reason to one or other or both of those days.
947
Likewise when recipients were asked “Do you believe that opening on Sundays
and/or public holidays makes your business more or less profitable?” it was not
possible to attribute the answer to one or other or both of those days.
948
(ii) Recipients were asked questions about “weekend penalty rates” without any
distinguishing or clarification of those questions related to Saturday or Sunday
penalty rates. Mr Parker accepted “The answer will not tell you anything as
between Saturday and Sunday”.
949
(iii) Where questions sought to elicit answers about the effect of a reduction in
penalty rates they did not identify the level of that reduction. 950
(iv) A number of the questions prompted answers. For example, the question that
sought to elicit what respondents might do in the event that “weekend penalty
rates” were to reduce prompted only four options, those being:
(a) “put on additional staff”;
(b) “open for longer hours”;
(c) “use the savings to improve your business”;
(d) “use the savings to invest in training”.
[1082] We also note that a significant number of the relevant questions only had small to
modest numbers of responses, further undermining their reliability.
951
[1083] The Productivity Commission considered the reliability of the Jetty Survey given the
survey design and achieved sample sizes. The Productivity Commission concluded that a
‘major deficiency’ of the survey was that it asked for employers’ views about the impact of a
hypothetical reduction in penalty rates without specifying the actual magnitude (point (iii) in
paragraph [1081] above), and as a result the responses ‘would reflect different judgments by
respondents on the magnitude of the hypothetical change’, and would likely overstate any
impacts.
952
[1084] Further, the Productivity Commission also noted businesses that opened on Sundays
and/or public holidays were only provided with a set of responses to how they would respond
to a reduction in penalty rates and could provide no additional responses, including no change
(point (iv) in [1081]). The Productivity Commission concluded that this would also likely
overstate any impacts.
The Benchmarking Survey
[1085] RCI also tendered and relied upon an RCI survey described as the “restaurant and
catering Australia benchmarking survey” from 2014 (the 2014 benchmarking survey). The
[2017] FWCFB 1001
242
survey was attached to the statement of Ms Carlita Warren, the Policy and Public Affairs
Director of RCI.
[1086] The survey was conducted electronically and forwarded to a list of 2,760 members and
non-members’ of RCI. Ms Warren was unable to say how many of the survey recipients were
RCI members and how many were non-members.
953
Ms Warren confirmed that the recipient
list was ‘generated from the RCI’s data base that had previously received communications
from the RCI’.
954
Of the 2,760 recipients, 340 responded to at least some part of the survey
955
and of those only 121 completed all of the survey.
956
[1087] During the course of cross-examination, Ms Warren was directed to the criticisms of a
previous ‘benchmarking survey’ conducted by RCI, made by the majority of the Full Bench in
the Transitional Review of the Restaurant Award. In that review the Full Bench (majority)
stated at paragraph [113]:
‘for example, the RCI conducted a survey of its members in 2011 concerning a large
range of issues of relevance to the industry. One question in the survey was “what has
been the impact on weekend penalty rates being enforced through the restaurant
industry?’”
[1088] The Full Bench said of that question:
‘that question is curiously phrased, in particular the impact of “enforced” is not entirely clear.
The intermingling of weekend penalty rates and public holiday rates in the question also
reduces the value of the survey response for our purposes.’
[1089] Ms Warren accepted that a similar question appeared in the 2014 benchmarking
survey
957
and acknowledged that the criticism made by the Transitional Review Full Bench
(majority) had not been drawn to her attention. Ms Warren also acknowledged that the survey
questions from 2011, 2012 and 2013 are ‘pretty much the same’.
958
[1090] As with the Jetty Survey questionnaire, the questions put as part of the Benchmarking
Survey had a number of significant deficiencies, including:
(i) Questions seeking reasons for not opening on Sundays/public holidays
prompted respondents with answers.
(ii) Answers were not able to be disaggregated to determine whether answers
related to Sunday or a public holiday or both.
(iii) Respondents were restricted in the number of answers for several questions, for
example if they had more than one reason they were forced to choose one of
the prompted responses.
(iv) Questions that relevantly identified “reduced penalty rates on the weekend”
making a “difference to running your business successfully”, did not in any
way quantify the level of reduction that was being described.
[1091] As to the proper process for survey data collection, and the conduct of surveys more
generally, United Voice relied upon the expert evidence of Ms Helen Bartley.
959
Ms Bartley is
[2017] FWCFB 1001
243
a qualified practicing market researcher with the AMSRS and is also an accredited statistician
with the Statistical Society of Australia.
[1092] Ms Bartley was asked to provide evidence about the necessary pre-requisites for the
establishment and conducting of a survey from which reliable conclusions may be drawn. In
respect of data collection Ms Bartley gave evidence that she would expect such data to be
collected “in accordance with accepted market and social research industry standards, such as
the ISO International Standard for Market, Social and Opinion Research (AS:ISO 20252)
which is the international standard for access panels in market opinion and social research.’
[1093] Ms Bartley considered the following pre-requisites for the establishment and conduct
of a survey from which reliable conclusions may be drawn:
A clear aim and objectives for the survey;
960
Clear definitions of concepts such as a well-defined target population, scope and
timeframe;
961
A questionnaire that is relevant, contains meaningful and relevant questions that are
unbiased and easy to answer, has response options that are mutually exclusive and
follows a logical sequence;
962
An unbiased sample design and selection process that maximises the survey
response where respondents are randomly selected from the target population and
from a current and accurate sampling frame and a sufficiently large sample to draw
results that are statistically accurate;
963
and
The consequences of any limitations with the survey to be considered.
964
[1094] United Voice relied on these points to respond to the Jetty Survey
965
and submitted
that the survey did not meet these standards and therefore the results are not reliable.
966
A
similar submission was made in relation to the Benchmarking Survey.
967
[1095] The Productivity Commission characterises the test of reliability proposed by Bartley
as ‘overly stringent’ and goes on to make the following observation:
‘Evidence is always imperfect, and few conclusions about anything in the social sciences could
be reached if only those studies that met the full set of conditions set by Bartley were given
any weight’.
968
[1096] The Productivity Commission explained that all of these business surveys would fail
the “stringent” tests suggested by Bartley
969
and argued that only surveys from the ABS
would be considered reliable if these tests were applied. Instead, the Productivity Commission
contended that, while the results “should be treated as suggestive more than definitive”, they
should not be disregarded as evidence is “always imperfect”.
970
Further, the Productivity
Commission stated that “few conclusions about anything in the social sciences could be
reached if only those studies that met the full set of conditions set by Bartley were given any
weight”.
971
[1097] We agree with the above observation. The assessment of survey evidence is not a
binary task – that is, such evidence is not simply accepted or rejected. Most survey evidence
has methodological limitations – be it sample related the nature of the questions put or the
response rate. The central issue is the extent to which the various limitations impact on the
reliability of the results and the weight to be attributed to the survey data.
[2017] FWCFB 1001
244
[1098] Given the limitations in the Jetty Survey and the Benchmarking survey, and consistent
with the view expressed by the Productivity Commission, we propose to treat the data from
these surveys as suggestive or anecdotal, rather than definitive. We expressly reject the
proposition advanced by RCI that the results of the Jetty Survey can be extrapolated to all
businesses covered by the Restaurant Award and that an estimate can be made of the
aggregate employment effect of reducing penalty rates.
[1099] RCI also relies on the ‘Final Report of the Visitor Economy Taskforce: A Plan to
Double Overnight Visitor Expenditure to NSW by 2020’
972
(the Taskforce Report). The
Taskforce Report expresses the view that:
‘The penalty rates currently imposed by the Fair Work Act 2009 curtail the financial viability of
business operating in visitor economy sectors such as food, retail and accommodation. Many
businesses are unable to stay open during peak periods (such as public holidays, evenings and
weekends) due to the current penalty rates imposed under the Fair Work Act 2009, leaving
demand unmet and benefit from visitor expenditure lost.
Inadequate service levels, due to insufficient staffing at peak periods, result in a failure to
retain customers, but may also drive away potential future customers through negative online
reviews posted on the websites used so much by visitors to inform their dining, shopping and
accommodation choices.
Easing the impact of penalty rates under the Fair Work Act 2009 will give employers the
flexibility to hire staff during high-demand periods and allow NSW to fully capture the
revenue potential of discretionary visitor spend.’
973
[1100] Recommendation 15 in the Taskforce Report is relevant for present purposes:
‘Call upon the Commonwealth Government to review the Fair Work Act 2009 to remove those
provisions for penalty rates which significantly increase labour costs and deter businesses in
the visitor economy from operating at times/days of the week when the tourism and hospitality
sector faces peak demand (see also Food and Wine recommendations).’
974
[1101] Eight actions are identified to implement the recommendations made. Relevantly,
action 15A states:
‘Call upon the Commonwealth Government to review the Fair Work Act 2009, including to
require an employee to work five days during the working week before being entitled to
receive penalty rate wages for any subsequent shifts during the weekend.’
975
[1102] We note that if adopted the proposed amendment to the FW Act ‘to require an
employee to work five days during the working week before being entitled to receive penalty
rate wages for any subsequent shift during the weekend’, would have the practical effect of
eliminating weekend penalty rates in the retail and hospitality sectors. The Commonwealth
has not acted on the recommendation.
[1103] It is also relevant to observe that no employer party in these proceedings has sought to
vary any of the modern awards before us in a manner consistent with action 15A in the
Taskforce Report.
[2017] FWCFB 1001
245
[1104] Finally, we would also observe that the Taskforce Report is dated June 2012. In other
words it predates the July 2014 reductions in Sunday penalty rates in the Restaurant Award.
(ii) United Voice
[1105] United Voice relied on the evidence of 4 lay witnesses each of whom was employed
under the Restaurant Award:
William King, Food and Beverage Attendant and Bar Manager Level 3 at Mestizo
Cocina Peruvina Restaurant;
976
Angus Lonergan, barista at The Place;
977
Jennifer Miller, chef at Oscar’s on the Yarra;
978
and
Alexandra Kindness, kitchen hand at Demedios café.
979
William King
[1106] Mr King has worked in the hospitality sector for over 20 years and since August 2014
he has been employed as a casual level 3 Food and Beverage Attendant and Bar Manager at
Mestizo Cocina Peruvina Restaurant in South Australia.
[1107] Mr King works about 30 hours per week. He works shifts on Wednesdays, Thursdays
and Fridays. On Saturdays he starts work at 2.00 pm and finishes around 10.00 pm,
sometimes later. At the time he made his statement he did not work on Sundays, though he
did when he was initially employed at the restaurant.
[1108] As to the impact of working on weekends and public holidays Mr King’s evidence is
as follows:
‘As a result of regularly working Saturdays, some Sundays and public holidays I have missed
many events with my family and close friends. These included attending engagement parties,
birthday parties and celebrating my own birthday. These events are usually celebrated on the
weekend. Occasionally, if I provide enough notice, I can get time off work to attend weddings.
I recently spent some time coaching my step-daughters netball team on Saturday mornings. I
would quite often work late on a Friday night, and when I couldn’t sleep in on Saturday
morning because of netball I was unable to properly rest. I would still be tired when I went to
work early in the afternoon. I found I could not commit for a second season because I was too
exhausted from working in the evenings.
I felt like I was missing out. My daughter is getting into her middle teenage years, and does
not want to play netball anymore. I feel like I have missed part of her life. Even when I was
able to coach her team, I would miss a lot of her life. After the game, I would not see her until
Sunday afternoon. I would wake up around twelve, and that was when I could see her.’
980
[1109] Mr King deals with the impact of a reduction in penalty rates as proposed by RCI at
paragraphs 21–27 of his statement, in particular:
‘In the event that I am required to work Sundays and public holidays, if the penalty rates were
reduce, I would be disadvantaged financially. I live week to week and have done for a long
time. If I earned any less money, and I would need to work more. I do not think I would be
offered more work at my current workplace, their staffing needs are pretty set. I do not believe
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I could find more work elsewhere. The key nights for hospitality are Fridays, Saturdays and
Sundays, and there is a lot of competition for those shifts.981
[1110] In his statement Mr King did not specifically refer to the impact of Sunday work on
his social and family interactions. During his oral evidence he was questioned about whether
there was a difference between Saturday and Sunday work in terms of the level of intrusion
into his social life. The essence of his evidence in respect of this issue was:
It depends on when a particular social event is scheduled: ‘If I’ve got friends that
are having a nice casual barbecue and it happens to be on a Sunday afternoon then
that’s going to intrude on my social life more than if it was a party on a Saturday
night’.
982
As to the timing of particular social events, most birthday celebrations
predominantly occurred on Friday or Saturday night.
983
In respect of family events and whether they occurred more commonly on a
Saturday or Sunday: ‘Maybe 50-50 or more leaning towards the Saturday’.
984
He drew no distinction between the level of intrusion associated with working on a
Saturday or Sunday evening.
985
[1111] In response to a question about whether he had factored possible increases in working
hours into the calculation of loss from reductions in penalty rates, Mr King said that there
would be no more hours. There are currently two people rostered to work both days and
nights on Saturdays and Sundays and that is all that is required to handle a 45 seat restaurant.
In response to the proposition that he could look for additional work with another
establishment, Mr King said:
‘If I could find somewhere in hospitality that wanted you to work for them not
including Friday, Saturday nights, then, yes, I could. However finding something
like that in my experience, is, I’m going to say, very little to none.’
986
Angus Lonergan
[1112] Mr Lonergan has worked in hospitality for about 10 years, most recently as a barista.
He currently works as a casual employee for about 20 to 25 hours per week. He regularly
works on the weekend and has worked on public holidays in the past.
[1113] Mr Lonergan gave evidence about the impact of working on weekends and public
holidays and, in particular, the adverse impact on the time he is able to spend with his partner
and friends:
‘I have trouble making time to see friends who work during the week, and it is very rare that I
will see my friends as a group. I am often unable to attend birthday parties and other
celebrations because I am working and they are held on the weekend. If they are during the
day, I am normally working. If they are at night, I will probably have to leave early so that I
am not tired for my shift the next day.’
987
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[1114] As to Mr Lonergan’s evidence that he was ‘often unable to attend birthday parties’,
during the course of his oral evidence he said that these events were often on Friday or
Saturday evening.
988
In the course of cross-examination Mr Lonergan was asked whether
there was any difference between Saturday and Sunday work in terms of the level of intrusion
into his social life. He replied: ‘not particularly, no’.
989
[1115] Mr Lonergan deals with the impact of reduction in penalty rates as proposed by RCI,
at paragraphs 43 to 46 of his statement, in particular:
‘I have calculated that if penalty rates are reduced in this way, then I will lose approximately
$153.00 to $122.00 when I work a 7 hour public holiday shift.
While I would be able to work additional hours, the impact of doing so would mean that I
would have less time to search for full-time work.
990
Jennifer Miller
[1116] Ms Miller has worked in the hospitality industry ‘on and off’ for about 30 years and
since December 2014 as a casual Commis Chef at ‘Oscars on the Yarra’ in regional Victoria
(a level 4 Cook Grade 3). Her hours fluctuate on a weekly basis, from 2 to 47 hours per week,
spread across all of the days of the week. The majority of her shifts are between Thursday and
Sunday and she works on public holidays, from time to time. A lot of Ms Miller’s shifts are
“split” or double shifts whereby she works a breakfast or lunch shift and then comes back to
work a dinner shift.
991
[1117] As to the impact of weekend and public holiday work Ms Miller’s evidence is as
follows:
‘When I work mornings, I leave home before my son goes to work. When I work nights, he’s
usually already asleep when I come home. When I work nights, I can’t phone friends up and
talk to them because when I get home, they’re already asleep. On weekends and in the
evenings, when my friends are all out socialising, I’m usually at work.
If I want to see my grandchildren, I have to nip in and do it between shifts, which is difficult.
The entire time I have worked in hospitality, I have had to miss family functions, including
weddings and birthdays, because I have had to work. I still miss those events.
I can’t think of any positive benefits for me from working the hours that I work, except for the
penalty rates. A lot of the time when I’ve had to work public holidays and miss out on time
with my family and extended families, I’ve been able to console myself by thinking that at
least I’m getting paid penalty rates.
Previously, I have worked Christmas Day, Christmas Eve and Boxing Day. The first time I
worked Christmas Day, I had to explain it to my children who were upset. That was awful.
When I worked on Christmas Day, I had to get my family to save me some of Christmas
lunch, or they would have to wait until I finished worked. By the time I got home, everyone
had opened their presents and I had missed out on the day. I always felt very sad working on
those days.’
992
[1118] During the course of her oral evidence Ms Miller acknowledged that working
weekends ‘goes with the [restaurant] industry’
993
. Ms Miller was also asked whether there
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was any difference between Saturday and Sunday work in terms of the level of intrusion into
her social life. She replied:
‘I feel Sunday is worse for me, because we have a lot of small children in our family and its
usually Sundays that they have parties and picnics and things like that.’
994
[1119] Ms Miller deals with the impact of a reduction in penalty rates as proposed by RCI at
paragraphs 30–39 of her statement and estimates that she will lose about $65 when working a
15 hour split shift on Sundays and between $140.25 and $175.47 on a public holiday
(depending on whether the RCI or ABI proposal is adopted). As to the impact of such a
reduction in her earnings Ms Miller says
‘If penalty rates are cut as proposed by the RCI, then I would have to work more to earn the
same amount of money, or find ways to reduce my household expenditure. My household
expenses are already tight and there are some months when I don’t make enough to meet my
monthly expenses and have to go without. Losing $260 a month would be very stressful. I
don’t know what else I could give up.
While I would be able to work some additional hours, the impact of doing so would mean that
I would spend even less time with family, and have even less leisure time. Also, I do not know
if I will be offered additional hours by my employer. If I am not, I would have to find a second
job.
…
Even if I could find a second job, it is extremely difficult to balance two jobs, because both
employers might want me to be available all of the time, even if they weren’t rostering me on
for that day. It would mean a lot of juggling, which would not be manageable.’
995
[1120] Under cross-examination Ms Miller maintained that while it would be possible for her
to get a second job on days she was not working for her current employer, the second
employer would also require her to be flexible. In this regard, Ms Miller said:
‘That is very possible, however, they require you to be flexible and work most days. Be
available seven days a week. And if I’m already working in a job that have permanent hours
on Friday, Saturday and Sunday, that’s contradictory. I can’t sort of say: ‘I can’t work for you
this day because I’m working for this other person.” You have to be available all the time.’
996
[1121] In response to the proposition that she could work in a second job on days when her
primary employer did not require her to work, Ms Miller said that most restaurants did not
need employees on the days when she currently does not work and want employees on
weekends and that she had found this out by making inquiries.
997
Alexandra Kindness
[1122] Ms Kindness has worked in the hospitality industry since about 2007. In 2008 she
started work as a permanent part-time kitchen hand in a café (a level 2 kitchen hand under the
Restaurant Award) and consistently works on Saturdays, Sundays and evenings each week.
The café does not open on public holidays. Ms Kindness works a little less than 30 hours per
week on the following roster:
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Tuesday: on call
Wednesday: 6:30 pm to 9:30 pm
Thursday: at the very least a lunch shift
Friday: 12:30 pm to 2:30 pm and 6:30 pm to 9:30 pm
Saturday: 11:30 am to 2:30 pm and 6:30 pm to 9:30 pm
Sunday: 11:00 am to 3:00 pm
[1123] As to the impact of working on weekends Ms Kindness’ evidence is as follows:
‘Most of my friends and relatives work between the hours of 9.00am to 5.00pm, Monday to
Friday. Working weekends and evenings has a significant impact on my social life. For
example, in May 2015, my mother and brother invited me to attend a classic car show in Emu
Park. Despite having a great desire to spend quality time with my family, I had to turn down
the invitation, as I had been rostered to work that weekend. This is not unusual, and when it
occurs I feel disconnected from my family and friends. I virtually have no social life.
I study remotely, so working evenings and weekends is of no benefit in terms of freeing up my
weekday days.’
998
[1124] As with the previous lay witnesses called by United Voice, Ms Kindness, was cross-
examined about whether the level of social intrusion differed between Saturday and Sunday
work:
‘Can I ask you to think about, in your mind, is the level of that social intrusion different between
a Saturday or a Sunday, or you view it in the same way? - - - I have found that people who
work 9 to 5 jobs, Monday to Friday will tend to – they might organise a social thing for a
Saturday evening, however if it is a Sunday thing it will be during the day, when I’m working.
It will not be an evening event because obviously they have to work the next day…
Do you think that level of intrusion into your social life is the same on Saturdays and
Sundays? Do you think its more or less on one of those particular days? I’m just asking to see
if you draw any comparison or whether generally you view it as the same level of intrusion
into your social life? - - - It’s the same.’
999
[1125] Ms Kindness deals with the impact of a reduction in penalty rates as proposed by RCI
at paragraphs 21 to 27 of her statement, in particular:
‘I have calculated that if penalty rates were reduced in this way, then I would lose
approximately $20 per week from my weekly take home pay, which would cause me financial
hardship.
Other than cancelling my gym membership, I have no luxury costs that can be removed from
my budget.
If penalty rates are reduced in the way proposed by the RCI, I would have to work more to
make up the loss of pay. I am already studying a reduced course-load, and struggling to
balance work with study. I could reduce the number of subjects I am studying this semester,
but I would then take longer to finish my degree.
Further, I would lose my education allowance from the Department of Veterans Affairs if I
studied less than full-time.
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Since it is difficult to balance work and study while working the hours that I work, I would
have to seriously consider reducing discontinuing my degree so I could work enough hours to
make enough money to get by. Discontinuing study would drastically limit my career
prospects.’
1000
7.4.5 Consideration
(i) The late night penalty
[1126] It is convenient to deal first with the claim in respect of the late night penalty.
[1127] RCI seeks to vary the late night penalty in the Restaurant Award and the Fast Food
Award, in the same terms. A common submission was advanced in respect of both awards.
The essence of the submission put was that shortening the span of hours which attract a
penalty rate and keeping a uniform penalty rate, ‘achieves a level of consistency and ease of
application’. This submission was the subject of some elaboration during the course of RCI’s
closing oral submissions:
‘… the change which is sought there, at the heart or at the core of that is really to streamline and
create administrative ease, if you like, in the application of the rates.
So while the figure of 5 per cent is put forward, the Restaurant & Catering Industrial isn’t
necessarily wedded to that number, but what, in its proposal, it is seeking to do is to try and
streamline the rate that applies to that so a small operator or a business owner doesn’t have to
worry about factoring different rates at different hours for different employees…’
[1128] In support of its position, RCI relied on a report by the Fair Work Ombudsman dated
June 2015 – ‘National Hospitality Industry Campaign Restaurants, Café’s and Catering
(Wave 2)’ (‘the FWO Wave 2 Report’). The FWO Wave 2 Report reveals a high level of non-
compliance (58 per cent), RCI referred to the following extract from the FWO Wave 2
Report:
‘The most commonly identified errors were employers providing flat rates of pay for all hours
worked with many employers advising they had adopted this practice to simplify their payroll
process. In many cases the hourly rate paid was not enough to cover hours attracting penalties,
loadings or overtime. In respect of pay slips and record-keeping, the most common errors
related to insufficient information being recorded on payslips, with employers commonly
advising they weren’t aware which information was required to be included.’
[1129] The essence of RCI’s submission is that varying clause 34.2 such that it only provides
for a 5 per cent loading for work between midnight and 5.00 am would make the award
simpler and improve compliance. It is not submitted (at least not expressly) that the variation
proposed would lead to an increase in the operating hours of fast food businesses, or to an
increase in employment. Nor is there much direct, probative evidence to support such a
contention.
[1130] The proposition that a variation in the terms sought would increase compliance is only
given limited support by the FWO Wave 2 Report. That report identified the most common
source of non-compliance as the underpayment of hourly rates, whereas errors in the
application of weekend penalty rates and loadings only accounted for 17 per cent of instances
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of incorrect payment. The FWO Wave 2 Report makes no direct reference to non-compliance
in relation to the application of the late night penalty in clause 34.2.
[1131] We acknowledge that the variation proposed would make the award simpler and easier
to understand, consistent with one of the s.134 considerations (s.134(1)(g)). But the same may
be said about the abolition of the evening work penalty. Simplicity is a laudable objective, but
it is only one of the matters we are required to take into account – the central question is
whether the award term provides ‘a fair and relevant minimum safety net’.
[1132] We do not propose to vary the late night penalties in the Restaurant Award in the
manner proposed by RCI. A sufficient merit case has not been advanced to support the extent
of the changes proposed.
[1133] We are however persuaded to vary the span of hours prescribed in clause 34.2(a)(ii).
At present the award provides an additional payment of 15 per cent of the standard hourly rate
for work performed between midnight and 7.00 am.
[1134] In our view the span of hours attracting the 15 per cent additional payment should be
amended to ‘between midnight and 6.00 am’. In the context of this award the provision of an
additional payment for work performed between 6.00 am and 7.00 am does not achieve the
modern awards objective. Such a term does not provide a ‘fair and relevant minimum safety
net’, because it overcompensates employees for work performed between 6.00 am and
7.00 am (and hence is not ‘fair’, to employers) and is not suited to the contemporary
circumstances prevailing in the industry covered by the modern award (and hence is not
‘relevant’). Common experience suggests that many cafes are often open from 6.00 am,
particularly in capital and regional cities.
[1135] We note that of the 109 modern awards which specify a spread of hours (or a penalty
payment applying to work before a nominated early start time) the majority provide for a start
time of 6.00 am or earlier (as shown by Chart 35 below).
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Chart 35
Modern awards with spread of hours – start times
1001
[1136] In deciding to vary clause 34.2(a)(ii) in the manner set out above, we have taken into
account the s.134 considerations and note that:
a substantial proportion of award-reliant employees covered by the Restaurant
Award are low paid and the variation will reduce the earnings of those employees,
but not to a significant extent. The variation will only apply to those employees who
work between 6.00 am and 7.00 am and will only reduce their earnings for that hour
of work (s.134(1)(a));
the variation will not encourage collective bargaining (s.134(1)(b));
the variation may lead some employers to open earlier (as suggested by one of the
RCI lay witnesses) but is unlikely to have significant employment effects
(s.134(1)(c)); and
s.134(1)(da) requires that we take into account, relevantly, the need to provide
additional remuneration to employees working ‘unsocial’ hours. In the context of
this industry we do not consider that working between 6.00 am and 7.00 am
constitutes ‘unsocial’ hours such as to warrant additional remuneration.
[1137] The considerations set out in s.134(1)(d), (e), (f), (g) and (h) are not relevant to the
variation proposed.
3
5
52
9
34
2 1
3
0
10
20
30
40
50
60
4.00am 5.00am 6.00am 6.30am 7.00am 7.30am 7.45am 8.00am
N
o
. o
f
aw
ar
d
s
Start times
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(ii) Sunday penalty rate
[1138] As mentioned earlier, RCI proposes to reduce the Sunday penalty rate for full-time and
part-time employees, from 150 per cent to 125 per cent. RCI also proposes that the Sunday
penalty rate for casual level 3 to level 6 employees be reduced from 175 per cent to 150 per
cent. The effect of the proposed variations would be to align the penalty rates for Saturday
and Sunday work, at 125 per cent (with the casual loading added for casual employees, to
provide a payment of 150 per cent for Saturday and Sunday work).
[1139] RCI submits that the current penalty rates within the Restaurant Award are not
meeting the modern awards objective and that the variations proposed are aimed at ‘adjusting
the awards so that they operate in a manner consistent with the prevailing operational
requirements: employer characteristics; and the changing demographics of the workforce in
those industries’. RCI further submits that such changes will, having regard to the views
expressed by expert witnesses and operators and managers of cafes and restaurants, facilitate
increased trade and employment levels and also ease the regulatory burden on predominantly
small and owner-operated businesses within the restaurant and fast food industries. In doing
so, it said that the variations proposed will assist in the achievement of the modern awards
objective.
1002
[1140] RCI does not contend that the proposed variations will achieve certain positive
outcomes, as a matter of fact, but rather emphasises the importance of removing disincentives
and barriers which exist.
[1141] As mentioned earlier, proposed variations to modern awards must be justified on their
merits. The extent of the merit argument required will depend on the circumstances. The
variations proposed to weekend penalties by RCI constitute significant changes to the modern
award. Such changes should be supported by an analysis of the relevant legislative provisions
and, where feasible, probative evidence.
[1142] The RCI lay witness evidence was of limited assistance. There was some evidence as
to the impact of existing weekend and public holiday penalties on operating hours and staffing
composition (with a higher than optimal level of junior staff being rostered on weekends). But
there was a paucity of evidence about the likely impact on employment levels and service of a
reduction in the Sunday penalty rate as sought by RCI.
[1143] The methodological issues associated with RCI’s survey evidence significantly limits
the utility of that evidence, and the weight we attribute to it.
[1144] A central problem with the case advanced by RCI is that it fails to adequately address
or deal with the consequences of the 2014 Restaurants Penalty Rates decision. That decision
reduced the Sunday penalty rate for level 1 and 2 casual employees only, and rejected an
application to reduce Sunday penalty rates for full-time and part-time employees and level 3–
6 casuals. As we mention in Chapter 3 as a general proposition previous Full Bench decisions
should generally be followed, in the absence of cogent reasons for not doing so (see [253]–
[255] above).
[1145] In the course of closing argument, counsel for RCI did not suggest that the 2014
Restaurants Penalty Rates decision was wrong, but simply that its task was more confined
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than the task we are undertaking.
1003
We accept that the Review is broader in scope than the
Transitional Review, but it does not appear from its decision that the Full Bench adopted a
narrow approach to its task. In particular, as we have already mentioned, the Full Bench in the
2014 Restaurants Penalty Rates decision rejected the proposition that the proponent of an
award variation has to establish a material change in circumstances since the making of the
modern award. Further, the submission put by RCI ignores the fact that the 2014 Full Bench
expressly rejected essentially the same case that is being put to us and it is plain from a
reading of the 2014 Restaurants Penalty Rate decision that the issue of Sunday penalty rates
was fully ventilated.
[1146] ABI’s alternative application in the earlier Transitional Review proceedings was in
substantially the same terms in these proceedings.
1004
Further, as in these proceedings, in the
Transitional Review case, RCI presented survey evidence and relied on lay evidence and
expert evidence from Professor Lewis in support of the proposed variations to weekend
penalty rates. Indeed, in terms of the lay evidence presented the applicants in the Transitional
Review case presented a more substantive evidentiary case – adducing evidence from 20
restaurant operators and 2 catering operators.
1005
United Voice also presented lay and expert
evidence in the Transitional Review proceedings.
[1147] In the Transitional Review the application to vary the Restaurant Award was rejected
at first instance.
1006
Permission to appeal was granted. In the course of granting permission to
appeal, the Full Bench (majority) said:
‘[90] The Full Bench in the Modern Awards Review 2012 decision identified a “significant
change in circumstances which warrants a different outcome” as being an example of “cogent
reasons” which might justify a departure from a previous Full Bench decision. However, it is
clear that there might be other cogent reasons why a Full Bench decision might not be
followed in the conduct of a modern award review. These might include that the evidence
demonstrates that the modern award has not operated in practice in the way intended by the
Full Bench in its earlier decision, or that a matter critical to the proper operation of the modern
award was not raised before the Full Bench and consequently not considered, or that the Full
Bench made a patently demonstrable error. For the purpose of the two-yearly review, if a party
cogently demonstrates that for any reason an award is not achieving the modern awards
objective and/or is not operating effectively, without anomalies or technical problems arising
from the award modernisation process, then that must be taken into account in the conduct of
the review under item 6(2) regardless of whether circumstances have changed since the Full
Bench decision which resulted in the making of the modern award.
[91] In paragraph [247] of the Decision (which we have earlier set out), the Deputy President
concluded that cogent reasons had not been established because the “grounds on which they
[the 18 applicants] seek the variations do not identify a significant change in circumstance;
rather they are largely merits considerations which existed at the time the Award was made”.
That conclusion, with respect, appears to have established a criterion for the determination of
the penalty rates case, namely “a significant change in circumstance”, which was not derived
from item 6 of Schedule 5 of the Transitional Act…
[92] The 18 applicants ran a case before the Deputy President, supported by a considerable
volume of evidence, that the existing weekend penalty rates provisions in the Restaurant
Award were not meeting the modern awards objective and were not operating effectively. The
case was not confined to or even significantly concerned with any change in circumstances
since the Restaurant Award was first made; the 18 applicants relied upon a range of matters
including that penalty rates were inhibiting restaurant operators from opening and/or
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employing persons on weekends, thereby suppressing business turnover and job creation, and
that the level of penalty rates on Sundays was too high given that the disability associated with
working Sundays was no higher than Saturdays and higher than was necessary to attract
persons to work on Sundays. Those matters were raised in connection with the alternative
penalty rates application as well as the primary case. Although the Deputy President made
some findings about these aspects of the applicants’ case, her adoption of “a significant
change in circumstance” as the apparent criterion for variation (including at paragraph [226] in
relation to the specific issue of “disabilities associated with working unsociable hours”) meant
that the alternative case was not considered in accordance with the requirements of item 6 of
Schedule 5 of the Transitional Act and that the exercise of the discretion was artificially
confined and thereby miscarried. Although we recognise there are several possible ways of
reading the Deputy President’s reasoning process in the Decision, we have taken the view, on
balance, that the approach adopted by the Deputy President was attended by appellable
error.’1007 (emphasis added)
[1148] The Full Bench proceeded to quash the decision subject to appeal insofar as it
determined the alternative penalty rates application and to rehear and make a further order in
relation to that alternative application based on the evidence before the Member in the
proceeding at first instance. As we have mentioned, the alternative application considered by
the Transitional Review Full Bench is, in substance, the same as the variation sought by RCI
in these proceedings.
[1149] The Full Bench (majority) then considered the evidence and submissions (at [95]–
[137]) and concluded (at [138] and [140]–[144]):
‘[138] None of this evidence would cause us to conclude that a total Sunday penalty rate of 50%
is too high. For career restaurant industry workers, the disability associated with working on
Sundays which we have earlier described clearly applies. Even for transient and lower-skilled
casual employees working primarily on weekends, that disability exists, as in the retail
industry. However, we consider that for this latter category of primarily younger workers, the
superimposition of the casual loading of 25% in addition to of the Sunday penalty of 50%,
resulting in a total loading of 75%, would tend to overcompensate them for working on
Sundays and is more than is required to attract them to work on that day. That raises an issue
as to whether the Restaurant Award is meeting the modern awards objective in s.134.’ …
[140] The appropriate course to address this issue is to vary the Restaurant Award to provide,
in respect of the class of employees in question, that the Sunday penalty rate together with the
casual loading should not exceed 50% in total. We consider that varying the Restaurant Award
in this manner would be consistent with the modern awards objective in s.134 and, to the
extent relevant, the minimum wages objective in s.284…
[141] The difficulty then is to find a mechanism by which to separate the class of transient and
lower-skilled casual employees from career restaurant industry employees, recognising that
the latter category of employees is also likely to include persons employed on a casual basis,
working regular and/or full-time hours. We consider that the distinction should be made on the
basis that, for casual employees employed in the Introductory Level classification or in any
classification falling within the Level 1 and Level 2 pay grades, the Sunday penalty rate
together with the casual loading should not exceed 50% in total (that is, the 25% casual
loading and in addition a further 25%). We have chosen those classification levels because, for
Food and Beverage Attendant Grade 3, Cook Grade 2, Clerical employee Grade 3 and
Storeperson Grade 3 (all of which classifications fall within the Level 3 pay grade), an
“appropriate level of training is required”…
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[142] The completion of the training requirements described above would be a strong
indicator, we consider, that an employee intends to pursue a career in the restaurant industry
and is not a transient and low-skilled worker. Such employees are not intended to be affected
by the change to the Restaurant Award we propose to make.
[143] In making this change, we do not intend as far as possible to affect the take-home pay of
existing employees, noting that we are dealing with low-paid employees. Therefore we
consider that the variation should include a requirement that no existing employee classified as
Level 3 or above be moved down to Levels 1 or 2 or be discriminated against in the allocation
of work as a result of this variation.
[144] The variation shall take effect on 1 July 2014.’ 1008
[1150] In substance the RCI now seeks to vary the outcome of the 2014 Restaurants Penalty
Rates decision. But seeks to do so without addressing the reasons for the earlier decision, or
indeed even contending that the earlier decision was wrong.
[1151] Further, there is no material before us which would enable us to assess the impact of
the variation proposed by RCI. We have no data about the numbers of full-time and part-time
employees covered by the Restaurant Award or the numbers of Level 3 to Level 6 casual
employees. Nor do we know what proportion of the employees are Level 1 and 2 casuals.
Absent this evidence we are unable to make any useful assessment as to the effect of varying
the award in the manner sought. The limited lay evidence before us suggests that the
proportion of such employees is quite high, suggesting that the benefits of the variation
proposed by RCI – in terms of employment and service improvements – would be very
modest, yet the detriment to the employees affected would be significant.
[1152] Nor is there any evidence of positive employment effects or service improvements as a
consequence of the reduction in Sunday penalty rates introduced by the 2014 Restaurants
Penalty Rates decision on 1 July 2014. Indeed, 2 of RCI’s 5 lay witnesses were unaware of
the fact that on 1 July 2014 the Restaurant Award was varied to reduce the Sunday penalty
rate for level 1 and 2 casuals from 175 per cent to 150 per cent. Both of these witnesses were
RCI members and we assume that RCI informed its members of the award variations.
[1153] Further, none of the RCI lay witnesses suggested that there had been any positive
employment effect (either in overall numbers of employees or in hours worked) as a
consequence of the previous reduction in the Sunday penalty rate.
7.4.6 Conclusion
[1154] At present the Restaurant Award provides for a 15 per cent loading for work
performed between ‘midnight and 7.00 am’. For the reasons given we have decided to vary
the span of hours prescribed in clause 34.2(a)(ii) so that the additional 15 per cent loading
applies between ‘midnight and 6.00 am’.
[1155] As to the claims in respect of the Sunday penalty rate, on the material presently before
us we are not satisfied that the variations proposed are necessary to ensure that the modern
award sought to be varied achieves the modern awards objective. In short, RCI has not
established a merit case sufficient to warrant the granting of the claim.
[2017] FWCFB 1001
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[1156] If these were simply inter partes proceedings we would dismiss the RCI claim. But the
claim has been made in the context of the Review and s.156 imposes an obligation on the
Commission to review each modern award.
[1157] We propose to provide RCI (and any other interested party) with a further opportunity
to seek to establish that the weekend penalty rates in the Restaurant Award do not provide a
‘fair and relevant minimum safety net’. In the event that a party wishes to take up this
opportunity, it will need to address the deficiencies in the case put to date, as set out above. In
particular, any such case will need to:
provide material which would enable us to assess the impact of the variations
proposed (see [1151]);
provide evidence as to the effects (in terms of employment and service levels of the
reductions in Sunday penalty rates consequent on the Restaurants 2014 Penalty
Rates decision (see [1152]–[1153]);
provide a cogent argument as to why we should depart from the Restaurants 2014
Penalty Rates decision in respect of Sunday penalty rates; and
address the Productivity Commission submissions in relation to the payment of
casual loading in addition to weekend penalty rates.
[1158] In relation to the provision of additional evidence as to the effects of the 2014
reduction in Sunday penalty rates, we are not suggesting that quantitative evidence (or
‘natural experiment’ evidence) as to the impact of these changes is required. However we do
expect significantly more extensive lay evidence as to this issue than was presented in these
proceedings.
[1159] In relation to the last point, in the event that we were persuaded to depart from the
Transitional Review Full Bench decision we put any applicants on notice that the outcome of
any further proceedings may result in the acceptance of the Productivity Commission
submission such that Sunday penalty rates are varied so that all casuals receive both the
Sunday penalty rate applicable to full-time and part-time employees and the casual loading.
[1160] We deal with the future conduct of this aspect of these proceedings in Chapter 12,
Next Steps.
7.5 The Fast Food Industry Award 2010
7.5.1 The Claims
[1161] Ai Group seeks to vary clause 25.5 of the Fast Food Industry Award 2010 (the Fast
Food Award) by adjusting the span of hours in respect of which employees receive a 10 per
cent loading for ‘evening work’, and by reducing the penalty rate for Sunday work, from 150
per cent to 125 per cent. The changes sought are set out below, in a marked up version of
clause 25.5:
25. Hours of work
…
[2017] FWCFB 1001
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25.5 Penalty rates
(a) Evening work Monday to Friday
(i) A loading of 10% will apply for ordinary hours of work within
the span of hours between 9.00 pm 10.00 pm and midnight, and
for casual employees this loading will apply in addition to their
25% casual loading.
(ii) A loading of 15% will apply for ordinary hours of work after
midnight, and for casual employees this loading will apply in
addition to their 25% casual loading.
(b) Saturday work
A loading of 25% will apply for ordinary hours of work within the span of
hours on a Saturday, and for casual employees an additional 25% on top of the
casual rate.
(c) Sunday work
(i) A 50% 25% loading will apply for all hours of work on a
Sunday for full-time and part-time employees.
(ii) A 75% 50% loading will apply for all hours of work on a
Sunday for casual employees, inclusive of the casual loading.
[1162] The NRA has made a claim to similar effect, though it proposes the deletion of clauses
2.5(b) and (c) and the insertion of a provision in the following terms:
‘(b) Weekend work
A loading of 25% will apply for ordinary hours of work within the span of hours on
Saturday and Sunday, and for casual employees an additional 25% on top of the casual
rate.’
[1163] The NRA also proposes an amendment to clauses 26, Overtime, as follows:
‘The rate of overtime shall be time and a half for the first two hours on any one day
and at the rate of double time thereafter, except on a Sunday which shall be paid for at
the rate of double time and on a Public Holiday which shall be paid for at the rate of
double time and a half. Casual employees shall be paid 275% on a Public Holiday.’
[1164] RCI also seeks a reduction in the penalty rate for Sunday work (from 150 per cent to
125 per cent) but proposes a more substantial change in respect of evening work. RCI
proposes the deletion of the existing ‘evening work Monday to Friday’ provision (clause
25.5(a)) and the insertion of the following term:
[2017] FWCFB 1001
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Additional payment for work done between the hours of Midnight and 5.00 am Monday
to Friday
An employee, including a casual, who is required to work any of their ordinary hours between
the hours between midnight and 5.00 am Monday to Friday inclusive, must be paid an
additional shift allowance of 5% per hour worked. For the purposes of this clause midnight
will include midnight Sunday.
[1165] If granted, RCI’s proposed variation to clause 25.5(a) would:
delete the existing entitlement to a 10 per cent loading within the span of hours
between 9.00 pm and midnight;
adjust the span of hours in respect of which employees currently receive a 15 per
cent loading (the loading would also reduce) from ‘after midnight’ to ‘the hours
between midnight and 5.00am’; and
reduce the existing loading for ordinary hours of work after midnight from 15 per
cent to 5 per cent.
[1166] The NRA and RCI also seek reductions in the public holiday penalty rate. We deal
later with that aspect of those claims.
7.5.2 Background to the Fast Food Award
[1167] The Award Modernisation Full Bench designated the Retail and Hospitality industries
as priority industries in the award modernisation process in the decision issued on 20 June
2008 and determined that the fast food industry would be considered as part of the retail
industry, rather than in the hospitality industry
1009
. Initially the Full Bench rejected proposals
by the SDA, ARA and NRA that there should be a separate award covering the fast food
industry:
‘… In particular, at least at this stage, we do not intend to exclude community pharmacies, fast
food outlets or hairdressing services…Obviously the precise scope of a modern retail award
cannot be determined at this stage but we intend to include a broad range of awards in our
consideration to maximize the potential for rationalisation of award coverage’
1010
[1168] Ai Group subsequently submitted a separate draft fast food award which provided that
ordinary hours could be worked on any day Monday to Sunday. The draft award contained a
20 per cent penalty for working between 1.00 am and 5.00 am on any day and a 200 per cent
penalty for work on public holidays
1011
. In the accompanying submission Ai Group submitted
that loaded rates, rather than separately identified penalties were a feature of enterprise
awards and agreements in the fast food industry.
1012
[1169] The SDA filed a draft general retail industry award, which included the fast food
industry within its scope.
1013
The draft provided for loadings of 25 per cent and 100 per cent
for work performed on Saturdays and Sundays, respectively.
1014
Public holidays attracted
loadings of 150 per cent and 175 per cent for permanent and casual employees,
respectively.
1015
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[1170] An exposure draft of a modern award for the general retail industry was published on
12 September 2008. The coverage of the exposure draft extended to the fast food industry and
provided for penalty rates which reflected those proposed by the SDA.
1016
In the
accompanying Statement, the Full Bench did not specifically address the issue of the penalty
rates contained in the exposure draft.
1017
Following the publication of the exposure draft
submissions were filed by interested parties.
[1171] Ai Group objected to the inclusion of fast food within the broader retail award on the
basis that the penalty rates proposed in the draft retail award would add considerable costs to
employers and ‘could have the effect of penalising the Fast Food industry from operating at
times and on days when they are in most demand’.
1018
[1172] After written and oral submissions from a range of interested parties, and taking into
account the diversity of provisions across the broader sector, the Full Bench decided to make
a separate award covering the fast food industry:
‘The more awards with disparate provisions are aggregated the greater the extent of changes in
the safety net. Changes may be able to be accommodated by a “swings and roundabouts”
approach, specific provisions relevant to part of the industry or transitional provisions.
However, significant changes may also result in net disadvantage to employees and/or
increased costs for employers. The publication of an exposure draft which sought to rationalise
the terms and conditions across the various types of retail establishment provided a means
whereby the impact of such an approach could be fully evaluated.
We have considered these matters and the submissions of the parties and have decided to
make separate awards for general retailing, fast food, hair and beauty, and community
pharmacies…
In reaching this decision we have placed significant reliance on the objective of not
disadvantaging employees or leading to additional costs. We note that such an approach will
not lead to additional awards applying to a particular employer or employee.
The contents of the four awards we publish with this decision are derived from the existing
awards and NAPSAs applying to the different sectors. Although the scope of the awards is
obviously reduced, this did not eliminate the variations in terms and conditions within each
part of the industry. We have generally followed the main federal industry awards where
possible and had regard to all other applicable instruments. In this regard we note in particular
the significant differences in awards and NAPSAs applying to the fast food and pharmacy
parts of the industry.’1019
[1173] The Fast Food Award which was then published, provided lower penalty rates for
ordinary hours worked on a Sunday than in the draft Retail award.
1020
Under the Retail Award
the penalty rate for work on a Sunday was 200 per cent, while the Fast Food Award provided
a penalty rate of 175 per cent for all work by full-time, part-time and casual employees on a
Sunday.
[1174] In a Statement issued on 26 June 2009, the Commission provided parties an
opportunity to apply to vary modern awards created in earlier stages that had not yet come
into operation.
1021
An application was made on 27 October 2009 by the NRA and Ai Group in
AM2009/41 to vary penalty rates in the Fast Food Award, including a claim to reduce the
http://www.airc.gov.au/awardmod/fullbench/modernawards/matters_documents.cfm?number=AM2009/41
[2017] FWCFB 1001
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rates payable on weekends to 125 per cent for all ordinary hours worked on Saturdays and
Sundays, and to vary the time when the evening loading was payable.
[1175] The Commission subsequently granted the change in relation to the evening loading
and reduced the penalty rate for full-time and part-time employees on a Sunday from 175 per
cent to 150 per cent
1022
. The rate for casual employees working on a Sunday remained
unchanged at 175 per cent. In its decision issued on 29 January 2010, the Commission stated:
‘[26] We have reconsidered the level of this loading having regard to the Sunday penalty rates
in relevant pre-reform awards and NAPSAs and in particular the penalties now applicable in
the restaurant industry. In all the circumstances we consider that a loading of 50% for full-time
and part-time employees and 75% for casuals is fair and appropriate.’
1023
[1176] During the present proceedings the SDA and Ai Group made submissions about the
extent to which penalty rates under the Fast Food Award were considered during the award
modernisation proceedings.
[1177] Ai Group contend that the material shows that:
‘(a) the focus in the award modernisation process was rationalising the number of awards that
operated in relation to the fast food industry;
(b) the principal concern of the employer parties was the inappropriateness of the National Fast
Food Award being used as the new safety net and, if was to be used, the increased costs for
employers in the fast food industry associated with the terms of that Award;
(c) although some material (in the form of statutory declarations) was relied upon by the
employer parties, that material was not tested in cross-examination;
(d) the material (in the form of statutory declarations) relied upon by the employer parties did
not relate to the extent of disutility or disability associated with Sunday work in the fast food
industry;
(e) the material (in the form of statutory declarations) relied upon by the employer parties did
not relate to the issue of the level of disutility or disability of Sunday work in comparison to
Saturday work in the fast food industry;
(f) the former Commission did not address the extent of disutility or disability associated with
Sunday work in the fast food industry;
(g) the former Commission did not address the level of disutility or disability of Sunday work
in comparison to Saturday work in the fast food industry
(h) the former Commission did not address the increasing prevalence of Sunday trading and
24/7 trading in the fast food industry;
(i) the former Commission did not address the overall relevance of the Sunday penalty rate;
and
(j) the former Commission did not address the overall fairness of the Sunday penalty rate.’
1024
[2017] FWCFB 1001
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[1178] Contrary to Ai Group’s submission, the SDA submit that the issue of penalty rates was
extensively considered during the award modernisation process. In outlining the process that
led to the making of, and subsequent variation to the Fast Food Award, the SDA submit:
‘… there was substantial submission and argument from interested retail parties which focused
on the appropriate Sunday rate…the NRA/ANRA provided lengthy submissions on detailed
costings and a number of witness statements …
The AIG likewise filed extensive and detailed submissions seeking to emphasise the claimed
unique features of the fast food industry and examined the history of industrial regulation in
the industry in support of the proposition that the NFFR Award was an unsatisfactory
instrument for the purposes of determining a modern award to reflect the fast food industry as
a whole.’
1025
[1179] The SDA also referred to various proceedings before the Award Modernisation Full
Bench, including hearings on 5 November 2008 where rosters and costings were analysed.
[1180] The SDA contend that in making the Fast Food Award the Commission explicitly
directed itself to the issue of evening and weekend penalties,
1026
and that:
1027
The question of appropriate penalty rates for evening and weekend work was a
central controversy during the award modernisation process and was addressed by
extensive submissions and evidence;
the provisions of the award dealing with penalty rates were not only considered and
determined, but subsequently reconsidered and reduced by a Full Bench of the
Commission; and
the current provisions in the award have been described by the Commissions as
“fair and appropriate.
[1181] We agree with the submissions advanced by the Ai Group.
[1182] While the application made by the NRA and Ai Group during the award
modernisation process sought to reduce the Sunday penalty rate, it appears from the
29 January 2010 decision (see [1175]) that the penalty rates in the Fast Food Award were
primarily set on the basis of the rates in the various pre-modernisation instruments.
[1183] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue and will
proceed on the basis that prima facie the modern award being reviewed achieved the modern
awards objective at the time it was made. The extent of a previous Full Bench’s consideration
of a contested issue is relevant to assessing the weight to be attributed to that decision. It is
apparent from an examination of the relevant decisions that the Award Modernisation Full
Bench did not undertake a detailed or considered review of the penalty rates in the Fast Food
Award. Rather, understandably enough in view of the time constraints on the award
modernisation process, the Full Bench gave effect to the existing penalty rates in the
preponderance of pre-reform instruments.
[2017] FWCFB 1001
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7.5.3 The Evidence
(i) Overview
[1184] Ai Group called 13 witnesses in support of its application to vary the Fast Food
Award:
Nicola Agostino: a Director of Agostino Group Holdings which operates three
franchised McDonald’s restaurants in Western Australia;
1028
Adam Dando: a Director of Jasie Pty Ltd which operates eight franchised
McDonald’s outlets in Queensland;
1029
Patricia Deasy: Principal Consultant, Australian Survey Research Group Pty
Ltd;
1030
Marcus Dunn: sole Director of Jamadu (Qld) Pty Ltd which operates five franchised
McDonald’s restaurants on the Gold Coast in Queensland;
1031
David Eagles: a Director of Eyrie Holdings Pty Ltd which operates two franchised
McDonald’s restaurants in Bunbury, Western Australia;
1032
Gina Feast: State Human Resources Manager for Hungry Jack’s Pty Ltd;
1033
Ayman Haydar: a Director of Haydar Pty Ltd which operates four franchised
McDonald’s restaurants in Perth, Western Australia;
1034
Marek Kopias: National Training and Human Resources Design Consultant for
McDonald’s Australia Limited;
1035
Mallika Krishnamurthy: Director of Consumer and Business Insights for
McDonald’s;
1036
Krista Limbrey: Human Resources Business Partner for NSW/ACT of
McDonald’s;
1037
Domit Makhoul: Human Resources Manager, Victoria and Tasmania of Hungry
Jack’s Pty Ltd;
1038
Dr Andrew Pratley: Statistical Consultant and Director of Dr Andrew Pratley Pty
Ltd and Adjunct Lecturer of the University of Sydney Business School;
1039
and
Julie Toth: Chief Economist for Ai Group.
1040
[1185] RCI called two witnesses in support of its application to vary the Fast Food Award:
RCI fast food witness 1: operator hamburger restaurants.
1041
RCI fast food witness 2: operator of nine shopping centre food outlets.
1042
[2017] FWCFB 1001
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[1186] The NRA did not adduce any evidence in support of its claim.
[1187] The SDA called an expert witness – Ms Helen Bartley – who gave evidence in relation
to the Ai Group employee survey.
[1188] The ACTU called an expert witness – Dr Martin O’Brien – who gave evidence about
the earnings and household circumstances of the national fast food workforce.
[1189] It is convenient to deal first with the Ai Group employee survey.
(ii) The Ai Group employee survey
(a) General
[1190] Ai Group engaged Australian Survey Research Group Pty Ltd (ASR) to design an
online employee survey to be administered to employees of McDonald’s Australia Limited
(McDonald’s) and Hungry Jack’s Pty Ltd (Hungry Jack’s).
[1191] The McDonald’s survey was made available to all McDonald’s employees classified
as Level 2, 3 or 4 under the McDonald’s Australia Enterprise Agreement 2013. (Note: there is
no classification level 1 under the enterprise agreement and level 2 in the agreement is
equivalent to level 1 in the Fast Food Award). The survey was made available to employees
to complete online via a link on the McDonald’s intranet. Employees were able to complete
the survey at various times in the period from 26 June 2015 until the survey finally closed on
27 July 2015. At the time the survey closed 101,201 employees had access to the survey.
1043
[1192] The Hungry Jack’s survey was made available to all Hungry Jack’s employees who
were classified as ‘Crew Members’. The survey was made available to employees to complete
online. Employees were able to complete the survey at various times in the period from 23
June 2015 until the survey finally closed on 27 July 2015. At the time the survey closed
13,564 Crew Members had access to the survey.
1044
[1193] After the exclusion of duplicate and incomplete survey responses, there were 944 valid
responses for Hungry Jack’s employees and 20,635 valid responses for McDonald’s
employees.
1045
Hence the response rate to the McDonald’s employee survey was 20.4 per cent
(20,635 divided by 101,201)
1046
and the response rate to the Hungry Jack’s survey was 7.0 per
cent (944 divided by 13,564).
1047
[1194] The data entered by the survey respondents was stored by ASR in a data collection
software package known as ‘SurveyManager’ and was then analysed by ASR staff using a
software package known as ‘Statistical Package for the Social Sciences’ (SPSS). The analysis
produced frequency distributions and various cross tabulations. A report of the survey results
is set out in Annexure PAD 3 to Ms Deasy’s Amended First Affidavit.
1048
We will return to
the survey results shortly.
[1195] Evidence in respect of the development and administration of the survey was given by:
Marek Kopias - National Training and HR Design Consultant at McDonald’s;
1049
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Gina Feast - State Human Resources Manager at Hungry Jack’s;
1050
and
Patricia Deasy - Principal Consultant for ASR.
[1196] Ms Deasy developed the survey and a copy of the survey questions is set out in
Annexure PAD-2 to her Amended First Affidavit.
1051
Online survey links were distributed to
McDonald’s and Hungry Jack’s in June 2015. Mr Kopias was the survey administrator for
McDonald’s and Ms Feast performed the same role for Hungry Jack’s.
[1197] Two experts also gave evidence in respect of the Ai Group employee survey. Dr
Andrew Pratley,
1052
called by Ai Group, and Ms Helen Bartley,
1053
called by the SDA.
[1198] Three broad issues were raised in respect of the Ai Group employee survey:
(i) non-response bias;
(ii) consolidation of the results in the ‘weighting issue’; and
(iii) the extent to which the survey results can be extrapolated beyond McDonald’s
and Hungry Jack’s (the ‘representativeness issue’).
[1199] We also note that there is a dispute about the reliability of the survey results on the
basis of the response rates and about the effect of the options provided in answering certain
survey questions. As to the last point, the issue concerns the questions which ask ‘What
impact does working on a [Saturday or Sunday] have on spending time with your friends and
family?’ There was some criticism of the fact that the suite of possible answers to these
questions did not include ‘I don’t know’. Ms Deasy was cross-examined in respect of this
issue.
1054
Ms Deasy responds to the criticism made and specifically rejects the proposition that
the responses to these questions were not reliable because they do not capture all of the
potentially valid responses.
1055
We accept Ms Deasy’s evidence in respect of this issue.
[1200] There is also a dispute regarding the impact of the response rates on the reliability of
the survey results. Ms Bartley describes the response rates for the McDonald’s and Hungry
Jack’s surveys, 20.4 per cent and 7 per cent respectively as ‘low to very low’
1056
which ‘could
significantly affect the validity of any conclusions sought to be drawn about the populations
of fast food industry employees from the responses received’.
1057
The response rates are also
relevant to the issue of non-response bias. In respect of this issue Ms Bartley says that ‘the
survey non-response was large and possible differences between the survey participants and
non-respondents could affect the results’.
1058
We deal with the issue of non-response bias and
the ‘representativeness issue’ shortly.
[1201] Both Dr Pratley
1059
and Ms Deasy
1060
reject Ms Bartley’s characterisation of the
response rates as low and very low. Further, Ms Deasy rejects the proposition that the
response rates may affect the validity of the conclusions which can be drawn about the survey
population.
1061
[1202] We prefer the evidence of Dr Pratley and Ms Deasy in respect of this issue. We are
satisfied, subject to one caveat, that the Ai Group employee survey is representative of the
views and circumstances of the McDonald’s and Hungry Jack’s employees who were
[2017] FWCFB 1001
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surveyed. The caveat relates to the survey results in respect of employment status (i.e. full-
time, part-time or casual) and we deal with that issue later (at [1223]–[1228]). We now turn to
the issue of non-response bias.
(b) Non-Response Bias
[1203] As we have mentioned, not all employees responded to the survey. The response rates
to the McDonald’s and Hungry Jack’s surveys were 20.4 per cent and 7.0 per cent
respectively. Non-response bias refers to the potential for answers given by those who
responded to the survey to be different from the answers that would have been given by those
employees who did not complete the survey, had they done so. Non-response bias may mean
that the responses of the survey respondents are not representative of the survey population.
[1204] The survey asks a number of questions which call for the expression of an individual’s
opinion. For example: What days do you prefer to work? Would you work some or more
hours on a Sunday if you were offered those hours? The critical question is the nature and
effect of non-respondent bias on the aggregate survey responses and whether non-respondents
have characteristics or views which might be different to those of the respondents in respect to
the matters at issue in the survey - centrally, in the context of the Ai Group claim, the impact
of weekend work on employees.
[1205] In her expert report Ms Bartley expresses the following opinion in respect of the Ai
Group employee survey and non-response bias:
‘… the survey non-response was large and possible differences between the survey participants
and non-respondents could affect the results … due to the low response rates to the surveys,
the achieved samples may be biased and I cannot be confident that the samples are
unbiased.’1062
[1206] In an expert report prepared in reply to Ms Bartley’s report, Dr Pratley compares
certain characteristics of the survey respondents against the survey population. One measure
of bias would be if there was a difference between the demographic profile of the sample (the
survey respondents in this case) and the total population (i.e. all of the McDonald’s and
Hungry Jack’s employees who had access to the survey). Chart 36 below plots the cumulative
percentage by sample age group compared to the population age group.
[2017] FWCFB 1001
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Chart 36
[1207] How close the sample data fits the population data is measured by the coefficient of
determination (R
2
). Values near to one indicate a close fit; values nearer to zero indicate a
poor fit. If all the percentages in the sample and population data were exactly equal, the
coefficient of determination would be one. In the case of Chart 36, the R
2
value is 0.9362,
which reflects a strong positive correlation between the ages of the sample group and the total
survey population.
1063
[1208] Dr Pratley also compared the sample and population groups, by location. He found
that all sample values for the number of locations were within +/- 4 per cent of the population
values.
1064
[1209] Dr Pratley’s conclusion in respect of the bias issue is set out at paragraph 122 of his
reply report:
‘Based on the data in Figure 1 and no specific evidence of bias within the sample, I conclude
that the sample is representative of the population (McDonald’s and Hungry Jack’s).’
1065
[1210] In the course of her oral evidence Ms Bartley was asked to comment on Dr Pratley’s
conclusion and responded as follows:
‘The statement is reasonable with respect to the variable age because that’s what he made the
comparison between, the same and – or in his analysis that’s presented in paragraphs 109 to
121, but we don’t know with respect to the questions that were asked what the answers would
have been of the non-response, so we don’t know whether the achieved sample is
representative of the overall population because we don’t know what the answers would have
been to those who didn’t respond … ultimately it’s the answers that those people would have
given if they had’ve responded, in a theoretical sense, that make the difference …
The survey was about people’s attitudes and perceptions and so on. We don’t know – and
there may well be differences between the people who choose to participate and provide
opinions on all this sort of stuff than those who didn’t. We’re talking about the opinions, and
that’s what really matters if we’re trying to make an assessment of the representativeness of
the sample…
Cumulative percentage of sample versus population31 years and older 100% . 25-30 years old 90% 21-24 years old 80% 20 years old 70% 19 years old .60% 18 years old : 50% 17 years old 40% 16 years old R2 = 0.9362 age groups 30% 20% · Age groups 15 years old 10% Less than 14 0% years old Cumulative population percentages for 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulative sample percentages for age groups
[2017] FWCFB 1001
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… my general conclusion is that I cannot be confident that there’s no bias. I’m not saying
there is and I’m not saying there isn’t. I’m saying I cannot be confident.’
1066
[1211] It is agreed – by Dr Pratley and Ms Bartley – that non-responses do not necessarily
introduce bias.
1067
Further, as is apparent from the extract set out above, Ms Bartley is not
positively asserting that the employee surveys are affected by non-response bias (or any other
form of bias). Ms Bartley’s general conclusion is that she cannot be confident – one way or
the other (i.e. either there is, or there is not, bias) – in respect of this issue. This may be
contrasted with Dr Pratley’s evidence.
[1212] Dr Pratley acknowledged the theoretical possibility of non-response bias, in the course
of his oral evidence:
‘So theoretically, it’s entirely possible that there is some form of response bias but I saw no
evidence within the data that I analysed or within the question set that I looked at that would
indicate there would be a form of response bias. But I can’t rule out that theoretically it might
be possible under some circumstances that it could have occurred…
But simply mentioning it because some people didn’t participate by default the conclusion is
that the results are biased, wrong or unrepresentative would call into question all research
that’s ever been conducted in this country…
It is the logical undertaking that if you cannot see bias within the sample, that the survey
results therefore would not be biased and that therefore there would be a correlation, a very
strong correlation between the preferences and views of those that responded and the
preferences and views of those in the population. Unfortunately, I’m not able to test any of
that directly.’
1068
[1213] On the basis of his comparison of certain demographic characteristics (i.e. age and
location) of the survey respondents and the survey population (i.e. age and location), Dr
Pratley concludes that the sample is representative of the population.
[1214] Hence the expert evidence is to the effect that non-responses do not necessarily
introduce bias however non-response bias is theoretically possible, but the fact and effect of
non-respondent bias could not be tested. We note that non-response bias is theoretically
possible in any survey without a 100 per cent response rate.
[1215] Given the similarity between the characteristics of the survey respondents (in respect
of their age profile and location) and the absence of any contrary evidence indicative of bias,
we accept Dr Pratley’s opinion in respect of this issue.
(c) The Weighting Issue
[1216] The results of the two surveys were pooled for the purpose of analysis and reporting,
that is, the responses from Hungry Jack’s employees were simply added to those from
McDonald’s employees.
1069
The results from the two surveys were not weighted to reflect the
relative proportions of the McDonald’s and Hungry Jack’s survey populations within the
combined total population.
1070
In her expert report, Ms Bartley expresses the opinion that the
data should have been weighted, because:
[2017] FWCFB 1001
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‘The McDonald’s population of employees is much larger than the Hungry Jack’s employee
population. This means that in pooling the results of the two surveys, they should be weighted
to reflect the correct proportions of employees from each organisation, so that the pooled
results are not biased in favour of the McDonald’s employee survey results.
The McDonald’s employee survey response rate was much greater for the McDonald’s
employee survey (20%) than the Hungry Jack’s employee survey (6%). The weighting would
also help address this issue.’
1071
[1217] The issue of potential bias due to a failure to weight the survey results was also
addressed by Ms Bartley during her oral evidence:
‘Now if there was a difference between the results obtained from McDonald’s employees and
Hungry Jack’s employees the feedback from McDonald’s employees was going to outweigh in
a biased way the feedback from the Hungry Jack’s employees. So really what should happen is
if the population percentages were 90/10, McDonald’s/Hungry Jack’s, in the sample you
would part weight the data so that the sample was 90/10 as well. So that is my point around
that issue.’
1072
(emphasis added)
[1218] It is apparent from the above extract that Ms Bartley’s concern about potential bias
was predicated upon there being a difference in the responses provided by McDonald’s
employees and Hungry Jack’s employees. This is an important point and we return to it
shortly.
[1219] The real question is whether the failure to weight the responses made any difference,
specifically was there a difference in the McDonald’s versus Hungry Jack’s employees’
responses, such that the underrepresentation of Hungry Jack’s employees would affect the
aggregate survey outcome.
[1220] The ‘weighting issue’ was also addressed by Ms Deasy. In the course of cross-
examination, Ms Deasy rejected the proposition that ‘the survey results pooled together are
necessarily biased in favour of McDonald’s respondents’.
1073
Ms Deasy’s evidence is to the
effect that the responses as between McDonald’s and Hungry Jack’s employees were
materially the same:
‘I don’t agree with that statement, that they were biased. McDonald’s results made a greater
contribution to the frequency distribution but in my scanning of the separate results, where
there were questions around behaviours or opinions, the results were similar to within .1 in
some cases, of a per cent, or 1 per cent. So I saw no difference in the proportional answers to
questions with the different samples. So while McDonald’s would have a greater contribution
in some answers, the answers proportionally between the two samples were so similar that
there was no need to weight.’
1074
(emphasis added)
[1221] Further, Ms Deasy’s evidence was that she had scanned the separate results of each
survey and was ‘stunned by how similar they were’.
1075
[1222] Given the evidence as to the similarity in the answers given by the two groups of
survey respondents we are satisfied, subject to one caveat, that the failure to apply a weighting
to the results did not introduce any bias.
[2017] FWCFB 1001
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[1223] The caveat to our general conclusion in respect of the ‘weighting issue’ relates to
employment status. At paragraph 17 of the ‘Fast Food employee survey report’ it is said that:
‘Two thirds of employees are employed casually (67.4%), while only 4.7% are employed as
permanent full-time employees and 20.2% are employed as permanent part time.’1076
[1224] Further, paragraph 4 of the ‘Additional analysis report’ dated 23 September 2016 says:
‘chart 200 below … clearly indicates that as employees age, their employment status moves
from predominantly casual to predominantly part time.’1077
[1225] It is apparent from a comparison of the Limbrey affidavit of 23 September 2016
1078
and the Makhoul affidavit of the same date
1079
that there are significant differences between
McDonald’s and Hungry Jack’s in terms of the proportion of employees engaged on a part-
time or casual basis. The relevant data is summarised below.
Table 43
McDonald’s and Hungry Jack’s – employee by level and status
Award
Classification
level
McDonald’s
Hungry Jack’s
Total F/T P/T Casual Total F/T P/T Casual
Level 1 91 107 1 938 14 127 75 042 13 470 477 12 881 112
Level 2 3 239 915 1 418 906 1 339 1 112 226 1
Level 3 4 565 4 002 563 - 355 347 12 -
[1226] In both businesses most employees are classified at level 1 (92 per cent of McDonald’s
employees and 88 per cent of Hungry Jack’s employees), but at Hungry Jack’s level 1
employees are usually engaged on a part-time basis (96 per cent), whereas at McDonald’s
level 1 employees are usually casuals (82.4 per cent). Similarly, at level 2 most Hungry Jack’s
employees (83 per cent) are engaged on a full-time basis whereas at McDonald’s only 28 per
cent of level 2 employees are full-time, 44 per cent are part-time and 28 per cent are casuals.
The differences between the two businesses are less marked among level 3 employees.
[1227] It is apparent that the statements set out at [1223]–[1224] are not true insofar as
Hungry Jack’s is concerned.
1080
[1228] Given the differences between the two businesses in respect of the employment status
of the employees surveyed and the absence of weighting, the survey results do not accurately
represent the employment status of Hungry Jack’s employees. Nor do we think it reasonable
to extrapolate the survey results in relation to employment status beyond the employees
surveyed.
[1229] We note that there are also some differences in the age profile of McDonald’s
employees and Hungry Jack’s employees. Some 53.6 per cent of McDonald’s employees are
younger than 18 years of age, compared to 43.3 per cent of Hungry Jack’s employees. But
these differences do not alter our finding (at [1273]) that a typical Fast Food employee is
likely to be aged between 14 and 24 years. We note that 90 per cent of both McDonald’s and
Hungry Jack’s employees are aged between 14 and 24 years.
1081
[2017] FWCFB 1001
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[1230] Subject to the caveat in respect of employment status, we reject the SDA’s general
submission that because of the structural differences between McDonald’s and Hungry Jack’s
workforces the results of the Ai Group survey cannot be extrapolated beyond the survey
respondents. We now turn to deal with the representative issue.
(d) The Representativeness Issue
[1231] The central issue here is the extent to which the results of the Ai Group employee
survey can be extrapolated beyond McDonald’s and Hungry Jack’s employees.
[1232] In their closing submission the SDA contends that the case advanced by Ai Group is
‘fundamentally misdirected’ in that:
‘… the Ai Group has not adduced sufficient evidence to enable the Commission to make
findings of the type proposed in respect of the industry and workforce covered by the Fast
Food Award. The Ai Group’s evidentiary case is overwhelmingly directed at the workforce of
two employers, McDonald and Hungry Jack’s, which form part of a much larger industry.
There is insufficient evidence before the Commission to enable it to find that the
characteristics of McDonald’s and Hungry Jack’s businesses and their employees are typical or
characteristic of the fast food industry generally.’
1082
[1233] The above proposition is further developed later in the SDA written submission (at
paragraphs [659]–[667]). The SDA’s argument can be distilled into three points:
1. At best, Ai Group’s evidence ‘arguably supports … findings in relation to that
part of the fast food industry and workforce comprised of McDonald’s and Hungry
Jack’s. In its submissions however, the Ai Group has elided McDonald’s and Hungry
Jack’s with the fast food industry as a whole’.
1083
In short, the SDA contends that the
Ai Group employee survey results are not representative of the views of all employees
in the Fast Food industry.
2. As McDonald’s and Hungry Jack’s collectively represent a small minority of
the total number of fast food establishments across Australia, the SDA submits that:
‘It would be unsound and unsupported by the evidence for the Commission to assume that 95%
of fast food operators (and their employees) bear the same characteristics, experiences of the
award and preferences as McDonald’s and Hungry Jack’s (and their employees).’
1084
3. The employees of McDonald’s and Hungry Jack’s are covered by various
enterprise agreements and on that basis the SDA submits:
‘The effect then of the Ai Group’s submission is to invite the Commission to undertake its
statutory function in the 4 yearly modern award review by reference not only to a small
minority of fast food operators, but operators whose employees’ terms and conditions of
employment are not determined by the Fast Food Award … for that further reason, the
evidence relating to McDonald’s and Hungry Jack’s and their employees is inherently of less
relevance or weight to the Commission’s task in the four yearly review.’
[1234] It is convenient to deal with the second and third points first.
[2017] FWCFB 1001
272
[1235] The third point is unpersuasive. The fact that an enterprise agreement applies to the
survey respondents does not mean that this evidence is ‘inherently of less relevance or weight
to the Commission’s task in the four yearly review’. Three short points may be made in this
regard:
(i) The fact that the survey respondents are subject to enterprise agreements does
not cause them to be unrepresentative of the characteristics of employees in the
industry to which the modern award relates (i.e. the fast food industry).
(ii) It is not known whether these employees will continue to have their terms and
conditions of employment regulated by an enterprise agreement into the future
(i.e. beyond the expiration of the nominal terms of the current enterprise
agreements). Further, the modern award serves as the comparator for the
purpose of applying the BOOT to any replacement enterprise agreement.
(iii) The FW Act – and in particular the modern awards objective – does not
exclude a consideration of the circumstances of employees whose terms and
conditions of employment are set by an enterprise agreement.
[1236] For completeness, in relation to (i) above, we note that earlier (see [957]), we decided
to attach little weight to the evidence of Mr Cox, partly because an enterprise agreement
remained in operation at the particular enterprise in respect of which he gave his evidence.
Our consideration of the evidence of Mr Cox is to be distinguished from the issue here, which
is directed at the preferences of employees and hence the existence of an enterprise agreement
does not impact on our consideration in the same way.
[1237] The submission referred to in the second point advanced by the SDA is based on the
fact that the McDonald’s and Hungry Jack’s businesses collectively represent only ‘a small
minority of fast food establishments across Australia’
1085
and that ‘Ai Group has not adduced
any evidence … about the operations of the remaining 95% of fast food operators which
collectively employ about 50% of the fast food industry workforce’.
1086
[1238] We accept that in 2015 the Fast Food industry consisted of 24,564 enterprises across
Australia and that the industry is characterised by ‘high competition amongst the businesses
which participate in it offering a wide range of different fast food options’.
1087
We also accept
that there are about 1000–1300 McDonald’s and Hungry Jack’s establishments, which is
about 5 per cent of the total number of enterprises in the industry.
[1239] However, it seems to us that the SDA’s submission misses the point. Ai Group is not
contending that the characteristics of five per cent of the business operators in the Fast Food
industry (i.e. McDonald’s and Hungry Jack’s establishments) are representative of the
remaining 95 per cent of business operators in the industry. Ai Group’s central contention is
that the survey responses (by McDonald’s and Hungry Jack’s employees) are representative
of 86 per cent of employees in the Fast food industry (i.e. they are representative of the
persons employed by the ‘Major chains’).
[1240] In light of the case presented by Ai Group, the relevant characteristics to be examined
by the Commission are the characteristics of the employees in the Fast food industry, not the
number and characteristics of the businesses of the employers in the industry. We agree with
[2017] FWCFB 1001
273
Ai Group’s characterisation of the SDA’s emphasis on the characteristics of business
operators as ‘a straw man argument’ – a claim erected by the SDA (which is not part of the
case of Ai Group) in order to allow the SDA to knock down the claim.
1088
The real issue is the
extent to which the survey results are representative of other employees in the Fast Food
industry. This is the issue raised in the first of the SDA’s points (see [1233] above).
[1241] As to the first point, we agree with the proposition that the results of the Ai Group
survey are not necessarily representative of the views and circumstances of all employees in
the Fast Food industry. The survey population was not a stratified random sample of all Fast
Food industry employees – it was a survey of certain categories of McDonald’s and Hungry
Jack’s employees. The difficulty in applying conclusions from the survey to all Fast Food
industry employees is accepted by Dr Pratley:
‘If you could turn to page 60 of your report, at paragraph 184, and you repeat what you say
earlier; you state your conclusion that the survey only has limited representativeness to the
minor chains, and in the next paragraph you conclude that it has very little representativeness
of the independents. Then in paragraph 186 you say that based on these conclusions you
disagree with the statement by Ms Bartley that it’s not possible to draw any reliable
conclusions about the population of all fast food employees. Dr Pratley, I don’t follow that
reasoning, and can I suggest to you that if in light of your conclusions that the survey results
are only of limited or very limited representativeness in respect of minor and independents,
one can’t draw reliable conclusions about the population of all fast food employees, do you
accept that?---I accept from my statements in those paragraphs that once we consider all
employees, the strongest conclusions that can be drawn will be very limited, but I wouldn’t say
that nothing can be concluded.’
1089
(emphasis added)
[1242] As we have mentioned, we are satisfied that the survey is representative of the views
and circumstances of the McDonald’s and Hungry Jack’s employees surveyed, save for the
issue of employment status. Importantly, this survey population is a significant proportion of
the total population of Fast Food industry employees. It is common ground that there were
214,265 employees in the Fast Food industry in 2014.
1090
At the time it closed, on 27 July
2015, some 114,765 McDonald’s and Hungry Jack’s employees were able to access the
survey. Hence, the survey population was 114,765 employees. We do not know how many
Fast Food industry employees there were in July 2015, but using the available data, for 2014,
(that is, 214,265 employees) the survey population amounts to just over half (53.6 per cent) of
all Fast Food industry employees.
[1243] The next question is to what extent can the survey results be extrapolated beyond
McDonald’s and Hungry Jack’s employees? Can the survey results be said to be
representative of the views of any other Fast Food industry employees (i.e. other than
McDonald’s and Hungry Jack’s employees)? In considering this question it is important to
pay close regard to the evidence in respect of this issue. We begin with Dr Pratley’s evidence.
[1244] In his ‘First Report’
1091
Dr Pratley expresses the following opinion:
1092
‘Based on the design of the survey and the implementation by McDonald’s and Hungry Jack’s, I
conclude that the data is representative of the population of fast food employees.’
[1245] This general proposition is then subject to the following qualification:
[2017] FWCFB 1001
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‘A number of McDonald’s stores operate 24/7. Where questions in the employee survey
specifically relate to working hours outside of normal fast food trading hours, the conclusions
will not have the same validity across the fast food industry as those questions which are
independent of working hours.’1093
[1246] The conclusion to Dr Pratley’s First Report states:
‘… I conclude that the employee survey of McDonald’s and Hungry Jack’s is representative of
the fast food industry employees, except in the circumstances where questions specifically
relate to hours outside that of standard trade within the fast food industry.’1094
[1247] In her expert report of 26 October 2015
1095
Ms Bartley sets out her opinions in respect
of Dr Pratley’s ‘First Report’. Paragraph 12 of Ms Bartley’s report is relevant for present
purposes:
‘I understand that neither the McDonald’s nor Hungry Jack’s organisations were selected by
chance from a population of fast food franchise operators, using cluster sampling, or any other
probability sampling approach. It is not possible to draw any reliable conclusions about the
population of all fast food industry employees for data obtained from surveys of two
deliberately selected organisations.’
[1248] Dr Pratley’s reply report to Ms Bartley’s report is set out at Annexure AP-5 to Exhibit
Ai Group 17. Dr Pratley deals with the representativeness issue at paragraphs 154–176 and
modifies the conclusion expressed in his ‘First Report’.
1096
[1249] In summary terms, Dr Pratley’s evidence is that:
there are four categories of stores in the Fast Food industry:
(i) major chains that operate (some stores) 24/7;
(ii) major chains that do not operate any stores 24/7;
(iii) minor chains;
(iv) independents.
1097
Note: A ‘major chain’ has more than 50 stores; a ‘minor chain’ has less than 50 but
more than 15 stores; and an ‘independent’ has less than 15 stores.
data on employee numbers was available for 9 of the 17 major chains
1098
namely
Chicken Treat, Dominos Pizza, Hungry Jack’s, KFC, McDonald’s, Oporto, Pizza
Hut, Red Rooster and Subway. These 9 major chains employed 184,315
employees
1099
which represents 86 per cent of all employees in the Fast Food
industry.
1100
the McDonald’s/Hungry Jack’s survey is representative of other employees
employed by major chains that operate (some stores) 24/7 and is representative of
other employees employed by major chains that do not operate 24/7, except where
questions specifically relate to the 24/7 nature of the operation.
1101
the McDonald’s/Hungry Jack’s survey ‘only has limited representativeness to the
minor chains’;
1102
and
[2017] FWCFB 1001
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the McDonald’s/Hungry Jack’s survey ‘would have very limited representativeness
of the independents’.
1103
[1250] Importantly, Dr Pratley clearly expresses the opinion that the survey results can be
extrapolated beyond the employees of McDonald’s and Hungry Jack’s to all employees of the
major chains (subject to reservation in respect of questions specifically relating to the 24/7
nature of the operation).
[1251] Dr Pratley’s cross-examination in respect of this aspect of his reply report was
confined to the following exchanges:
‘And in paragraph 159 you’ve categorised the stores between major chains that operate 24/7 -
some stores, major chains that do not operate any stores 24/7, minor chains and independents.
Is that a taxonomy or a method of categorisation that you devised?---No, as per paragraph 157
I base that on the Food Industry Foresight breakdown.
I see, thank you. Yes, and you go on to say in paragraph 161 that table 1 is an extract showing
the breakdown, I follow. If I could ask you to move to paragraph 171, you say that based on
the data collected the nine companies have approximately 184,315 employees representing 86
per cent of all employees in the fast food industry, and the nine companies to which you there
refer are the nine companies listed in table 2 in respect of which a number appears in the right-
hand column, is that right?---That’s correct.
I see. Beyond the information that you obtained from the Food Industry Foresight Fast Food in
Australia 2013 which is set out in your report, you haven’t had regard to any other information
in identifying the nature or composition of other operators in the fast food industry?---I’m not
sure exactly what that question is asking.
I’ll rephrase it. Your statement in paragraph 172, the opinion you there express, is based upon
two things; one is your view that there was no evidence of bias, that’s right?---That’s correct.
And secondly, it’s based upon what you’ve set out above about the numbers of employees?---
In 172, the second part is reference to the fact that the stores in the sampling frame operate
some of their stores 24/7.
I see?---Not with regards to the other major chains.
In preparing your report you did not have any other information at hand or instructions
provided to you beyond what you refer to in this report in relation to the make up, composition
or operations of other major chains in the food industry?---That is correct.
Thank you. You’ve assumed – would this be correct, you’ve assumed that the other major
chains have the same operations, workforce composition as McDonald’s and Hungry Jack’s?--
-I would use the word similar.
And you, can I suggest to you, have no basis to assume that there is any such similarity
between any of these other chains and McDonald’s and Hungry Jack’s? Do you accept that?---
No, I would disagree.’
1104
[1252] Dr Pratley was taken to the last answer above during re-examination:
‘Then in respect of paragraph 172 of your report, where you were asked about organisations of
the representative nature of the survey in the major chains that operate some stores 24:7 and
[2017] FWCFB 1001
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you said that you disagreed that there was no basis for the assumption that underpinned that
opinion?---Sorry, could you please clarify that?
I understood your evidence, it was put to you that you assumed that the other majors had the
same operations, or similar operations to those conducted by McDonald’s and Hungry Jack’s
and that assumption was challenged and I understood your evidence to be that you disagree
that there was no basis for your assumption underpinning your conclusion?---Yes.
Why did you disagree?---I disagreed primarily based on a number of factors. The first is that
one of the leading companies in the space of collecting data logically groups these companies
together. So it’s not an opinion I hold that the major chains are similar, it’s an opinion held by
food industry foresight that they’re similar and that they report data together in that group as
per Table 1. So that’s the first part of that. The second part of that is that with regards to when
I look at how those stores operate when I look at their geographic dispersion, when I look at
the nature of their operations, they strike me as very similar in their nature. I could go down to
a level of a statistical analysis and prove, based on something as obscure as response time
from order to delivery that in fact they are very similar, but that was not something required of
me to do that.’
1105
[1253] In the course of her oral evidence, Ms Bartley made it clear that she had read Dr
Pratley’s reply report
1106
but, importantly, Ms Bartley was asked no questions – and gave no
evidence – directly related to Dr Pratley’s conclusion that the survey was representative of the
employees of all major chains.
[1254] So, in essence, we are left with Dr Pratley’s evidence. Dr Pratley was asked about the
basis for his conclusion and he provides a response. There is no evidence which, in terms,
challenges this aspect of Dr Pratley’s evidence.
[1255] The SDA challenges the representativeness of the Ai Group survey on a number of
grounds. It contends that the data only represents a small proportion of the workers and fast
food establishments covered by the Fast Food Award and, further, contends that the
characteristics of the surveyed employees cannot be said to be representative of the views and
circumstances of all Fast Food industry employees. We also note that the SDA contends that
the fact that the employees in the survey are covered by Enterprise Agreements is a limiting
factor. We deal with this issue at [1235]. Ai Group addressed the substance of the SDA’s
challenge, in its written submission in reply at paragraph 15:
‘Contrary to the submissions of the SDA (see SDA Submissions, par 658(a)), the Ai Group has
led sufficient evidence to establish the characteristics of the employees in the fast food
industry:
(a) First, the characteristics of employees of McDonald’s and Hungry Jack’s represent the
characteristics of 53 per cent of employees in the fast food industry (see Ai Group
Submissions, par 63; see also SDA Submissions, par 234).
(b) Secondly, the characteristics of employees of McDonald’s and Hungry Jack’s are
representative of the characteristics of the major participants in the fast food industry which
represent 86 per cent of employees in the fast food industry (see Pratley Affidavit (Exhibit
AiG 17), Second Report, p41, pars 13, 14, 15; p59, par 171; Pratley Cross Examination,
5 November 2015, PN21518; Pratley Re Examination, 5 November 2015, PN21661).
[2017] FWCFB 1001
277
(c) Thirdly, the characteristics of employees of McDonald’s and Hungry Jack’s have limited
representativeness for the balance of workers (that is, the remaining 14 per cent) in the fast
food industry (see Pratley Affidavit (Exhibit AiG 17), Second Report, p41, pars 16, 17; Pratley
Cross Examination, 5 November 2015, PN21523, PN21604, PN21605, PN21609).’
1107
[1256] That is, the Ai Group contends – based on Dr Pratley’s evidence – that the survey was
representative of the views and circumstances of the employees of the major fast food chains
(which collectively represent 86 per cent of all Fast Food industry employees).
[1257] This issue was also raised in the supplementary submissions filed by the SDA
1108
and
Ai Group
1109
which addressed Confidential Exhibit Ai Group 34 – ‘Food Industry Foresight –
Fast Food in Australia 2013’. The exhibit provides information about the number, type and
growth in restaurant, café and fast food outlets across Australia in the period 2005 to 2013
and, in relation to fast food outlets, it distinguishes between three different categories:
Quick Service Restaurants (QSR);
Snack Food Chains; and
Independent Fast Food.
[1258] Within the QSR category there are ‘QSR Major Chains’ (more than 50 outlets) and
‘QSR Minor Chains’ (less than 50 outlets).
[1259] Confidential Exhibit Ai Group 34 is referred to in paragraph 157 of Annexure AP-5 to
Dr Pratley’s affidavit of 3 November 2015.
1110
The SDA submits that Dr Pratley’s evidence
inaccurately describes the Fast Food industry as he makes no reference to snack food chains.
The submission put was not put to Dr Pratley in cross-examination and the SDA did not seek
to recall Dr Pratley. Nor was this matter the subject of any comment by the SDA’s expert
witness, Ms Bartley. In these circumstances we do not propose to have regard to the
submissions put. We note, however, that even if the point advanced by the SDA was accepted,
it would not alter our conclusion as to the representativeness of the Ai Group employee
survey.
[1260] The SDA submits that Exhibit Ai Group 34 confirms the varied and heterogeneous
character of the Fast Food industry. The SDA submission highlights the number of outlets in
each part of the Fast Food industry and submits:
‘In the Review, the Commission did not receive any evidence from:
(a) employers in the Independent Fast Food category – of which there were 8,734 outlets
in 2013; or
(b) employers in the Snack Food chains category (including juice bars) – of which there
were 1,975 outlets in 2013; or
(c) the other 15 employers in the Quick Service Restaurant major chains category beyond
Hungry Jacks and McDonalds which collectively represent approximately 79% of the
total number of outlets of major chains…
10. The case advanced by the Ai Group is constructed wholly around evidence given in
relation to Hungry Jacks and McDonalds. Yet Exhibit Ai Group 34 confirms that they
represent merely 7% of the total number of fast food outlets across Australia. This is
[2017] FWCFB 1001
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consistent with the SDA’s previous submission that Hungry Jacks and McDonalds collectively
represent only between approximately 4% and 6% of the total number of fast food
establishments across Australia.
11. The Ai Group’s case rests upon two unsubstantiated assumptions of homogeneity:
First as between the workforce of Hungry Jacks and McDonalds; and secondly as between the
operations and workforce of those two chains and the rest of the fast food industry.
12. The falsity of the first assumption was revealed in the evidence given by Mr Makhoul,
Human Resources Manager (Victoria and Tasmania) for Hungry Jacks, and Ms Limbrey,
People Insights and Recruitment Manager for McDonalds. That evidence established that the
workforces of McDonalds and Hungry Jacks were materially different in two key respects -
age and employment status. Mr Makhoul gave evidence that “[G]enerally speaking, Hungry
Jack’s corporate stores do not employ many casual employees”. His evidence further
disclosed that the majority of Hungry Jacks employees were adults and working part-time.
Conversely, the evidence of Ms Limbrey was that the majority of McDonalds employees were
juniors employed on a casual basis. As conceded by Ms Deasy, her finding from the survey of
the McDonalds and Hungry Jacks workforces that employment status moved from
predominantly casual to predominantly permanent as employees increased in age, was not
accurate in relation to the Hungry Jacks workforce.
13. As to the second claim of homogeneity, the Commission does not have before it any
evidence to enable a finding that the operations of McDonalds and Hungry Jacks and the
claimed preferences of their respective workforces are representative of the rest of the fast
food industry. The differences between McDonalds and Hungry Jacks themselves noted in the
previous paragraph strongly suggest otherwise. Exhibit Ai Group 34 confirms, in detail, the
varied and heterogeneous character of the fast food industry.’
1111
(references omitted)
[1261] As mentioned earlier, we agree with the proposition that the Ai Group survey is not
necessarily representative of the views and circumstances of all employees in the Fast Food
industry. We have also dealt with the differences between Hungry Jack’s and McDonald’s in
relation to the employment status and age profile of their employees (see [1229]–[1230]).
[1262] But, for the reasons given earlier, the SDA’s focus on the number of operators in each
sector of the Fast Food industry is misconceived. The real issue is the extent to which the
survey results are representative of the other employees in the Fast Food Industry.
[1263] Dr Pratley’s unchallenged evidence is that nine of the QSR major chains employ
184,315 employees
1112
of the 214,265 employees in the Fast Food industry.
1113
Hence the vast
majority of employees in the Fast Food industry (86 per cent) are employed by the QSR
Major chains.
[1264] We accept Dr Pratley’s evidence that the survey results are representative of the
employees of the major chains (subject to the reservation in respect of questions specifically
relating to the 24/7 nature of the operation). This aspect of Dr Pratley’s evidence was not the
subject of any direct challenge by Ms Bartley. Dr Pratley’s cross examination did not
undermine this aspect of his evidence and he explained the basis for his conclusion during the
course of his oral evidence.
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7.5.4 The Fast Food industry
[1265] The Fast Food industry can be broadly characterised as involving the production of
non-preservable items in that the food produced is for immediate consumption, rather than
stored for later use or sale.
1114
The Fast Food Award defines the ‘fast food industry’ as:
‘… the industry of taking orders for and/or preparation and/or sale and/or delivery of:
Meals, snacks and/or beverages, which are sold to the public primarily to be consumed
away from the point of sale;
Take away foods and beverages packaged, sold or served in such a manner as to allow their
being taken from the point of sale to be consumed elsewhere should the customer so decide;
and/or
Food and/or beverages in food courts and/or in shopping centres and/or in retail complexes,
excluding coffee shops, cafes, bars and restaurants providing primarily a sit down service
inside the catering establishment.’
[1266] The industry is comprised of about 24,600 establishments
1115
which operate in a
number of industry sub-sectors (see [1350]). In terms of employee numbers the industry is
dominated by the QSR major chains which employ about 86 per cent of the 214,265 Fast
Food industry employees. Just under half (98,911 employees; 46 per cent) of Fast Food
industry employees are employed in McDonald’s outlets.
1116
[1267] The standard hours of operation of most fast food outlets include Saturdays and
Sundays, reflecting customer demand for the purchase and consumption of fast food. In
McDonald’s stores, the peak period of sales was usually regarded as Friday to Sunday
1117
with
17 per cent of the weekly revenue is earned on a Saturday
1118
and 14 per cent of weekly
revenue is generated on a Sunday.
1119
In some McDonald’s stores, Sunday sales were 25 to 30
per cent greater than on the average weekday.
1120
7.5.5 Fast Food industry employees
(i) Profile of a ‘typical’ Fast Food industry employee
[1268] The ABS data of direct relevance to the Fast Food industry is quite limited.
[1269] A paper
1121
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework the Fast Food Award is ‘mapped’ to the
Takeaway food services industry class, which is at the ANZSIC 4 digit level.
[1270] The ABS Labour Force survey is the usual source for data on employment, however
data on employed persons by industry is only available at the 3 digit or industry group level.
The relevant industry group is ‘Cafes, restaurants and takeaway food services’. In addition to
‘takeaway food services’ this industry group also includes persons employed in cafes and
restaurants (where consumption occurs on the premises) and catering services (where services
are provided at specified locations or events).
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[1271] The ABS Census of Population and Housing (Census) is the only data source with
information on employment at Takeaway food services level. The most recent Census data is
from August 2011 and we deal with that data later.
[1272] The August 2011 Census data shows that there were around 175 000 employees in
Takeaway food services. Table 44 compares certain characteristics of employees in the
takeaway food services sector, with employees in ‘all industries’.
Table 44
Labour force characteristics of the Takeaway food services industry class,
ABS Census 9 August 2011
Takeaway food services All industries
(no.) (%) (no.) (%)
Gender
Male 76 365 43.5 4 207 586 50.8
Female 99 167 56.5 4 082 662 49.2
Total 175 532 100.0 8 290 248 100.0
Full-time/part-time status
Full-time 33 484 20.3 5 279 853 67.8
Part-time 131 539 79.7 2 507 786 32.2
Total 165 023 100.0 7 787 639 100.0
Highest year of school completed
Year 12 or equivalent 84 144 48.9 5 098 228 62.6
Year 11 or equivalent 29 339 17.1 885 404 10.9
Year 10 or equivalent 38 507 22.4 1 687 055 20.7
Year 9 or equivalent 15 844 9.2 317 447 3.9
Year 8 or below 3578 2.1 141 973 1.7
Did not go to school 512 0.3 20 158 0.2
Total 171 924 100.0 8 150 265 100.0
Student status
Full-time student 88 934 51.1 612 990 7.5
Part-time student 7809 4.5 506 120 6.2
Not attending 77 215 44.4 7 084 360 86.4
Total 173 958 100.0 8 203 470 100.0
Age (5 year groups)
15–19 years 91 312 52.0 547 666 6.6
20–24 years 33 506 19.1 927 865 11.2
25–29 years 14 422 8.2 1 020 678 12.3
30–34 years 8117 4.6 933 827 11.3
35–39 years 6460 3.7 934 448 11.3
40–44 years 6175 3.5 938 386 11.3
45–49 years 5491 3.1 911 739 11.0
50–54 years 4510 2.6 848 223 10.2
55–59 years 3085 1.8 652 190 7.9
60–64 years 1766 1.0 404 470 4.9
65 years and over 688 0.4 170 718 2.1
Total 175 532 100.0 8 290 210 100.0
Average age 24.1
38.8
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Takeaway food services All industries
(no.) (%) (no.) (%)
Hours worked
1–15 hours 81 900 49.6 875 554 11.2
16–24 hours 30 005 18.2 792 539 10.2
25–34 hours 19 636 11.9 839 694 10.8
35–39 hours 14 017 8.5 1 676 920 21.5
40 hours 9514 5.8 1 555 620 20.0
41–48 hours 4671 2.8 895 619 11.5
49 hours and over 5283 3.2 1 151 693 14.8
Total 165 026 100.0 7 787 639 100.0
Source: ABS, Census of Population and Housing, 2011.
Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
[1273] The profile of Fast Food employees differs from the profile of employees in ‘All
industries’ in 4 important respects:
(i) almost 80 per cent of Fast Food employees work part-time (i.e. less than
35 hours per week
1122
), compared to only 32.2 per cent of all employees;
(ii) about half (49.6 per cent) of Fast Food employees work 1–15 hours per week
and just over two-thirds (67.8 per cent) work 1–24 hours per week, compared
to only 11.2 per cent respectively of all employees;
(iii) over half (52 per cent) of Fast Food employees are aged between 15 and 19
years, and 71.1 per cent are aged between 15 and 24 years, compared with only
6.6 per cent and 17.8 per cent respectively of all employees; and
(iv) over half (55.6 per cent) of Fast Food employees are students (51.1 per cent are
full-time students and 4.5 per cent study part-time) compared to 13.6 per cent
of all employees.
[1274] The 2011 Census data is broadly consistent with the results of the 2015 Ai Group
employees survey – in terms of the differences between the characteristics of Fast Food
employees compared with employees generally. Table 45 below captures some of the key
demographic results from the Ai Group employee survey and compares them to the July 2015
ABS data for all industries.
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Table 45
1123
Comparison between Ai Group employee survey and all industries from the
ABS Labour Force survey, July 2015
Ai Group employee survey (%)
ABS Labour Force Survey
(July 2015) – all industries
Total employed (%)
1. Full time/part time
Permanent full time 5.1 Full time 69.3
Casual/permanent part time 94.9 Part time 30.7
2. Hours worked
1–15 hours 70.1 1–19 hours 15.4
1–25 hours 88.7 1–29 hours 27.6
3. Age
14–19 years 81.6 15–19 years 5.5
14–24 years 91.5 15–24 years 15.6
4. Student status
Full-time student 67.4 Full-time student 7.5
Part-time student 10.5 Part-time student 6.7
Not a student 22.1 Not a student 85.8
Note: The Labour Force Survey has no information on people aged 14 years and under as the scope of the survey only
includes people aged 15 years and over.
In the Labour Force Survey, full-time employed are defined as employed persons who usually worked 35 hours or more a
week (in all jobs) and those who, although usually working less than 35 hours a week, worked 35 hours or more during the
reference week. Part-time employed are defined as employed persons who usually worked less than 35 hours a week (in all
jobs) and either did so during the reference week, or were not at work in the reference week.
For student status, data from the August quarter 2015 are presented as these data were only available quarterly.
[1275] On the basis of the data in Table 45 a ‘typical’ Fast Food employee is likely to be:
a student (full-time or part-time);
aged between 14 and 24 years;
employed on a part-time basis (in the sense that they are not a full-time employee
and may be engaged on either a casual or part-time basis); and
working between 1 and 24 hours per week.
[1276] The report by Dr O’Brien (the O’Brien Report)
1124
deals with the earnings and
household circumstances of Fast Food industry employees. Much of the earnings data cited in
the O’Brien Report is only available at the ANZSIC 3 digit level, for the ‘Accommodation
and food services’ (‘AFS’) division, which includes ‘Takeaway food services’. The 2011
Census is the only source of earnings data at the 4 digit takeaway food services level. The
2011 Census data shows that takeaway food services employees are a relatively low paid
group within the AFS division.
1125
The ABS data for AFS employees shows that:
Average weekly earnings for AFS employees in the May Quarter of 2015 were
$556.30 compared to $1136.90 for employees in all industries.
1126
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The relatively low earnings of employees in the AFS division are affected by the
number of hours they work. About a third of the earnings differential is accounted
for by the difference in hours worked.
1127
[1277] Using the benchmark of two-thirds of median hourly earnings to define ‘low paid’ and
half of median hourly earnings to define ‘very low paid’, Dr O’Brien concludes that ‘at least
thirty per cent of AFS are low paid and at least ten per cent are very low paid’.
1128
Based on
the 2011 Census data Dr O’Brien concludes that ‘the percentage of low paid full-time workers
[in takeaway food services] is in the vicinity of fifty to sixty per cent … [and] the percentage
of very low paid … in the vicinity of twenty five to thirty per cent of employees’.
1129
[1278] Dr O’Brien also concludes
1130
that a high proportion of takeaway food services
employees are dependent students within a household (35.8 to 37.4%, depending on the data
source) and that:
‘Further analysis of household related data showed FBS employees were more likely to reside
in households in lower household income brackets, in lower socioeconomic areas, rent rather
than own their own homes, rely on various forms of social security benefits to supplement
their income, and … experience financial difficulties in relation to paying utility bills, heating
their home, paying their rent or mortgage, and their ability to raise money in an emergency
situation.’
1131
[1279] In terms of renting and financial hardship indicators, Table 46 from the Dr O’Brien
Report compares the circumstances of FBS employers with employees in all industries:
Table 46
1132
Renting Situation and Financial Hardship (%)
[1280] The incidence of weekend work is also a distinguishing characteristic of the Fast Food
industry. ABS data shows that for all industries only around one quarter of employees work
on weekends.
1133
FBS All Industries Renting 41.5 28.1 Financial Situation - 18.2 11.6 dissatisfied Could not pay 13.0 9.3 elect/gas/phone on time Could not pay 6.8 4.3 mortgage/rent on time Pawned or sold something 3.7 2.9 Went without meals 3.4 1.9 Was unable to heat home 1.4 1.4 Asked for financial help - 10.6 8.9 family/friends Asked for financial help - 2.1 1.5 welfare/community org Difficulty raising $3000 - 15.6 7.9 drastic measures Difficulty raising $3000 - 17.6 7.3 couldn't Source: HILDA (2013a)
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[1281] The Ai Group employee survey provides some additional data about the working
hours of Fast Food employees:
about 80 per cent of respondents work the same shift, or a similar shift, each
week
1134
and work a similar number of hours each week;
1135
and
some 81 per cent of respondents work on weekdays; 64 per cent on Saturdays and
58 per cent on Sundays (the total is greater than 100 per cent as they may work any
combination of these categories).
1136
[1282] Finally, Ai Group contends that Fast Food industry employees can be categorised as
career or non-career employees. As a general proposition we accept that the employees of the
QSR major chains can be so categorised and, as mentioned earlier, the employees of the QSR
major chains account for 86 per cent of all Fast Food industry employees.
[1283] Ms Limbrey – McDonald’s HR Business Partner NSW/ACT – categorises the
following types of employees as ‘career employees’:
Full-time crew members (level 1 under the Fast Food Industry Award 2010)
Shift supervisors (level 2 under the Fast Food Industry Award 2010); and
Shift managers (level 3 under the Fast Food Industry Award 2010).
[1284] Ms Limbrey categorised casual crew members and most part-time crew members as
‘non-career employees’.
1137
[1285] Similar observations were made by Mr Makhoul in relation to Hungry Jack’s.
1138
(ii) Employee experiences and preferences in the Fast Food industry
(a) Experiences with weekend work
[1286] The employee respondents to the Ai Group survey who said they worked on a
Saturday or a Sunday were asked about the impact working on that day had on spending time
with their family and friends. The responses for Saturday and Sunday work were similar, as
shown by Charts 37 and 38 below:
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Chart 37
1139
Impact of working on a Saturday on spending time with family/friends
% choosing answer n= 13,714
Chart 38
1140
Impact of working on a Sunday on spending time with family/friends
% choosing answer n=12,316
[1287] Slightly more Saturday workers (46.2 per cent) reported some or a lot of negative
impact on spending time with their family and friends, compared to Sunday workers (43.9 per
cent).
[1288] The proportion of employees who worked on a Sunday and experienced some or a lot
of negative impact on spending time with their family and friends, increased with age.
0 20 40 60 A lot of positive impact 2.0 Some positive impact 5.4 No impact 46.4 Some negative impact 40.1 A lot of negative impact 6.1
% choosing answer n=12,316 0 20 40 60 A lot of positive impact 1.9 Some positive impact 4.7 No impact 49.5 Some negative impact 37.5 A lot of negative impact 6.5
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Chart 39
1141
Impact of working on Saturdays on spending time with family/friends by age
(group brackets)
Chart 40
1142
Impact of working on Sundays on spending time with family/friends by age
(group brackets)
[1289] Those respondents who said they worked on Sundays were asked about travelling to
work on Sunday compared to other days of the week. As shown by Chart 41 below, most
respondents (64 per cent) thought it was about the same, 12.4 per cent said it was easier and
11.6 per cent said it was harder.
14 - 18 years 7.2% 47.6% 45.2% 19 - 24 years 7.6% 43.8% 48.6% 25 years and over 9.4% 39.3% 51.3% Some or a lot of positive impact No impact Some or a lot of negative impact
14 - 18 years 6.5% 51.3% 42.2% 19 - 24 years 6.4% 45.6% 48.0% 25 years and over 6.2% 38.2% 55.6% Some or a lot of positive impact No impact Some or a lot of negative impact
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Chart 41
1143
How travelling to work on a Sunday compares to other days of the week
% choosing answer n=12,380
(b) Employee preferences
[1290] The Ai Group employee survey also provides data on employee preferences.
[1291] Most employees (63.2 per cent) preferred to work a mixture of weekdays and
weekends: 30.4 per cent preferred to work weekdays (Monday to Friday) only and 6.5 per
cent preferred to work only on weekends.
1144
As shown by Chart 42 below, generally
speaking, the preference for working only weekdays increased with age: 61.7 per cent of
those aged 30 years and over only want to work weekdays, compared to 19.3 per cent of 14
year olds. The preference to only work weekdays can also be seen as a preference not to work
on weekends.
[1292] Survey respondents were also asked what day they would prefer to work on a
weekend. Most (44.7 per cent) preferred to work both Saturday and Sunday, with 28.6 per
cent preferring Saturday only and 26.7 per cent preferring Sunday only.
It's about the same as other days 64.0 It's easier on Sunday 12.4 It's harder on Sunday 11.6 Not sure 11.1 Don't know because I only work Sunday .9 0 20 40 60 80
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Chart 42
1145
Preferred days to work by age (individual brackets)
[1293] All respondents, irrespective of when they actually worked or preferred to work, were
asked if they would work some or more hours on a weekend, if offered. Some 72.3 per cent
said they would work some or more hours on a Saturday if offered and 70.5 per cent said they
work some or more hours on a Sunday if offered.
1146
Interest in working more hours, on either
a Saturday or Sunday, was highly correlated with age.
1147
[1294] In relation to Sunday work, 79 per cent of respondents aged 14 years and under
expressed a willingness to work some or more hours on a Sunday. This proportion falls to 63
per cent of those aged 21 to 24 years and to 44 per cent for those over 30 years of age, as
shown by Chart 43 below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 14 years or younger n=2,356 19.3 5.8 75.0 15 years n=5,229 20.8 8.2 71.1 16 years n=3,889 20.6 9.0 70.4 17 years n=2,579 26.3 9.3 64.4 18 years n=1904 41.5 4.7 53.8 19 years n=1,238 44.3 52.9 20 years n=754 47.3 50.7 21 - 24 years n=1,324 50.1 47.0 25 - 30 years n=744 48.8 49.2 More than 30 years n=1,049 61.7 35.7 Week days % n=6,389 Week ends only % n=1,376 Mix of week days & week ends % n=13,301
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Chart 43
1148
Willingness to work some or more hours on a Sunday, if offered
% respondents within an age group
[1295] The above data on employee preferences is particularly significant because under the
enterprise agreements which apply to the employees surveyed a loaded hourly rate is paid for
all ordinary hours and ordinary hours can be worked at any time Monday to Sunday. In other
words, the expressed preferences for working some or more hours on a Sunday have not been
influenced by the payment of any additional remuneration for Sunday work.
[1296] The Ai Group employee survey did not ask respondents to record their classification
level, hence there is no direct measure of employee preferences by classification level. In
response to a Statement and Directions dated 8 September 2016
1149
Ai Group tendered
evidence setting out the number of McDonald’s and Hungry Jack’s employees by, among
other things, classification level and age. McDonald’s and Hungry Jack’s each have three
employee classification levels – those levels and the equivalent classification in the Fast Food
Industry Award 2010, are set out below:
Fast Food Industry Award 2010
McDonald’s
1150
Crew Member Level 1
Shift Supervisor Level 2
Shift Manager, Trainee Manager or Manager Level 3
Hungry Jack’s
1151
Crew Member Level 1
Assistant Manager Level 2
Restaurant Manager Level 3
[1297] At about the time the Ai Group employee survey was conducted there were 98,911
persons employed in McDonald’s restaurants
1152
and 15,168 Hungry Jack’s employees
1153
%
R
E
S
P
O
N
D
E
N
T
S
[2017] FWCFB 1001
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employed in corporate owned stores. The number of McDonald’s
1154
and Hungry Jack’s
1155
employees by award classification level was:
Level 1: 104 577
Level 2: 4 578
Level 3: 4 924
[1298] The number of employees by age and award classification level is set out in Table 47
and Chart 44 below.
Table 47
Number of McDonald’s
1156
and Hungry Jack’s
1157
employees by age and classification
No. of employees
by age
Award Classification Level
Total Level 1 Level 2 Level 3
14 6 629 6 629 - -
15 17 270 17 270 - -
16 18 899 18 895 4 -
17 16 595 16 559 30 6
18 13 852 13 476 291 85
19 9 848 9 106 537 205
20 6 777 5 772 646 359
21-24 12 424 9 229 1 672 1 523
25 11 559 7 415 1 398 2 746
113 853 104 577 4 578 4 924
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Chart 44
1158
Number of McDonald’s and Hungry Jack’s employees by age and classification
[1299] Ai Group submits that the age of a McDonald’s/Hungry Jack’s employee can be used
as a proxy for the classification level at which the person is employed. We agree, despite the
SDA’s submission to the contrary.
1159
Based on the data in Table 47, most employees
classified at level 1 (i.e. 84.1 per cent) are under 21 years of age; whereas about two-thirds
(67.1 per cent) of level 2 employees and most (86.7 per cent) level 3 employees, are 21 years
of age or older.
[1300] Using age as a proxy for classification level it can be inferred that the reported
experiences and preferences of employees aged 14–20 years can be attributed to level 1
employees and the reported experiences and preferences of those aged 21 years and over can
be attributed to level 2 or 3 employees.
6629
17270 18895 16559
13476
9106
5772
9229 7415
0 0
4
30
291
537
646
1672 1398
0 0 0
6
85
205
359
1523
2746
1
10
100
1000
10000
100000
14 15 16 17 18 19 20 21–24 25
N
u
m
b
e
r
o
f
e
m
p
lo
ye
e
s
Age of employees
Level 1 Level 2 Level 3 Award classification:
Note: The vertical axis uses a logarithmic scale where the logarithms of the original values are used to
determine the height of the columns, such that each increment on the axis increases by a multiple of 10.
This is done for ease of interpretation as it compresses the larger numbers to be comparable with the
smaller numbers.
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[1301] We accept that age is an imperfect proxy for an employee’s classification level – there
are level 1 employees who are 21 years of age or older and there are level 2 and level 3
employees who are younger than 21 years of age. But given the age distribution at each
classification level it is a reasonable to adopt age as a proxy for an employee’s classification.
[1302] As we have mentioned, the survey results show a marked difference in the willingness
to work some or more hours on a Sunday based as age (see Chart 43). Almost three in four
respondents (73 per cent) aged under 21 years of age were willing to work some or more
hours on a Sunday, compared to just over half (56 per cent) employees aged 21 years or older.
[1303] The responses to a number of other, related, survey questions also show a strong
correlation to the age of the respondent, namely:
Preferred day to work: generally speaking, the preference for working only
weekdays (i.e. Monday to Friday) – and by inference the preference to not work on
weekends – increased with age. Twice as many respondents aged 21 years and over
(54 per cent) preferred not to work on weekends compared to those aged 14 to 20
years (26 per cent).
1160
Negative impact of Sunday work: a significantly higher proportion of respondents
aged 21 years and over (55.1 per cent) reported some or a lot of negative impact of
working on Sundays on spending time with family and friends, compared to
respondents aged 14 to 20 years (42.3 per cent). Almost three times as many
employees aged 21 years and over (15.4 per cent) reported a lot of negative impact,
compared to those aged 14 to 20 years (5.2 per cent). Similarly, just over half (51.2
per cent) of respondents aged 14 to 20 years reported ‘no impact of working on
Sundays on spending time with family and friends, compared to 39 per cent of
respondents aged 21 years and over.
1161
[1304] It is also likely that the correlation between the reported experiences and preferences
and age is influenced by the student status of the employee respondent. In this regard we note
that 73.4 per cent of full-time students indicated that they would work some or more hours on
a Sunday, if offered.
1162
Full-time students also indicated a much stronger preference for
working a mix of weekdays and weekends (70.3 per cent) than non-students (41.7 per cent).
Further, almost 80 per cent of full-time students preferred to work either weekends or a mix of
weekdays and weekends, compared to 44 per cent of non-students.
1163
[1305] It seems to us that there is a clear distinction between the reported preferences and
experiences of level 1 employees (using those aged 14 to 20 years as a proxy), from
classification level 2 or 3 employees. In terms of reported preferences, level 1 employees
(compared to level 2 or 3 employees) are more likely:
to express a preference for weekend work (either weekends only or a mix of
weekdays and weekends); and
to express a willingness to work some or more hours on a Sunday.
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[1306] In terms of their reported experiences, level 1 employees (compared to level 2 or 3
employees) are less likely:
to report some or a lot of negative impact from working on Sundays on spending
time with family and friends;
and are more likely:
to report no impact of working on Sundays on spending time with family and
friends.
[1307] A number of McDonald’s franchises gave evidence about the duration of weekend
shifts worked by employees at award classification levels 1, 2 and 3. That evidence supports a
finding that, for most award level 1 employees who worked on a weekend, the duration of
their shift (for Saturdays and Sundays) was between 4 and 5 hours,
1164
whereas most award
level 2 and 3 employees who worked on a weekend worked an eight hour shift.
1165
[1308] We also note that there is a difference between the duration of weekend shifts worked
by award level 1 McDonald’s employees, compared to award level 2 and level 3 McDonald’s
employees.
[1309] Ms Limbrey referred to an ‘Hours Worked Report’ in her evidence. The Hours
Worked Report relates to 11971 award level 1 employees at 164 restaurants operated by
McDonald’s. The report shows the actual times worked by each award level 1 employee who
worked at a company restaurant on a weekend during the period 5 April 2015 to 26 April
2015. Based on the Hours Worked Report Ms Limbrey’s evidence is that the average shift
length worked by award level 1 employees in company restaurants during this period was:
5.38 hours for Saturdays; and
5.28 hours for Sundays.
1166
[1310] The rationale for rostering these employees for these shift durations was explained by
Dunn at paragraphs [30] and [33] of his affidavit (Exhibit Ai Group 1):
‘For each of my restaurants the optimal shift lengths for Level 2 employees on a Saturday is 4.5
hours. Labour laws require crew working more than 5 hours to be given a 30 minute unpaid
break. If I need 9 hours covered from 8am to 5pm, for example, I could cover this with one
person but I am short during the paid break and I also run the risk that this crew person could
call in sick and leave me 9 hours short. If I use two crew people for 4.5 hours each, I have the
whole shift covered and also should one of them call in sick I have the possibility of asking
one person if they want to stay late or the other if they would like to come in early. When I
have many crew on at a time with many different start and finish times it is quite easy to
arrange four or five people to cover an hour or so each and cover a whole shift without the
manager having to spend time cold calling crew to work….
In my view, for each of my restaurants the optimal shift lengths for Level 3 employees on a
Saturday is eight hours. It is my opinion based on experience and observation, that eight hours
is the right amount of time for a Level 3 shift. It takes considerable time for the Level 3
employee to set up their shift and position crew for a successful shift. It then takes
considerable time to prepare the shift for handover. I believe shifts of less than 8 hours may
result in less productivity. I also want to keep these highly trained staff for as long as possible
[2017] FWCFB 1001
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(there is considerably more investment in the training of employees to level 3 level than
training employees to a Level 2). Based on experience and observation, staff who get enough
hours have adequate pay to keep them from looking for alternative employment.’
(iii) The health impact of weekend work
[1311] McDonald’s has a system for reporting and recording injuries and safety incidents
relating to its employees (whether employed directly by McDonald’s or by a franchise).
1167
McDonald’s Workplace Safety team prepared a report setting out the frequency of reported
incidents by day of the week in the period from 1 May 2014 to 17 May 2015.
1168
Chart 45 sets
out the number of incidences by the day of the week on which the incident occurred in this
period:
Chart 45
Reported Incident Data by Day of the Week: 1 May 2014 to 17 May 2015
[1312] As shown by Chart 45, the number of reported incidents progressively increases from
Monday through to Saturday and then declines on Sundays. In her evidence, Ms Limbrey
comments on this data and notes that:
‘This pattern reflects the sales patterns of restaurants set out in Confidential Exhibit KTL3. In
my experience as a Restaurant Manager, on days of higher sales restaurants need to roster a
higher number of employees to work a greater number of hours.’
1169
[1313] The evidence in the proceedings supports a finding that, in the Fast Food industry,
Sunday work is not associated with a higher rate of safety incidents (i.e. number of reported
incidents divided by number of employees working).
1170
(iv) Employees are rostered to work within the parameters of their
stated availability
[1314] In addition to the preferences and availability data the data on temporary unavailability
and employee complaints is also relevant to the assessment of the relative disutility of Sunday
work.
366 402 429 433
493
531
461
0
100
200
300
400
500
600
N
o
. o
f
in
ci
d
e
n
ts
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[1315] At McDonald’s, temporary unavailability – for example to deal with a social
commitment on a particular day – is recorded in a book at each restaurant which is set up like
a diary and usually referred to as the ‘NA book’. The employee simply writes their name on
the date that they are unavailable.
1171
[1316] Dando was asked to produce the NA books in relation to the eight franchised
restaurants operated by Jasie Pty Ltd for the period 1 May 2015 to 31 July 2015.
1172
The chart
below sets out the average number of employees that appear on each day of the week in the
NA book.
Chart 46
NA book numbers by day of the week
Jasie Pty Ltd 1 May 2015 – 31 July 2015
[1317] The most number of entries in the NA book was in relation to Saturday, followed by
Sunday and then Friday. Dando’s evidence was that the chart accorded with his experience in
managing the business.
1173
[1318] A similar pattern emerges in relation to the five restaurants operated by Jamadu;
1174
the two franchised restaurants operated by Eyrie Holdings Pty Ltd
1175
and the three franchised
restaurants operated by Agostino Group Holdings Pty Ltd.
1176
[1319] We note that Haydar’s evidence is different in that in the course of cross-examination
he agreed with the proposition that ‘the greatest preponderance of when people call in sick or
have other commitments such that they become temporarily unavailable is on Sundays’.
1177
No extracts were produced from the NA books at the four franchised restaurants operated by
Haydar Pty Ltd.
[1320] As to the complaint data, McDonald’s employees have a number of means by which
they can make complaints. These include, raising concerns with the management team at the
restaurant or Licensee, or by contacting the Human Resources Department or by raising
concerns via the PAL (Personal Action Letter) program available to all employees on metime
(the PAL System). The PAL System is a way for employees to contact the Human Resources
4.8
4.4 4.4 4.5
7.1
8.6
7.9
0
1
2
3
4
5
6
7
8
9
10
N
A
p
e
r
st
o
re
p
e
r
d
ay
[2017] FWCFB 1001
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Team directly without the employee’s manager or anyone else knowing, regarding concerns
that they have. These methods are communicated to employees as part of their orientation
when they begin employment with McDonald’s.
[1321] The PAL System has been electronic and available to employees online since 2014.
1178
Limbrey is familiar with the PAL System and in her first affidavit she states:
‘Since the PAL System has been online I am not aware of complaints about weekend or evening
work being made as employees are able to set their own availabilities when they apply for
work at McDonald’s and to make adjustments to those availabilities once employed.’1179
[1322] Limbrey’s evidence is consistent with the evidence of the McDonald’s franchisees.
1180
For example, in his first affidavit Dunn states:
‘Jamadu maintains a system for receiving complaints from employees and/or for employees to
raise concerns with their supervisor.
There are letters in the crew room that can be sent to McDonald’s anonymously but I am not
aware of them ever needing to be used. We have received no complaints from McDonald’s. I
observe Jamadu’s workforce to have an excellent culture. There is an employment index
questionnaire that crew can answer to give feedback about the restaurant in a number of areas.
McDonald’s would address any complaints with me. Jamadu maintains many levels of
management and fosters an ‘open door’ policy. In my observation, if a crew person or a
manager has a problem they tell somebody they trust and that person brings the concern to me
or my General Manager. As to complaints specifically concerning weekend work, full time
managers are required to work weekends in my business. This doesn’t suit everybody and we
do have managers who leave to work in another industry that offers 9-5 Monday to Friday.
Most Managers love that shift work provides them with flexibility. If a Manager wants
specific days off they are almost always honoured. Part time and casual crew simply work the
hours that they choose to be available for.’
1181
[1323] The observation that some managers (award level 3) express their dissatisfaction with
weekend work by leaving the industry is consistent with the preference data for level 3
employees referred to earlier (see [1302]–[1306]).
7.5.6 Consideration
(i) The late night penalty
[1324] It is convenient to deal first with the claims in respect of the late night penalty. To
place the claims in context it is necessary to say something about the background to the
current provision.
[1325] As we have mentioned, the Fast Food Award was one of the ‘priority awards’ made
on 19 December 2008. In making the award the AIRC attached significant weight to the terms
of the pre-reform award, the National Fast Food Retail Award 2000. At the time the Fast
Food Award was made, clause 26.2(a) provided as follows:
[2017] FWCFB 1001
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‘(a) Evening work Monday to Friday (excluding shiftwork)
A loading of 10 % will apply for ordinary hours of work within the span of hours between
6.00 pm and midnight, and for casual employees an additional 25 % of the rate on top of the
casual rate.’
[1326] In 2009 a joint NRA and Ai Group application sought to vary the Fast Food Award in
a number of respects, including the penalty rate for evening work. It was proposed that clause
26.2(a) be replaced by the following:
‘A loading of 10 % will apply to full time and part time employees for ordinary hours of work
within the span of hours between 9.00 pm and midnight’
[1327] In its decision of 29 January 2010 the Award Modernisation Full Bench decided to
vary clause 26.2(a), for the following reasons:
‘Since making this award the Commission has reviewed the penalty payments applying in the
restaurant industry. Those penalty payments are found in the Restaurant Industry Award 2010.
For fast food operations that open into the evening there is logic in adopting a similar approach
to penalty payments. We have decided to vary cl 26.2(a) to provide for a 10% loading to be
payable after 9.00 pm and a 15% loading to be payable after midnight. Casual employees are
to receive the relevant loading in addition to the 25% casual loading’.
[1328] The evening penalty rate in the Restaurant Award was considered by the Award
Modernisation Full Bench in its decision of 25 September 2009:
‘We deal now with night work before midnight on Monday to Friday. There is no clear national
benchmark emerging from the pre-reform awards and NAPSAs in the industry. A penalty in
the order of 10% for work between 7.00pm and midnight is common to the Victorian
Restaurant Award and most NAPSAs. There is a penalty of a similar quantum in both
Queensland NAPSAs, but the penalty applies from time later than 7.00pm in each case.
However, there is no penalty rate at all in the NSW Restaurant Award, which applies in the
largest State. In this circumstance, bearing in mind the terms of clause 27A of the consolidated
request and having regard to the fact that evenings constitute core trading times and the
operational requirements of the industry in that regard, we have decided to adopt a penalty of
10% between the hours of 10pm and midnight.’
[1329] The AIRC rejected a subsequent attempt by the LHMU to have the penalty apply to
work between 8 pm and midnight (instead of 10 pm and midnight) and decided not to depart
from the penalty provisions in the exposure draft.
[1330] Clause 34.2 of the Restaurant Award currently provides:
‘34.2 Additional payment for work done between the hours of 10.00 pm to 7.00 am
on Monday to Friday
(a) An employee, including a casual, who is required to work any of their ordinary
hours between the hours of 10.00 pm and midnight Monday to Friday
inclusive, or between midnight and 7.00 am Monday to Friday inclusive, must
be paid an additional amount per hour calculated according to the following:
[2017] FWCFB 1001
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(i) Between 10.00 pm and midnight
For each hour or part of an hour worked during such times—10% of the
standard hourly rate per hour extra.
(ii) Between midnight and 7.00 am
For each hour or part of an hour worked during such times—15% of the
standard hourly rate per hour extra.
(b) For the purposes of this clause midnight will include midnight Sunday.’
[1331] The evening penalty rate provisions in the Fast Food and Restaurant Awards differ in
the time at which the 10 per cent evening penalty commences – 10 pm under the Restaurant
Award and 9 pm under the Fast Food Award. Ai Group seeks a variation to the Fast Food
Award so that the 10 per cent evening work loading applies from 10 pm, not 9 pm.
[1332] Having regard to the reasons given by the Award Modernisation Full Bench for
varying the evening penalty provision in the Fast Food Award it appears that the existing
threshold for the payment of the penalty – 9 pm – was simply an error. The Full Bench clearly
intended to align the evening penalty rate provisions in the Fast Food and Restaurant Awards,
but for whatever reason that intention was incompletely implemented.
[1333] We agree with the proposition that there is logic in adopting a similar approach to
evening penalty rate payments in these two awards.
[1334] It is convenient to deal here with another aspect of clause 25.5, in particular clause
25.5(a)(ii) which states:
‘(ii) A loading of 15% will apply for ordinary hours of work after midnight, and for
casual employees this loading will apply in addition to their 25% loading.’
[1335] Clause 25.5(a)(ii) provides for the payment of a 15 per cent loading for ordinary hours
of work ‘after midnight’, but does not set the span of hours between which the loading is to be
paid. The equivalent provision in the Restaurant Award (clause 34.2(a)(ii), above) provides
that the 15 per cent loading is paid for ordinary hours worked between midnight and 7.00 am.
We note that RCI proposes to vary the span of hours to which this penalty applies, but the
pertinent point for present purposes is that the Fast Food Award does not presently prescribe
the span of hours during which the loading is to be paid. For the reasons set out above it
would be logical to align the evening penalty rate provisions in the Fast Food and Restaurant
Awards. We now turn to the RCI’s claim.
[1336] RCI’s claim in relation to the late night penalty did not receive much attention in the
proceedings, in either the evidence or in submissions. RCI led evidence from two lay witness
fast food business proprietors: the operator of 3 hamburger restaurants employing 65
employees in South Australia (RCI Fast Food Witness 1) and the operator of nine shopping
centre food outlets employing 120 employees in Queensland (RCI Fast Food Witness 2). The
identity of these witnesses and the names of the businesses they operate was the subject of a
[2017] FWCFB 1001
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confidentiality order. No particular findings are sought to be drawn from the evidence of the
RCI witnesses. Both witnesses address the late night penalty. Witness 1 says:
‘Although the company closes to the public week nights at 9PM we incur the 10% late night
penalty during clean up and staff generally staying back until 10PM to complete the necessary
closure of operations on each site. This equates to a total of $4,391 across all three sites per
annum and is considered a disincentive for the business’
[1337] During cross-examination Witness 1 did not suggest that the removal of the 10 per
cent penalty between 9 pm and 10 pm would lead to a change in staffing arrangements or
trading hours, but did note that the time between 9 pm and 10 pm ‘is still our core business
trading hours and with that 10 per cent it is – it does disadvantage us slightly when it is still
core business hours’.
[1338] Witness 2’s evidence was that:
‘The company would consider extending its evening trading hours across all outlets if the late
night penalty was altered from 9PM to Midnight.’
[1339] Witness 2 operates nine fast food outlets in Queensland; six of which are open until
7.00 pm on weeknights. The other three outlets trade until 9.30 pm on Thursday night. During
the course of cross-examination the witness explained that the trading hours reflected the level
of demand:
‘In paragraph 4 you say that the operating times are typically 9 am to 7 pm weekdays. I had a
look at your website. It tells me that three of your outlets trade to 9.30 pm on Thursday nights.
Is that correct?---Yes, that’s correct.
I take it that that’s because, in the case of those three outlets, the level of trade justifies them
opening to the later hour of 9.30?---Yes. And all the current outlets are in shopping centres, so
that’s the late-night trade night.
I see. And in relation to the other six outlets, the level of trade doesn’t justify you opening past
about 7 pm on weeknights?---Correct.’
[1340] The witness went on to concede that the existing late night penalty did not restrict his
ability to extend the trading hours from 7 pm to 9 pm in the six outlets which presently traded
until 7 pm, and then made the following concession:
‘So I would suggest to you that your claim in paragraph 7 that the company would consider
extending its evening trading hours across all outlets if the late-night penalty was altered out to
midnight, you would accept that that’s an overstatement because you already, in relation to all
but three of your stores, only trade to 7 pm. Do you accept that’s so?---Yes, I would agree to
that. Yes.’
[1341] As mentioned earlier, RCI is seeking to vary the late night penalty provisions in the
Restaurant Award and the Fast Food Award in the same terms and advances a common
submission in respect of both awards. In support of its position RCI relied on a report by the
Fair Work Ombudsman in respect of compliance with the Restaurant Award. Compliance
with the Fast Food Award was the subject of a subsequent report by the Fair Work
[2017] FWCFB 1001
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Ombudsman, dated March 2016 – ‘National Hospitality Industry Campaign 2012–15
Takeaway Foods (Wave 3)’ (the ‘FWO Wave 3 Report’).
[1342] The results of the FWO Wave 3 Report reveal a high level of non-compliance (67 per
cent).
[1343] The FWO Wave 3 Report states:
‘Fair Work Inspectors found some businesses providing flat rates of pay for all hours worked,
with many advising they had adopted this practice to simplify their payroll processes. In nearly
one third of cases, the hourly rate paid was not enough to cover hours attracting penalty rates
and loadings, resulting in additional errors.’
[1344] The essence of RCI’s submission is that varying clause 25.5(a) such that it only
provides for a 5 per cent loading for work between midnight and 5.00 am would make the
award simpler and improve compliance. It is not submitted (at least not expressly) that the
variation proposed would lead to an increase in the operating hours of fast food businesses, or
to an increase in employment. Nor is there much (if any) direct, probative, evidence to
support such a contention.
[1345] The proposition that a variation in the terms sought would increase compliance is only
given limited support by the FWO Wave 3 Report. That report identified the most common
source of non-compliance as the underpayment of hourly rates, whereas errors in the
application of penalty rates and loadings only accounted for 15 per cent of instances of
incorrect payment.
[1346] We acknowledge that the variation proposed would make the award simpler and easier
to understand, consistent with one of the s.134 considerations (s.134(1)(g)). But the same may
be said about the abolition of the evening work penalty. Simplicity is a laudable objective, but
it is only one of the matters we are required to take into account – the central question is
whether the award term provides ‘a fair and relevant minimum safety net’.
(ii) The Sunday penalty rate
[1347] We now turn to the claims to reduce the penalty rate for Sunday work, from 150 per
cent to 125 per cent for full-time and part-time employees and from 175 per cent to 150 per
cent for casual employees. As mentioned earlier, no party contended that the penalty rate for
Saturday work – presently 125 per cent – should be varied.
[1348] The claims made are consistent with the recommendations in the PC Final Report, that
for full-time and part-time employees the Sunday penalty rates be set at the higher rate of
125 per cent and the existing Saturday penalty rate.
[1349] In addition to the general findings made on the basis of the common evidence (see
Chapter 6), there a number of important contextual matters relevant to our consideration of
weekend penalty rates in the Fast Food Award.
[1350] The Fast Food industry comprises of about 24,600 establishments operating in a
number of industry sub-sectors. There is a high level of competition in the industry with
businesses offering a wide range of different fast food options.
1182
In terms of employment,
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the industry is dominated by the QSR major chains, which employ about 86 per cent of Fast
Food industry employees. McDonald’s and Hungry Jack’s employ just over half,
1183
and
McDonald’s alone employs 46 per cent of the employees in the Fast Food industry.
[1351] The standard operating hours of most fast food businesses include Saturdays and
Sundays, reflecting customer demand for the purchase and consumption of fast food. In
McDonald’s stores the peak period of sales is usually Friday to Sunday,
1184
with 17 per cent
of the weekly revenue earned on a Saturday
1185
and 14 per cent of weekly revenue generated
on a Sunday.
1186
In some McDonald’s stores, Sunday sales were 25 to 30 per cent greater than
on the average weekday.
1187
[1352] As we have mentioned a ‘typical’ Fast Food employee is likely to be:
a student (full-time or part-time);
aged between 14 and 24 years;
employed on a part-time basis (in the sense that they are not a full-time employee
and may be engaged on either a casual or part-time basis); and
working between 1 and 24 hours per week.
[1353] Further, the profile of Fast Food employees differs from the profile of employees in
‘All industries’ in four important respects:
(i) almost 80 per cent of Fast Food employees work part-time (i.e. less than
35 hours per week
1188
), compared with only 32.2 per cent of all employees;
(ii) about half (49.6 per cent) of Fast Food employees work 1–15 hours per week
and just over two-thirds (67.8 per cent) work 1–24 hours per week, compared
with only 11.2 per cent respectively of all employees;
(iii) over half (52 per cent) of Fast Food employees are aged between 15 and
19 years, and 71.1 per cent are aged between 15 and 24 years, compared with
only 6.6 per cent and 17.8 per cent respectively of all employees; and
(iv) over half (55.6 per cent) of Fast Food employees are students (51.1 per cent are
full-time students and 4.5 per cent study part-time) compared to 13.6 per cent
of all employees.
[1354] The incidence of weekend work is also a distinguishing characteristic of the Fast Food
industry. The Ai Group employee survey, which is representative of the major QSR chains
(and 86 per cent of employees in the industry) shows that some 64 per cent of respondents
work on Saturdays and 58 per cent on Sundays (the total is greater than 100 per cent as they
may work on both days).
1189
ABS data shows that for all industries only around one quarter of
employees work on weekends.
1190
[1355] We now turn to the s.134 considerations.
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[1356] Section 134(1)(a) requires that we take into account ‘relative living standards and the
needs of the low paid’. A threshold of two-thirds of median full-time wages provides a
suitable benchmark for identifying who is ‘low paid’, within the meaning of s.134(1)(a). On
the basis of the O’Brien Report and Chart 27 (see [738] above) we are satisfied that a
substantial proportion of Fast Food industry employees are ‘low paid’; are more likely to
reside in a lower income households and are more likely to experience financial difficulties.
[1357] A reduction in Sunday penalty rates will have an adverse impact on those Fast Food
industry employees who usually work on a Sunday. It is likely to reduce the earnings of those
employees, who are already low paid and to have a negative effect on their relative living
standards and on their capacity to meet their needs.
[1358] While s.134(1)(a) is a consideration against the reduction in Sunday penalty rates, it
needs to be borne in mind that the primary purpose of such penalty rates is to compensate
employees for the disutility associated with working on Sundays, it is not designed to address
the needs of the low paid. As we have mentioned, the needs of the low paid are best addressed
by the setting and adjustment of modern award minimum rates of pay (independent of penalty
rates).
[1359] The adverse impact of a reduction in Sunday penalty rates is relevant to our
consideration of the transitional arrangements associated with any reduction in penalty rates
(see Chapter 13).
[1360] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’. A reduction in penalty rates is likely to increase the incentive for employees to
bargain, but may also create a disincentive for employers to bargain. It is also likely that
employee and employer decision-making about whether or not to bargain is influenced by a
complex mix of factors, not just the level of penalty rates in the relevant modern award. We
are not persuaded that a reduction in penalty rates would ‘encourage collective bargaining’
and on that basis this consideration does not favour a change to weekend penalty rates.
[1361] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. Obtaining employment is the focus of
s.134(1)(c).
[1362] Other than the common evidence dealing with the employment effects of a reduction
in penalty rates (see Chapter 6) there is a paucity of direct evidence from industry participants
about the employment effects of reducing the Sunday penalty rate. None of the Ai Group lay
Fast Food operator witnesses addressed the employment effects of such a change.
[1363] As mentioned, RCI led evidence from 2 lay witness fast food proprietors. Witness 1
gave evidence that:
‘A reduction to the Sunday penalty rate would benefit the Company and would boost casual
employment by 3 new staff across the three sites. This is because we currently reduce
headcount in each site on Sundays to mitigate the Sunday penalty rate.’
1191
[1364] In cross-examination the witness clarified that a reduction in the Sunday penalty rate
would lead to the employment of three casual employees (one at each site) at key times on a
Sunday, that is from noon until 3.00 pm and in the evening.
1192
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[1365] Witness 2 gave evidence that:
‘… any reduction to the Sunday and Public Holiday penalty rate would benefit the Company
and would boost casual employment in each outlet.’
1193
[1366] The company referred to operates nine Fast Food outlets. During cross-examination
Witness 2 conceded that he had not worked out how many additional casuals would be
employed if the Sunday penalty rate was reduced.
1194
The witness also conceded that the
suggestion that such a reduction would ‘boost casual employment in each outlet’ was ‘really
just surmise or speculation’ on his part.
1195
[1367] On the basis of the common evidence we conclude that a reduction in the Sunday
penalty rate in the Fast Food Award (from 150 per cent to 125 per cent) is likely to lead to
some increase in employment, albeit only a modest increase.
[1368] Section 134(1)(d) requires that we take into account ‘the need to promote flexible
modern work practices and the efficient and productive performance of work’.
[1369] Ai Group submits
1196
that this consideration is not relevant to our consideration of its
claim.
[1370] The NRA submits that a reduction in Sunday penalty rates will:
promote flexible modern work practices by creating additional options for rostering
of staff on Sundays; and
will increase efficiency and productivity.
[1371] As we have mentioned, the NRA did not adduce any evidence in support of its claim.
[1372] RCI submits that ‘at a general level’ there is ‘sufficient evidence’ to find that the
current Sunday penalty rate operates ‘negatively in relation to promoting flexible work
practices and the efficient and productive performance of work’.
1197
RCI does not identify the
evidence which is said to support the finding advanced. As mentioned, RCI led evidence from
two lay witness fast food proprietors.
1198
That evidence says nothing about the impact of a
reduction in the Sunday penalty rate on ‘flexible modern work practices and the efficient and
productive performance of work’.
[1373] We regard s.134(1)(d) as neutral to our consideration of the claims before us.
[1374] Section 134(1)(da) requires that we take into account the ‘need to provide additional
remuneration’ for, relevantly, ‘employees working on weekends’. As mentioned earlier, an
assessment of ‘the need to provide additional remuneration’ to employees working in the
circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a range
of matters, including:
(i) the impact of working at such times or on such days on the employees concerned
(i.e. the extent of the disutility);
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(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g. through
‘loaded’ minimum rates or the payment of an industry allowance which is intended to
compensate employees for the requirement to work at such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[1375] As to matter (ii) the relevant modern award does not already compensate employees
for working on weekends, other than through the penalty rates prescribed in the award. As
mentioned earlier, working on weekends, (matter (iii)), is a feature of the Fast Food industry.
[1376] As mentioned in Chapter 3, compensating employees for the disutility associated with
working on weekends is a primary consideration in the setting of weekend penalty rates.
Assessing the extent of the disutility of working at such times or on such days (issue (i)
above) includes an assessment of the impact of such work on employee health
1199
and work-
life balance, taking into account the preferences of the employees for working at those times.
In the Fast Food industry, Sunday work is not associated with a higher rate of safety incidents
(i.e. number of reported incidents divided by number of employees working).
1200
[1377] The Ai Group survey provides a useful source of information on employee disutility
associated with Sunday work. The Ai Group employee survey results show a marked
difference in the willingness to work some or more hours on a Sunday based on age (see
Chart 45). Almost three in four respondents (73 per cent) aged under 21 years of age were
willing to work some or more hours on a Sunday, compared to just over half (56 per cent)
employees aged 21 years or older. The responses to a number of other, related, survey
questions also show a strong correlation to the age of the respondent, namely:
Preferred day to work: generally speaking, the preference for working only
weekdays (i.e. Monday to Friday) – and by inference the preference to not work on
weekends – increased with age. Twice as many respondents aged 21 years and over
(54 per cent) preferred not to work on weekends compared to those aged 14 to 20
years (26 per cent).
1201
Negative impact of Sunday work: a significantly higher proportion of respondents
aged 21 years and over (55.1 per cent) reported some or a lot of negative impact of
working on Sundays on spending time with family and friends, compared to
respondents aged 14 to 20 years (42.3 per cent). Almost three times as many
employees aged 21 years and over (15.4 per cent) reported a lot of negative impact,
compared to those aged 14 to 20 years (5.2 per cent). Similarly, just over half (51.2
per cent) of respondents aged 14 to 20 years reported ‘no impact of working on
Sundays on spending time with family and friends, compared to 39 per cent of
respondents aged 21 years and over.
1202
[1378] It is also likely that the correlation between the reported experiences and preferences
and age is influenced by the student status of the employee respondent. In this regard we note
that 73.4 per cent of full-time students indicated that they would work some or more hours on
a Sunday, if offered.
1203
Full-time students also indicated a much stronger preference for
working a mix of weekdays and weekends (70.3 per cent) than non-students (41.7 per cent).
[2017] FWCFB 1001
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Further, almost 80 per cent of full-time students preferred to work either weekends or a mix of
weekdays and weekends, compared to 44 per cent of non-students.
1204
[1379] As a consequence of our decision on these claims the employees covered by the Fast
Food Award will continue to receive additional remuneration for working on Sundays.
[1380] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’. Any reduction in Sunday penalty rates
would apply equally to men and women workers. For the reasons given earlier we regard
s.134(1)(e) as neutral to our consideration of the claims before us.
[1381] Section 134(1)(f) requires that we take into account ‘the likely impact of any exercise
of modern award powers on business, including on productivity, employment costs and the
regulatory burden’.
[1382] Ai Group contends
1205
that if the Sunday penalty rate was reduced then employment
costs would reduce. The NRA makes a similar point, and submits that the current level of
Sunday penalty rates in the award ‘imposes an unreasonable employment cost’. This
consideration supports a reduction in the Sunday penalty rate. It was not contended that a
reduction in the Sunday penalty rate would impact on productivity or regulatory burden.
[1383] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’. We regard s.134(1)(g) as neutral to our consideration
of the claims before us. No party contended to the contrary.
[1384] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’.
[1385] Ai Group submits
1206
that the reduction in the level of penalty rates will not have
economy wide effects. The NRA takes a different position and submits ‘the impact of
reducing Sunday penalty rates in the Fast Food Award will have positive economy-wide
effects in that it will encourage further employment and increase productivity in the fast food
industry’.
1207
[1386] A detailed assessment of the impact of a reduction in Sunday penalty rates in the Fast
Food Award on the national economy is not feasible on the basis of the limited material
before us.
[1387] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’, taking into account
the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into
account those considerations insofar as they are relevant to the matter before us.
[1388] The central issue is whether the existing Sunday penalty rate provides a ‘fair and
relevant minimum safety net’. In relation to level 1 employees we have concluded that the
existing Sunday penalty rate is neither fair nor relevant. The evidence as to the work
preferences and experiences of level 1 employees leads us to conclude that the existing
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penalty rate overcompensates those employees for the level of disutility associated with
Sunday work. That evidence supports a reduction in the Sunday penalty rate, for level 1
employees, from 150 per cent to 125 per cent.
[1389] The position in respect of level 2 and 3 employees is quite different. There is a clear
distinction between the reported preferences and experiences of level 1 employees (using
those aged 14 to 20 years as a proxy), and those employees classified at levels 2 and 3. In
terms of reported preferences, level 1 employees (compared to level 2 and 3 employees) are
more likely to express a preference for weekend work (either weekends only or a mix of
weekdays and weekends) and a willingness to work some or more hours on a Sunday.
[1390] In terms of their reported experiences, level 2 and 3 employees (compared to level 1
employees) are more likely to report some or a lot of negative impact from working on
Sundays on spending time with family and friends and less likely to report no impact of
working on Sundays on spending time with family and friends.
7.5.7 Conclusion
[1391] For the reasons given we will vary the late night penalty provision as proposed by Ai
Group. The 10 per cent evening work loading will now apply to work between 10.00 pm
(rather than 9.00 pm) and midnight.
[1392] We do not propose to vary the Fast Food Award late night penalty in the manner
proposed by RCI. A sufficient merit case has not been advanced to support the extent of the
changes proposed.
[1393] As mentioned earlier, RCI is also seeking to vary the late night penalty in the
Restaurant Award in the same terms as its proposed variation to the Fast Food Award. We
have dealt with that proposal in Chapter 7.4.5(i) of our decision and have decided that the
current 15 per cent loading be payable between midnight and 6 am (not 7 am as it is in the
current award term). We adopt the same view in respect of the Fast Food Award. We note
that the Fast Food Award does not presently prescribe the span of hours during which the
loading is paid. For the reasons set out above ([1331]–[1335]) we propose to align the span of
hours in the Fast Food Award with that provided in the Restaurant Award.
[1394] For the reasons given, we have decided to reduce the Sunday penalty rate, for level 1
employees. The Sunday penalty rate for full-time and part-time level 1 employees will be
reduced from 150 per cent to 125 per cent and the penalty rate for level 1 casuals will be
reduced from 175 per cent to 150 per cent. We do not propose to change the Sunday penalty
rate for Level 2 and 3 employees.
[1395] Level 2 and 3 employees experience a higher level of disutility associated with Sunday
work than that experienced by level 1 employees. The evidence supports the retention of the
current Sunday penalty rate for level 2 and 3 employees. In this context we note that level 2
and 3 employees are, generally speaking, regarded as ‘career’ employees with the QSR major
chains whereas casual and part-time crew member (level 1 employees) are usually regarded as
‘non-career’ employees.
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[1396] The change to the Sunday penalty rate for Level 1 employees will apply to the vast
majority of Fast Food industry employees. We note that about 92 per cent of McDonald’s and
Hungry Jack’s employees are Level 1 employees and that the employment composition of
McDonald’s and Hungry Jack’s is, broadly speaking, representative of the major chains,
which in turn employ just over 86 per cent of all employees in the Fast Food industry.
[1397] In the settlement of the order giving effect to this part of our decision, the parties are to
give consideration to whether it is necessary to include a term similar to that contained in
clause 34.1A of the Restaurants Award.
[1398] As set out earlier, neither Ai Group, the NRA nor RCI propose any change to Saturday
penalty rates.
[1399] As mentioned earlier, in the Review the Commission is not constrained by the terms of
a particular application, it may vary a modern award in whatever terms it considers
appropriate, subject to procedural fairness considerations. Accordingly, if we were satisfied of
the merit of doing so, it would be open to us to reduce the Saturday penalty rate. But as we are
not satisfied of the merit of doing so, we have decided not to adopt that course.
[1400] As set out in Chapter 6, there is a disutility associated with weekend work, above that
applicable to work performed from Monday to Friday.
[1401] We are satisfied that the existing Saturday penalty rates in the Fast Food Award
achieve the modern awards objective – they provide a fair and relevant minimum safety.
[1402] There are two final matters we wish to address.
[1403] As mentioned earlier, we have a preference for what the Productivity Commission
calls the ‘default’ method to the interaction of casual loadings and weekend penalties. Under
this approach, the casual loading is added to the applicable weekend penalty rate when
calculating the Saturday and Sunday rates for casuals. This issue is addressed in clause 25.5 of
the Fast Food Award which provides, relevantly:
(c) Saturday work
A loading of 25% will apply for ordinary hours of work within the span of
hours on a Saturday, and for casual employees an additional 25% on top of the
casual rate.
(d) Sunday work
(i) A 50% loading will apply for all hours of work on a Sunday for
full-time and part-time employees.
(ii) A 75% loading will apply for all hours of work on a Sunday for casual
employees, inclusive of the casual loading. (emphasis added)
[1404] It appears that there may be a different method for calculating the payment to casual
employees for weekend work, depending on whether it is Saturday work or Sunday work. For
[2017] FWCFB 1001
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Sunday work, the Productivity Commission’s ‘default’ method is applied. But for Saturday
clause 25.5(a) may be interpreted such that the Saturday work loading (25 per cent) is applied
to the casual rate of pay for ordinary hours (that is, the relevant minimum hourly rate of pay +
the 25 per cent casual loading). Hence in respect of Saturday work there is a degree of
compounding by applying a penalty upon a penalty.
[1405] In the context of the Fast Food Award there appears to be no logical reason why there
should be a different method for calculating the entitlements of casuals, depending on whether
they work on a Saturday or Sunday.
[1406] Our provisional view is that clause 25.5(a) be amended, as follows:
(a) Saturday work
(i) A 25% loading will apply for all hours of work on a Saturday for
full-time and part-time employees.
(ii) A 50% loading will apply for all hours of work on a Saturday for casual
employees, inclusive of the casual loading.
[1407] The other matter concerns the NRA’s proposed amendment to clause 26, Overtime. It
will be recalled that the proposed variation sought the deletion of the words: ‘Casual
employees shall be paid 275% on a Public Holiday’. On its face the NRA proposal appears to
have merit, given that the penalty rate for casuals who work on public holidays is set out in
clause 30.3, which seemingly renders the last sentence in clause 26 unnecessary. It is also
relevant to observe that the sentence sought to be deleted does not appear to deal with
‘overtime’ in any event. We note however that the proposed change was not the subject of any
submissions or evidence.
[1408] In the circumstances we propose to adopt the provisional view that the last sentence of
clause 26 be deleted. We deal with the process for interested parties to comment on our
provisional view in Chapter 12, Next Steps.
[1409] We deal with the transitional arrangements associated with the reduction in penalty
rates we have determined in Chapter 13 of our decision.
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8. The Retail Sector
8.1 Overview
[1410] This section present data on the Retail group of modern awards, that is:
General Retail Industry Award 2010; and
Pharmacy Industry Award 2010
[1411] The data in this section are based on the Commission’s report Industry profile—Retail
trade. We also make reference to two expert reports. Dr Watson’s report is titled ‘Employee
Earnings in the National Retail Industry’
1208
(the Watson Report). Professor Peetz and Dr
Watson co-author a report titled ‘Characteristics of the Workforce in the National Retail
Industry’
1209
(the Peetz and Watson Report). These two experts were not required for cross-
examination in relation to their reports and, broadly speaking, we accept their evidence, save
where the data upon which they rely had been supplanted by more recent data.
[1412] The data presented are collected from five sources: the ABS, the Fair Work
Commission’s AWRS and ARS, the HILDA Survey and the Department of Employment’s
WAD. The ABS contains a number of surveys on the performance, structure and
characteristics of industries. The AWRS, ARS and HILDA are large-scale quantitative
surveys that collectively provide information on enterprises, employees and households.
HILDA has the added advantage of presenting information over time. The WAD is a database
that contains information of all Australian enterprise agreements. Further information on the
Commission’s data sources is located on its website.
1210
[1413] A paper
1211
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. There are 4 levels within the ANZSIC structure: division,
subdivision, group and class. The most readily available data are at the division level (or 1
digit level) and data are presented at this level. In this instance, the relevant division of
ANZSIC is Division G: the Retail sector (for convenience we refer to this as the Retail
sector). The following presents the subdivisions, groups and classes within the Retail sector:
39 Motor vehicle and motor vehicle parts retailing
o 391 Motor vehicle retailing
3911 Car retailing
3912 Motor cycle retailing
3913 Trailer and other motor vehicle retailing
o 392 Motor vehicle parts and tyre retailing
3921 Motor vehicle parts retailing
3922 Tyre retailing
40 Fuel retailing
o 400 Fuel retailing
4000 Fuel retailing
41 Food retailing
o 411 Supermarket and grocery stores
4110 Supermarket and grocery stores
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o 412 Specialised food retailing
4121 Fresh meat, fish and poultry retailing
4122 Fruit and vegetable retailing
4123 Liquor retailing
4129 Other specialised food retailing
42 Other store-based retailing
o 421 Furniture, floor coverings, houseware and textile goods retailing
4211 Furniture retailing
4212 Floor covering retailing
4213 Houseware retailing
4214 Manchester and other textile goods retailing
o 425 Electrical and electronic goods retailing
4221 Electrical, electronic and gas appliance retailing
4222 Computer and computer peripheral retailing
4229 Other electrical and electronic goods retailing
o 423 Hardware, building and garden supplies retailing
4231 Hardware and building supplies retailing
4232 Garden supplies retailing
o 424 Recreational goods retailing
4241 Sport and camping equipment retailing
4242 Entertainment media retailing
4243 Toy and game retailing
4244 Newspaper and book retailing
4245 Marine equipment retailing
o 425 Clothing, footwear and personal accessory retailing
4251 Clothing retailing
4252 Footwear retailing
4253 Watch and jewellery retailing
4259 Other personal accessory retailing
o 426 Department stores
o 427 Pharmaceuticals and other store-based retailing
4271 Pharmaceutical, cosmetic and toiletry goods retailing
4272 Stationery goods retailing
4273 Antique and used goods retailing
4274 Flower retailing
4279 Other store-based retailing n.e.c.
43 Non-store retailing and retail commission-based buying and/or selling
o 431 Non-store retailing
o 432 Retail commission-based buying and/or selling.
[1414] Table 48 shows how the modern awards in the Retail sector ‘map’ with the relevant
industry class.
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Table 48
1212
Modern awards ‘mapped’ to ANZSIC class
Retail group modern award ANZSIC class included in profile
General Retail Industry 4110 – Supermarket and grocery stores
4122 – Fruit and vegetable retailing
4129 – Other specialised food retailing
4211 – Furniture retailing
4213 – Houseware retailing
4214 – Manchester and other textile goods retailing
4221 – Electrical, electronic and gas appliance retailing
4222 – Computer and computer peripheral retailing
4229 – Other electrical and electronic goods retailing
4231 – Hardware and building supplies retailing
4231 – Garden supplies retailing
4241 – Sport and camping equipment goods retailing
4242 – Entertainment media retailing
4243 – Toy and game retailing
4244 – Newspaper and book retailing
4245 – Marine equipment retailing
4251 – Clothing retailing
4252 – Footwear retailing
4253 – Watch and jewellery retailing
4259 – Other personal accessory retailing
4260 – Department stores
4272 – Stationary good retailing
4273 – Antique and used goods retailing
4274 – Flower retailing
4279 – Other store-based retailing n.e.c.
Pharmacy Industry 4271 – Pharmaceutical, cosmetic and toiletry goods retailing
[1415] We propose to first set out the data relating to the Retail sector and the employers who
operate within it, before turning to the characteristics of employees in the sector. It should be
noted that the data in some of the tables presented in this chapter may not add up to 100, due
to rounding.
8.1.1 Features of the Retail Sector
(i) General economic indicators
[1416] Key indicators for Retail sector are presented in Table 49. The data show that the
industry accounted for:
over $380 billion of sales and almost 5 per cent of value added to the economy;
over 10 per cent of employment, 9 per cent of actual hours worked per week in all
jobs and over 8 per cent of wages;
over 6 per cent of all businesses and over 16 per cent of all award-reliant non-
managerial employees;
around 2 per cent of investment;
almost 20 per cent of total underemployment; and
almost $18 billion in company gross operating profit.
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Table 49
1213
Economic indicators of the Retail sector
Retail sector Percentage of
all industries
Industry value added ($m) (June 2016)
a
74 284 4.8
Sales ($m) (June 2016)
a,c
381 950 14.9
Employment (‘000s) (August 2016)
b
1256 10.5
Actual hours worked per week in all jobs (‘000s) (August 2016)
b
35 762 9.0
Company gross operating profit ($m) (June 2016)
a,c
17 723 7.1
Wages ($m) (June 2016)
a,d
41 774 8.2
Gross fixed capital formation ($m) (June 2015)
a
8656 2.1
Businesses (June 2015)
e
132 382 6.2
Award-reliant non-managerial employees (‘000s) (May 2016)
d
368 16.2
Underemployment (‘000s) (August 2016)
b
208 19.5
Note: (a) sum of four quarters; (b) average over the four quarters; (c) All industries excluding Agriculture, forestry and
fishing, Education and training, Health care and social assistance and some subdivisions of Finance and insurance services;
(d) all industries excluding Agriculture, forestry and fishing; (e) All industries excluding the public sector.
Industry value added and sales are seasonally adjusted and expressed in real terms from chain volume estimates. Employment
is expressed in seasonally adjusted terms. Actual hours worked per week in all jobs and underemployment are expressed in
original terms. Company gross operating profits and wages are seasonally adjusted from current price estimates. Gross fixed
capital formation is expressed in original and real terms, from chain volume estimates.
(ii) Business size
[1417] As shown in Table 50, businesses in the Retail sector were predominantly small
businesses and more likely to be employing businesses compared with businesses across all
industries.
Table 50
1214
Percentage of businesses by business size, June 2015
Retail sector All industries
(%) (%)
All businesses
Non-employing 41.8 60.6
Small 53.8 36.9
Medium 4.2 2.4
Large 0.2 0.2
100.0 100.0
Employing businesses
Small 92.5 93.5
Medium 7.2 6.1
Large 0.3 0.4
100.0 100.0
Note: Small businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and large businesses
employ 200 or more persons. The publication only includes actively trading businesses in the market sector and hence
excludes entities that are in the public sector.
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[1418] In June 2015, small businesses accounted for over half of businesses in the Retail
sector. Both small and medium businesses comprised a higher proportion of businesses in the
Retail sector than across all industries.
(iii) Industry concentration and competition
[1419] As mentioned earlier, industry concentration refers to the degree with which a small
number of firms provide a major proportion of total production within an industry and
provides a measure of competition within an industry.
[1420] As shown in Table 51, large businesses accounted for almost half of wages and
salaries, sales and service income and industry value added in the Retail sector. Small and
non-employing businesses accounted for higher proportions of wages and salaries in the
Retail sector than in total selected industries (i.e. all industries except for Financial and
insurance services), while medium businesses accounted for lower proportions across each of
these measures in the Retail sector than in total selected industries.
Table 51
1215
Wages and salaries, sales and service income, and industry value added by business size,
2014–15
Percentage of industry total
Wages and
salaries
Sales and service
income
Industry value
added
(%) (%) (%)
Retail sector
Small and non-employing 30.6 33.8 31.5
Medium 23.0 19.9 20.7
Large 46.4 46.3 47.8
100.0 100.0 100.0
Total selected industries
Small and non-employing 28.2 35.3 35.6
Medium 26.8 22.3 21.5
Large 44.9 42.4 43.0
100.0 100.0 100.0
Note: Small and non-employing businesses employ less than 20 persons, medium businesses employ 20 to 199 persons and
large businesses employ 200 or more persons. Total selected industries exclude Financial and insurance services as
businesses in this industry were not in the scope of the survey. Small and non-employing businesses cannot be disaggregated.
[1421] Table 52 provides information on market and competition for enterprises in the Retail
sector and across all industries in 2014. Subjective measures of market and competition
include the number of direct competitors faced and the degree of competition observed for
their major products and/or services during the last financial year.
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Table 52
1216
Market and competition, 2014
Retail sector All industries
(%) (%)
Nature of market
Domestic only 88.2 83.6
Domestic with some export 10.5 14.6
Export with some domestic np 1.4
Export only – 0.5
100.0 100.0
Market focus
Immediate local area only 58.3 44.0
Intrastate 19.4 19.5
Interstate 2.5 9.1
Australia wide 19.8 27.4
Other – np
100.0 100.0
Number of direct competitors
1–4 21.2 21.7
5–9 27.3 23.6
10–19 22.2 18.9
20–49 14.0 12.8
50 or more 13.5 16.4
None/captive market/no effective competition np 6.6
100.0 100.0
Degree of competition
Intense competition 31.5 29.6
Strong competition 45.8 42.3
Moderate competition 20.3 21.6
Limited competition 2.5 6.5
100.0 100.0
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
[1422] Most enterprises in the Retail sector and across all industries operated within the
domestic market only. A higher proportion of enterprises in the Retail sector focused on the
immediate local area only compared with enterprises across all industries, which were more
likely to focus Australia wide. We note however that enterprises in the Retail sector are facing
increased competition from overseas based on-line retailers.
[1423] While most enterprises reported five to nine direct competitors, enterprises in the
Retail sector were less likely to report 50 or more direct competitors compared with all
industries. Most enterprises reported strong or intense competition, with enterprises in the
Retail sector less likely to report limited competition compared with all industries. We note
that the Productivity Commission has identified that the most sweeping change impacting
upon the retail sector “does not involve physical provision of goods and services” but rather
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“online provisions playing a much more important role” in relation to some products and
services.
1217
This in turn has increased competition and reduced the need for brick and mortar
establishments.
(iv) Award reliance
[1424] A higher proportion of non-managerial employees in the Retail sector were reliant on
award rates of pay relative to all industries, offset by a lower proportion of employees on
individual arrangements (Table 53). However, collective agreements were the most common
method of setting pay.
Table 53
1218
Methods of setting pay, May 2016
Retail sector All industries
(%) (%)
Award only 34.5 24.5
Collective agreement 37.6 38.9
Individual arrangement 27.9 36.6
All methods of setting pay 100.0 100.0
[1425] The Commission’s Award Reliance Survey collected data on the number of
organisations that use each modern award. The most common modern award used by award-
reliant organisations within the Retail sector in 2013 was the General Retail Industry Award
2010 (Table 54). This was used by more than six in 10 award-reliant organisations in the
Retail sector. It was also the second most common modern award used by award-reliant
organisations across all industries.
Table 54
1219
Top 10 modern awards used in the Retail sector,
percentage of award-reliant organisations, 2013
Retail sector
All
industries
(%) (%)
General Retail Industry Award 2010 61.5 15.1
Vehicle Manufacturing, Repair, Services and Retail Award 2010 11.6 6.6
Pharmacy Industry Award 2010 10.9 2.1
Clerks—Private Sector Award 2010 8.9 16.0
Meat Industry Award 2010 4.0 0.9
Manufacturing and Associated Industries and Occupations Award 2010 2.5 4.7
Road Transport and Distribution Award 2010 2.0 2.3
Hospitality Industry (General) Award 2010 1.0 13.3
Fast Food Industry Award 2010 0.9 1.8
Nursery Award 2010 0.8 0.4
Note: An award-reliant organisation has at least one employee that receives the exact award rate of pay.
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(v) Profitability
[1426] Profit margins are operating profits before tax as a percentage of income received, and
can be used to compare profitability between industries. They provide an indication of the
level of competition within an industry as well as its level of capital intensity.
[1427] Profit margins for the Retail sector compared with total selected industries are
presented for the period 2012–13 to 2014–15 in Chart 47. Profit margins in the Retail sector
were lower relative to total selected industries and also decreased over the period.
Chart 47
1220
Profit margins, 2012-13 to 2014-15
Note: Profit margins are calculated as the percentage of sales and service income available as operating profit before tax.
Total selected industries exclude Financial and insurance services as businesses in this industry were not in the scope of the
survey.
(vi) Wages and Salaries
[1428] Wages and salaries comprised a lower proportion of total expenses in the Retail sector
compared with total selected industries at around 11 per cent (Chart 48).
0
2
4
6
8
10
12
Retail trade Total selected industries
Per cent
2012–13 2013–14 2014–15
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Chart 48
1221
Wages and salaries as a percentage of total expenses by subdivision, 2012-13 to 2014-15
Note: Total selected industries exclude Financial and insurance services as businesses in this industry were not in the scope
of the survey.
(vii) Productivity
[1429] Average annual growth in productivity is presented for both labour and multifactor
productivity over the two most recent productivity cycles, 2003–04 to 2007–08 and 2007–08
to 2014–15. The common approach to measuring productivity is to compare average annual
rates of growth in the market sector between peaks in the productivity cycle (as identified by
the ABS) rather than focusing on short-run (quarterly and annual) trends.
[1430] Chart 49 shows that average annual growth of both labour and multifactor productivity
were higher in the Retail sector compared with the market sector in both productivity cycles.
While there was a decline in multifactor productivity for the market sector across both cycles,
it increased in the Retail sector. Average annual growth in both labour and multifactor
productivity in the Retail sector was higher from 2007–08 to 2014–15 than the previous cycle.
0
2
4
6
8
10
12
14
16
18
20
Retail trade Total selected industries
Per cent
2012–13 2013–14 2014–15
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Chart 49
1222
Average annual growth rates of labour and multifactor productivity, 2003-04 to 2014-15
Note: The 2007–08 to 2014–15 growth cycle is incomplete. Labour productivity measures the amount of output per unit of
labour which is measured in terms of gross value added per hour worked on a quality adjusted hours basis. Multifactor
productivity measures the ratio of growth in output to growth in two or more factor inputs and represents that part of the
change in output that cannot be explained by changes in the inputs. Multifactor productivity, in this case, is based on the
gross value added of capital and labour in production and is measured on a quality adjusted hours basis. The total market
sector comprises all industries except for Public administration and safety, Education and training and Health care and social
assistance.
(viii) Business viability
[1431] Chart 50 shows the survival rates in June 2015 of businesses that were operating in
June 2011 by business size. It shows that while business survival rates increased with
business size in the Retail sector and for all industries, the survival rates among businesses of
all sizes in the Retail sector were consistently lower than for all industries.
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
Labour productivity Multifactor productivity Labour productivity Multifactor productivity
2003–04 to 2007–08 2007–08 to 2014–15
Per cent
Retail trade Market sector
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Chart 50
1223
Business survival rates, by employment size, June 2011 to June 2015
Note: Survival rates in June 2015 of businesses that were operating in June 2011. The publication only includes actively
trading businesses in the market sector and hence excludes entities that are in the public sector.
(ix) Enterprise characteristics
[1432] The highest proportion of enterprises in the Retail sector operated 7 days per week,
followed by weekdays and Saturday (Table 55). Collectively, these two groups accounted for
over three-quarters of enterprises in the Retail sector. In contrast, across all industries, almost
half operated at these times while around half operated weekdays only.
Table 55
1224
Structure and operations, 2014
Retail sector All industries
(%) (%)
Operating days
Weekdays only 18.9 48.8
Weekdays and Saturday 37.1 17.5
Some weekdays and weekend 2.8 2.3
Operating 7 days 40.6 31.1
Other np 0.4
100.0 100.0
Average number of operating days per week 6.2 5.8
Average years of operation under current ownership 18.9 18.5
Note: np = not published due to estimate having a relative standard error of greater than 50 per cent.
0 20 40 60 80 100
Non-employing
Small
Medium
Large
Total
Per cent
Retail sector All industries
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(x) Labour market trends
[1433] Table 56 shows how employment in the Retail sector changed between August 2011
and August 2016. Over the period, growth in full-time, part-time and total employment in the
Retail sector was lower than growth across all industries. Indeed, full-time employment
contracted in the Retail sector compared with a small increase for all industries while total
employment was unchanged.
Table 56
1225
Average annual growth rate of employed persons, by full/part-time status and
industry group of main job, August 2011 to August 2016
Industry group Full-time Part-time Total
(%) (%) (%)
Retail sector –1.1 1.3 0.0
All industries 0.7 2.7 1.3
8.1.2 Retail sector employees
(i) Composition of employment
[1434] Table 57 shows that the total workforce in the Retail sector comprised around 10 per
cent of total employment in August 2016. More than half of the workforce in the Retail sector
was female. While the proportion of full-time and part-time employment within the Retail
sector was relatively even, the proportion that is employed part-time (50.1 per cent) is greater
than for all industries (31.9 per cent).
Table 57
1226
Composition of employed persons, August 2016
Total employment Percentage of total employment
Male Female Total Total
Full-
time
Part-
time
Full-
time
Part-
time
Male Female
Full-
time
Part-
time
(‘000s) (%) (%) (%) (%) (%) (%) (%) (%)
Retail sector 1194.7 28.9 15.5 20.9 34.6 44.5 55.5 49.9 50.1
All industries 11 869.1 43.5 10.1 24.6 21.8 53.6 46.4 68.1 31.9
Note: Data may not sum to 100 due to rounding. All data are expressed in original terms.
[1435] As shown in Table 58, young people aged between 15 and 24 years were more likely
to be employed in the Retail sector, comprising almost one in three employed persons aged
24 years or under compared with less than one in six employed persons across all industries.
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Fewer employed persons aged 25 years and over were employed in the Retail sector than
across all industries.
Table 58
1227
Employed persons by age, August 2016
Age Retail sector All industries
(Years) No. (‘000s)
Percentage of
employment
Percentage of
employment
15–19 174.7 14.6 5.3
20–24 211.1 17.7 9.7
25–34 255.8 21.4 23.5
35–44 190.7 16.0 21.8
45–54 192.7 16.1 21.2
55–59 76.5 6.4 8.7
60–64 53.1 4.4 5.9
65 and over 40.1 3.4 3.8
Total 1194.7 100.0 100.0
Note: All data are expressed in original terms.
[1436] The Peetz and Watson Report finds a higher proportion of young people in the Retail
sector in 2013 than shown in the table—between 38 and 39 per cent aged 24 years or under
and between 19 and 21 per cent aged 19 years or under.
1228
[1437] Professor Peetz and Dr Watson also observe that the weekend retail workforce is
ageing: between 2004 and 2013 the point estimate of the average age of the weekend
employee retail workforce increased from 27.3 years to 29.0 years
1229
.
[1438] Professor Peetz and Dr Watson also provide data on the proportion of retail employees
who are ‘dependent students’. A dependent student is defined as a person aged 15 to 24,
studying full-time, not working full-time and living in a household with their parent(s).
1230
In
2013 18.4 per cent of retail employees were dependent students and there was no statistically
significant change in the proportion of ‘dependent students’ in the weekend employee retail
workforce between 2004 and 2013.
1231
The Peetz and Watson Report concludes:
‘In summary, while a majority of tertiary students who are employed work in either
retailing or hospitality (i.e. accommodation and food services) industries, this does not
mean that most people who work in those industries are tertiary students. Nor does it
indicate that they are not in need. … The majority of retail employees are not students,
nor even young people (if we consider those under 25 years of age as young), even
though a significant minority are students.’
1232
(ii) Average hours worked
[1439] Table 59 shows that the average hours actually worked per week in all jobs in August
2016 were lower for the Retail sector than across all industries, as well as for both full-time
and part-time workers.
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Table 59
1233
Average hours actually worked in all jobs, by industry group of main job
and full/part-time status, August 2016
Industry group Average hours actually worked in all jobs
Full-time Part-time Total
Retail sector 40.1 16.1 28.1
All industries 40.6 17.4 33.2
Note: Actual hours of work refers to the hours actually worked during normal periods of work (including overtime) over a
specified reference week. It excludes meal breaks, paid/unpaid time ‘on call’, commuting time and time off during work
hours to attend educational activities not connected to the job. The actual hours of work over a specified period may be
affected if the person took personal/annual leave, went on strike, changed job, or similar reasons.
(iii) Forms and conditions of employment
[1440] The majority of workers in the Retail sector were employees with paid leave
entitlements, although the proportion of employees without paid leave entitlements was
higher relative to employment across all industries (Table 60). The proportion of employees
without paid leave entitlements was similar to that found by Dr Watson for 2013.
1234
Table 60
1235
Employed persons by employment type in main job, August 2016
Retail sector All industries
No. (‘000s)
Percentage of
employment
Percentage of
employment
Employee 1068.5 89.5 82.7
With paid leave entitlements 682.4 57.1 62.0
Without paid leave entitlements 386.2 32.3 20.8
Owner manager of enterprise with employees 65.9 5.5 6.2
Owner manager of enterprise without
employees
59.8 5.0 10.9
Contributing family worker 0.3 0.0 0.2
Total 1194.5 100.0 100.0
Note: All data are expressed in original terms.
[1441] Full-time employees in the Retail sector were more likely to be employed with paid
leave entitlements while part-time employees were more likely to be employed without paid
leave entitlements (Table 61).
Table 61
1236
Employees with and without paid leave, August 2016
Full-time Part-time All employees
With paid
leave
Without
paid leave
With paid
leave
Without paid
leave
With paid
leave
Without paid
leave
(%) (%) (%) (%) (%) (%)
Retail sector 89.3 10.7 40.8 59.2 63.9 36.1
All industries 88.3 11.7 46.1 53.9 74.9 25.1
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[1442] An absence of paid leave entitlements is an indication of casual employment. It
follows that there are a higher proportion of casual employees in the Retail sector than across
all industries.
(iv) Employment tenure
[1443] Workers in the Retail sector were more likely to experience a shorter duration of
employment with an employer/business than workers employed across all industries. Chart 51
shows that almost one-quarter of workers in the Retail sector had been with their current
employer/business for ‘1–2 years’, while around one in five workers had been with their
current employer/business for less than 12 months.
Chart 51
1237
Duration of employment with current employer/business in the Retail sector,
February 2015
(v) Work schedule
[1444] Table 62 shows the prevalence and types of shiftwork arrangements used in
enterprises in the Retail sector and across all industries in 2014. A lower proportion of
enterprises in the Retail sector used shiftwork arrangements compared with all industries.
However, the most common shiftwork arrangements used in both enterprises in the Retail
sector and across all industries were set rosters and eight-hour shifts.
0
5
10
15
20
25
30
3 months 3 and 6
months
6 and 12
months
1–2 years 3–5 years 6–9 years 10–19 years 20 years or
more
Per cent
Retail trade All industries
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Table 62
1238
Prevalence and types of shiftwork arrangements, 2014
Retail sector All industries
(%) (%)
Uses shiftwork arrangements 17.9 23.8
Types of shiftwork arrangements
Rotating rosters 56.2 57.1
Set rosters 86.2 77.6
Early morning shifts 45.8 62.2
Afternoon shifts 72.7 71.9
Evening and night shifts 61.7 70.8
Standard business hours 78.2 69.7
Split/broken shifts 15.5 36.1
Standby/on call 35.8 39.8
8-hour shifts 86.2 80.3
12-hour shifts 20.7 27.8
Short shifts of 4 hours or less 59.5 53.7
Other – 3.6
[1445] Using the HILDA survey, Table 63 shows the current work schedule for employees in
their main job in 2015. The most common schedule for employees in the Retail sector was a
regular daytime schedule, although this proportion was less than for employees across all
industries. Employees in the Retail sector were more likely to work a regular evening shift
than employees across all industries.
Table 63
1239
Current work schedule in main job, employees, 2015
Retail sector All industries
(%) (%)
A regular daytime schedule 69.8 75.5
A regular evening shift 6.3 3.7
A regular night shift 3.4 1.7
A rotating shift (changes from days to evenings
to nights)
10.1 9.4
Split shift (two distinct periods each day) 1.2 1.4
On call 0.4 1.1
Irregular schedule 8.8 6.9
Other 0.1 0.2
Total 100.0 100.0
[1446] Using HILDA and ABS data the Peetz and Watson Report concluded that the
proportion of the total retail workforce that usually worked on weekends (either on one of
both of the weekend days) was between ‘a little below 60 per cent’ and 62 per cent, and that
31–35 per cent of the total retail workforce usually worked on a Sunday.
1240
[2017] FWCFB 1001
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(vi) Earnings
[1447] As shown in Table 64, most employees in the Retail sector received the adult rate of
pay; however, the proportion was lower than for all industries. The proportion of employees
that received a junior rate of pay was over three times the proportion across all industries.
Table 64
1241
Employees by rate of pay, May 2016
Retail sector All industries
(%) (%)
Adult rate of pay 85.4 94.0
Junior rate of pay 13.7 4.1
Apprentice or trainee 0.9* 1.9
Disability rate 0.04* 0.1
All rates of pay 100.0 100.0
Note: * Estimate has a relative standard error between 25 and 50 per cent and should be used with caution.
[1448] Average weekly earnings in the Retail sector were lower than for all industries across
each measure in Table 65. Average weekly earnings for full-time employees in the Retail
sector were around three quarters of average weekly earnings for full-time employees in all
industries.
[1449] Using similar measures of average weekly earnings to that presented in Table 65, Dr
Watson examines the changes from May 2010 to November 2014. His report finds that the
ratio of average weekly earnings in the Retail sector relative to all industries declined from
73 per cent to 69 per cent over that period.
1242
Table 65
1243
Average weekly earnings, May 2016
Retail sector
All
industries
Ratio of the Retail
sector relative to all
industries
($) ($) (%)
Average weekly earnings, all employees 692.60 1160.90 59.7
Average weekly earnings, full-time adult
employees
1133.50 1573.30 72.0
Average weekly ordinary time earnings,
full-time adult employees
1114.90 1516.00 73.5
Average weekly ordinary time earnings,
full-time adult male employees
1163.40 1613.50 72.1
Average weekly ordinary time earnings,
full-time adult female employees
1048.60 1352.10 77.6
Note: All data are expressed in original terms.
[1450] The distribution of hourly total cash earnings for adult employees in the Retail sector
is relatively more concentrated toward the lower end of the wage distribution than the
earnings of adult employees across all industries (Chart 52). Relative to all industries, the
[2017] FWCFB 1001
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Retail sector had a higher concentration of employees earning up to $25 per hour. Using data
from the EEH survey, the Watson Report compares the distribution of full-time non-
managerial employee total hourly cash earnings in the Retail sector relative to all industries.
Dr Watson finds that two-thirds of employees in the Retail sector fall below the average
weekly total cash earnings of employees in the Retail sector.
1244
Chart 52
1245
Distribution of hourly total cash earnings, adult employees, May 2014
Note: Earnings are calculated at $1 intervals up to and including the amount presented (e.g. $17 includes amounts over $16
per hour and up to and including $17 per hour) for adult employees in the federal jurisdiction. Earnings of employees who
receive a casual loading are discounted by 25 per cent.
[1451] Wages growth in the Retail sector was lower than wages growth across all industries
for most of the period between the June quarter 2011 and the June quarter 2015. However, the
trend was reversed between the September quarter 2015 and the June quarter 2016, as wage
growth in the Retail sector was higher than wage growth across all industries (Chart 53).
[1452] These trends are consistent with the expert reports: the Watson Report shows that
wages growth in the Retail sector was lower than across all industries between 2001 and
2014.
1246
0
2
4
6
8
10
12
14
15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 60
Per cent
Retail sector All industries
[2017] FWCFB 1001
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Chart 53
1247
Annual growth in Wage Price Index, June quarter 2011 to June quarter 2016
Note: All data are expressed in original terms.
(vii) Penalty payments
[1453] The Commission’s AWRS collected detailed data on employees’ wages and identified
employees that received penalty rates. Around one in 10 employees received penalty rates,
both in the Retail sector and across all industries (Table 66). Award-reliant employees were
more likely to receive penalty rates compared with employees on other methods of setting
pay, both within the Retail sector and across all industries.
Table 66
1248
Percentage of employees who receive penalty rates, by method of setting pay, 2014
Retail sector All industries
(%) (%)
Award 19.0 22.0
Other methods 5.5 6.2
All employees 10.6 10.6
Note: ‘Other methods’ of setting pay include enterprise agreements and individual arrangements. The sample analysed was
restricted to employees that reported working for businesses that either operated 6 or 7 days in a week, operated on weekends
or used shiftwork arrangements. ‘Penalty rates’ are collected in the AWRS by asking participants for the gross (before-tax)
amount received for penalty payments (for work performed outside standard hours).
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Per cent
Retail sector All industries
[2017] FWCFB 1001
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(viii) ‘Low paid’ employees in the Retail sector
[1454] A threshold of two-thirds of median full-time wages provides ‘a suitable and
operational benchmark for identifying who is low paid’, within the meaning of s.134(1)(a)
(see [165]–[168]).
[1455] The Watson Report comments on the earnings and financial circumstances of retail
workers compared to other workers:
‘Using both household-based and employer-based surveys, the overall pattern in earnings are
conclusive. Compared to workers in other industries, the retail workforce is amongst the
lowest paid, coming close behind accommodation and food services. While the percentages
vary slightly, the earnings for retail workers are about 70% of the earnings of the all-industry
average.
Along with hospitality and food services, retail has the largest proportion of low paid workers
in Australia. The extent to which the retail workforce is low paid varies, depending on the
definition of low pay and the population under examination. The most optimistic figure is a
proportion of 10% and the most pessimistic figure is 50%. A more robust estimate for the
pessimistic figure is probably about 20% using the definition of low paid as below two thirds
median earnings, and somewhere in the mid 30% range using the definition of low paid as
earnings below the bottom quintile…
When it comes to financial hardship, the data suggested that retail households faced greater
difficulties in raising emergency funds. This suggests that their financial resources are more
limited than those of other - industry households’.
1249
[1456] The most recent data for median earnings is for May 2016 from the ABS EEH. Data
on median earnings are also available from the CoE survey in August 2015. As such, the
minimum weekly wages presented from these awards are those determined from the Annual
Wage Review 2014–15 on 2 June 2015.
[1457] The following charts present the minimum weekly wages of each classification in the
General Retail Industry Award 2010 and Pharmacy Industry Award 2010, comparing them
with two-thirds of full-time median earnings.
[1458] Chart 54 shows that the full-time weekly wage for each classification in the General
Retail Industry Award 2010 was below the EEH measure of two-thirds of median full-time
earnings. Most classifications were below the CoE measure of two-thirds of median full-time
earnings except for Retail Employee Levels 7 and 8.
[2017] FWCFB 1001
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Chart 54
1250
Comparison of minimum weekly wages in the General Retail Industry Award 2010 and
two-thirds of median full-time earnings
Note: Weekly earnings from the Characteristics of Employment Survey are earnings in the main job for full-time employees.
Weekly earnings from the Survey of Employee Earnings and Hours are weekly total cash earnings for full-time adult non-
managerial employees.
[1459] Chart 55 shows that the full-time weekly wages for most classifications in the
Pharmacy Industry Award 2010 were below both measures of two-thirds of median full-time
earnings. The Pharmacist, Experienced Pharmacist, Pharmacist in charge and Pharmacist
manager classifications were above both measures of two-thirds of median full-time earnings,
while the ‘Pharmacy Interns – Second half of training’ classification was only above the CoE
measure.
721.50 738.70 750.20
764.90 796.30
807.90
848.30 882.80
818.67
917.33
0
100
200
300
400
500
600
700
800
900
1000
Retail
Employee
Level 1
Retail
Employee
Level 2
Retail
Employee
Level 3
Retail
Employee
Level 4
Retail
Employee
Level 5
Retail
Employee
Level 6
Retail
Employee
Level 7
Retail
Employee
Level 8
2/3
median
full-time
earnings
(CoE)
2/3
median
full-time
earnings
(EEH)
$ per week
[2017] FWCFB 1001
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Chart 55
1251
Comparison of minimum weekly wages in the Pharmacy Industry Award 2010 and two-
thirds of median full-time earnings
Note: Weekly earnings from the Characteristics of Employment Survey are earnings in the main job for full-time employees.
Weekly earnings from the Survey of Employee Earnings and Hours are weekly total cash earnings for full-time adult non-
managerial employees.
(ix) Bargaining
[1460] The Department of Employment’s WAD contains information on the AAWIs
negotiated under enterprise agreements in each quarter.
[1461] AAWIs negotiated under enterprise agreements and approved in each quarter for the
Retail sector between the June quarter 2011 and the June quarter 2016 were generally lower
than across all industries (Chart 56).
721.50
738.70
764.90
796.30
721.50
738.70
764.90
796.30
806.80
834.40
943.90
1033.80
1058.00
1179.10
818.67
917.33
0
200
400
600
800
1000
1200
$ per week
[2017] FWCFB 1001
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Chart 56
Average annualised wage increases for federal enterprise agreements approved in the
quarter, June quarter 2011 to June quarter 2016
1252
8.1.2 Summary
[1462] The Retail sector’s contribution to overall sales, profits, wages, employment and hours
worked was relatively large. Employees within the sector were also more likely to be
underemployed and award reliant.
[1463] Key findings within this sector were that employers were relatively more likely to be
characterised by:
small and medium businesses;
lower profit margins;
lower wages and salaries as a proportion of total expenses;
lower survival rates;
strong or intense competition; and
operate more than 6 days per week.
[1464] Key findings within this sector were that employees were relatively more likely to be
characterised by:
female;
part-time and casual workers;
award-reliant; and
lower paid.
0
1
2
3
4
5
Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Per cent
Retail sector All industries
[2017] FWCFB 1001
332
[1465] Further, retail households face greater difficulties in raising emergency funds. This
suggests that their financial resources are more limited than those of other industry
households.
8.2 The General Retail Industry Award 2010
8.2.1 The Claims
[1466] The Australian Retailers Association, the National Retail Association and the Master
Grocers Association (collectively the Retail Employers) and ABI seek to vary the General
Retail Industry Award 2010 (the Retail Award) to reduce the loading payable on Sundays
from 100 per cent to 50 per cent. ABI has also made a claim concerning public holiday
penalty rates, which will be discussed later in this decision.
[1467] The changes sought to Sunday penalty rates are set out below, in a marked up version
of clause 29.4.
29 Overtime and penalties
…
29.4 Penalty payments
(a) Evening work Monday to Friday
A penalty payment of an additional 25% will apply for ordinary hours
worked after 6.00 pm. This does not apply to casuals.
(b) Saturday work
A penalty payment of an additional 25% will apply for ordinary hours
worked on a Saturday for full-time and part-time employees. A casual
employee must be paid an additional 10% for work performed on a
Saturday between 7.00 am and 6.00 pm.
(c) Sunday work
A penalty payment of an additional 100% 50% loading will apply for
all hours worked on a Sunday. This penalty payment also applies to
casual employees instead of the casual loading in clause 13.2.
[1468] The Retail Employers also seek to amend the Retail Award to reduce the rates payable
for shiftwork performed on Sundays. If granted, the variation would reduce the shiftwork rate
payable on Sunday from 200 per cent to 175 per cent for full-time and part-time employees,
and from 225 per cent to 200 per cent for casual employees. The changes sought are set out
below, in a marked up version of clause 30.3:
30. Shiftwork
…
[2017] FWCFB 1001
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30.3 Rate of pay for shiftwork
(a) Any shiftwork performed between midnight Sunday and midnight
Friday will be paid at the rate of 130% (155% for casuals) of the
ordinary time rate of pay.
(b) Any shiftwork performed on a Saturday will be paid at the rate of 150%
(175% for casuals) of the ordinary time rate of pay.
(c) Any shiftwork performed on a Sunday will be paid at the rate of 200%
175% (225% 200% for casuals) of the ordinary time rate of pay.
(d) Where an employee elects to work on a public holiday shift then the
provisions set out in clause 29.4(d) will apply for all hours of the shift.
(e) For the purposes of this clause, where a shift falls partly on a public
holiday, the shift which commences on the public holiday will be
regarded as the public holiday shift. Provided that if the employee elects
not to work on a public holiday shift such employee will be entitled to
be absent without loss of pay.
(f) Provided that in any shop where it is mutually agreed between an
employer and the majority of employees engaged under the provisions
of this clause another shift may be substituted for the shift which
commences on the holiday as the holiday shift and in such instance the
provisions of clause 29.4(d) relating to such holiday will apply only to
the day so substituted.
[1469] The claims of the Retail Employers and ABI are opposed by the SDA.
8.2.2 Background to the Retail Award
[1470] The Award Modernisation Full Bench designated the ‘Retail industry’ as a priority
industry in the award modernisation process and initially proposed making one award to cover
general retail, pharmacy, hair and beauty and fast food, :
‘…at least at this stage, we do not intend to exclude community pharmacies, fast food outlets or
hairdressing services…Obviously the precise scope of a modern retail award cannot be
determined at this stage but we intend to include a broad range of awards in our consideration
to maximize the potential for rationalisation of award coverage’
1253
[1471] The SDA subsequently filed a draft general retail industry award, the scope of which
included the fast food, hair and beauty, and community pharmacy industries.
1254
The SDA’s
draft award provided for loadings of 25 per cent and 100 per cent for work performed on
Saturdays and Sundays, respectively.
1255
Public holidays attracted loadings of 150 per cent for
full-time and part-time employees and 175 per cent for casuals.
1256
[1472] The ARA, by contrast, submitted that no penalty rates should apply to weekend
work
1257
unless it exceeded the maximum allowable number of ordinary hours. This
submission was advanced on the basis that “if an employee chooses to accept a retail job that
[2017] FWCFB 1001
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involves working on evenings or weekends, but within the span of ordinary hours…
additional compensation is (not) warranted.”
1258
Similarly, the ARA submitted that public
holiday penalty rates should only be payable if the time worked fell during a period that
would otherwise attract overtime payments (in which case the rate would be 250% in lieu of
any other penalties).
1259
[1473] The MGA submitted that as Sunday work was no longer as intrusive to the personal
time of employees than it had historically been a penalty rate of 150 per cent of the ordinary
rate (‘rather than the 200 per cent that existed in most States’
1260
) was the appropriate rate. It
submitted that the penalty rate for public holidays remain at 250 per cent.
1261
The NRA and
ANRA submitted that a rate of 150 per cent for Sunday work was appropriate.
1262
[1474] An exposure draft of a modern award for the general retail industry was published on
12 September 2008. The coverage extended to the fast food, hair and beauty, and community
pharmacy industries and provided for penalty rates which reflected those proposed by the
SDA.
1263
In the accompanying Statement, the Full Bench did not specifically address the issue
of the penalty rates contained in the exposure draft.
1264
After the publication of the exposure
draft submissions were filed by interested parties.
[1475] A number of parties continued to agitate for the creation of multiple awards across the
retail sector. In the decision issued on 19 December 2008 the scope of the modern Retail
Award was restricted to what was defined as the ‘general retail sector’. Separate awards were
made to cover employers and employees in the pharmacy, hair and beauty and fast food
industries:
‘The more awards with disparate provisions are aggregated the greater the extent of changes in
the safety net. Changes may be able to be accommodated by a “swings and roundabouts”
approach, specific provisions relevant to part of the industry or transitional provisions.
However, significant changes may also result in net disadvantage to employees and/or
increased costs for employers. The publication of an exposure draft which sought to rationalise
the terms and conditions across the various types of retail establishment provided a means
whereby the impact of such an approach could be fully evaluated.
We have considered these matters and the submissions of the parties and have decided to
make separate awards for general retailing, fast food, hair and beauty, and community
pharmacies…
In reaching this decision we have placed significant reliance on the objective of not
disadvantaging employees or leading to additional costs. We note that such an approach will
not lead to additional awards applying to a particular employer or employee.
The contents of the four awards we publish with this decision are derived from the existing
awards and NAPSAs applying to the different sectors. Although the scope of the awards is
obviously reduced, this did not eliminate the variations in terms and conditions within each
part of the industry. We have generally followed the main federal industry awards where
possible and had regard to all other applicable instruments. In this regard we note in particular
the significant differences in awards and NAPSAs applying to the fast food and pharmacy
parts of the industry.’
1265
[1476] In a Statement issued on 26 June 2009, the Commission provided parties an
opportunity to apply to vary modern awards created in earlier stages but which had not yet
[2017] FWCFB 1001
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commenced operation.
1266
A number of applications were made including a claim by the
NRA, Chamber of Commerce and Industry of Western Australia (CCIWA), Retail Traders
Association of Western Australia (RTAWA) and the ARA which sought to reduce the Sunday
penalty rates for full-time employees from 200 per cent to 150 per cent and for casual
employees from 225 per cent to 150 per cent. The rates sought reflected the NAPSAs
applying in New South Wales and to Queensland exempt shops, but were not generally
reflected in other pre-reform awards and NAPSAs.
1267
The Award Modernisation Full Bench
considered these applications and concluded that:
‘The modern award rate of 100% for full time employees is in line with the existing rate in
Victoria, the Australian Capital Territory, Queensland non-exempt shops, Western Australia
and Tasmania. In our view the critical mass supports the retention of this provision.
For casual employees there is a case for reducing the penalty payment. The level of 100%
applies in Victoria, Queensland non-exempt shops and the Australian Capital Territory. Other
states are higher or lower, but we believe that 100% represents a fair outcome overall. We will
provide that the casual rate for working on Sundays will be the same as for full time
employees.’
1268
[1477] On 26 August 2009 the Award Modernisation Request was amended by the Minister
for Employment and Workplace Relations to include a new paragraph:
‘53. The Commission should ensure that the hours of work and associated overtime
penalty arrangements in the retail, pharmacy and any similar industries the Commission views
as relevant do not operate to discourage employers from:
offering additional hours of work to part-time employees; and
employing part-time employees rather than casual employees.’
1269
[1478] In a Statement issued on 10 September 2009, the Award Modernisation Full Bench
invited submissions addressing the effect of the variation to the Ministerial request:
‘In its decision of 19 December 2008 the Commission made the General Retail Industry Award
2010 and the Pharmacy Industry Award 2010. Any interested party which is of the view that
either of those awards, or any other award, should be varied to give effect to the 26 August
variation should make an appropriate application. We will endeavour to deal with any such
application before the end of 2009.’
1270
[1479] No such applications were made.
[1480] In making the Retail Award, the ‘main federal industry award’ was deemed to be the
Shop, Distributive and Allied Employees Association - Victorian Shops Interim Award
2000
1271
(the Victorian Shops Interim Award).
[1481] The Victorian Shops Interim Award was the subject of proceedings in 2003 which
sought to extend the coverage of the award by ‘roping in’ some 17 000 employers.
1272
[1482] In SDA v $2 and Under and Others (No. 1)
1273
a Full Bench of the AIRC decided that
the ‘roping in’ would take place in a staged process so that all of the increases in labour costs
were not introduced at the same time.
1274
The Full Bench made an award, known as the Shop,
[2017] FWCFB 1001
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Distributive and Allied Employees’ Association Victorian Shops Interim (Roping-in No. 1)
Award 2003 (‘the Roping-In Award’) which roped in some 17 000 employees. Importantly for
present purposes, the Full Bench decided to adopt ‘as an interim measure’ pending a further
hearing, a penalty rate of 150 per cent for all work performed in ordinary hours on a
Sunday
1275
.
[1483] In the proceedings which followed, the Full Bench heard evidence and submissions
regarding the appropriate penalty rate for Sunday work. In essence, the SDA sought a Sunday
penalty rate of 200 per cent and the Retail Employers contended that a penalty rate of 150 per
cent was fair and equitable for both employers and employees.
[1484] In SDA v $2 and Under and Others (No. 2)
1276
, the Full Bench decided, by majority, to
apply the 200 per cent Sunday work penalty which extended the Victorian Shops Interim
Award to those employees who were the subject of the Roping-In Award. It is apparent from
the majority decision that particular regard was paid to the terms in the Victorian Shops
Interim Award and the general principles applicable to roping in awards. So much is clear
from the following parts of the majority decision:
‘[98] The rationale of fixing a Sunday penalty rate for ordinary time work on the basis of
providing compensation for the disabilities upon employees, applied in an abstract way, would
involve the task of seeking to place a value upon the level of compensation required. It seems
to us that such an exercise would necessitate a thorough assessment and fixation of a range of
related penalties, such as Saturday penalties, having regard to associated disabilities, rather
than the fixation of a single penalty rate in isolation. However, an abstract exercise of that type
is not appropriate in the context of the present matter. We are required to consider the fixation
of a final Sunday penalty rate in the context of the history of the provision, established
approaches in relation to the making of a roping-in award and the statutory context. Further,
we are now required to determine the single outstanding issue of the appropriate final rate for
ordinary time work on a Sunday. We do so, without repeating it, in the context of the
background, the statutory scheme, principles in respect of roping-in awards and factual context
set out in the January 2003 decision…
[116] Having considered all of the material, it is our view that the primary focus of our
considerations should be on the interim award provisions in respect of the working of ordinary
time on Sundays, found in the provisions operating in respect of Exempt Shops for a
considerable time…
[119] As indicated above, we think the primary focus in assessing a fair minimum standard for
the penalty for work in ordinary hours on a Sunday, in the context of living standards
generally prevailing in the Australian community, is found in the interim award provisions and
beyond that, to a lesser degree, in award provisions operating more generally in the Victorian
retail sector. In our view, the provisions in other State and Territory awards and in federal
awards, considered broadly, provide little assistance. Both the interim award, in respect of
Exempt Shop provisions, and the predominance of other retail awards operating in Victoria
support the double time standard. Such a provision in the roping-in award will also provide a
single consistent standard as between the interim and roping-in award.’
1277
(Footnotes omitted)
[1485] The majority also considered the evidence of 2 expert witnesses (Dr Michael Bittman
and Dr Graeme Russell), in relation to the nature of Sunday work and the associated social
disabilities,
1278
and concluded that the evidence ‘demonstrates a significant social disability
associated with work on a Sunday’.
1279
[2017] FWCFB 1001
337
[1486] The minority decision of Giudice J. concluded that:
‘Taking all of these considerations into account, but particularly the penalty rates under the
parent award for work in ordinary hours on other days of the week, a penalty rate of 100% for
work performed in ordinary hours on Sundays in the retail industry in Victoria is excessive. In
the circumstances it is not necessary that I express a final view on the appropriate penalty
rate’.
1280
[1487] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue, but the
particular context may be a cogent reason for not following a previous Full Bench decision. In
considering the weight to be given to the majority decision in SDA v $2 and Under and
Others (No. 2) the following points are relevant:
(i) The legislative scheme, the scope of the parties involved, and the roping-in
nature of the proceedings in which that case was decided is materially different
from the FW Act and the present Review;
(ii) The evidentiary case advanced in previous proceedings was much more limited
than the material before us in the present proceedings; and
(iii) While the majority decision had regard to the expert evidence it is apparent
from the decision that the majority paid particular regard to the existing terms
of the Victorian Shops Interim Award and the general principles applicable to
roping in awards.
[1488] Having regard to the above contextual considerations we do not feel constrained to
follow the decision of the majority in SDA v $2 and Under and Others (No. 2).
[1489] In submissions filed in the current matter, the Retail Employers emphasise the fact that
during the award modernisation:
no witnesses were called to give evidence;
no expert evidence was presented; and
the Award Modernisation Full Bench did not undertake any analysis of the
proceeding disabilities associated with working on weekends, or the relative
disabilities as between Saturday and Sunday work, rather the focus of the AIRC was
on ‘bringing together disparate State and Territory award conditions’.
1281
[1490] The SDA, by contrast, submits that “the Sunday rate issue was very much a live issue
in the context of the Award Modernisation process” and that “it was contested in different
ways with numerous issues presented”.
1282
[1491] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue and will
proceed on the basis the prima facie the modern award being reviewed achieved the modern
awards objective at the time it was made. The extent of a previous Full Bench’s consideration
of a contested issue is relevant to assessing the weight to be attributed to that decision. It is
[2017] FWCFB 1001
338
apparent from an examination of the relevant decisions that the Award Modernisation Full
Bench did not undertake a detailed or considered review of the penalty rates in the Retail
Award. Rather, understandably enough in view of the time contains on the award
modernisation process, the Full Bench gave effect to the existing penalty rates in the ‘critical
mass’ of pre-reform instruments.
8.2.3 The Retail Industry
[1492] A paper
1283
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework the General Retail Industry Award 2010 is
‘mapped’ to the following industry classes:
4110—Supermarket and grocery stores
4121—Fresh meat, fish and poultry retailing
4122—Fruit and vegetable retailing
4129—Other specialised food retailing
4211—Furniture retailing
4213—Houseware retailing
4214—Manchester and other textile goods retailing
4221—Electrical, electronic and gas appliance retailing
4222—Computer and computer peripheral retailing
4229—Other electrical and electronic goods retailing
4231—Hardware, building and garden supplies retailing
4241—Sport and camping equipment goods retailing
4242—Entertainment media retailing
4243—Toy and game retailing
4244—Newspaper and book retailing
4245—Marine equipment retailing
4251—Clothing retailing
4252—Footwear retailing
4253—Watch and jewellery retailing
4259—Other personal accessory retailing
4260—Department stores
4272—Stationary good retailing
4273—Antique and used goods retailing
4274—Flower retailing
4279—Other store-based retailing n.e.c.
1284
6632—Video and other electronic media rental and hiring
6639—Other goods and equipment rental and hiring n.e.c.
7220—Travel agency and tour arrangement services
9421—Domestic appliance repair and maintenance
9499—Other repair and maintenance n.e.c.
9532—Photographic film processing
[1493] It is convenient to refer to the aggregation of these industry classes as the General
retail industry.
[2017] FWCFB 1001
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[1494] The Census is the only data source that contains all of the employment characteristics
in Table 67 for the General retail industry. The most recent Census data is from August 2011.
[1495] The August 2011 Census data shows that there were around 718 000 employees in the
General retail industry. Table 67 compares certain characteristics of employees in the General
retail industry with employees in ‘all industries’.
Table 67
1285
Labour force characteristics of General retail industry,
ABS Census 9 August 2011
General retail industry All industries
(No.) (%) (No.) (%)
Gender
Male 272 937 38.0 4 207 586 50.8
Female 445 476 62.0 4 082 662 49.2
Total 718 413 100.0 8 290 248 100.0
Full-time/part-time status
Full-time 297 444 43.8 5 279 853 67.8
Part-time 381 411 56.2 2 507 786 32.2
Total 678 855 100.0 7 787 639 100.0
Highest year of school
completed
Year 12 or equivalent 401 644 56.9 5 098 228 62.6
Year 11 or equivalent 96 094 13.6 885 404 10.9
Year 10 or equivalent 161 414 22.8 1 687 055 20.7
Year 9 or equivalent 36 107 5.1 317 447 3.9
Year 8 or below 10 133 1.4 141 973 1.7
Did not go to school 1043 0.1 20 158 0.2
Total 706 435 100.0 8 150 265 100.0
Student status
Full-time student 162 730 22.9 612 990 7.5
Part-time student 30 998 4.4 506 120 6.2
Not attending 517 593 72.8 7 084 360 86.4
Total 711 321 100.0 8 203 470 100.0
Age (5 year groups)
15–19 years 142 891 19.9 547 666 6.6
20–24 years 130 352 18.1 927 865 11.2
25–29 years 82 568 11.5 1 020 678 12.3
30–34 years 63 026 8.8 933 827 11.3
35–39 years 61 146 8.5 934 448 11.3
40–44 years 59 347 8.3 938 386 11.3
45–49 years 56 752 7.9 911 739 11.0
50–54 years 49 716 6.9 848 223 10.2
55–59 years 37 244 5.2 652 190 7.9
60–64 years 24 893 3.5 404 470 4.9
65 years and over 10 478 1.5 170 718 2.1
Total 718 413 100.0 8 290 210 100.0
Average age 33.3 38.8
[2017] FWCFB 1001
340
General retail industry All industries
(No.) (%) (No.) (%)
Hours worked
1–15 hours 182 056 26.8 875 554 11.2
16–24 hours 105 062 15.5 792 539 10.2
25–34 hours 94 294 13.9 839 694 10.8
35–39 hours 123 140 18.1 1 676 920 21.5
40 hours 78 338 11.5 1 555 620 20.0
41–48 hours 48 641 7.2 895 619 11.5
49 hours and over 47 324 7.0 1 151 693 14.8
Total 678 855 100.0 7 787 639 100.0
Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
[1496] The profile of General retail industry employees differs from the profile of employees
in ‘All industries’ in 5 important respects:
(i) General retail industry employees are predominately female, (60 per cent,
compared to 49.2 per cent of all employees);
(ii) over half (56.2 per cent) of General retail industry employees are employed on
a part-time or casual basis (i.e. less than 35 hours per week
1286
), compared with
only 32.2 per cent of all employees;
(iii) over one quarter (26.8 per cent) of General retail industry employees work
1–15 hours per week compared with only 11.2 per cent of all employees;
(iv) almost four in ten (38.0 per cent) General retail industry employees are aged
between 15 and 24 years compared with only 17.8 per cent of all employees;
and
(v) over one quarter (27.3 per cent) of General retail industry employees are
students (22.9 per cent are full-time students and 4.4 per cent study part-time)
compared with 13.7 per cent of all employees.
8.2.4 The Evidence
(i) The Retail Employers
[1497] ABI called 3 witnesses to give evidence during the proceedings. Expert evidence was
given by Professors Lewis
1287
and Rose,
1288
and evidence of a survey of retail sector
employees was given by Ms Emily Baxter.
1289
[1498] The Retail Employers called 6 lay witnesses in support of their proposed variations:
Barry Barron, Chief Operating Officer of the Sussan Group Pty Ltd;
1290
[2017] FWCFB 1001
341
Heath Goddard, Managing Director, founder and owner of Pillow Talk Pty Ltd;
1291
Graeme Gough, Director and part owner of Quaymarket Pty Ltd (SPAR
Ballina);
1292
Jorge-Daniel Leroy d’Oreli, General Manager of Jeanswest;
1293
Peter Antonieff, Director of Prapla Pty Ltd (FoodWorks Oxley);
1294
and
Belinda Daggart, Director of Bindoura Pty Ltd (Bakers Delight Lavington).
1295
[1499] The Retail Employers also rely upon expert evidence provided by Dr Sean Sands,
Research Director of the Australian Centre for Retail Studies (ACRS) within the Department
of Marketing at Monash University.
1296
[1500] It is convenient to deal first with the Retail Employers’ lay witness evidence.
Barry Barron
1297
[1501] Mr Barron is the Group Chief Operating Officer of the Sussan Group, a privately
owned speciality fashion group, comprising Sportsgirl, Sussan and Suzanne Grae businesses.
The Sussan Group operates 493 stores across all States and Territories (180 under the Sussan
brand; 119 under the Sportsgirl brand and 194 under the Suzanne Grae brand) and employs
about 4,399 employees in retail positions. Mr Barron’s evidence primarily relates to the
Sussan and Sportsgirl businesses.
[1502] The majority of both Sussan and Sportsgirl retail employees are covered by the Retail
Award.
[1503] The use of labour by these businesses is limited to a percentage of retail sales in each
store: ‘Store managers are required to operate within this labour budget, and this forms part of
the assessment of their performance’.
1298
As to the impact of Sunday penalties, Mr Barron
says:
‘In allocating the budgeted hours across trading days, the group has had to limit allocations to
Sunday due to the high cost of labour as a result of Sunday penalties.
Approximately 81% of Sussan and 95% of Sportsgirl stores trade on Sundays. The stores that
do not trade on Sundays are closed because opening would result in a Sunday trading loss.
These losses would primarily be as a result of higher Sunday labour costs due to penalties. The
hours that our stores trade on Sundays varies from location to location. Taking into account
the higher Sunday labour costs, Sunday employees engage entirely in selling activities and
operating hours are restricted to busy periods to ensure turnover can cover the additional
labour costs. In some instances we are required to trade on Sunday by landlords for hours that
impact negatively on profit contribution…
Sunday has over the past 10 years become an increasingly important trading day for the
business. While the proportion of stores opening on Sundays has increased steadily over this
period, the average hours per store has decreased. This is despite the fact that sales per hour
significantly higher than other days, and with this ratio growing.’1299
[2017] FWCFB 1001
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[1504] We note that of the 5 Sportsgirl stores (out of 119) that do not trade on Sundays, 3 are
in country locations (Shepparton, Lismore and Mildura).
1300
[1505] The Sussan and Sportsgirl businesses respond to the current Sunday penalty rate by, in
effect, restricting Sunday to ‘customer service only’ days:
‘This means that the business limits the work performed on Sundays almost solely to selling.
We do not carry out any stock replenishment (unless there is no stock of a particular item on
display), minimal store cleaning is carried out and no administrative tasks are completed.’
1301
[1506] During the course of cross-examination Mr Barron agreed with the proposition that the
tasks identified – stock replenishment, store cleaning and administrative tasks, as not being
done on a Sunday were done on another day of the week.
1302
[1507] At paragraph [18] of his statement Mr Barron says:
‘With the increase in labour costs on Sundays the business has needed to respond in order to
maintain labour costs at the required percentage of turnover. This has meant that a number of
stores have reduced the hours they trade on a Sunday, because as a business we prefer to
maintain customer service levels when we are open.’
[1508] In the course of his evidence, Mr Barron points to the fact that the allocated labour
hours to Sundays for Sussan and Sportsgirl in NSW and Victoria fell between 2010/11 and
2014/15 as shown below:
1303
Table 68
Allocated labour hours
Sussan Sportsgirl
hours % ↓ hours % ↓
NSW
2010/11 32833
6.6%
28307
11.7%
2014/15 27303 26980
Victoria
2010/11 27167
14%
27963
29.1%
2014/15 23832 21629
[1509] We note that the percentage fall in hours in these stores between 2010/11 and 2014/15
was higher in Victoria than NSW.
1304
During cross-examination Mr Barron accepted that
when referring to increased labour costs since 2010 he was referring principally to the cost of
Sunday labour in Sportsgirl and Sussan in NSW and the ACT.
1305
[1510] Mr Barron rejected the suggestion that the NSW experience in this regard was
inconsistent with his evidence that labour costs had led to reduced hours (because Sunday
penalty rates increased in NSW but the reduction in hours is less than in Victoria, where
penalty rates remained unchanged).
1306
But no satisfactory explanation was provided for this
evident anomaly.
[2017] FWCFB 1001
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[1511] Mr Barron’s evidence is that over the past 10 years Sunday has become an
increasingly important trading day for the business. Sunday trading accounts for about 10.5
per cent and 11.75 per cent of Sussan and Sportsgirl weekly trading (taking into account only
those stores that trade on Sundays). The average Sunday turnover per labour hour is higher
than the average weekly turnover excluding Sundays:
1307
Table 69
Turnover per labour hour
Turnover ($)/hr labour Sussan Sportsgirl
Average Weekly
(excluding Sundays)
167 184
Sundays 254 291
[1512] Referring to the disparity in turnover/labour on Sundays compared to average weekly
turnover excluding Sundays, Mr Barrow says:
‘… we would expect to operate extended trading hours on Sunday, if it were not for the
disproportionately high labour costs’.
1308
[1513] At paragraphs 12, 13 and 28 of his statement, Mr Barron sets out the effect of a
reduced Sunday penalty rate:
‘If Sunday penalties were reduced to an additional 50% most of the stores we close could
become viable. Attached to this statement and marked BB1 is an analysis of the viability of
opening a number of these stores at different penalty rates.
Reduced Sunday penalty rates would allow us to open additional stores and provide more
hours of work on Sundays, while engaging employees to work beyond purely selling
activities, e.g. restocking, administration task, etc…
Given the earlier observations I made about customer service levels and the need to match our
operations with our customer needs, I firmly believe we would redirect all, or at very least the
substantial majority, of the labour cost savings brought about by a reduced Sunday penalty
rate back into store labour budgets. The changes we would implement would include:
(a) opening some stores that are currently closed on Sundays;
(b) extending trading hours in stores that are open;
(c) allowing stores to undertake administrative tasks in addition to sales service on
Sundays; and
(d) putting more money into store labour budgets for the hours that they already trade
in order to provide better service.’1309
[1514] The essence of Attachment BB1 to Mr Barron’s statement is that to break even at the
current Sunday penalty rate a store has to do 15 per cent more sales than are required to break
even at a 150 per cent penalty rate.
1310
[1515] We note that there are some limitations on the capacity of the business to open some
stores which are currently closed on Sundays. In particular the Greenwood Plaza shopping
centre (one of the locations where Sportsgirl does not open on Sundays) is closed on
Sundays.
1311
[2017] FWCFB 1001
344
[1516] Mr Barron was cross-examined in respect of the changes which would be implemented
if Sunday penalty rates were reduced. In particular, Mr Barron acknowledged that Suzanne
Grae has more stores than Sussan, though they are smaller stores, and that a greater proportion
of Suzanne Grae stores are closed on a Sunday (compared to the number of Sussan stores
closed on Sundays).
1312
The significance of this is that the terms and conditions of Suzanne
Grae employees are set by the Suzanne Grae Agreement 2012 (the ‘SG Agreement’)
1313
, not
the Retail Award. The SG Agreement provides for a reduction in some penalty rates in
exchange for an increase in ordinary rates of pay (over and above that prescribed in the Retail
Award). The SG Agreement provides for a Sunday penalty rate of 150 per cent and no penalty
rate for Saturdays.
[1517] Mr Barron was cross-examined about these matters – the short point being that even
with the benefit of a lower Sunday penalty rate a number of Suzanne Grae stores do not open
on Sundays:
‘I take it that the 2012 agreement, the current agreement, and its predecessors were entered into
because the company saw it as providing - those agreements as providing for a set of
conditions more suitable to its business operations than those provided for by the award?---
Correct.
So in the Suzanne Grae setting, even with the benefit of a lower Sunday penalty rate of time
and a half, I take it that the level of business in those stores doesn’t generally justify them
opening?---Correct.
Can I suggest to you that the same outcome would likely occur with the Sussan stores if
penalty rates were reduced since Sunday is, relatively speaking, the quietest day?---
Incorrect.’1314
[1518] Earlier in his evidence Mr Barron rejected the proposition that Sunday is a quiet day
for Sussan ‘generally, across the board’:
‘It’s your lowest earning day of the seven?---No, but it’s one of our highest earning days on an
hour by hour takings basis in individual stores. I absolutely reject that. It’s a very busy day.
Can I suggest to you that in the face of earning the lowest daily sales for Sundays for Sussan,
in the face of a reduction of Sunday penalty rates to time and a half, do you accept that that of
itself may not lead to any increase in opening hours or openings at all in Sussan businesses -
brands?---I do not accept that.’1315
Heath Goddard
1316
[1519] Mr Goddard is the Managing Director and owner of Pillow Talk Pty Ltd (Pillow Talk),
a homewares retailer specialising in home linen. Pillow talk operates 56 stores throughout
Queensland, NSW, the ACT and Victoria, and employs about 557 employees in its stores
under the Retail Award.
[1520] Pillow Talk trades 7 days a week in the majority of its stores, only 1 store does not
trade on Sundays ‘due to, in part, cost of wages not being commensurate with turnover on that
particular day’.
1317
[2017] FWCFB 1001
345
[1521] The business has responded to the level of labour costs on Sundays by generally
capping hours worked by any given employee on a Sunday at 5 hours, ‘to avoid having to
provide staff with an unpaid meal break and necessitating rostering an additional team
member to work on that day to cover rest periods’.
1318
The business operates a roster system
that results in Sunday now effectively being a ‘service only’ day:
‘This means that the number of employees working on a Sunday is kept to an absolute
minimum restricting them to selling activities only, to the exclusion of merchandising, stock,
cleaning and administrative tasks.’
1319
[1522] Mr Goddard’s statement sets out an analysis of 21 stores that currently trade on
Sundays and which were also trading in 2009, prior to the commencement of the Retail
Award. This analysis suggests that since 2009 total labour hours have reduced by 4061
hours.
1320
Mr Goddard’s evidence is that this fall:
‘… has largely arisen given the significant increase in staffing and operational costs from 2009
to 2015. Given the extremely competitive and volatile environment in which all retail
establishments currently operate Pillow Talk is unable to pass these increased costs onto
consumers meaning that Pillow Talk has had to look at all areas of its cost base to reduce costs
and improve productivity in order to maintain profitability and ensure the viability of the
business. Naturally staff and wage cost are not immune from this consideration.’
1321
[1523] The analysis also shows that 14 per cent of all hours worked are worked on Saturdays
and 10 per cent on Sundays, yet the average sales per hour was $41,058 on Saturdays and
$41,610 on Sunday. As Mr Goddard observes, ‘it is clear that Sunday wage rates are resulting
in significantly lower levels of employment/engagements on that day’.
1322
[1524] In the event that Sunday penalty rates were reduced, as sought by the Retail
Employers, Mr Goddard says that:
‘… Pillow Talk would almost certainly provide more hours of work to existing employees
and/or engage new employees. In the 21 stores that were part of the Sample Data Set alone
2072.5 hours were worked on Sundays. For those stores, a reduction to a 50% Sunday penalty
would mean that 936.25 additional ordinary hours of work could be put into those stores
without any impact on labour cost percentages.
While I am unable to exactly predict the increase in employment and/or the volume of
additional hours which would be provided to employees, Pillow Talk would not simply look to
accept the labour cost savings and keep hours in stores at current levels. As a customer service
focused business, and given the relative importance of Sunday as a trading day, the business
would like to add greater staffing volume on Sundays and a reduction in Sunday labour costs
would provide the business with the opportunity to do so. Further, the wage costs for Pillow
Talk have already been budgeted for 12 months’ in advance. Therefore a reduction in penalty
rates would result in a saving which could be spent on more hours of work for existing
employees or hours of work for new employees.’1323
[1525] During the course of cross-examination Mr Goddard was asked whether he intended to
reallocate some of the hours worked on Saturdays to Sundays if the Sunday penalty rate was
reduced:
[2017] FWCFB 1001
346
‘Well there would be a commensurate saving and we would probably put a little into Saturday
and more into the Sunday, because both days are more compressed in turnover as retailing
changes. So both days we’d probably get a little bit more staffing put into it.’1324
[1526] Mr Goddard also agreed with the proposition that whether the additional hours were in
fact put back into the business would depend principally on the anticipated level of sales in
particular stores.
1325
Graeme Gough
1326
[1527] Mr Gough is a director and part owner of Quaymarket Pty Ltd (SPAR Ballina).
[1528] SPAR Ballina is located in QuayWest Shopping Centre in Ballina NSW and is a
650m² shop with ‘a deli, fresh produce, cooked and prepared food such as bakery lines,
sandwiches and pies as well as the usual grocery and tobacco lines’.
1327
The business employs
20 employees (3 full-time, 1 part-time and 16 casuals). SPAR Ballina trades every Sunday
and trading across all days of the week is reasonably even. Currently the store is not profitable
– it requires $72,000 in sales per week to break even and is currently making about $70,000
per week. Indeed the business has not been profitable for any of the financial years since
2011.
1328
[1529] Rostered hours on Sundays are limited to keep costs down. At paragraph 19 of his
statement, Mr Gough sets out the measures used to limit labour costs on Sundays:
(a) rostering more junior employees on Sundays, as their hourly rate is lower than the
more senior employees. However, this can and does create productivity issues. The
hours worked summary at GG1 shows the split between junior employees (20 and
under) and senior employees for 13 July 2015 and 26 July 2015. In this period, 39.5
hours (or an average of 19.75 hours per week) were rostered to senior employees and
46 hours (or an average of 23 hours per week) were rostered to junior employees;
(b) Sunday is effectively a “service only” day. This means that the business limits the
work performed on Sundays almost solely to selling. We do not carry out any stock
replenishment (unless there is no stock of a particular item on display), we do not do
any store cleaning and no administrative tasks are completed;
(c) Our Deli doesn’t function to its full extent on Sundays. There is no preparation of hot
food (such as pies, pastries) other than chickens, no baking is done and there is no
food prepared such as sandwiches and pizzas. These tasks are undertaken on every
other day of the week;
(d) myself and the Manager work a number of unpaid hours in the business. I work
approximately 38 unpaid hours per week, with the majority of these hours being
worked between Monday and Friday. However, I will usually be in the store every day
of the week. I also undertake ad hoc tasks which often fall on Sundays, such as
maintenance tasks and driving the forklift, as there are no senior employees rostered
on Sundays who can undertake these duties. The Manager of SPAR Ballina is rostered
for 38 hours per week but will work approximately 60 hours per week (the balance of
the hours being unpaid). The majority of these extra hours will fall between Monday
to Friday, and the Manager works every second Sunday.’1329
[2017] FWCFB 1001
347
[1530] Mr Gough was also asked whether the work referred to (stock replenishment, cleaning
and administrative tasks) in paragraph (b) above was simply done on another day:
‘What you do I take it is you allocate those hours of work to days other than Sunday?---Yes, to
an extent. We don’t do, as I’ve said in the statement, the paragraph there, we don’t - we
wouldn’t do a major stock replenishment or we wouldn’t undertake, you know, a clean of the
deli area for example or a stripping out stock to clean in the chilling units. So we do - we keep
it to a minimum sort of day for that activity.
Yes, and those duties and work just get done when you can on other days, other than Sunday?-
--Well they’re also rostered on other days as well. We have days for doing different tasks and
those tasks don’t happen to fall on Sundays.’
1330
[1531] In the event that the Sunday penalty rate was reduced to 150 per cent, Mr Gough says
(at paragraph [20] of his statement) that he would take the following steps:
‘(a) roster more senior staff over both Saturday and Sunday. This would allow for a more
productive work force on both days leading to a corresponding increase in sales. This would in
turn reduce the amount of unpaid hours being used to prop up the business;
(b) operate the bakery department of the stores. This would mean that extra hours would be
rostered to carry out this function;
(c) my partner, the Store Manager, and myself who work less “unpaid” hours and these hours
would be given to other employees.
I am not certain that I would reinvest all of the labour cost savings brought about by a
reduction in the Sunday penalty back into the additional labour hours. I would first need to
address the profitability issue set out earlier in my statement. A return to required profitability
would, however, mean more job security for our staff and enhanced prospects for the business,
and it follows that this has a strong likelihood of creating even more jobs or more casual
hours.’1331
[1532] During cross-examination Mr Gough clarified paragraph (a) and said that some junior
staff would be replaced by senior staff on Sundays.
1332
[1533] As to the evidence in paragraph [20] of his statement Mr Gough conceded in cross-
examination that the business would probably try to address its cash flow issues first, in the
event that Sunday penalty rates were reduced
1333
and went on to say:
‘(a), (b) and (c) of paragraph 20, there’s a lot of losses to recoup, that’s so?---It is but it’s a
chicken and egg thing really, because for us to - if we just relied on the recouping of the
penalty rate we’d be a long time before we actually made good those losses, I can tell you. So
if we could determine that it is a better reinvestment of that saving into productivity issues,
then we could accelerate the return of profitability. So I think that’d be more along the lines
that we would follow.’
‘But they are a long way off from being able to be pursued even if penalty rates were reduced,
do you accept that?---Well we’re undertaking a range of measures to improve the business and
I think we provided some rostering information as part of the submission which showed we’d
dramatically cut overall hours to try and improve the business. We’ve invested in capital
equipment to try and improve a lot of the business. So these aren’t just thoughts, these are
things that you know ongoing we’ve been doing. We’ve just changed a whole lot of marketing
[2017] FWCFB 1001
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within the business to try and improve the fortunes of the business. It’s not as if we’re just
simply sitting back, waiting for something else to happen, you know, to improve it. We’ve
actively pursued other things to improve the business as well.’
1334
[1534] Mr Gough was also asked if he had calculated the impact of the proposed reduction in
penalty rates:
‘I take it you actually haven’t sat down and calculated the impact of the proposed reductions in
penalty rates on how that would improve your profitability?---Well anecdotally we’ve looked
at what would happen if we operated our bakery, for example, and you know you’ve got to
understand we’re just a small business really. We don’t have a lot of resources to forecast and
to put all of these things together. We don’t have a lot of time to do it, but when - we’ve done
quite well in our bakery business and we think that it would do quite well on Sundays and
Saturdays. So they’re the sorts of discussions and thoughts that we’ve had.’
1335
Jorge-Daniel Leroy d’Oreli
1336
[1535] Mr d’Oreli is the General Manager of Jeanswest. Jeanswest operates 197 stores across
all States and the ACT and employs about 1,300 employees of which about 1,154 are
employed in retail store positions under the Retail Award.
1337
About 184 of Jeanswest’s 197
stores trade on Sundays.
1338
[1536] Mr d’Oreli details some of the competitive challenges currently facing Jeanswest:
‘… international retailers, especially in the apparel and footwear category, continue to see value
in the Australian market with the increasing number of new entrants and stores. This has had a
clear impact on our sales performance.
Jeanswest Chadstone has seen more and more international brands open with Zara opening in
2012 and Uniqlo opening in 2014. Jeanswest Chadstone which traditionally has been one of
our most high profile stores has struggled in recent years.’1339
[1537] The use of labour by Jeanswest is limited to a percentage of retail sales in each store:
‘Store Managers are required to operate within this labour budget, and the business manages
Store Manager performance in part on this’.
1340
As to the impact of Sunday penalty rates, Mr
d’Oreli says:
‘With the increase in labour costs on Sundays, in particular in New South Wales, the Australian
Capital Territory and South Australia, Jeanswest has needed to focus on maintaining labour
costs at the required percentage of turnover. Given Sunday has continued to grow in
importance as a trading day, in order to avoid negative impacts on customer service levels the
business has actually increased the overall hours worked on Sundays, but at the same time we
have sought to limit Sunday activities in terms of the work performed.
Sunday is effectively a “service only” day. This means that the business limits the work
performed on Sundays almost solely to selling as there are no stock deliveries and limited
administrative tasks to be completed.’1341 (emphasis added)
[1538] At paragraph 18 of his statement, Mr d’Oreli sets out some of the measures used to
control labour costs on Sundays:
[2017] FWCFB 1001
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‘(a) reducing trading hours - several stores trade 11 .30 am to 4.00 pm on Sundays to both
reduce overall trading hours, and also in an effort to avoid the need for an unpaid meal break.
Such trade hours removes the requirement to roster an additional person for 3 hours to cover
the meal break;
(b) rostering employees in such a way to avoid the need for breaks, thereby reducing their
individual earning capacity. For example a 6 hour trade day is covered by two employees
working 3.25 hour shifts, with one employee working the first half of the day an another
working the second half. By rostering in this way neither employee requires a break and
therefore no cover is required.’
1342
[1539] During cross-examination, Mr d’Oreli clarified that the reference in paragraph 18(a) of
his statement to ‘several stores’ was a reference to about 10 stores.
1343
[1540] Mr d’Oreli’s evidence is that if Sunday penalty rates were reduced to the rate sought
by the Retail Employers, Sunday trading hours would increase:
‘Of the 13 stores that are currently closed on Sundays, I expect to re-open 3 stores (1 in Western
Australia, 1 in Queensland and 1 in Victoria) on Sundays if the Sunday penalty rates was
reduced from its current additional 100% to an additional 50%. Naturally this would result in
additional shifts for employees working at those stores, or new opportunities for employment
within the business…
As General Manager Retail I believe that all, or at least the substantial majority, of the labour
cost savings brought about by a reduction in the Sunday penalty rate would be reinvested into
labour hours within stores. With our customers having broader access to online channels, and
therefore greater choice. the key offering we have in bricks and mortar stores is the customer
experience, a significant part of which is service. Putting more hours into our stores will
improve service to our customers.
With a reduction in the Sunday penalty rate Jeanswest would extend the trading hours for 28
stores that currently trade on Sundays. Specifically, there are 8 stores in Western Australia, 3
in New South Wales, 2 in Victoria, 11 in Queensland, 2 in South Australia, and 2 in Tasmania
whose trading hours would extend.’1344
[1541] Mr d’Oreli was cross-examined about this aspect of his evidence:
‘Now, in paragraph 14 you refer to the 13 stores that are currently closed on Sundays, and
you’re able to say that you expect to re-open three stores if the penalty rate for Sunday was
reduced to 50 per cent. So I take it you have undertaken some sort of analysis or calculation to
derive the conclusion?---That’s correct. Yes, we have.
All right. And what sort of calculation or analysis did you undertake?---A number of things,
mostly that these stores currently cannot afford to trade on those days with the current - so if
they were to be reduced, it would be more advantageous to us to trade those days.
Yes. But that outcome is specific to the three stores; the reduction in penalties doesn’t change
the - doesn’t lead you to open the other 10 stores?---There are more factors impacting.
That’s right. So what I’m getting at, I suppose, is the analysis that you’ve undertaken was
directed to these 13 stores individually?---Mm-hm…---That’s correct.
And is that analysis document?---No
[2017] FWCFB 1001
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So was it an analysis that you did in your mind?---No. This is done on a quarterly basis all the
time. It was just based on the fact that these stores currently cannot afford to trade; and based
on a reduction, would more than likely be able to trade…
You look at that most recently occurring information before you make this statement?---I
looked specifically at the period that I’ve discussed in my statement here, which was the
period between 2011 and 2014. I’m saying that through a recurring quarterly basis we review
and decide whether or not those stores open. So if you’re asking me about the latest quarter,
whether or not we’ve made any decisions to change the trading of those stores, no, we haven’t,
based on the fact that those stores haven’t shown any improvement in any other days of the
week to warrant an increase.
I see. So in saying to the Commission that if the penalty rates were reduced, you expect to
reopen three stores, did you reach that conclusion by analysing the data from 2011 to current
time?---Yes.’1345
Peter Christian Antonieff
1346
[1542] Mr Antonieff is a director of Prapla Pty Ltd owner of FoodWorks Oxley, which is
located on a shopping strip in Oxley, Queensland. Mr Antonieff bought the business in 2004.
[1543] FoodWorks Oxley employs 7 employees (including Mr Antonieff and his wife) all
employed under the Retail Award. The business trades 7 days a week, from 6.00 am to
7.30 pm. Sundays account for about 15.7 per cent of weekly trading which is the second best
trading day (after Saturday).
[1544] Mr Antonieff observes that the business is experiencing a number of competitive
challenges:
‘In July 2013 a Woolworths supermarket opened next door to FoodWorks Oxley. Since this
time, FoodWorks Oxley had experienced a significant decline in sales, as some customers have
been shopping at Woolworths.’
1347
[1545] Mr Antonieff notes that with the commencement of the Retail Award Sunday penalty
rates progressively increased (from 150 per cent to 200 per cent). Since 2008, the business has
reduced both its overall rostered hours and the rostered hours on Sundays:
‘A comparison of the Sunday hours and total hours rostered in 2008 with the Sunday hours and
total hours rostered in 2013, as shown in paragraph 15 of this statement, shows that the hours
rostered on Sundays and total hours rostered had decreased in 2013. On average the hours
rostered on a Sunday had decreased by 14.25 hours per week, and the hours rostered overall
had decreased by an average of 52 hours per week. These changes were made primarily due to
the increasing cost of labour on Sundays.
As discussed earlier in my statement, a Woolworths supermarket opened next door to
FoodWorks Oxley in July 2013. There has been a significant decline in hours rostered on
Sundays and hours rostered overall from 2013 onwards. This is partly attributed to the opening
of the Woolworths and therefore the decline in sales, but has also been due to the rate of pay
on Sundays.’1348
[2017] FWCFB 1001
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[1546] At paragraph 18 of his statement, Mr Antonieff sets out some of the measures used to
control labour costs on Sundays:
‘(a) the store is prepared for the weekend on Friday (for example ensuring all products are fully
stocked) so that no extra hours across the weekend need to be used for this task;
(b) we roster more junior employees on Sundays, as their hourly rate is lower than the more
senior employees;
(c) we have ensured that no deliveries arrive on Sundays, which means that no hours on
Sundays are used for unloading deliveries and employees can concentrate on sales; and
(d) Sunday is effectively a “service only” day. This means that the business limits the work
performed on Sundays almost solely to selling. We do not carry out any stock replenishment
(unless there is no stock of a particular item on display), we do not do any store cleaning and
no administrative tasks are completed.’
1349
[1547] In addition to these measures, since 2014 both Mr Antonieff and his wife commenced
working significant rostered hours in the business (including on Sundays). Mr Antonieff’s
evidence is that if Sunday penalty rates were reduced (from 200 per cent to 150 per cent) then
he and his wife would work less hours ‘which would mean there would be more hours of
work available to other employees’.
1350
[1548] Mr Antonieff was cross-examined about this aspect of his evidence:
‘In paragraph 19 you say that if penalties were reduced for Sundays you and your wife would
work less hours. You mean in particular you would work less hours on a Sunday, is that right?-
--Correct. I have a young family, I have three kids. You know, our work commitments which
is what we signed up for, I don’t have a problem with that, but I’m sure that the Commission
would appreciate the fact that it would be better for a wage earner to earn the wage on a
Sunday, so I give those hours back, and in return I also get a quality of life back and spend
time with my kids as well.
So what do you want to spend your time with on Sundays instead of working Sundays?---With
my family.
When you say you would work less Sunday hours I take it that if that happened that time that
you currently spend working on Sundays you would then work all or most of that time during
weekdays in the business. Would that be likely to be so?---On the business.
On the business?---On the business.’
1351
Belinda Daggart
1352
[1549] Ms Daggart purchased the Bakers Delight franchise in Lavington, NSW, in July 2002.
Prior to purchasing the business, Ms Daggart was the manager of Bakers Delight Lavington
for 3 years (under different ownership).
[1550] Bakers Delight Lavington employs 18 employees (7 full-time, 1 part-time an
10 casual) most of whom are covered by the Retail Award. The business trades 7 days a week:
7.00 am – 7.00 pm Monday to Wednesday and on Friday; 7.00 am – 8.00 pm on Thursday
and 7.00 am – 6.00 pm on Saturday and Sunday. Over the past 10 years, Sunday has become
[2017] FWCFB 1001
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an increasingly important trading day for the business and currently accounts for about 12 per
cent of weekly trading.
[1551] The commencement of the Retail Award progressively increased Sunday penalty rates
for NSW retail businesses (from 150 per cent to 200 per cent). The business responded to the
increase in Sunday labour costs by reducing the number of hours rostered on Sundays (by 31
per cent) and across the whole week (by 11.6 per cent).
1353
[1552] At paragraph 19 of her statement, Ms Daggart refers to the other methods used by the
business to reduce the cost of trading on Sundays:
‘a) making Sunday a “service only day”. This means that the business limits the work performed
on Sundays almost solely to selling. The bakers and sales assistants only perform a small
number of cleaning duties in comparison to the cleaning duties they undertake on weekdays
and no administrative duties are undertaken;
b) approximately five years ago we decided to close the store at 6.00pm on Sundays, being an
hour earlier than we had previously closed. This decision was made because of the rising cost
of Sunday labour.
c) the bakers bake until 11 am on Sundays, in comparison to Monday to Friday when they
bake until 4.00pm and on Saturdays when they bake until 2.00pm. We made this decision to
cut back the baking hours on Sundays as a result of the cost of labour.
d) we no longer provide tastings on Sundays. From Monday to Saturday we have one sales
assistant take tastings of various products around the shopping centre for anywhere between
one to two hours in order to entice customers to the store. We ceased doing this on Sundays
gradually over the last 12 months because we cannot afford to have a sales assistant
performing this duty at the Sunday rate of pay;
e) we roster more junior employees to work on Sundays. We always have one senior employee
working on Sundays in an attempt to ensure we maintain customer service, however we have
noticed a negative impact in this as generally the more junior employees tend to be less
experienced and have less developed communication skills;
f) my father, also a Director of Bakers Delight Lavington, and I both work every Sunday, my
father in a baking capacity and myself either as a baker or in a sales capacity, in order to
reduce the cost of labour on Sundays.’1354
[1553] Ms Daggart’s evidence is that if Sunday penalty rates were reduced (from 200 per cent
to 150 per cent) then her ‘preferred operating structure’ would include:
‘a) I would not work on the weekends, which would mean I would roster another employee to
work;
b) I would roster the more senior casual employees on Sundays, as they would provide better
customer service; and
c) I would roster bakers until 2.00pm on Sundays (as opposed to 11am which is currently the
case).’
1355
[1554] Ms Daggart was questioned about the proposition at a) above:
[2017] FWCFB 1001
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‘One of those things understandably is that you say that you would not work on the weekends
which would mean that you’d roster another employee to work. I presume that’s just to regain
some of your work/life balance, is it?---Yes, because I have young children.
Would I be right in assuming that you’d be wanting to spend time with your children on a
Sunday instead of work?---Yes, because they go to school during the week, so I don’t see
them during the week.’
1356
[1555] Ms Daggart also notes that a reduction in the Sunday penalty rate would provide an
additional 103.75 hours (at ordinary rates) that could be rostered in the business without
having any negative impact on the labour cost target (i.e. labour costs are limited to 35 per
cent of retail sales). As Ms Daggart also says:
‘I would put all of these hours back into the business, as I believe that this would drive
stronger sales’.1357
[1556] Ms Daggart was cross-examined about the above statement:
‘You say that you believe that putting these hours back into the business would drive stronger
sales, have you done the analysis to suggest that that’s in fact the case, that that in fact would
be the case? More rostered hours would drive stronger sales?---Well at the moment I’m
currently trialling with having three staff members on a closing shift in the afternoons and our
sales are growing a little bit each week at the moment. So we’re getting an extra few customers
per shift a week, so that’ll just be a thing that you have to sort of play with and see whether it’s
going to work or not. But I know that having had more senior staff on at different times of the
day has helped grow our business because from this time last year, we’re up 150 customers
approximately a week and we’ve got more senior staff in the business now than what we had
18 months ago.’1358
[1557] The SDA submits that the Retail Employers lay witnesses ‘made important
concessions on a number of key issues which had the effect of undermining the cogency of
the particular contentions sought to be made by the employer parties’.
1359
Appendix 1 to the
SDA’s submissions is a table which particularises the employer contentions and provides an
analysis of the evidence upon which the employers rely in support of those contentions. We
have reviewed all of this material.
[1558] As put by the SDA, we accept that demand or sales is a key driver of labour allocation.
But it is also clear that it is common for retail businesses to fix labour budgets to a proportion
of retail sales, hence labour costs, such as Sunday penalty rates, (or sales) may impact on the
amount of labour rostered.
[1559] We also accept that the lay evidence provides little support for the contention that
increased Sunday penalty rates in NSW negatively impacted employment and labour hours in
the retail industry (see particularly [1508]–[1510] above).
[1560] We acknowledge that there are some limitations in the Retail Employers lay evidence
and that the evidence as to future intentions is somewhat guarded, necessarily so. Despite this
we found that the evidence was presented in a clear and forthright manner by persons with
significant experience in the Retail sector. Further, collectively, the Retail Employers lay
evidence covers 749 retail stores operating in various market segments, across all Australian
[2017] FWCFB 1001
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States and Territories, and the businesses concerned employ some 6155 employees covered
by the Retail Award.
[1561] Subject to the limitations noted above, we consider that the Retail Employer’s lay
evidence is cogent, relevant and persuasive.
[1562] As mentioned earlier, ABI and the Retail Employers also relied on expert evidence
and survey evidence in support of their claims. We have dealt with the evidence of Professors
Lewis and Rose in Chapter 6, though we will return to part of Professor Rose’s evidence
shortly. ABI also rely on evidence of a survey of retail sector employees and the Retail
Employers relied on expert evidence for Dr Sands.
[1563] ABI called Ms Emily Baxter, a lawyer for the Australian Business Lawyers Advisors
(ABLA) who presented an analysis of a survey undertaken by ABLA of employers.
1360
[1564] ABLA developed a survey in July 2015 using the Survey Monkey program for the
purpose of collecting evidence from employers in the retail industry on their trading and
rostering practices (the ‘Retail survey’).
1361
Ms Baxter was not involved in developing the
survey.
1362
[1565] The survey was sent to a number of employer organisations who then sent it to their
members. Baxter’s evidence was that 8700 members were sent the survey and 690 responses
were received. The survey analysis was based on the responses of the 485 businesses who
confirmed that the Retail Award applied to their business and that they were not covered by
an enterprise agreement.
1363
[1566] The survey results may be shortly summarised:
88.3 per cent of respondents indicated that Sunday trading hours are lower than
weekdays;
1364
the majority of respondents indicated that public holiday trading hours were lower
than weekday trading hours (ranging from 83.4 per cent on Melbourne Cup/Show
Day, to 98.1 per cent on Christmas Day);
1365
88.9 per cent rostered fewer employees on a Sunday than a weekday;
1366
and
90.5 per cent rostered fewer employees on a public holiday than a weekday.
1367
[1567] Answers could be provided to survey questions by either multiple choice or ‘free text’
where businesses could provide more than one answer. The free text responses were grouped
into seven categories, including ‘wages/costs’. The responses are summarised below:
(i) For those whose trading hours were lower on a Sunday, the main reason was
wages/costs (53.18 per cent).
1368
(ii) For those whose trading hours were lower on a public holiday, the main reason
was also wages/costs (62.55 per cent).
1369
[2017] FWCFB 1001
355
(iii) For those who responded that rostering of employees differed on a Sunday to
weekdays or Saturdays, 80.77 per cent responded wages/costs as the reason.
1370
(iv) For those who responded that rostering of employees differed on public
holidays to weekends or weekdays, 75.68 per cent responded wages/costs as
the reason.
1371
[1568] ABI submits that the survey is broadly representative of employment across Australia
based on responses from employers in each State and Territory
1372
and is a ‘reliable source of
information’ for employers in the industry.
1373
[1569] The Retail Employers submit that the survey provides evidence that:
the current Sunday penalty rate (200 per cent) limits and reduces trading hours on
Sundays;
1374
the current Sunday penalty rate offers fewer hours of work to employees than other
days;
1375
and
overall labour hours in retail stores will increase after a reduction in the penalty
rate.
1376
[1570] The SDA contends that no weight should be given to the survey results,
1377
for the
following reasons:
Ms Baxter had no direct knowledge of the terms upon which the employer
organisation distributed the survey or the proportion of the total membership who
were sent the survey;
1378
a response rate of 7.9 per cent was “extremely low”;
1379
the conduct of surveys as discussed in the Annual Wage Review 2012–13 decision
on representativeness of surveys, particularly of membership bases;
1380
there is no way of ascertaining whether the sample is representative of employer
organisations’ membership or employers more broadly;
1381
many respondents did not answer all of the questions, and only four questions were
completed by all respondents;
1382
based on the grouping of answers to why trading hours differed on Sundays, such as
wages/costs, “very little” can be concluded on the role of wages, including penalty
rates;
1383
and
the survey results reflect perceived rather than actual effects.
1384
[1571] As we have explained earlier, and as described in the Annual Wage Review 2012–13
decision, if survey material such as this is to be regarded as definitive we need to be confident
[2017] FWCFB 1001
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that it is a reliable representation of the target population, in this case, retail businesses. In
particular:
‘If a membership list is used as the basis for a survey, then it is essential that those that respond
are properly representative of the entire membership base (e.g. by firm size, form of
ownership, industry sector, geographic location). Where this is not the case, then the responses
become more like case studies or anecdotes—accounts of the situation of those who did
respond, but not to be taken as representative of the survey population (e.g. the membership)
as a whole.’
1385
[1572] We are not satisfied that the Retail survey can properly be said to be representative of
all retail businesses. While providing the survey to all members of employer groups would
maximise the total number of responses, the number of businesses that responded to the
survey is relatively low. This could lead to biased results as the sample may not represent the
retail business population.
[1573] Further, although a breakdown of businesses by State and Territory is provided, we
have no information about the breakdown by business size which would be beneficial in
determining the representativeness of the survey.
[1574] For the reasons given we reject the proposition that the results of the Retail survey can
be extrapolated to all businesses covered by the Retail Award. However, we also reject the
SDA’s submissions that we give no weight to the survey. As mentioned earlier, the
assessment of survey evidence is not a binary task – that is, such evidence is not simply
accepted or rejected. The central issue is the extent to which a survey’s limitations impact on
the reliability of the results and the weight to be attributed to those results. Given the
limitations of the Retail survey we propose to treat the survey results as suggestive or
anecdotal, rather than definitive.
[1575] The SDA also relies upon expert evidence provided by:
Kevin Kirchner, Principal, Fulcrum Economics Australia;
1386
Helen Bartley, Bartley Consulting;
1387
Prof Morris Altman, Dean & Head, Newcastle Business School and Professor of
Behavioural & Institutional Economics, University of Newcastle;
1388
Dr Ian Watson, freelance researcher and Visiting Senior Research Fellow, Macquarie
University and SPRC, UNSW;
1389
Prof David Peetz, Professor of Employment Relations at the Centre for Work,
Organisation & Wellbeing, Griffith University;
1390
Serena Yu, labour market researcher at the Workplace Research Centre, University of
Sydney;
1391
Prof Sara Charlesworth, Australian Research Council Future Fellow and Professor at
the Centre for Sustainable Organisations and Work, within the School of Management
at RMIT University;
1392
and
[2017] FWCFB 1001
357
Dr Fiona Macdonald, Vice Chancellor’s Senior Research Fellow at the Centre for
Sustainable Organisations and Work, within the School of Management at RMIT
University.
1393
[1576] We have already dealt with the evidence of Ms Bartley, Professor Altman, Dr Yu,
Professor Charlesworth and Dr McDonald, in Chapter 6. We have also dealt with the evidence
of Dr Watson and Professor Peetz in Chapter 8.1, the overview of the Retail sector.
[1577] Mr Kirchner’s evidence responds to Dr Sands’ expert report. It is convenient to deal
with Dr Sand’s evidence now.
[1578] Dr Sands is Research Director at the Australian Centre for Retail Studies, Monash
University, and he provided a report Retail Award Research (the Sands Report).
1394
[1579] The Sands Report contained three sections:
(i) an analysis of trends in the retail industry;
(ii) the ‘shopfloor employee perspective’; and
(iii) the retailer perspective.
(i) Trends in retail trade
[1580] This part of the Sands Report discussed trends in the performance of the Retail trade
industry using data from the ABS, NAB and the Shopping Centre Council of Australia.
[1581] ABI submits that the Sands Report shows that the retail industry:
generates revenue of $380 billion per year;
1395
accounted for around 2 per cent of investment at June 2015;
1396
accounted for around $20 billion in company gross operating profits at September
2015; and
[1582] ABI also submits that the Sands Report shows that retail employment:
increased by more than all other industries over the past 20 years;
1397
and
accounted for around 9 per cent of actual hours worked per week in all jobs and 8
per cent of wages at September 2015.
1398
[1583] The SDA called Kevin Kirchner, Principal of Fulcrum Economic Australia, to provide
a response to this part of the Sands Report.
1399
The SDA submits that the following findings
can be made on Mr Kirchner’s uncontested evidence:
1400
retail sales have grown in real terms over the period 2010 to 2014–15;
1401
[2017] FWCFB 1001
358
total profits across Retail trade have remained at a strong level
1402
and have
exceeded the record level reached around 2008;
1403
profit margins from 2010 to 2015 were at strong levels and around historical highs
despite a decline in the past 12 months;
1404
wages have not grown at a faster rate than wages growth across the whole
economy;
1405
the number of persons employed and aggregate hours worked have increased in
recent years;
1406
and
the number of persons employed aged 15–19 years has declined over recent years
while the number of persons employed in other ages has increased.
1407
[1584] We have had regard to this part of the Sands Report and to Mr Kirchner’s evidence.
The evidence, together with the data in Chapters 8.1 and 8.2.3, provides part of the context
within which the claims before us are to be determined.
[1585] In regards to consumer trends, the Retail Employers submit:
consumers demand access to retail businesses on Sundays, foot traffic across a
portfolio of stabilised shopping centres showing an increase of 5.8 per cent on
Sundays;
1408
shopping centre leases mandate that tenants open on Sundays;
1409
and
retail businesses would lose customers to competitors if they closed on Sundays.
1410
[1586] ABI submits that the Sands Report shows that a range of factors drive the demand for
Sunday trading, including the need to balance competing work-life pressures and to connect
with family members by spending time shopping together.
1411
As a result, Sunday has become
the shopping day of choice for many consumers, accounting for 10–25 per cent of some
retailers’ weekly trade.
1412
[1587] The SDA also submit that Dr Sands accepted in cross-examination that he had
potentially jeopardised the representativeness of the sample used for the retailer interviews by
including in the invitation to potential survey participants a statement that the research will be
used to seek a reduction in the Sunday penalty rate under the Retail Award. The inclusion of
such a statement may have made it more likely that those with strong feelings in favour of a
reduction in Sunday penalty rates would participate in the interviews.
1413
[1588] We note that the PC Final Report also considered trends in retail trading across days of
the week and it is convenient to refer to that material now.
[1589] The PC Final Report concludes that the share of weekly sales on Sundays have gone
from a relatively small proportion to resemble that of other days of the week. This point is
illustrated in data from the ABS that compared the share of weekly retail sales by each day of
[2017] FWCFB 1001
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the week (Chart 57). While still the lowest proportion across the days of the week, the
proportion of retail sales on Sundays increased from less than 5 per cent in 1982 to be
relatively more comparable with the remaining days of the week in 2014, particularly Monday
and Tuesday.
1414
This suggests that although consumer demand for shopping on Sundays has
increased significantly since the early 1980s, the preference to shop still remains higher on
Saturdays than Sundays.
Chart 57
1415
:
Retailing trends by the weekday, share of weekly retail sales, 1982 to 2014
Note: Based on estimating trading days effects on ABS monthly retail data.
[1590] The PC Final Report also commented that there is some evidence that consumers are
taking advantage of longer trading hours by making more frequent trips to supermarkets. This
was provided in data showing that the number of supermarket trips and the value of
transactions on Sundays are higher than Mondays and Tuesdays, although still below
Saturdays (Chart 58). Additional data is used to show that the growth in average daily foot
traffic in shopping centres between 2009 and 2014 was greater for Sunday than the remaining
days of the week.
1416
0
5
10
15
20
1982 1986 1990 1994 1998 2002 2006 2010 2014
Monday
Tuesday
Thursday
Friday
Sunday
Wednesday
Saturday
Share of weekly retail sales
[2017] FWCFB 1001
360
Chart 58
1417
:
Growth and significance of shopping by weekdays
Supermarket trips and transaction values by day,
year ending August 2013
Growth in average daily foot traffic in
shopping centres, 2009–2014a
Note: a The Shopping Centre Council of Australia obtained six years of data (between 2009 and 2014) pertaining to centre
foot traffic for ‘stabilised’ centres, that is those that are unaffected by development from the beginning to the end of the
analysis period, across most states. Further, data were used from centres that were already subject to seven day trade and
therefore could be considered ‘super stable’ centres. Using 2009 as the ‘baseline’ for the analysis, the change in foot traffic
was then calculated over the following five years. The data relates to shopping centres owned by one major shopping centre
provider. The results exclude Western Australia, where Sunday trading has only been permitted since 2012, and also exclude
the ACT, Tasmania and the Northern Territory either because they did not have stabilised centres, or the dataset was not
sufficiently reliable.
[1591] The PC Final Report argued that lowering penalty rates would have effects that mimic
the relaxation of trading hours, where consumers have benefited through greater convenience
and variety.
1418
This is said to be demonstrated by comparing the number and timing of
transactions between jurisdictions with and without restrictions on trading hours. To do this,
the PC Final Report presented data that compared the average daily transactions for Coles’
supermarkets between Victoria and Western Australia. Chart 59 reproduces the charts from
the PC Final Report which compared the average daily transactions for Saturday and Sunday.
0
4
8
12
16
20
Mon Tues Wed Thur Fri Sat Sun
%
o
f
to
ta
l
w
e
e
k
t
ri
p
s
a
n
d
v
a
lu
e
Trips
Value
2.2
1.5 1.5
-8.9
0.1
2.2
5.8
-12
-8
-4
0
4
8
Mon Tues Wed Thur Fri Sat Sun
G
ro
w
th
i
n
f
o
o
t
tr
a
ff
ic
(
%
)
[2017] FWCFB 1001
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Chart 59
1419
:
Longer weekend opening hours, Victoria and Western Australia, 2012–2013
Note: Average daily Coles’ supermarket transactions. A transaction represents the purchase of any basket of goods that
generates a receipt.
[1592] The Productivity Commission contends that Chart 59 shows that weekend trading hour
restrictions not only reduce the aggregate number of transactions but also confine transactions
to a short period.
1420
[1593] Chart 59 indicates a response by consumers to longer trading hours through a greater
number of transactions, especially on Sundays. The increase in demand for retail services
highlights that consumers derive a benefit from longer trading hours and also respond to such
changes.
(ii) Retail employee focus group and survey material
[1594] The second part of the Sands Report involved an analysis of focus groups and an
online survey of shopfloor employees’ perspective on motivation and satisfaction, working
weekdays versus weekends, Sunday work and observations of customer shopping preferences.
The information from the focus groups informed the development of the online survey. Much
of the analysis compared employees that were reliant on the General Retail Industry Award
2010 with employees on enterprise agreements.
[1595] The focus groups contained 48 shopfloor employees across Sydney, Melbourne,
Brisbane, Adelaide, Hobart and Perth, aged between 20 and 55 years, with between 1 and 35
years of shopfloor experience and between 6 months and 25 years of employer tenure.
[1596] The online survey comprised 1009 shopfloor employees, of which 506 worked on
Sundays, and was conducted in April 2015. Dr Sands described the survey as representative
of the ‘shopfloor’ working population according to gender, age and location. The survey
respondents were aged between 18 and 58 years.
[1597] The survey reported that 44 per cent of respondents were reliant on the General Retail
Industry Award 2010, 31 per cent were covered by an enterprise agreement and 25 per cent
were not sure of their industrial arrangement.
0
60
120
180
240
0 3 6 9 12 15 18 21 24
Time of day
WA
Victoria
Saturday Transactions ('000)
0
60
120
180
240
0 3 6 9 12 15 18 21 24
Time of day
Victoria
WA
Sunday Transactions ('000)
[2017] FWCFB 1001
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[1598] Some of the key findings from the focus groups included:
shopfloor employees reported that permanent staff are mostly employed on
weekdays and casual are mostly employed on weekends;
1421
working on weekends was more focused on trade and customer service delivery,
and the pace of work was faster;
1422
and
shopfloor employees reported that there were differences in the way customers shop
between weekdays, evening/nights and weekends. Customers on weekdays were
more likely to be buying something specific or browsing for a potential purchase,
customers on evenings/nights were more ‘rushed’, while customers on weekends
were more likely to purchase ‘big ticket’ items.
1423
[1599] The key findings of the online survey showed that:
For all employees:
o 44 per cent of employees reported a high level of satisfaction with
working in the industry (responding 8–10 out of 10);
o around 72 per cent of respondents worked weekends and around 37 per
cent worked evenings/nights;
o those aged under 25 years were less likely to work weekdays and more
likely to work on weekends;
1424
For those who worked weekends:
o they were more likely to work on Saturdays than Sundays;
o around 46 per cent of employees that worked on Sundays work every
Sunday, and a further 30 per cent worked on a Sunday once a fortnight;
o almost half of employees reported no real change in the availability of
Sunday hours over the past five years;
o over half of respondents reported that their workload on Sundays was
about the same as any other day, with almost one-third reporting “more
work to do”;
o around two-thirds responded that the key benefit of working Sundays
was increased pay, with the next most common response being “having a
weekday off” reported by around one quarter of respondents;
o the main difficulty with working on Sundays was the “impact on the
ability to spend time with family/friends” reported by over half of
respondents;
[2017] FWCFB 1001
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o over half of respondents, particularly those on the Retail Award, reported
hardly ever having the ability to make up time for community, sporting
or cultural events during the week;
o over half of respondents on EBAs and around four in ten on the Retail
Award reported hardly ever being able to make up time for family and
friends during the week, with the main reason being friends/family were
not available at other times;
o shopfloor employees were asked to rate their willingness to work on
Sundays (from 0 to 10) at various penalty rates and, while the
willingness to work increased relatively rapidly from no penalty rate to a
50 per cent penalty rate, the willingness to work increased at an
“incremental” rate from a 50 per cent to 100 per cent penalty rate.
1425
For employees that did not work on Sundays:
o those on EBAs were more likely to report this was due to contractual
arrangements, while those on the Retail Award were more likely to report
that the store is closed on Sundays; and
o almost half reported that nothing would motivate them to work on
Sundays.
1426
[1600] ABI submits that the Sands Report identified individuals who benefit from weekend
work, including employees aged 24 years and under, finding a statistically significant
difference between young and older employees in relation to the imposition of weekend work
on time spent with family and friends.
1427
[1601] The Retail Employers submit that:
many retail employees choose, or are happy, to work on Sundays because it suits
their personal circumstances and allows flexibility around non-work
commitments;
1428
46 per cent of surveyed retail employees work every Sunday;
1429
employees will continue to work in retail if the penalty rate is reduced to 50 per
cent;
1430
retail employees willingness to work and satisfaction with working on Sundays
increased “substantially” from no penalty rate to a penalty rate of 50 per cent, yet
increased “incrementally” from 50 per cent to 100 per cent;
1431
53 per cent of non-Sunday workers would work on Sunday if they could, with a
“substantial” majority not requiring higher pay to do so;
1432
and
[2017] FWCFB 1001
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81 per cent of Sunday employees did not believe it had an adverse impact on their
health.
1433
[1602] ABI also suggested the Sands Report identified advantages from working on Sundays,
including:
flexibility around life commitments;
faster pace and increased sales opportunities of weekend trade;
easier parking; and
having a weekday off.
1434
[1603] ABI submits that only a “minority” of respondents (17 per cent) saw no real benefit in
working on a Sunday, with penalty rates not the sole motivator for people undertaking
weekend work.
1435
[1604] The Retail Employers observed that retail employees find working on Sundays
difficult due to the limited number of staff, inexperienced staff and lack of managerial
support.
1436
The Retail Employers also made reference to the following findings in the Sands
Report:
only 5 per cent of retail employees who do not work on Sundays cite religious
reunion or observance and no retail employees in the focus groups identified these
reasons;
1437
family events can be, and are, arranged around Sunday work;
1438
and
social interactions can be, and are, arranged around Sunday work.
1439
[1605] The Sands Report found that 72 per cent of retail employees work weekends.
1440
However, Dr Sands agreed that this may be an overestimate as Dr Watson found that 62 per
cent of the total retail workforce usually worked on weekends by using the HILDA survey.
1441
[1606] In cross-examination, Dr Sands conceded that:
while the most common reason for not working Sundays was contractual
arrangements, the analysis assumed that employees would otherwise be willing to
work Sundays;
1442
and
for employees that work Monday to Friday, nothing is going to motivate them to
work Sundays.
1443
[1607] The SDA highlighted what it submits are weaknesses in the Sands Report:
1444
the employee focus groups consist of qualitative research and are not representative
of the broader industry;
1445
and
[2017] FWCFB 1001
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the findings of the employee online survey contain overestimates when compared
with data from the HILDA survey from Dr Watson.
1446
[1608] The SDA also submitted that the employee survey:
failed to ask participants that worked on Sunday whether this was because it was a
requirement imposed by their employer or roster;
1447
and
neglected to take account of the possibility of loss aversion.
1448
[1609] If the Commission were to give weight to the results of the employee survey, as
proposed by the Retail Employers, then the SDA submits that weight should also be given to
the following findings that support the conclusion that the Sunday penalty rate be retained:
1449
80 per cent of Sunday employees observed no real change or an increase in the
availability of Sunday hours over the last five years;
1450
The “vast majority” of employees that do not work on Sundays state that nothing
will motivate them to work on a Sunday;
1451
The main difficulty with Sunday work is the impact on the ability to spend time
with family/friends;
1452
86 per cent of Sunday employees hardly ever or never are able to make up time to
attend community, sporting or cultural events during the week;
1453
and
29 per cent of Sunday employees with children believe that Sunday work has an
adverse impact on the health and development of their children.
1454
(ii) Interviews with retail managers
[1610] The final part of the report involved 14 in-depth interviews with 16 retail managers
(some involved multiple managers), from 3 small (fewer than 20 employees); one medium
(20–199 employees) and 12 large retailers (200+ employees). Only one of the retailers did not
trade on Sundays and who “recently made this decision due to high labour costs and an
inability to work 7 days a week”.
1455
Further, the retailers that did trade on Sundays did not
open all of their stores. Dr Sands noted that it is common for stores not located in shopping
centres and in more regional locations to be closed on Sundays with operators in shopping
centres “forced to open” on Sundays due to leasing agreements or to avoid losing business.
1456
[1611] The types of strategies used to reduce labour costs on Sundays included limiting
opening hours, rostering junior or casual employees; rostering shorter shifts (without breaks);
reducing the number of employees during quiet periods; and owners working by
themselves.
1457
Dr Sands commented that retailers have strategically dedicated weekends to
sales while other operational activities such as administration, inventory management, re-
stocking and cleaning are performed on weekdays.
1458
[1612] Sundays were described by retailers as a busy shopping and trading day. According to
the retailers surveyed, the busiest retail areas on Sundays are clothing and apparel, furniture
[2017] FWCFB 1001
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and homewares, sporting goods and outdoor living.
1459
Retailers perceived the consequences
of not trading on Sundays to include:
loss of sales;
breach of contractual agreement with shopping centres;
loss of goodwill;
loss of customers and sales to competitors; and
loss of staff due to less available work hours.
1460
[1613] Other key information provided by retailers included:
the proportion of weekly trade attributed to Sundays is dependent on store location,
with higher proportions in metropolitan areas and in warmer seasons; and
employees most commonly available to work on Sundays are those with full-time
commitments on weekdays (e.g. another job or studying) and those with weekday
caring responsibilities.
1461
[1614] The Retail Employers submit that the Sands Report presents evidence that businesses
respond to a double time penalty rate on Sundays by:
closing stores on Sundays;
1462
limiting and reducing trading hours on Sundays;
1463
limiting operational activities such as administration tasks, inventory management,
stock replenishment, cleaning, and limiting deliveries to days other than Sunday;
1464
offer fewer hours to employees on Sunday than other days;
1465
offer fewer hours to employees on days other than Sundays in response to an
inability to reduce Sunday hours any further;
1466
structuring rosters to eliminate breaks and shift crossover;
1467
rostering younger and less experienced employees on Sundays
1468
which is
negatively impacting service delivery;
1469
and
owners and family members working on Sundays.
1470
[1615] Further, the Retail Employers submit that the Sands Report supports the proposition
that if there is a reduction in penalty rates on Sundays then retail businesses are likely to:
roster more hours on activities such as restocking;
1471
[2017] FWCFB 1001
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roster more hours on Sundays, including to managers and experienced staff
members
1472
; and
expand operational activities;
1473
[1616] ABI highlight that the qualitative analysis provided evidence of the steps taken to
address wage costs on Sundays, such as:
rostering of casual, younger and “cheaper” employees;
reducing Sunday labour budgets;
performing only service delivery and not other activities such as stock resupply;
shorter shifts; and
fewer management staff.
1474
[1617] As to the various criticisms of aspects of the Sands Report we accept that the
employee focus group data and the retailer interviews constitute qualitative research, hence,
as Dr Sands acknowledged, the results are not ‘generalisable or representative … in a
qualitative sense’.
1475
We also note that not all of the comments in respect of particular issues
are sourced from answers to questions concerning those issues. However, as Dr Sands
observes, focus group research involves an iterative conversation and attempts to identify the
themes emerging from that conversation.
1476
Despite the limitations of qualitative research it
can provide more detail and context to assess in gaining a deeper understanding about a
particular issue.
[1618] In relation to the employee survey aspect of the Sands Report, due to various
limitations in the survey design, we are not satisfied that it can be said to be representative of
the views of retail employees generally. Given these limitations we propose to treat the survey
results as suggestive or anecdotal, rather than definitive.
(ii) Conclusion on the ABI and Retail Employers evidence
[1619] A number of general propositions can be drawn from the Retail Employers lay
evidence, the Retail survey and the Sands Report:
(i) Sunday is a significant trading day for retail businesses,
1477
(ii) In order to maintain profitability it is common for retail businesses to fix labour
budgets to a proportion of retail sales, hence changes in labour costs (or sales)
may impact on the amount of labour rostered.
1478
(iii) The current level of Sunday penalty rates has led employers to take measures
to reduce the labour costs associated with trading on Sunday, including:
o closing stores,
1479
[2017] FWCFB 1001
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o restricting trading hours on Sundays,
1480
88.3 per cent of respondents to
the Retail survey said that their Sunday trading hours are lower than
weekday trading hours
1481
and the main reason given was wages/costs
(58.18 per cent),
1482
o limiting the activities performed, so that Sundays are effectively limited
to customer service and selling,
1483
o operating with less experienced junior employees,
1484
o owners of the retail business work on Sundays instead of rostering
employees.
1485
[1620] The evidence also supports the proposition that a lower Sunday penalty rate would
increase service levels with a consequent increase in employment (in terms of hours worked
by existing employees or the engagement of new employees). In particular, a reduction in
Sunday penalty rates is likely to lead to:
more stores being open on Sundays,
1486
increased Sunday trading hours,
1487
a reduction in hours by some owner operators,
1488
an increase in overall hours worked in retail stores,
1489
65.5 per cent of respondents
to the Retail survey said that they would allocate more hours to employees on
Sunday if the Sunday penalty rate was reduced (from 200 per cent to 150 per cent).
[1621] It is not suggested that the likely changes identified above will apply uniformly across
all retail businesses. The actual impact of a reduction in Sunday penalty rates will depend on
the circumstances applying to individual businesses or stores. An assessment of a range of
considerations (including the level of Sunday penalty rates) may mean that particular
businesses or stores do not change their existing Sunday trading hours. For example: the
business may not be trading profitably and any reduction in costs will be applied to facilitate a
return to profitability (see Gough at [1533] above); the shopping centre in which the store
operates may not open on a Sunday (see Barron at [1515] above); or there may be insufficient
consumer demand.
[1622] As to the last point, Mr d’Oreli’s evidence was that 13 of Jeanswest’s 197 stores do
not trade on Sundays and if Sunday penalty rates were reduced he expected to reopen 3 of
those 13 stores on Sundays. Mr d’Oreli was asked about the factors which led him to the view
that he probably would not open the other 10 stores on Sundays and he replied:
‘There’s a lot of factors. Mostly the cost is the biggest thing. The other ten may not be open
because there is no Sunday traffic flow or there’s no environment for that Sunday shopping.
For instance, some country towns there’s no point opening on Sundays because they just - the
whole town doesn’t open. If that were to change we would most certainly review that.’
1490
[2017] FWCFB 1001
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(iii) The SDA
[1623] The SDA called 7 witnesses. The names, addresses and workplaces of these witnesses
are confidential per the Order of Catanzariti VP of 3 March 2016.
1491
For convenience we
refer to these witnesses as witness SDA Retail 1; witness SDA Retail 2; witness SDA Retail
3; etc.
[1624] The SDA also relies upon expert evidence provided by the following individuals:
Kevin Kirchner, Principal, Fulcrum Economics Australia;
1492
Helen Bartley, Bartley Consulting;
1493
Prof Morris Altman, Dean & Head, Newcastle Business School and Professor of
Behavioural & Institutional Economics, University of Newcastle;
1494
Dr Ian Watson, freelance researcher and Visiting Senior Research Fellow,
Macquarie University and SPRC, UNSW;
1495
Prof David Peetz, Professor of Employment Relations at the Centre for Work,
Organisation & Wellbeing, Griffith University;
1496
Serena Yu, labour market researcher at the Workplace Research Centre, University
of Sydney;
1497
Prof Sara Charlesworth, Australian Research Council Future Fellow and Professor
at the Centre for Sustainable Organisations and Work, within the School of
Management at RMIT University;
1498
and
Dr Fiona Macdonald, Vice Chancellor’s Senior Research Fellow at the Centre for
Sustainable Organisations and Work, within the School of Management at RMIT
University.
1499
[1625] We have dealt with the SDA’s expert evidence elsewhere and we now turn to deal
with the SDA’s lay witness evidence.
Witness SDA Retail 1
1500
[1626] Witness SDA Retail 1 has been employed as a retail assistant on a full-time basis for
about 15 years and currently works at a store that trades as a newsagent, bookstore, gifts and
confectionary outlet (as a Retail Employee Level 3 under the Retail Award). At the time the
statement was made, the witness worked Sunday to Tuesday from 5.30 am to 1.30 pm and
Wednesday from 1.00 pm to 9.30 pm and on Thursday from 1.30 pm to 9.30 pm.
[1627] As to the impact of weekend work, witness SDA Retail 1 says:
‘Most of our big social occasions are on Sundays and I am regularly arriving late to birthdays
and barbeques with family and friends. Sometimes I miss these events altogether… You miss
out on a lot when you work on a Sunday, particularly spending quality time with people you
care about…’
1501
[2017] FWCFB 1001
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[1628] At paragraphs 13, 15 and 16 of his statement, witness SDA Retail 1 sets out the impact
upon him of a reduction in Sunday and public holiday penalty rates as sought by the Retail
Employers, in particular:
‘I do not like working on Sundays but I need the penalty rate. The Sunday penalty rate goes
some way to making up for the disadvantages of working on that day and they are crucial to
assisting me to meet my financial obligations. Without the additional penalty rates it would be
difficult to provide for my family…
If the Sunday penalty rate were reduced to time and a half from double time, I would be
$74.06 worse off every week. This equates to a 7.88% reduction to my current weekly
earnings. This is a lot of money to me and losing this from my weekly income would cause yet
more financial stress to my family.
I also work the majority of public holidays that fall on a Monday, as I am currently rostered
every Monday. The reason I volunteer to work on the public holidays is because of the penalty
rate of double time and a half. I would much prefer to be spending this day with family and
friends. It is a sacrifice to work on public holidays and if the penalty rate were reduced on
these days, I would be far less likely to volunteer to work them.’
1502
[1629] During the course of his oral evidence, the witness said that if the Sunday penalty rate
was reduced from 200 per cent to 150 per cent then he would not work on Sundays, but would
work on Saturdays instead (at the current Saturday penalty rate of 125 per cent):
‘Because there’s – for the amount that you’re losing, it’s more – I find it more valuable to me to
– and more quality of life if I’m going to lose that much, spending it with my family on the
Sunday’
1503
Witness SDA Retail 2
1504
[1630] Witness SDA Retail 2 is employed on a full-time basis as a Level 1 Retail Employee
under the Retail Award. At the time the statement was made the witness worked 76 hours a
fortnight and was rostered on weekends once a fortnight (witness SDA Retail 2’s working
arrangements are detailed at paragraphs 2 and 3 of her statement), including on Sunday
between 10.00 am and 5.00 pm.
[1631] As to the impact of working on weekends and public holidays, particularly on her
capacity to engage in social activities, the witness says:
‘If I had a choice, I would prefer not to work weekends I don’t think that is possible… If I
refused to work weekends, or pushed back on my weekend roster in any way, I doubt I’d have
a job…
When my children were young, I had trouble working on the weekends. My children often
wanted to participate in school or other social activities, such as sport or friends’ birthday
parties on Saturdays or Sundays and I couldn’t take them to these events because of my work.
Now, I find the difficulty with working on weekends arises in my own social life. If there is a
special family celebration on a Sunday, for example, I will try to organise annual leave in
advance or simply arrive late to the function. Taking time off on the weekends that I am
rostered to work is not really an option. I simply have to work around my shifts and plan
[2017] FWCFB 1001
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activities with my family in advance, given that many of them work more regular weekday
hours.’1505
[1632] The witness plans her activities in advance as best she can, so that they occur on a
weekend when she is not working.
1506
As to the relative level of intrusion into her social
activities of Sunday versus Saturday work, the witness said it was ‘about the same’.
1507
[1633] Witness SDA Retail 2 earns $1,606.75 per fortnight, and if Sunday penalty rates in the
Retail Award were reduced in the manner sought by Retail Employers, she would lose
approximately $60 per fortnight:
‘[T]he penalty rates I receive on Saturday, and particularly Sunday, are a significant component
of my wage…
I rely on my weekend penalties to boost my take home pay. If Sunday penalty rates were
reduced, it would be even harder for me to survive financially than at present.’
1508
Witness SDA Retail 3
1509
[1634] Witness SDA Retail 3 is employed on a part-time basis and has worked at an airport
for about 15 years. The witness is employed under the Retail Award and works a 40 hour
fortnightly roster on Monday and Tuesday from 5.00 am to 10.30 am and in ‘week 2’ on
Friday to Wednesday from 5.00 am to 10.30 am. At the time the witness applied for her
present position, she was aware that the business operated on weekends and that it was
expected that he would work on weekends.
1510
[1635] As to the impact of weekend and public holiday work, the witness says:
‘I regularly miss out on social activities because of my hours, particularly during my Week 2
Roster. For example, on a Sunday, if I have been up since 3:30am to get to work by 5:00am, I
am often too tired to attend social activities like barbeques or other gatherings later in the day.
My Saturday nights are also limited because I need to be up so early on Sunday mornings.’
1511
[1636] During cross-examination, the witness acknowledged that both Saturday and Sunday
work intruded upon his social activities.
1512
In reply to a question as to the relative level of
intrusion of Saturday and Sunday work, the witness said:
‘Well, most of the intrusions are usually on a Saturday night, because a lot of my friends and the
people who I associate with who usually work on a Friday, so most occasions usually happen
on a Saturday night and I can’t go to them because I have to be in bed quite early to start work
on Sunday morning, early.’
1513
[1637] At paragraphs 6, 12 and 13 of her statement, the witness sets out the impact upon him
of a reduction in penalty rates as sought by the Retail Employers:
‘Although my hours can vary depending on the amount of overtime I work, last fortnight, as an
example, I worked 46.25 hours. Only 18 of those hours were paid at my ordinary hourly wage.
I am heavily reliant upon penalty rates…
[2017] FWCFB 1001
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If there were a reduction in Sunday penalty rates, I would lose $53.15 per fortnight. This is a
lot of money to me considering my financial and caring responsibilities and my disability,
which means that I would struggle to work additional hours to make up for this loss.
I work on average seven out of the ten public holidays, depending upon when these public
holidays fall. Sometimes, I work all the public holidays in a year. I am not in a position to
refuse to work on public holidays as I need the extra money but I’d prefer not to work on these
days from a social perspective.’1514
Witness SDA Retail 4
1515
[1638] Witness SDA Retail 4 has worked on a part-time basis with her current employer since
2009 (as a Level 1 Retail Employee under the Retail Award). The witness works shifts on
Monday from 5.15 pm to 8.15 pm; Tuesday from 8.15 am to 6.15 pm; Wednesday from
10.15 am to 8.15 pm; Saturday from 3.00 pm to 8.15 pm and Sunday from 7.45 pm to
12.45 pm. When the witness accepted her current job she was aware that she would be
required to work on weekends.
1516
[1639] The witness’s evidence as to the adverse impact of weekend and public holiday work
is set out at paragraphs 11–13 of her statement. Working at these times impacts her ability to
see her family:
‘If my grandchildren come to visit from Sydney, it is hard to get time off to see them because of
the work I do on the weekends. I tend to use annual leave or leave without pay so that I can
spend time with them. I also find that my weekend work makes it difficult for me to visit my
son in Orange and my son in Sydney as often as I would like and I struggle to catch up with
friends for lunch or dinner.
I have worked Sundays since I started… I don’t feel like I have much choice in working
Sundays because this is the shift the company gives me. It is very difficult for me to take a
weekend off because it is hard to find people to replace my shift. Other employees who are
trained as supervisors often do not want to work weekends.
I used to feel heavily pressured to work on public holidays. In 2013, I refused to work New
Years Eve, which was not my rostered shift. I had already worked Christmas Eve, which was
also not my rostered shift, and I had missed time with my grandchildren because of it. After
refusing to work New Years Eve, I was treated horribly by my supervisor and the 2IC who
ignored and excluded me.’1517 (footnotes omitted)
[1640] The witness was also asked about the relative level of intrusion into her social
activities of Saturday and Sunday work:
‘That level of intrusion into your social and personal life, that’s about the same between a
Saturday and a Sunday?---Probably overall it is but if there’s a family event that goes all
weekend. Even if there is something on a Saturday then the family gets together on a Sunday
so it sort of carries over the whole weekend.’
1518
[1641] At paragraphs 14–15 of her statement, the witness sets out the likely impact of a
reduction in penalty rates as sought by the Retail Employers:
‘I consider Sunday to be more of a day of leisure than Saturday. Whilst I’d prefer not to have to
work on Sundays, I need the Sunday penalty rate to make my financial situation more
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manageable. If the penalty rate were reduced from 200% to 150% on Sunday, I would lose
$47.48 per week. This would make it harder for me to justify working the Sunday shift and
would be difficult for me financially. I feel that every bit I earn is needed to get me across the
line financially from week to week. I would probably still have to work on Sunday, not just
because I need the money, but because I would feel pressured to do so. In the past, after I
refused to work a short shift at night, I lost a number of hours in my roster at other times.
I work on some public holidays. If l can see my grandchildren, either by them visiting me or
by me visiting them, I prefer not to work on a public holiday. Otherwise, I work on a public
holiday because I can’t afford to turn down a 250% penalty rate merely for the benefit of a day
off.’1519
[1642] As to whether she would still work on Sundays if the penalty rate was reduced to 150
per cent, the witness said:
‘I would have to do whatever the shift is because I need to have a job… because I need to
work’
1520
Witness SDA Retail 5
1521
[1643] Witness SDA Retail 5 commenced work with her current employer in 2000 and is
employed on a permanent, part-time basis, working an average of 28.75 hours per week (as a
Level 1 Retail Employee under the Retail Award). The witness’s working arrangements are
detailed at paragraph 5 of her statement. In week 1, the witness works Wednesday from
9.00 am to 1.00 pm; Thursday from 1.00 pm to 9.00 pm and Friday from 9.00 am to 5.30 pm
and in week 2 on Wednesday from 9.30 am to 5.30 pm; Thursday from 9.00 am to 6.00 pm;
Friday from 9.00 am to 5.30 pm; Saturday from 9.00 am to 5.00 pm and Sunday from
10.00 am to 5.00 pm.
[1644] When the witness applied for her present job she was aware that is was a retail
business that operated 7 days a week
1522
and when she moved from casual to part-time
employment the witness was aware that she was going to work Saturdays and Sundays.
1523
[1645] The witness deals with the impact of a reduction in penalty rates as proposed by the
Retail Employers at paragraphs 7–13 of her statement, in particular:
‘My current fortnightly income of $1,056.00 barely meets my costs of living…
My weekly expenses include mortgage repayments on my house, general grocery and other
household bills as well as the costs of running my car. These costs need to be covered by my
income of just over $700.00 per week…
My roster requires me to work every second weekend. If I did not receive the 100% penalty
rate on Sunday, I would find it increasingly difficult to meet my living expenses, including
paying my mortgage and providing for my son. Penalty rates are a critical component of my
income and make missing out on Sunday family time more tolerable.
The $246.83 that I earn on Sunday is about 20% of my fortnightly gross wage of $1265.00.
This is despite the fact that the hours that I work on Sunday are only about 11% of those that I
work every fortnightly roster. Any reduction in the Sunday penalty rate would place a great
deal of financial pressure on me. In the past, when a public holiday has fallen on my rostered
[2017] FWCFB 1001
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days, I have elected to work that day in order to get the public holiday penalty rate that
applies. This is despite not wanting to work on these holidays.’1524
[1646] The witness was asked about the relative level of intrusion into her social life of
Saturday and Sunday work:
‘And can I assume from what you’ve said that the level of intrusion into your social life is about
the same between Saturday and Sunday?---Well, no, because Sunday is more important. If my
kids don’t come down till Sunday night from Sydney, we usually try and get - like, you know,
Sunday is quite important to me, so I really missed out on a lot. You can’t compare Saturday to
Sunday when, you know, my daughter might work Saturday, but she doesn’t the Sunday, and
my son might work Saturday and not the Sunday; so, you know, Sunday is more important
than Saturday, of course.
And the importance you associate, though, relates to spending time with family, such as your
son, such as your daughter, such as your granddaughter; that’s what you’re saying is
important. Yes?---Yes.
So if you were able to spend time with them - so it’s not that the quality of time differs, but
you’re saying - sorry, I withdraw that. I apologise. So if you see your grandchild for two hours
on a Saturday, that’s the same, isn’t it, as if you see them on a Sunday for two hours; the
important thing to you is seeing these people that are close to you?---Yes, that’s the most
important thing, is seeing them.’1525
Witness SDA Retail 6
1526
[1647] Witness SDA Retail 6 has worked for her current employer since 2000 and is
employed on a permanent part-time basis (as a Level 1 Retail Employee under the Retail
Award). The witness works a 51 hour per fortnight roster where in Week 1 she works Monday
from 1.30 pm to 5.30 pm; Tuesday from 9.00 am to 1.30 pm; Wednesday from 1.30 pm to
5.30 pm and Thursday from 9.00 am to 4.00 pm. In week 2 she works Monday from 1.30 pm
to 5.30 pm; Tuesday from 9.00 am to 1.30 pm; Wednesday from 1.30 pm to 5.30 pm;
Thursday from 1.30 pm to 9.00 pm; Saturday from 10.00 am to 3.00 pm and Sunday from
1.00 pm to 5.00 pm.
[1648] The witness accepted her current job knowing that she would be working Saturdays
and Sundays.
1527
[1649] As to the impact of working Sundays, the witness’s evidence is as follows:
‘Whilst my roster requires that I work on Saturdays and Sundays and whilst I’d prefer to have
my weekends to myself, the reality is that I rely on the money that I receive in penalty rates on
these days to support myself financially. This compensates me for the weekend events that I
often miss, particularly on Sundays when my family and friends most often get together for
social functions. My family is tight knit and my two brothers live close by, one is just up the
street. I have often missed my nieces’ and nephews’ birthday parties because of my weekend
work.’
1528
[1650] As best she can, the witness plans her social activities and family interactions to occur
on the weekends when she is not working.
1529
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[1651] The witness earns $931.25 a fortnight, and if the Sunday penalty rate was reduced to
the rate sought by the Retail Employers, she would earn $37.96 less a fortnight or 4 per cent
of her fortnightly income before tax:
‘… This is a lot of money to me. Considering the difficulties I have meeting my living
costs on my current income, a reduction in my Sunday penalty rate would place me
under even more financial strain.
When I work on a public holiday, I do so because of the extra money I am able to earn and it
is always a trade off with the time I would ordinarily spend with my family or friends.’
1530
Witness SDA Retail 7
1531
[1652] Witness SDA Retail 7 is employed as a retail service assistant on a part-time basis and
has worked for her current employer since October 2007 (as a Level 1 Retail Employee under
the Retail Award). The witness works 30.5 hours per week and her weekly roster is Monday
from 9.00 am to 3.00 pm; Tuesday from 7.00 am to 4.00 pm; Wednesday from 10.00 am to
3.00 pm; Thursday from 9.00 am to 3.30 pm and Sunday from 7.00 am to noon.
[1653] At the time the witness applied for her current job, she was aware that it was a retail
business that operated 7 days a week and that she would be required to work on weekends.
1532
[1654] At paragraphs 10–13 of her statement, the witness sets out the impact upon her of a
reduction in penalty rates as sought by the Retail Employers:
‘After [my living] expenses are paid, I have very little, if anything, left over for savings or
discretionary spending. At present, I do not have any money in savings. If something
unexpected occurred, I would struggle to meet those needs…
My manager offered my Sunday shift to me around eight months ago. The reason that I work
on Sunday is that the higher rate of pay has a significant effect on my ability to cope
financially - I used to struggle even more than I do now to pay my debts and living expenses. I
decided to take up the offer of working on Sundays as I suspected that if I refused, the
company would find someone else to take my place on that day and the opportunity for more
income would be lost.
If the Sunday penalty rate were reduced, the difficulties I have surviving financially week to
week to support my family would again be compounded. For example, a cut in the penalty rate
from 200% to 150% would see me lose approximately $47.43 per week. Working to receive
the Sunday penalty rate has become a necessity for me, particularly in circumstances where
my children are getting older and my child support payments will soon cease altogether.’1533
8.2.5 Consideration
[1655] We propose to deal with the s.134 considerations first.
[1656] Section 134(1)(a) requires that we take into account ‘relative living standards and the
needs of the low paid’. A threshold of two-thirds of median full-time wages provides a
suitable benchmark for identifying who is ‘low paid’, within the meaning of s.134(1)(a). As
shown in Chart 54 (see [1458]) a substantial proportion of award-reliant employees covered
by the Retail Award are ‘low paid’. Further, retail households face greater difficulties in
[2017] FWCFB 1001
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raising emergency funds. This suggests that their financial resources are more limited than
those of other industry households.
[1657] As stated in the PC Final Report, a reduction in Sunday penalty rates will have an
adverse impact on the earnings of those hospitality industry employees who usually work on a
Sunday. It is likely to reduce the earnings of those employees, who are already low paid, and
to have a negative effect on their relative living standards and on their capacity to meet their
needs.
[1658] The evidence of the SDA lay witnesses provides an individual perspective on the
impact of the proposed changes. For example, witness SDA Retail 1 said that if Sunday
penalty rates were reduced to 150 per cent he would be $74.06 worse off each week – a
reduction of 7.88 per cent in his current weekly earnings.
1534
[1659] The extent to which lower wages induce a greater demand for labour on Sundays (and
hence more hours for low-paid employees) will somewhat ameliorate the reduction in income,
albeit by working more hours. We note the Productivity Commission’s conclusion that, in
general, most existing employees would probably face reduced earnings as it is improbable
that, as a group, existing workers’ hours on Sundays would rise sufficiently to offset the
income effects of the penalty rate reduction.
[1660] The ‘needs of the low paid’ is a consideration which weighs against a reduction in
Sunday penalty rates. But it needs to be borne in mind that the primary purpose of such
penalty rates is to compensate employees for the disutility associated with working on
Sundays rather than to address the needs of the low paid. The needs of the low paid are best
addressed by the setting and adjustment of modern award minimum rates of pay (independent
of penalty rates).
[1661] We are conscious of the adverse impact of a reduction in Sunday penalty rates on the
earnings of retail workers who work on Sundays and this will be particularly relevant to our
consideration of the transitional arrangements associated with any such reduction.
[1662] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’. A reduction in penalty rates is likely to increase the incentive for employees to
bargain, but may also create a disincentive for employers to bargain. It is also likely that
employee and employer decision-making about whether or not to bargain is influenced by a
complex mix of factors, not just the level of penalty rates in the relevant modern award.
[1663] Despite the absence of any direct evidence as to the likely impact of a reduction in
Sunday penalty rates on collective bargaining, ABI submits that the changes proposed ‘are
only likely to increase the prospects of collective bargaining’.
1535
[1664] Section 134(1)(b) speaks of ‘the need to encourage collective bargaining’. Contrary to
ABI’s submissions we are not persuaded that a reduction in penalty rates would ‘encourage
collective bargaining’, it follows that this consideration does not provide any support for a
change to Sunday penalty rates.
[2017] FWCFB 1001
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[1665] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. Obtaining employment is the focus of
s.134(1)(c).
[1666] On the basis of the common evidence we conclude that a reduction in the Sunday
penalty rate in the Retail Award is likely to lead to some additional employment. We are
fortified in that conclusion by the evidence called by ABI and the Retail Employers (see
[1671] below).
[1667] This consideration lends support to a reduction in Sunday penalty rates.
[1668] It is convenient to deal with the considerations s.134(1)(d) and (f) together.
[1669] It is self-evident that if the Sunday penalty rate was reduced then employment costs
would reduce. It was not contended that a reduction in the Sunday penalty rate would impact
on the regulatory burden. This consideration supports a reduction in the Sunday penalty rate.
As we have mentioned, s.134(1)(f) is not confined to a consideration of the impact of the
exercise of modern award powers on ‘productivity, employment costs and the regulatory
burden’. It is concerned with the impact of the exercise of those powers ‘on business’.
[1670] The evidence called by the ABI and Retail Employers supports the proposition that the
current level of Sunday penalty rates has led employers to take measures reduce the labour
costs associated with Sunday trading including:
closing stores,
1536
restricting trading hours on Sundays,
1537
88.3 per cent of respondents to the Retail
survey said that their Sunday trading hours are lower than weekday trading
hours
1538
and the main reason given was wages/costs (58.18 per cent),
1539
limiting the activities performed, so that Sundays are effectively limited to customer
service and selling,
1540
operating with less experienced junior employees,
1541
owners of the retail business work on Sundays instead of rostering employees.
1542
[1671] The Retail survey results, the Sands Report and the evidence of the Retail Employers’
lay witnesses also supports the proposition that a lower Sunday penalty rate would increase
the level and range of services offered on a Sunday. The type of changes suggested in the
evidence are:
more stores being open on Sundays,
1543
increased Sunday trading hours,
1544
a reduction in hours by some owner operator,
1545
[2017] FWCFB 1001
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an increase in overall hours worked in retail stores,
1546
65.5 per cent of respondents
to the Retail survey said that they would allocate more hours to employees on
Sunday if the Sunday penalty rate was reduced (from 200 per cent to 150 per cent).
[1672] On this basis, it may be said that a reduction in penalty rates will promote flexible
modern work practices. This consideration lends support to a reduction in Sunday penalty
rates.
[1673] Section 134(1)(da) requires that we take into account the ‘need to provide additional
remuneration’ for, relevantly, ‘employees working on weekends’. As mentioned earlier, an
assessment of ‘the need to provide additional remuneration’ to employees working in the
circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a range
of matters, including:
(i) the impact of working at such times or on such days on the employees
concerned (i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g.
through ‘loaded’ minimum rates or the payment of an industry allowance
which is intended to compensate employees for the requirement to work at
such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[1674] It is convenient to deal with matters (ii) and (iii) first.
[1675] As to matter (ii), the minimum wage rates in the Retail Award do not already
compensate employees for working on weekends. However, in this context it is relevant to
observe that there are terms of the Retail Award which operate to minimise the incidence of
Sunday work. In particular, clause 28.13 provides:
‘28.13 Employees regularly working Sundays
(a) An employee who regularly works Sundays will be rostered so as to have
three consecutive days off each four weeks and the consecutive days off will
include Saturday and Sunday.
(b) This requirement will not apply where the employee requests in writing and
the employer agrees to other arrangements which are to be recorded in the
time and wages records. It cannot be made a condition of employment that an
employee make such a request.
(c) An employee can terminate the agreement by giving four weeks’ notice to the
employer.’
[1676] We also note that clause 28.11 provides that (absent an individual agreement to the
contrary) ordinary hours are to be worked so as to provide an employee with 2 consecutive
days off each week or 3 consecutive days off in a 2 week period. Clauses 28.13 and 28.11
only apply to full-time employees.
[2017] FWCFB 1001
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[1677] In relation to matter (iii), weekend work is a feature of the Retail sector. As mentioned
earlier, enterprises in the Retail sector operate 7 days a week (compared to 31.1 per cent
across all industries) operate on an average of 6.2 days per week and just over 40 per cent of
enterprises operate 7 days a week. This feature of the Retail sector was consistent with the lay
witnesses called by the Retail Employers and the SDA. Further, the Watson and Peetz Report
concluded that the proportion of the total retail workforce that usually worked on weekends
(either on one or both weekend days) was between ‘a little below 60 per cent’ and 62 per cent,
and that 31-35 per cent of the total retail workforce usually worked on a Sunday.
1547
[1678] We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In
addition to the findings set out in Chapter 6, the lay witness evidence led by the SDA spoke to
the adverse impact of weekend work on the ability of retail sector employees to engage in
social and family activities.
[1679] While for some of those witnesses Sunday work had a particularly adverse impact,
others simply referred to the impact of weekend work and one said that the intrusion into their
social activities of Saturday and Sunday work was ‘about the same’.
1548
[1680] We also note the following findings from the Sands Report online survey of retail
employees:
The ‘vast majority’ of employees that do not work on Sundays state that nothing
will motivate them to work on a Sunday;
1549
The main difficulty with Sunday work is the impact on the ability to spend time
with family/friends;
1550
86 per cent of Sunday employees hardly ever or never are able to make up time to
attend community, sporting or cultural events during the week;
1551
and
29 per cent of Sunday employees with children believe that Sunday work has an
adverse impact on the health and development of their children.
1552
[1681] We note that in the event Sunday penalty rates were reduced (but not removed
entirely) employees working on Sundays would still receive ‘additional remuneration’.
[1682] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’. Any reduction in Sunday penalty rates
would apply equally to men and women workers. For the reasons given earlier we regard
s.134(1)(e) as neutral to our consideration of the claims before us.
[1683] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’. We regard s.134(1)(g) as neutral to our consideration
of the claims before us. No party contended to the contrary.
[2017] FWCFB 1001
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[1684] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’.
[1685] The Retail Employers adopt Ai Group’s submissions (dealing with the Fast Food
Award) in respect of this consideration. It will be recalled that Ai Group submit that the
reduction in the level of penalty rates will not have economy wide effects. However, the
Retail Employers go on to submit (at para 154):
‘Additionally, we note that the size of the retail industry means that any positive impacts of
varying the Sunday penalty rate under the [Retail Award] will have a positive impact on the
Australian economy’.
[1686] ABI advances a similar submission.
1553
[1687] A detailed assessment of the impact of a reduction in Sunday penalty rates in the
Retail Award on the national economy is not feasible on the basis of the limited material
before us.
[1688] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’, taking into account
the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into
account those considerations insofar as they are relevant to the matter before us.
[1689] The central issue in these proceedings is whether the existing Sunday penalty rate
provides a ‘fair and relevant minimum safety net’.
[1690] ABI and the Retail Employers advance three broad contentions in support of their
claim to reduce the Sunday penalty rate in the Retail Award:
(i) weekends are important time for retail trade (unlike when the penalty rate was
first fixed);
(ii) deterrence is no longer a valid consideration in determining the appropriate
level of a penalty rate; and
(iii) the current level of Sunday penalty rate is ‘dis-incentivising’ employers from
trading at times at which it would otherwise be profitable and productive to
trade.
[1691] In substance the submission put is that the current penalty rates are neither fair nor
relevant. In short, the existing Sunday penalty rate is not ‘proportional to the disability’.
[1692] As set out earlier, ABI and the Retail Employers propose that the Sunday penalty rate
be reduced from 200 per cent to 150 per cent for all employees (inclusive of the 25 per cent
loading for casual employees).
[1693] ABI and the Retail Employers accept that there is disability associated with Sunday
work and that there is a need to compensate for that disability. It is also accepted that for some
[2017] FWCFB 1001
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employees the disutility associated with Sunday work is higher than for Saturday work.
1554
As
ABI put it in its additional submission filed on 2 May 2016:
‘… sometimes, working on Sundays may involve a very slight increased disability to some
employees when compared to Saturday work.
This slightly increased disability for some employees is addressed by the draft clause for the
Retail Award which provides for a higher Sunday penalty rate as compared to Saturday (25%
greater loading on Sundays). The proposed clause may over-compensate the level of increased
disability for those who experience it, and certainly provides compensation beyond those
employees for whom there is additional disability.’
1555
[1694] We think ABI understates the relative disutility of Sunday as opposed to Saturday
work, but it does acknowledge that there is a difference in the extent of disutility.
[1695] Further, as we have mentioned, ABI and the Retail Employers are not proposing that
the Sunday penalty rate be reduced to the Saturday penalty rate.
[1696] Implicit in the claim advanced by ABI and the Retail Employers is an acceptance of
the proposition that the disutility associated with Sunday work is higher than the disutility
associated with Saturday work. If this was not the case then they would have proposed that
the penalty rates for Sunday and Saturday work be the same.
[1697] We note that the PC Final Report recommended that for full-time and part-time
employees the Sunday penalty rates be set at the higher rate of 125 per cent and the existing
Saturday penalty rate.
[1698] In the Retail Award the existing Saturday penalty rate for full-time and part-time
employees is 125 per cent. Hence, if adopted the Productivity Commission recommendation
would result in the reduction of the Sunday penalty rate for full-time and part-time employees
from 175 per cent to 125 per cent.
[1699] As mentioned earlier, in the Review the Commission is not constrained by the terms of
a particular application, it may vary a modern award in whatever terms it considers
appropriate, subject to procedural fairness considerations. Accordingly, if we were satisfied of
the merit of doing so, it would be open to us to adopt the recommendation in the PC Final
Report (and reduce the Saturday penalty rate to 125 per cent) or indeed to go further and
reduce the Sunday penalty rate. But as we are not satisfied of the merit of doing so, we have
decided not to adopt that course.
8.2.6 Conclusion
[1700] We are satisfied that the existing Saturday penalty rates for full-time and part-time
employees in the Retail Award achieves the modern awards objective – they provide a fair
and relevant minimum safety net. We refer to the Saturday penalty rate for casual employees
shortly.
[1701] In relation to the Sunday penalty rate, for the reasons given, we have concluded that
the existing Sunday penalty rate is neither fair nor relevant. As mentioned earlier, fairness in
this context is to be assessed from the perspective of the employees and employers covered by
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the modern award in question. The word ‘relevant’, in the context of s.134(1), is intended to
convey that a modern award should be suited to contemporary circumstances.
[1702] Based on the evidence before us and taking into account the particular considerations
identified in paragraphs 134(1)(a) to (h), insofar as they are relevant, we have decided to
reduce the Sunday penalty rate for full-time and part-time employees, from 200 per cent to
150 per cent.
[1703] We deal with the transitional arrangements associated with the reduction in the Sunday
penalty rate in the Retail Award in Chapter 13 of our decision.
[1704] We now turn to the application of weekend penalty rates in the Retail Award to casual
employees. The Retail Award provides that casual employees are paid a casual loading of 25
per cent.
[1705] Casuals are currently paid an additional 10 per cent for work performed on a Saturday
between 7.00 am and 6.00 pm, that is in addition to the 25 per cent casual loading. It is not
clear whether the 10 per cent premium is compounded upon the casual rate of 125 per cent of
the applicable minimum hourly rate or whether it is simply added to the 125 per cent such that
casuals are paid 135 per cent of the applicable hourly rate. But for present purposes, and for
the sake of convenience, we will refer to the Saturday rate for casuals as 135 per cent, for
work performed during 7.00 am and 6.00 pm.
[1706] It is also relevant to observe that clause 30.3(c) of the Retail Award provides that:
‘Any shiftwork performed on a Sunday will be paid at the rate of 200% (225% for casuals) of
the ordinary time rate of pay.’
[1707] Yet, curiously, the Sunday rate for non-shift casuals is 200 per cent (inclusive of the
25 per cent casual loading), which is the same as the Sunday rate for full-time and part-time
employees.
[1708] While these provisions no doubt have some history, they are plainly inconsistent and
appear to lack logic and merit.
[1709] For instance, how is it that a casual employee working on a Saturday between 7.00 am
and 6.00 pm is paid a premium of 135 per cent, but a casual working at, say, 6.00 am on a
Saturday (or after 6.00 pm) is only paid the casual loading (i.e. 125 per cent)? Working early
on a Saturday (at say 5.00 am or 6.00 am) or working late (say after 9.00 pm) may be said to
attract a higher level of disutility than working between 7.00 am and 6.00 pm, yet casual
employees receive less for working at these times.
[1710] The position in respect of Sunday work is even more curious. Casuals who work
shiftwork on a Sunday are paid the Sunday loading (i.e. 225 per cent in total). In these
proceedings the Retail Employers are seeking to reduce the premiums for shiftwork on
Sunday, yet the proposal advanced retains the differential between full-time/part-time
employees (at 150 per cent) and casual employees (at 175 per cent). If casual shiftworkers
who work on Sunday are entitled to the Sunday loading plus their casual loading why is it that
casual non-shiftworkers are treated differently?
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[1711] Casual loadings and weekend penalty rates are separate and distinct forms of
compensation for different disabilities. Penalty rates compensate for the disability (or
disutility) associated with the time at which work is performed.
[1712] The casual loading is paid to compensate casual employees for the nature of their
employment and the fact that they do not receive the range of entitlements provided to full-
time and part-time employees, such as annual leave, personal carer’s leave, notice of
termination and redundancy benefits.
[1713] Importantly, the casual loading is not intended to compensate employees for the
disutility of working on Sundays.
[1714] As mentioned earlier we have a preference for what the Productivity Commission calls
the ‘default’ approach to the interaction of casual loadings and weekend penalties. Under this
approach, the casual loading is added to the applicable weekend penalty rate when calculating
the Saturday and Sunday rates for casuals.
[1715] In our view, the casual loading should be added to the Sunday penalty rate when
calculating the Sunday rate for casual employees. We propose to adopt the Productivity
Commission’s ‘default’ method. Accordingly, the new Sunday rate for casual employees in
the Retail Award will be 25 plus 150, that is 175 per cent.
[1716] If the approach advocated by the Productivity Commission was applied to the
Saturday rates for casuals then they would be entitled to a loading of 150 per cent (being the
standard Saturday loading of 125 per cent plus the 25 per cent casual loading) for all hours
worked on Saturday.
[1717] The Productivity Commission acknowledged that doing so could increase the casual
rates in some awards such as the Retail Award, which, to some extent, could offset the impact
of reducing Sunday penalty rates:
‘The neutral treatment of casual penalty rates would diminish or, in some cases, eliminate the
impact of income effects of the Productivity Commission’s other penalty rate reforms affecting
casual employees.’
1556
[1718] Recommendation 15.1 of the PC Final Report states:
‘The Fair Work Commission should, as part of its current award review process:
…
investigate whether weekend penalty rates for casuals in these industries should be set so
that casual penalty rates on weekends would be the sum of the casual loading and the
revised penalty rates applying to permanent employees, with the principle being that there
should be a clear rationale for departing from this.’
[1719] While expressing the view that there may be grounds for some casual penalty rates to
rise on Saturdays the Productivity Commission urged some caution in the adoption of the
principle of neutrality:
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‘… a major proviso is that the current regulated pay levels set for casual employees are ‘rough
and ready’ and may not take into account the generally lower average skills and experience of
those employees. Were this to be true, achieving parity in the employer costs of employing
casuals compared with permanent employees might only have the appearance of ‘equal pay for
equal’ work and would disadvantage the employment of casuals. That would be unfortunate
given that casual jobs are an important vehicle for gaining entry to the labour market for the
disadvantaged, the young, and those needing flexible working arrangements. In that context,
the wage regulator should make the presumption that casual penalty rates should fully take
account of the casual loading, but should not adopt that principle without closely considering
its impacts on such workers.’
1557
[1720] Despite the apparent merit of adopting a consistent approach to the application of
weekend penalty rates to casuals we are conscious of the fact that no party in the present
proceedings has advocated an increase in the Saturday rates for casuals. In the event that such
an application is made it can be determined in the award stage of the Review.
8.3 Pharmacy Industry Award 2010
8.3.1 The Claims
[1721] The Pharmacy Guild of Australia (the PGA) seeks to vary the Pharmacy Industry
Award 2010 (the Pharmacy Award) by removing clause 26.2(b) to (d) dealing with loadings
for early morning and evening work, and loadings for weekend work and to insert a new
clause, Additional remuneration, as set out in the marked up version of clause 26.2:
26.2 Overtime and penalty rates
…
(b) Morning and Evening work Monday to Friday
A loading of 50% (casuals 75%) will apply for hours worked before 8.00 am
and a loading of 25% (casuals 50%) for hours between 7.00 pm to 9.00 pm. A
loading of 50% will apply to hours worked from 9.00 pm to midnight (casuals
75%).
(c) Saturday work
A loading of 100% (casuals 125%) will apply for hours worked before
8.00 am, and a loading of 25% (casuals 50%) will apply for hours of work
from 8.00 am to 6.00 pm on a Saturday. A loading of 50% (casuals 75%) will
apply from 6.00 pm to 9.00 pm, and a loading of 75% (casuals 100%) for
hours from 9.00 pm to midnight.
(d) Sunday work
A 100% (casuals 125%) loading will apply for all hours of work on a Sunday.
26.2. Additional remuneration
26.2.1 The employer will pay to an employee the following rates for all ordinary hours
worked during the specified periods:
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Hours worked
Additional Remuneration
Full-time and part-time
employees
Additional Remuneration
Casual employees (inclusive of
casual loading)
% of minimum hourly rate
Monday to Friday
Before 7.00 am 150 175
Between 9.00 pm
and midnight
125 150
Saturday
Before 7.00 am 200 200
Between 7.00 am &
9.00 pm
125 125
Between 9.00 pm
and midnight
150 150
Sunday
Before 7.00 am 200 200
Between 7.00 am &
9.00 pm
150 150
Between 9.00 pm
and midnight
175 175
Public holiday 200 125
[1722] The effect of the variations sought by the PGA is set out below.
(i) Saturday work
Adjust the span of hours for the morning loading, so that it is paid for work
performed ‘before 7.00am’ (rather than before 8.00am) and reduce the current
loading paid to casuals, during this period from 225 per cent to 200 per cent (no
change in the loading for full-time and part-time employees, it remains at 200 per
cent).
Remove the current loading for work performed between 8.00am and 6.00pm, and
remove 6.00pm and 9.00pm and replace with a loading of 125 per cent for work
performed between 7.00am and 9.00pm for all employees.
Reduce the rate payable for work performed between 9.00 pm and midnight from
175 per cent (200 per cent for casuals) 150 per cent for all employees.
(ii) Sunday work
Replace the current 200 per cent loading for all Sunday work (225 per cent for
casuals) with rates payable at different times of the day, being:
o Before 7.00 am—200 per cent for all employees;
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o Between 7.00 am and 9.00 pm—150 per cent for all employees; and
o Between 9.00 pm and midnight—175 per cent for all employees.
[1723] The application for a variation to the public holiday rate is addressed in Chapter 9.
8.3.2 Background to the Pharmacy Award
[1724] The Award Modernisation Full Bench designated the ‘Retail industry’ as a priority
industry in the award modernisation process and, at that stage, rejected an SDA proposal that
community pharmacies be the subject of a separate modern award:
‘…we do not agree with all of the exclusions the SDA proposes. In particular, at least at this
stage, we do not intend to exclude community pharmacies, fast food outlets or hairdressing
services…Obviously the precise scope of a modern retail award cannot be determined at this
stage but we intend to include a broad range of awards in our consideration to maximize the
potential for rationalisation of award coverage’
1558
[1725] The SDA subsequently filed a draft general retail industry award, the scope of which
included the community pharmacy industry.
1559
The draft provided for loadings of 25 per cent
and 100 per cent for work performed on Saturdays and Sundays, respectively.
1560
Public
holidays attracted loadings of 150 per cent and 175 per cent for permanent and casual
employees, respectively.
1561
The penalty rates were proposed to cover employees across all
classifications of the award.
[1726] The PGA maintained that the community pharmacy industry should be confined to a
discrete modern award, separate from the broader retail industry. The PGA’s submissions did
not address penalty rates for weekend work, but focused primarily on issues of scope and
coverage.
1562
The draft award filed by the PGA at that time provided for penalty loadings of
50 per cent for work performed from 6.00 am to 8.00 am, and from 6.00 pm to midnight on
Saturdays (the intervening period receiving no penalties), a loading of 50 per cent for work
performed between 6.00 am and midnight on Sundays, and a loading of 100 per cent for work
performed on public holidays.
1563
[1727] An exposure draft of a modern award for the general retail industry was published on
12 September 2008. The coverage extended to community pharmacies and provided for
penalty rates which reflected those proposed by the SDA.
1564
In the accompanying Statement,
the Full Bench did not specifically address the issue of the penalty rates contained in the
exposure draft.
1565
Following the publication of the exposure draft submissions were filed by
interested parties.
[1728] APESMA submitted that a separate award should be made to cover community
pharmacies, and proposed that the rate for pharmacists working 6.00 pm to 9.00 pm on
Saturdays should be set at 150 per cent, submitting that the proposed 25 per cent loading in
the exposure draft was insufficient to compensate for the disutility of working on a Saturday
evening.
1566
[1729] The PGA submitted that the penalty rates proposed in clause 29 of the exposure draft
would substantially increase costs for community pharmacies, pointing to lower penalty rates
in various pre-reform awards, and noting that:
[2017] FWCFB 1001
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‘the nature of the community pharmacy industry, and its regulated health service
obligations, is that many pharmacies regularly open 7 days per week and operate long
hours. The existing overtime and penalty rate regimes within the industry have evolved
to accommodate this feature of the community pharmacy industry.’
1567
[1730] The PGA subsequently filed an analysis of potential cost increases by state, based on
the differences in conditions between existing pre-reform awards the proposed conditions
appearing in the exposure draft.
1568
That document concluded that the rates in the exposure
draft would lead to increases (of varying degrees) for all but one of the 18 categories of
establishment assessed.
1569
The report attributed the increases to the following factors:
‘a. New penalty rates which apply to the current base rate of pay of employees which in
some cases are well above the current award rates of pay;
b. Increase in casual loadings in most states (excluding NSW and Vic);
c. Increase in garment laundry allowances in all states;
d. Introduction of new allowances - first aid, language, bicycle. We have been
conservative in our estimation of these (see later comments);
e. Increase in penalty rates above existing penalty rates in some states.’1570
[1731] In its decision of 19 December 2008 the Award Modernisation Full Bench responded
to the concerns expressed about the scope of the proposed retail award and concluded that
separate awards should be made for some sections of the retail sector:
‘The more awards with disparate provisions are aggregated the greater the extent of changes in
the safety net. Changes may be able to be accommodated by a “swings and roundabouts”
approach, specific provisions relevant to part of the industry or transitional provisions.
However, significant changes may also result in net disadvantage to employees and/or
increased costs for employers. The publication of an exposure draft which sought to rationalise
the terms and conditions across the various types of retail establishment provided a means
whereby the impact of such an approach could be fully evaluated.
We have considered these matters and the submissions of the parties and have decided to
make separate awards for general retailing, fast food, hair and beauty, and community
pharmacies…
In reaching this decision we have placed significant reliance on the objective of not
disadvantaging employees or leading to additional costs. We note that such an approach will
not lead to additional awards applying to a particular employer or employee.
The contents of the four awards we publish with this decision are derived from the existing
awards and NAPSAs applying to the different sectors. Although the scope of the awards is
obviously reduced, this did not eliminate the variations in terms and conditions within each
part of the industry. We have generally followed the main federal industry awards where
possible and had regard to all other applicable instruments. In this regard we note in particular
[2017] FWCFB 1001
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the significant differences in awards and NAPSAs applying to the fast food and pharmacy
parts of the industry.’1571
[1732] The Pharmacy Award which was then published, provided for the same penalty rates
that now appear in the modern award.
1572
[1733] The PGA continued to express its concern that the penalty rates provisions in the
modern award (in the format proposed) did ‘not reflect the non-standard working time
patterns of employees’ or ‘the seven day a week and late trading practices that prevail in the
community pharmacy sector, as primary healthcare providers’.
1573
These submissions were
accompanied by a number of ‘testimonials’ from people employed in the community
pharmacy industry, many of which commented on the adverse effects penalty rates would
have upon the businesses they owned or worked for.
1574
[1734] On 26 August 2009 the Award Modernisation Request was amended by the Minister
for Employment and Workplace Relations to include a new paragraph:
‘53. The Commission should ensure that the hours of work and associated overtime
penalty arrangements in the retail, pharmacy and any similar industries the Commission views
as relevant do not operate to discourage employers from:
offering additional hours of work to part-time employees; and
employing part-time employees rather than casual employees.’1575
[1735] In a Statement issued on 10 September 2009, the Award Modernisation Full Bench
invited submissions addressing the effect of the variation to the Ministerial request:
‘In its decision of 19 December 2008 the Commission made the General Retail Industry Award
2010
8
and the Pharmacy Industry Award 2010.
9
Any interested party which is of the view that
either of those awards, or any other award, should be varied to give effect to the 26 August
variation should make an appropriate application. We will endeavour to deal with any such
application before the end of 2009.’
1576
[1736] On 22 December 2009, the Award Modernisation Full Bench issued a decision in
respect of a joint application by the PGA, the SDA and APESMA to vary the Pharmacy
Award, noting that:
‘The variations are sought by agreement between the PGA, SDA and APESMA (the applicants)
and no other parties have filed submissions in response to the application.’
1577
[1737] The agreed variations dealt with, among other things, penalty rates. In respect of this
the Full Bench decision states:
‘Further the applicants seek the removal of the word “ordinary” appearing in cll.26.2(b) and (c):
(b) Morning and Evening work Monday to Friday
A loading of 50% (casuals 75%) will apply for ordinary hours worked before 8.00 am
and a loading of 25% (casuals 50%) for hours between 7.00 pm to 9.00 pm. A loading
of 50% will apply to ordinary hours worked from 9.00 pm to midnight (casuals 75%).
https://www.fwc.gov.au/documents/decisionssigned/html/2009aircfb835.htm#P95_7757
https://www.fwc.gov.au/documents/decisionssigned/html/2009aircfb835.htm#P96_7807
[2017] FWCFB 1001
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(c) Saturday work
A loading of 100% (casuals 125%) will apply for ordinary hours worked before 8.00
am, and a loading of 25% (casuals 50%) will apply for ordinary hours of work from
8.00 am to 6.00 pm on a Saturday. A loading of 50% (casuals 75%) will apply from
6.00 pm to 9.00 pm, and a loading of 75% (casuals 100%) for hours from 9.00 pm to
midnight…
The variations developed by the parties are designed to reflect the circumstances of the
industry and deal with the transition from a large number of pharmacy awards to a single
national prescription for the industry. We approve the changes and will issue an order
reflecting the agreed variations.’1578
[1738] On 2 February 2010, the Award Modernisation Full Bench issued a decision
concerning separate applications by the SDA and the PGA to vary the Pharmacy Award.
Relevantly for present purposes, one of the variations sought by the PGA concerned the
penalty rates applicable to Sunday work. The Full Bench deals with this proposed variation at
paragraphs [10]–[12] of its decision:
‘The third variation concerns Sunday work. The PGA submits that the Sunday penalty should be
reduced from 100% to 50% from 8am to 6pm and other amounts for other parts of the day. It
submits that the variation will assist pharmacies meet the expectations of customers and
patients and is consistent with the pre-existing common industry award standard.
The SDA and APESMA submit that the matter was adequately addressed during the
proceedings to establish the modern award and the outcome should not be altered.
The 100% penalty in the modern award is consistent with the previous rate for pharmacy
assistants in New South Wales, Northern Territory, Victoria and South Australia and
pharmacists in Victoria and South Australia. We are not disposed to vary the rate we have
established in making this modern award.’1579
[1739] In the present proceedings, the SDA and the PGA made submissions about the extent
to which penalty rates under the Pharmacy Award were considered during the award
modernisation process.
[1740] The SDA submits that penalty rates were fully and carefully considered by the Full
Bench of the AIRC during the award modernisation process:
‘It is submitted to be readily apparent from the above extracts that the Sunday rate issue was
very much a live issue in the context of the Award Modernisation process as it concerned the
pharmacy industry. It was contested in different ways with numerous issues presented and it
will be seen from the [award modernisation material highlighted by the SDA] that the Guild
brought forward the same arguments now again advanced in favour of reducing penalty
rates.’
1580
[1741] The PGA, by contrast, submits that the award modernisation process was more about
the convenient rationalisation of existing rates in pre-reform instruments than it was about
assessing the disutility associated with working on weekends and public holidays and setting
rates accordingly. In particular, the PGA submits that:
[2017] FWCFB 1001
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‘(a) The main issues confronting the Full Bench were whether the community pharmacy
industry should be part of the general retail award and the rationalisation of the different
penalty rate prescriptions contained in various Federal, State and Territory awards.
(b) Neither party made detailed submissions or adduced specific evidence regarding the
change in disabilities associated with working unsocial hours, weekends and public holidays.
(c) [sic] The SDA submitted that the purpose of the award modernisation process was not
to inquire into the basis upon penalty rates should be set. The Guild’s submissions centred on
the impact of the proposed conditions and not on measuring the level of disabilities associated
with working unsocial hours, weekends and public holidays.
(d) In the reasons for decision, the Full Bench did not expressly address the question of
whether the penalty rates reflected the appropriate level of compensation for the disabilities
associated for working unsocial hours, weekends and public holidays. Rather the Full Bench
was concerned about rationalising the various penalty rates applicable under Federal and
State/Territory awards and to produce a uniform set of conditions.’1581
[1742] We agree with the submissions advanced by the PGA.
[1743] While the PGA submitted a range of material during the award modernisation process
in support of its contention that the penalty rates in the Pharmacy Award were too high, it
appears from a review of the relevant decisions that the Award Modernisation Full Bench did
not give detailed consideration to this material. Indeed the material filed by the PGA in those
proceedings is not mentioned in any of the relevant decisions. It is also clear – particularly
from the decision of 2 February 2010 (see [1738] above) – that the penalty rates in the
Pharmacy Award were primarily set on the basis of the penalty rates in the various pre-
modernisation instruments.
[1744] As mentioned in Chapter 3, in conducting the Review it is appropriate that the
Commission take into account previous decisions relevant to any contested issue and will
proceed on the basis that prima facie the modern award being reviewed achieved the modern
awards objective at the time it was made. The extent of a previous Full Bench’s consideration
of a contested issue is relevant to assessing the weight to be attributed to that decision. It is
apparent from an examination of the relevant decisions that the Award Modernisation Full
Bench did not undertake a detailed or considered review of the penalty rates in the Pharmacy
Award. Rather, understandably enough in view of the time constraints on the award
modernisation process, the Full Bench gave effect to the existing penalty rates in the
preponderance of pre-reform instruments.
8.3.3 The Pharmacy industry
[1745] The ABS data of direct relevance to the Pharmacy industry is quite limited.
[1746] A paper
1582
by Commission staff provides a framework for ‘mapping’ modern award
coverage to the ANZSIC. Using this framework the Pharmacy Industry Award 2010 is
‘mapped’ to the Pharmaceutical, cosmetic and toiletry goods retailing industry class.
[1747] The Census is the only data source that contains all of the employment characteristics
for Pharmaceutical, cosmetic and toiletry goods retailing. The most recent Census data is from
August 2011.
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[1748] The August 2011 Census data shows that there were around 63 000 employees in
Pharmaceutical, cosmetic and toiletry goods retailing. Table 70 compares certain
characteristics of employees in the Pharmaceutical, cosmetic and toiletry goods retailing
industry class, with employees in ‘all industries’.
Table 70
1583
Labour force characteristics of the Pharmaceutical, cosmetic and toiletry goods retailing
industry class, ABS Census 9 August 2011
Pharmaceutical, cosmetic
and toiletry goods
retailing
All industries
(No.) (%) (No.) (%)
Gender
Male 9491 15.2 4 207 586 50.8
Female 53 062 84.8 4 082 662 49.2
Total 62 553 100.0 8 290 248 100.0
Full-time/part-time status
Full-time 25 358 42.6 5 279 853 67.8
Part-time 34 198 57.4 2 507 786 32.2
Total 59 556 100.0 7 787 639 100.0
Highest year of school
completed
Year 12 or equivalent 39 221 63.6 5 098 228 62.6
Year 11 or equivalent 7213 11.7 885 404 10.9
Year 10 or equivalent 12 486 20.2 1 687 055 20.7
Year 9 or equivalent 2262 3.7 317 447 3.9
Year 8 or below 440 0.7 141 973 1.7
Did not go to school 42 0.1 20 158 0.2
Total 61 664 100.0 8 150 265 100.0
Student status
Full-time student 13 510 21.8 612 990 7.5
Part-time student 2896 4.7 506 120 6.2
Not attending 45 588 73.5 7 084 360 86.4
Total 61 994 100.0 8 203 470 100.0
Age (5 year groups)
15–19 years 10 750 17.2 547 666 6.6
20–24 years 12 545 20.1 927 865 11.2
25–29 years 8527 13.6 1 020 678 12.3
30–34 years 5589 8.9 933 827 11.3
35–39 years 4933 7.9 934 448 11.3
40–44 years 4943 7.9 938 386 11.3
45–49 years 4627 7.4 911 739 11.0
50–54 years 4345 6.9 848 223 10.2
55–59 years 3098 5.0 652 190 7.9
60–64 years 2027 3.2 404 470 4.9
65 years and over 1169 1.9 170 718 2.1
Total 62 553 100.0 8 290 210 100.0
Average age 33.3 38.8
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Pharmaceutical, cosmetic
and toiletry goods
retailing
All industries
(No.) (%) (No.) (%)
Hours worked
1–15 hours 15 414 25.9 875 554 11.2
16–24 hours 9270 15.6 792 539 10.2
25–34 hours 9511 16.0 839 694 10.8
35–39 hours 12 927 21.7 1 676 920 21.5
40 hours 5580 9.4 1 555 620 20.0
41–48 hours 4399 7.4 895 619 11.5
49 hours and over 2455 4.1 1 151 693 14.8
Total 59 556 100.0 7 787 639 100.0
Note: Part-time work in the Census is defined as employed persons who worked less than 35 hours in all jobs during the
week prior to Census night. This group includes both part-time and casual workers. Information on employment type is
collected for persons aged 15 years and over.
Totals may not sum to the same amount due to non-response. For full-time/part-time status and hours worked, data on
employees that were currently away from work (that reported working zero hours), were not presented.
[1749] The profile of Pharmaceutical, cosmetic and toiletry goods retailing employees differs
from the profile of employees in ‘All industries’ in 5 important respects:
(i) Pharmaceutical, cosmetic and toiletry goods retailing employees are
overwhelmingly female (84.8 per cent, compared to 49.2 per cent for all
industries);
(ii) over half (57.4 per cent) of Pharmaceutical, cosmetic and toiletry goods
retailing employees are employed on a part-time or casual basis (i.e. less than
35 hours per week), compared with only 32.2 per cent of all employees;
(iii) about one quarter (25.9 per cent) of Pharmaceutical, cosmetic and toiletry
goods retailing employees work 1–15 hours per week compared with only 11.2
per cent of all employees;
(iv) over one third (37.3 per cent) of Pharmaceutical, cosmetic and toiletry goods
retailing employees are aged between 15 and 24 years compared with only 17.8
per cent of all employees; and
(v) just over one quarter (26.5 per cent) of Pharmaceutical, cosmetic and toiletry
goods retailing employees are students (21.8 per cent are full-time students and
4.7 per cent study part-time) compared with 13.7 per cent of all employees.
[1750] The report by Ms Pezzullo on the effect of the Pharmacy Award on community
pharmacies included information on the current state of community pharmacies in
Australia.
1584
The report stated there were 5350 approved community pharmacies in Australia
at 30 June 2013.
1585
[1751] Referring to an IBISWorld report,
1586
Ms Pezzullo explained that retail pharmacies
(which include community pharmacies) could be categorised by the following:
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Banner group pharmacies or franchises (approximately one third of market share in
2014) are those where individual owners are provided with collective buying power,
marketing, administration, branding and operating systems.
Buying groups (less than 20 per cent of market share) have similar collective
buying power but pharmacy owners have greater decision-making over branding
and operating systems.
Discount pharmacies (around 4.5 per cent of market share) are larger than
traditional pharmacies and use a ‘checkout model’ rather than staff on the shop
floor.
Friendly Society Pharmacies Association (around 15 per cent of market share) are
not-for-profit entities where the assets are owned by the members’ friendly society
dispensaries.
Independent pharmacies (around 2–10 per cent of market share) are pharmacies
where the owner has complete control.
1587
[1752] We return to Ms Pezzullo’s report later.
[1753] We also note that another PGA witness, Mr Armstrong, gave evidence about the
community pharmacy sector and the regulatory environment in which it operates. We deal
with Mr Armstrong’s evidence later.
8.3.4 The Evidence
(i) The PGA
[1754] In support of its application, the PGA called 24 pharmacists to give lay evidence:
Anthony Tassone, co-proprietor of Casey Central Pharmacy in Narre Warren South,
Victoria;
1588
Paul Keane, owner and manager of Barmera Pharmacy in Barmera, SA;
1589
Angelo Pricolo, partner in Tambassis Pharmacy in Brunswick, Victoria;
1590
Gregory Da Rui, owner of Pharmacy 777 Bayswater in Bayswater, WA;
1591
David Heffernan, proprietor of Culburra Pharmacy in Culburra Beach, NSW;
1592
Quinn On , proprietor of Menai Discount Drug Store in Menai, NSW;
1593
Samantha Kourtis, partner and pharmacist in charge of Capital Chemist Charnwood
in Charnwood, ACT;
1594
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Kin Chong, partner in Kerang Terry White Chemist in Kerang, Victoria;
1595
Lia Mahony, owner of The Mahony Group of Pharmacies in Tamworth, NSW;
1596
Hassan El–Ahmad, co-proprietor of Amcal Pharmacy Craigieburn in Craigieburn,
Victoria;
1597
Michael Farrell, manager of Mega Save Chemist Caneland Mackay in Mackay,
QLD;
1598
Trent Playford, owner of West Gosford Pharmacy in West Gosford, NSW;
1599
Craig Bird, proprietor of Belrose Chemist in Frenchs Forest, NSW;
1600
Michelle Spiro, owner of Carrick’s Pharmacy in Bondi, NSW;
1601
Peter Crothers, owner and manager of Towers Drug Co in Bourke, NSW;
1602
John Cagney, part owner of Monarch Chemmart Pharmacy in Whyalla, SA;
1603
Dean Pollock, owner of Atherton Discount Drug Store in Atherton, QLD;
1604
Timothy Logan, owner of Tim Logan’s Nambour Pharmacy in Nambour, QLD;
1605
Patrick Costigan, owner of Costigans Good Price Pharmacy Warehouse in
Maryborough, QLD, and Good Price Pharmacy Warehouse Gympie in Gympie,
QLD;
1606
Maria Xynias, human resources manager of the Healthyworld Pharmacy Group,
which managers five pharmacies in Chermside, Upper Mt Gravatt, Stones Corner
and Ipswich, QLD;
1607
Ian Lewellin, proprietor of Currimundi Markets 7 Day Chemmart, and Currimundi
Medical Centre Chemmart, in Currimundi, QLD;
1608
Georgina Twomey, proprietor of Good Price Pharmacy Warehouse Innisfail in
Innisfail, QLD;
1609
and
Andrew Topp; owner of Capital Chemist in Bruce, ACT and with interests in 5
pharmacies in NSW.
1610
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[1755] The PGA lay witnesses gave evidence in respect of the operations of various
pharmacies covered by the Pharmacy Award, the impact of penalty rates on their business and
changes which they may adopt in the event that the PGA proposal was adopted.
[1756] Evidence was given about pharmacies in most States and in the ACT, as well as from
a range of rural, regional and capital city locations (as shown in Chart 60 below).
Chart 60
PGA evidence – size and location of pharmacies
[1757] There was also considerable diversity in the size of pharmacies (in terms of numbers
of employees) which were the subject of the PGA’s lay evidence. Chart 61 shows the number
of employees per pharmacy for each of the witnesses, in one instance only aggregated
employment data was available, across 5 pharmacies.
1611
The evidence related to 29
pharmacies, employing between 6 and 42 employees.
Queensland Mega Save Chemist Caneland Mackay in Mackay, QLD Atherton Discount Drug Store in Atherton, QLD New South Wales Tim Logan's Nambour Pharmacy Legend: Culburra Pharmacy in in Nambour, QLD Culburra Beach, NSW Costigans Good Price Pharmacy =0-10 Warehouse in Maryborough, = 11-20 Menai Discount Drug Store QLD & Good Price Pharmacy in Menai, NSW Warehouse Gympie in . =21-30 The Mahony Group of Gympie, QLD 0 =31-40 Pharmacies in Tamworth, Healthyworld Pharmacy Group in =41-50 NSW Chermside, Upper Mt Gravatt, West Gosford Pharmacy in Stones Corner and Ipswich, =91-100 West Gosford, NSW QLD Belrose Chemist in Frenchs Currimundi Markets 7 Day Forest, NSW Chemmart & Currimundi Carrick's Pharmacy in Medical Centre Chemmart, in Bondi, NSW Currimundi, QLD Towers Drug Co in Bourke, Good Price Pharmacy Warehouse NSW Innisfail in Innisfail, QLD Australian Capital Territory Capital Chemist in Bruce, ACT Capital Chemist Charnwood in Charwood, ACT Victoria Casey Central Pharmacy in South Australia Narre Warren, VIC Tambassis Pharmacy in Barmera Pharmacy in Brunswick VIC Barmera, SA Pharmacy 777 Bayswater in Monarch Chemmart Bayswater VIC Pharmacy in Whyalla, SA Kerang Terry White Chemist in Kerang, VIC Amcal Pharmacy Craigieburn in Craigieburn, VIC
[2017] FWCFB 1001
396
Chart 61
[1758] Under cross-examination most of the PGA’s lay witnesses generally conceded that
they had not undertaken specific calculations as to the precise monetary value of the proposed
reduction in penalty rates.
1612
A number of the lay witnesses conceded that they had not
undertaken any sort of cost-benefit analysis associated with increasing the level and range of
their services, additional staff, offering existing staff more hours, or extending trading hours
in the event the PGA’s proposed variations were accepted.
1613
[1759] We note that many of the lay witnesses gave evidence to the effect that their
businesses were profitable and that they would benefit from the introduction of the 6th
Community Pharmacy Agreement. We have had regard to this evidence, but note that this is
not a capacity to pay case.
[1760] It was also generally conceded that the level of penalty rates is only one factor among
a range of factors which affect the ability of the business to trade longer hours, particularly on
Sundays and public holidays.
1614
For example a number of witnesses, particularly in rural and
regional areas acknowledged that their trading hours were influenced by the trading patterns
of other stores in their locations. Most witnesses conceded that if penalty rates were reduced
the level of demand for their services would also be a factor in determining whether to extend
hours, as well as (for some) contractual terms in their lease which compelled particular times
of operation.
[1761] A number of witnesses gave evidence that staffing levels and trading hours have
remained relatively unchanged since the introduction of the Pharmacy Award and the
reduction in penalty rates (other than public holiday rates). This evidence casts some doubt on
the proposition that a reduction in weekend penalty rates would have a positive impact on
employment and would increase trading hours.
1615
0
10
20
30
40
50
60
70
80
90
100
P
G
2
2
P
G
1
8
P
G
2
3
P
G
2
4
P
G
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P
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P
G
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9
P
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5
P
G
8
P
G
1
5
P
G
1
6
P
G
6
P
G
1
4
P
G
7
P
G
1
0
P
G
1
3
P
G
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P
G
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P
G
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P
G
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P
G
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P
G
3
P
G
1
7
N
o
. o
f
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m
p
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e
s
Exhibit no.
PGA Witnesses: Employees per establishment
[2017] FWCFB 1001
397
[1762] In light of the concessions made, we accept that much of the evidence of the PGA’s
lay witnesses may be regarded as speculative in nature. As was the case with other employer
lay evidence in these proceedings, evidence about intentions in light of proposed changes is
necessarily speculative, as it is difficult to predict, with any certainty, what precise actions
would be taken in response to a particular change.
[1763] While the PGA lay evidence cannot be said to be statistically representative of the
employers covered by the Pharmacy Award, the diversity of the enterprises referred to in the
PGA lay evidence is relevant to the weight to be attributed to this evidence.
[1764] The SDA submits that the evidence of the PGA’s lay witnesses does not support the
findings proposed by the PGA as to the claimed negative impact of penalty rates.
1616
In
particular, the SDA submits that:
(i) the claims by many of the proprietors that the penalty rate provisions of the
Pharmacy Award were having an adverse effect on their businesses were
significantly overstated, without foundation or based on a misunderstanding of
the applicable award provisions; and
(ii) there is little evidence to support a finding that, in the event the PGA’s claims
were granted, there would likely be an increase in employment or hours of
work in the community pharmacy sector.
1617
[1765] Contrary to the SDA’s submissions, we are satisfied that a number of general
propositions can be drawn from the PGA lay evidence. The following aspects of the PGA’s
lay witness evidence are cogent, relevant and persuasive.
[1766] First, there were some instances of business owners performing work on Sundays and
public holidays which would usually be performed by employees, to reduce costs. For
example:
Ms Michelle Spiro (Carrick’s Pharmacy, Bondi, NSW) said that in an attempt to
save costs she and her partner work on Sundays.
1618
Mr Kin Chong (Kerang Terry White Chemist, Kerang, Vic) said that in an attempt
to save costs and reduce the impact of penalty rates on the business he and his
business partners work some days that attract penalty rates. He also opens for
reduced hours despite the community demand that the pharmacy stay open.
1619
[1767] Second, the current penalty rate regime has led employers to take measures to reduce
labour costs associated with trading at times when penalty rates apply (particularly in respect
of Sundays). In particular, the evidence discloses that a range of operational limitations are
imposed on Sundays in order to reduce labour costs, namely restricting trading hours; lower
staffing levels or service delivery restrictions.
(i) Restricting trading hours
[1768] Most of the pharmacies which were the subject of the lay evidence opened on both
Saturdays and Sundays (25 out of 29 pharmacies). But 18 of these 25 pharmacies opened for
[2017] FWCFB 1001
398
fewer hours on Sundays than on Saturdays.
1620
For example, the 5 pharmacies that were the
subject of Ms Xynia’s evidence opened from 8.30 am to 5.00 pm on Saturdays but only from
10.00 am to 4.00 pm on Sundays.
1621
Further, a number of the witnesses gave evidence about
the impact of Sunday penalty rates on Sunday trading hours:
Mr David Heffernan (Culburra Pharmacy, Culburra Beach, NSW) said that the
‘[p]harmacy is generally not open on Sundays…due to the penalty rates and staff
availability…on these days. The rates make it unprofitable to open’.
1622
Mr Kin Chong (Kerang Terry White Chemist, Kerang, Vic) said that due to penalty
rates, he has had to restrict the pharmacy’s opening hours, especially on Sundays
and public holidays.
1623
Mr Michael Farrell (Mega Save Chemist Caneland, Mackay, Qld) said that due to
Sunday penalty rates he has reduced the hours the pharmacy is open on Sundays to
10.00 am to 2.00 pm (he used to trade until 4.00 pm on Sundays).
1624
Mr Trent Playford (West Gosford Pharmacy, West Gosford, NSW) said that due to
the cost to the business of penalty rates, it was necessary to reduce the trading hours
on a Sunday from 9.00 am to 5.00 pm to 10.00 am to 4.00 pm.
1625
Mr Dean Pollock (Atherton Discount Drug Store, Atherton, Qld) said that he was
considering ceasing Sunday trading altogether as the amount they are required to
pay on that day ‘…is simply too expensive. Our pharmacy does not make enough
profit on a Sunday to make up for the amount we spend in wages’.
1626
Mr Timothy Logan (Tim Logan’s Nambour Pharmacy, Nambour, Qld) said that the
current Sunday penalty rates are putting at risk the service he currently provides on
Sundays: ‘At present, trading on a Sunday is breakeven but if current trends
continue it will cease to be profitable’.
1627
(ii) Lower staffing levels or sub-optimal staffing arrangements
Mr Paul Keane (Barmera Pharmacy, Barmera, SA) said that due to the current
penalty rates, rosters are mostly equalised across employed staff to avoid any
overtime hours and that ‘[s]taff hours have been cut to save costs’.
1628
Mr Angelo Pricolo (Tambassis Pharmacy, Brunswick, Victoria) said that he does
not always have the ‘most appropriate people on the floor outside of ordinary hours
as the cost of doing so outweighs any profit made from trading’.
1629
Mr Gregory Da Rui (Pharmacy 777, Bayswater, WA) said that current penalty rates
have forced him to reduce staff and that it is impossible to make a profit after
7.00 pm and on Sundays and Public Holidays due to the penalty rates. He said that
he opens at these times as a service to the public, but waiting times have
increased.
1630
Mr Quinn On (Menai Discount Drug Store, Menai, NSW) said that due to weekend
penalty rates, he generally rosters on junior pharmacy assistants to work these times
[2017] FWCFB 1001
399
as they are less expensive than having more experienced staff: ‘[u]nfortunately this
compromises the service that we are able to offer to patients and they simply work
the registers rather than also being able to assist with patient queries’.
1631
In
response to a question on cross-examination, Mr Quinn said ‘well if the penalty
rates were lower, then that means I can actually put on more pharmacists – an extra
pharmacist on the weekend to help put that service together because it’s actually
quite time consuming’.
1632
Ms Lia Mahony (The Mahony Group of Pharmacies, Tamworth, NSW) said that her
pharmacy employs more junior team members to reduce the impact of penalty rates,
‘however on weekends it is the time when customers often have more time to shop
and thus come in with more complex problems relying on senior or more
experienced team members’.
1633
Mr Michael Farrell (Mega Save Chemist Caneland, Mackay, Qld) said that due to
the cost of penalty rates on weekends, it is not financially viable to employ students
and train them.
1634
Mr Craig Bird (Belrose Chemist, Frenchs Forest, NSW) said that because of penalty
rates incurred on weekends and public holidays, he arranges rosters so that the
minimum number of staff required to open the Pharmacy are rostered on.
1635
Mr Dean Pollock (Atherton Discount Drug Store, Atherton, Qld) said that he will
usually roster his more junior employees to work on weekends: ‘[t]he downside of
that approach is those employees are not as fast or experienced as my more senior
staff, and when it is busy (which weekends often are) the level of customer service
can be compromised’.
1636
Ms Maria Xynias (Healthyworld Pharmacy Group, Brisbane Pharmacies, Qld) said
that due to the cost to the business, at times when penalty rates are incurred, the
minimum number of staff required to open the pharmacy are rostered on.
1637
(iii) Restrictions on the type and range of services provided
Ms Samantha Kourtis (Capital Chemist Charnwood, Charnwood, ACT) runs the
pharmacy on skeleton staff at times when penalty rates are incurred: ‘[g]iven
staffing is kept to a minimum at times when penalty rates are incurred, it is difficult
for pharmacists to spend time with patients and provide them with the best
healthcare service possible’.
1638
Mr Michael Farrell (Mega Save Chemist Caneland, Mackay, Qld) limits the times
when additional services are offered. For example, dose administration aid services
are not offered on weekends or public holidays, and nor are flu vaccinations.
1639
Mr Trent Playford (West Gosford Pharmacy, West Gosford, NSW) runs on a
skeleton staff (mostly junior pharmacy assistants) at times that incur penalty rates as
it is otherwise not financially viable to open, this means that the pharmacy is not
able to offer additional services on weekends to patients such as medical certificates
and Webster packs’.
1640
[2017] FWCFB 1001
400
Mr Craig Bird (Belrose Chemist, Frenchs Forest, NSW) said that ‘patients have less
access to a Pharmacist on weekends to ask questions and seek advice as the
Pharmacist is needed to dispense prescriptions’.
1641
Mr Patrick Costigan (Costigan’s Good Price Pharmacy Warehouse, Maryborough,
Qld) said that due to the penalty rates imposed on a Sunday, it is necessary to run
the pharmacy ‘on the bare minimum number of staff required’ which ‘compromises
the service that we are able to offer to our patients. It also increases the risk of
security issues such as theft’.
1642
[1769] Third, the PGA lay witnesses gave evidence about the likely effect of a reduction in
penalty rates on employment levels and service. The evidence of the lay witnesses generally
supports the proposition that a lower Sunday penalty rate would increase the level and range
of services offered, with a consequential increase in employment (in terms of hours worked
by existing employees or the engagement of new employees). The types of suggested changes
to the level and range of services in the event that the PGA’s proposed changes to penalty
rates were implemented, are summarised below.
(iv) Extend operating hours
Mr Anthony Tassone (Casey Central Pharmacy, Narre Warren, Vic) said that it
would be possible to extend trading hours on weeknights, weekends and possibly
Public Holidays as there is a late night/365 day a year medical centre opening at the
shopping centre soon’.
1643
In cross-examination Mr Tassone conceded that the more
significant factor bearing upon the extent of any change in his commercial
operations is what happens with the neighbouring medical care facilities.
1644
Mr Paul Keane (Barmera Pharmacy, Barmera, SA) said he would open his
pharmacy earlier, close later on Saturdays and also open on Sundays and Public
Holidays: ‘[i]t would also be possible to hire new staff to work on Sundays and
Public Holidays’.
1645
During cross-examination, Mr Keane said that he had done a
cost benefit analysis of the increased trading hours in the event penalty rates were
reduced and that the business ‘would be better than the current situation’.
1646
Mr
Keane also said: ‘[w]e have been asked by the local doctors to provide a Sunday
and public holiday service and I get repeated requests from customer. They say to
me, well, why don’t you open on Sundays anymore? And I said, it is purely the cost
of the wages’.
1647
Mr Angelo Pricolo (Tambassis Pharmacy, Brunswick, Vic) said that he would
‘…consider reverting back to 24 hour trading’.
1648
On cross-examination, Mr
Pricolo conceded that there were ‘a lot of considerations’ in deciding to revert back
to 24 hour trading, however, asserted the change in penalty rates would make it
more feasible.
1649
Mr David Heffernan (Culburra Pharmacy, Culburra Beach, NSW) said that it would
mean that his pharmacy could open every day of the year except for Christmas Day:
‘[t]his would provide an invaluable service to the local Culburra Beach community.
It would also be of great assistance to the Culburra Retirement Village’.
1650
[2017] FWCFB 1001
401
Mr Quinn On (Menai Discount Drug Store, Menai, NSW) would be able to
immediately extend the trading hours of the Menai DDS and it would also mean
that he could hire additional staff.
Ms Samantha Kourtis (Capital Chemist Charnwood, Charnwood, ACT) said that it
would allow her to extend the trading hours even further to open from 7.30 am to
9.00 pm every day.
1651
Mr Kin Chong (Kerang Terry White Chemist, Kerang, Vic) he would consider
opening longer on weekdays, weekends and public holidays to provide increased
access to pharmacy services and would also consider offering more hours to his
current employees, in addition to hiring new staff: ‘[t]hose new positions and longer
hours will be mainly focused on weekends and public holidays as they are the days
hours during which extended trading hours are most needed’.
1652
Ms Lia Mahony (The Mahony Group of Pharmacies, Tamworth, NSW) said that ‘it
would make these extended hours more profitable and I would be able to offer some
of my current team members more weekend shifts and later shifts that suit their
desired working conditions’.
1653
Mr Hassan El-Ahmad (Amcal Pharmacy Craigieburn, Craigieburn, Vic) said that he
could immediately look at extending the trading hours and would like to trade until
9.00 pm on weekdays and until 6.00 pm on weekends to provide a greater service to
patients who attend nearby medical centres: ‘This would also mean that I could
employ more staff and offer current staff additional hours’.
1654
Mr Michael Farrell (Mega Save Chemist Caneland, Mackay, Qld) said ‘it would
mean that we could extend the Mega Save Chemist’s trading hours. This in turn
would mean that we could offer existing staff members additional hours and
potentially hire new staff members’.
1655
Ms Michelle Spiro (Carrick’s Pharmacy, Bondi, NSW) would consider increasing
the pharmacy’s trading hours from 7.00 am to 7.00 pm. However, on cross
examination she confirmed her current trading hours were 9.00 am – 7.00 pm
weekdays and she was unaware that she could open at 8.00 am without paying an
additional penalty.
1656
Ms Spiro says ‘I would also offer more hours to my existing
staff which would enable me to open earlier in the morning and make a big
difference on Sundays as I would not have to work every Sunday myself!’
1657
Mr Peter Crothers (the Towers Drug Co., Bourke, NSW) could consider opening
the pharmacy for extended trading hours, particularly on Sundays: ‘[t]his would
provide greater access for patients to a very important health care service in the
remote area of Bourke’.
1658
However, in the course of cross examination Mr
Crothers said that any decision to open on Sundays would be ‘multi-factorial’ and,
further, while lower penalty rates would make it more feasible to trade on Sundays
that was not the major factor.
1659
[2017] FWCFB 1001
402
Mr John Cagney (Monarch Chemmart Pharmacy, Whyalla, South Australia) could
potentially extend the Monarch Pharmacy’s trading hours to include evenings and
Sundays: ‘[i]f this was possible, it would mean that more staff would be
employed’.
1660
Mr Timothy Logan (Tim Logan’s Nambour Pharmacy, Nambour, Qld) would open
for longer hours on Saturdays and Sundays and would employ additional staff
(particularly trainees) and provide existing staff with additional hours particularly
on Saturdays and Sundays.
1661
Mr Patrick Costigan (Costigan’s Good Price Pharmacy Warehouse, Maryborough,
Qld) would look at rostering on an additional staff member at each pharmacy on a
Sunday to assist with patient requirements.
1662
Ms Maria Xynias (Healthyworld Pharmacy Group, Brisbane Pharmacies, Qld)
would look at extending trading hours, particularly on Sundays.
1663
(v) Provide additional services or a higher level of service
Mr Gregory Da Rui (Pharmacy 777, Bayswater, WA) said that patients would have
better access to improved healthcare: ‘[i]t would allow me to roster on additional
Pharmacists meaning that they could spend more time with patients to answer their
questions. I would also look at hiring new staff’.
1664
Mr David Heffernan (Culburra Pharmacy, Culburra Beach, NSW) said that the
pharmacy may be able to provide the following services to the community:
MedsChecks; medical certificates; Webster packs; wound dressing; and flu
vaccinations’.
1665
Ms Samantha Kourtis (Capital Chemist Charnwood, Charnwood, ACT) could roster
more staff on and hire additional staff members: ‘[t]his would have the flow on
effect of allowing pharmacists time to spend valuable one on one time with patients
at all times and provide a high level healthcare service to patients at all times’.
1666
Ms Lia Mahony (The Mahony Group of Pharmacies, Tamworth, NSW) said
‘customers would have access to greater services through the ability to hire more
experienced staff and more staff to be able to devote more time to the consumer in
each occasion’.
1667
Mr Michael Farrell (Mega Save Chemist Caneland, Mackay, Qld) said it would be
possible to offer customers additional services: ‘[f]or example, it would be possible
to offer MedsChecks and dose administration aid services on Sundays. It would also
be possible to provide discharge services for rehabilitation hospitals on weekends.
This would be of great benefit to the community’.
1668
Mr Craig Bird (Belrose Chemist, Frenchs Forest, NSW) would change the
composition of staff rostered on weekends and public holidays. Rather than only
rostering on junior staff, he would also roster on more senior staff who have greater
[2017] FWCFB 1001
403
professional knowledge and would also consider rostering on two pharmacists
which would enable additional services to be offered to patients on weekends and
public holidays.
1669
Mr Timothy Logan (Tim Logan’s Nambour Pharmacy, Nambour, Qld): ‘…it would
mean that our customers will have greater access to medication checks, urgent
home deliveries, influenza vaccinations and CPAP sleep apnoea checks. This is
because these services would be available on weekends and Public Holidays as I
would be in a position to employ an additional Pharmacist and other staff to assist
with the provision of these services’.
1670
Mr Patrick Costigan (Costigan’s Good Price Pharmacy Warehouse, Maryborough,
Qld) would look at rostering on an additional staff member at each Pharmacy on a
Sunday to assist with patient requirements.
1671
Ms Maria Xynias (Healthyworld Pharmacy Group, Brisbane Pharmacies, Qld): ‘It
would also be possible to roster additional staff to work on weekends and public
holidays so that services such as webster packs, flu vaccinations, blood pressure
monitoring and MedsChecks could be more readily offered to patients. Also, by
rostering on additional staff, pharmacists could spend more time with patients
answering their questions and assisting them with their medication’.
1672
Mr Andrew Topp (Capital Chemist, Bruce, ACT) would look in the long term to
staffing the pharmacy properly, especially on weekends, and probably use more
student pharmacists which would be a benefit to the community. ‘We would also be
able to offer more services to more people, using a greater number of better
qualified staff because we could afford to hire them’.
1673
[1770] In addition to the lay witness evidence the PGA also relied on evidence given by Mr
Stephen Armstrong, economist and
1674
upon the expert evidence given by Ms Margaret Lynne
Pezzullo, of Deloitte Access Economics. Ms Pezzullo provided two reports for the
Commission: ‘The effect of Pharmacy Industry Award 2010 on community pharmacy in
Australia’
1675
and ‘The modern face of weekend work: survey results and analysis’. We
considered Ms Pezzullo’s second report in Chapter 6.
1676
[1771] Mr Armstrong is a former Chief Economist at the PGA and currently works as a
consultant economist and in that capacity consults to the PGA. As we have mentioned, Mr
Armstrong’s evidence deals with the nature of the community pharmacy sector and the
regulatory environment in which it operates. While Mr Armstrong was cross examined,
particularly as to the impact of the 6
th
Community Pharmacy Agreement, much of his
evidence was unchallenged. We have summarised aspects of Mr Armstrong’s evidence below.
[2017] FWCFB 1001
404
Overview of community pharmacy
[1772] Pharmacy businesses vary in size from those with an annual turnover of around half a
million dollars, to a small number with a turnover of over $15 million a year. The majority of
pharmacies have turnovers of between $1.5 million and $4 million, inclusive of all payments
from Government in relation to PBS dispensing. Small pharmacies may have only 2 or 3
employees (including the owner(s) of the pharmacy), while the largest pharmacies employ in
excess of 10 pharmacists and 40 or more other employees employed as dispensary assistants.
[1773] In addition to dispensing medications, community pharmacies also provide a range of
community health services as part of public health campaigns, including:
(i) Baby and maternal health services;
(ii) Home deliveries to the elderly, disabled or infirm;
(iii) Blood pressure monitoring;
(iv) Cholesterol monitoring;
(v) Blood glucose monitoring;
(vi) International Normalised Ratio (INR) monitoring;
(vii) Chronic disease support services;
(viii) Staged supply of medicines at the request of the prescriber;
(ix) Wound care services;
(x) Adherence and compliance support for patients with chronic conditions;
(xi) Weight management and nutrition services;
(xii) Bone density testing;
(xiii) Pain management services:
(xiv) Palliative support services;
(xv) Respiratory monitoring and support;
(xvi) Assistance with using drug delivery devices (.such as for asthma and chronic
obstructive pulmonary disease patients);
(xvii) Methadone or buprenorphine dosing; and
(xviii) Needle exchange.
[2017] FWCFB 1001
405
[1774] Most of the services mentioned above are low-margin or loss-making and in many
cases are provided free of charge and without remuneration from government. Mr Armstrong
notes that:
‘In this sense, community pharmacists do not operate in accordance with a standard corporatised
profit-driven model but, as a result of government regulation, fulfil an important public health
function that supplements the services provided by other fee-for-service healthcare
professionals.’
1677
[1775] Dispensary sales amount to around 70 per cent of a pharmacy’s turnover, and
Pharmaceutical Benefits Scheme (PBS) prescriptions account for more than 90 per cent of
dispensary sales. Hence around 60 to 65 per cent of a pharmacy’s sales are derived from PBS
prescriptions.
1678
Regulatory Framework
[1776] Pharmacies can only be owned and operated by registered pharmacists. Ownership
rules have prevented the same type of concentration in the pharmacy sector that has occurred
in many other sectors of the Retail industry.
[1777] Pharmacies are solely responsible for dispensing medicines pursuant to a prescription
(that is, drugs schedule from 4 to 8 in the Standard for the Uniform Scheduling of Medicines
and Poisons) and scheduled drugs in respect of which a prescription is not required (that is,
Schedule 2 and 3 medicines).
[1778] Existing ownership restrictions are found in State and Territory legislation, and take
the following forms:
(i) Restrictions on who can own pharmacies;
(ii) Restrictions on the numbers of pharmacies in which a registered pharmacist
may have a proprietary interest;
(iii) Restrictions on the ownership structures of pharmacy businesses; and
(iv) Pecuniary interest measures to prevent persons and corporations other than
registered pharmacists having an indirect interest in a pharmacy business.
[1779] State and Territory legislation also requires that a pharmacy be supervised and
managed by a registered pharmacist, and be owned either by a pharmacist or by some form of
legal entity in which pharmacists have effective control.
[1780] Between 2000 and 2008, there were around 5,000 pharmacies but that number has
risen in recent years and in 2014 there were 5,456 pharmacies. Chart 62 below shows the
number of pharmacies in Australia between 2000 and 2014.
[2017] FWCFB 1001
406
Chart 62
1679
[1781] The increase in the number of pharmacies can be largely attributed to the 2011
changes in the ‘location rules’ that govern where pharmacies that dispense PBS medicines can
be located.
[1782] Under the National Health Act 1953 (Cth) the Commonwealth imposes strict controls
on approving a new pharmacy, and on relocating existing pharmacies, for PBS purposes (the
‘location rules’).
[1783] The ‘location rules’ were reviewed in 2010, and amended to simplify the application
process and encourage pharmacies to be established in areas of community need. A pre-
existing PBS approval number is now no longer required before a new pharmacy can be
established in facilities such as shopping centres, large medical centres and private hospitals,
or in towns where there is only one pharmacy. These changes have been a primary driver
behind the increase in the number of PBS approved pharmacies nationally in the recent years.
The increase in the number of pharmacies has been almost as high as the rate of increase in
the volume of prescriptions dispensed nationally. As a result on average each pharmacy has
seen very little growth in prescription volume, with annualised growth of less than one per
cent.
1680
Price disclosure
[1784] Price disclosure arrangements first commenced as part of 2007 PBS reforms, and were
expanded from 1 December 2010.
[1785] Price disclosure requires suppliers of certain PBS listed brands of medicines to advise
the Commonwealth Government of the price at which their brands are sold to the market.
That involves submitting data regarding sales revenue, sales volume, and the value of
incentives (such as bonus stock) for each PBS medicine subject to price disclosure.
4,925 4,925 4,926 4,907 4,910 4,921
4,951
4,992 5,005
5,046
5,088
5,167
5,240
5,350
5,456
4,600
4,700
4,800
4,900
5,000
5,100
5,200
5,300
5,400
5,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Number of Pharmacies
[2017] FWCFB 1001
407
[1786] As a result of price disclosure, the amount the Government pays for the PBS listed
medicines from suppliers reflects the price at which they are supplied to the market, as
opposed to the recommended retail price. The practical effect is that where discounting is
occurring as a result of competition, price disclosure progressively reduces the price of PBS
medicines and ensures better value for money for the Government.
[1787] Under the 5
th
CPA (and all previous CPAs), one component of PBS remuneration for
dispensing was linked to the price of the drug. Referred to as the Pharmacy Mark-up, this
remuneration component was calculated as a percentage of the price of the medicine (15%,
10% or 4%, depending on the price of the medicine). For that reason price disclosure had a
significant impact on pharmacy revenue as the amount they were receiving for scripts
declined during the term of the 5
th
CPA in line with the reducing price of PBS medicines.
During the five years of the 5
th
CPA average remuneration per prescription declined. That is,
it was lower in 2014-15 than it was in either 2009-10 or 2010-11.
Community pharmacy agreements
[1788] Section 98BAA of the National Health Act 1953 (Cth) facilitates the Minister (acting
on the Commonwealth’s behalf) and the PGA entering into an agreement regarding how the
price of pharmaceutical benefits is to be determined for the purpose of the Commonwealth
making payments to pharmacists that supply those pharmaceutical benefits. Effectively this is
an agreement on what remuneration will be received by pharmacists approved to provide
medicines under the PBS. That agreement is called the Community Pharmacy Agreement and
it is currently in its sixth iteration, the 6
th
Community Pharmacy Agreement (6
th
CPA), which
took effect from 1 July 2015.
[1789] Under these agreements, remuneration is determined for pharmacies dispensing PBS
medicines on behalf of the Government. The PBS is a government-subsidised scheme that
provides subsidised or free medicines for pensioners and a schedule of essential medicines
subsidised or free of charge for others in the community.
The 6
th
CPA
[1790] In addition to setting the level and structure of remuneration for PBS medicines, under
the 6
th
CPA the Commonwealth will make available up to $1.26 billion in funding for
Community Pharmacy Programs (CPPs) over the term of the agreement. That funding is
conditional on the achievement of ‘real improvement in patient access to community
pharmacies (including through increased opening hours)’.
[1791] Following the making of the 6
th
CPA, the Guild created an online resource called the
6
th
CPA Forecaster. The function of the 6
th
CPA Forecaster tool is to compare a pharmacy’s
2014-15 dispensary remuneration with projected dispensary remuneration in the future, under
6
th
CPA, and then compare the 6
th
CPA projection with the estimated value of remuneration in
future years had 5
th
CPA continued unchanged.
1681 The underlying capability of the 6
th
CPA
Forecaster is based on the forecasting capacities of the ScriptMAP tool.
1682
[1792] One of the tools which has been developed to support modelling and analysis of that
kind, is ScriptMAP. Mr Armstrong explained that that tool has been in use since about 2008.
The ScriptMAP tool ‘provides information to members based on their own prescription
[2017] FWCFB 1001
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volume information of the impact of changes to pricing of medicines on the PBS’.
1683 The
ScriptMAP tool is designed to model the effect on individual pharmacies of changes in the
prices of PBS medicines and the remuneration received for dispensing PBS medicines.
[1793] The 6
th
CPA Forecaster tool is hosted on the Guild’s website and permits the entry of a
number of variables to reflect the dispensing characteristics of an individual pharmacy. The
output includes a projection of increases in dispensing remuneration over the five year life of
6
th
CPA.
[1794] A copy of a 6
th
CPA Forecaster tool output, based on inputs said to be reflective of an
‘average’ pharmacy, is Exhibit SDA 38.
1684 Mr Armstrong agreed that the inputs of historical
dispensing characteristics were, to his understanding, reflective of those of an ‘average’
pharmacy, with one exception. He said that he thought that the ‘growth’ value was higher
than average.
1685
Mr Armstrong did not know the proportion of pharmacies that were likely to
exercise a new option of applying a co-payment discount of up to $1
1686 and nor was he in a
position to describe how the Forecaster had been constructed, or how its default values had
been selected, as he had left the PGA’s employment before that tool was created.
[1795] The forecast given by the 6
th
CPA Forecaster is that, for an average pharmacy with
the default values provided, the 6
th
CPA would deliver an increase in dispensing
remuneration, over the five year life of that agreement, compared to 2014-15 remuneration, of
some $662,619 (or, an average increase of about $132,500 per year). The forecast difference
between the projected trajectory of remuneration under 6
th
CPA, compared to projected
trajectory if 5
th
CPA arrangements had remained undisturbed, was an amount of some
$509,211 over the life of 6
th
CPA (about $100,000 per year).
[1796] In effect, the 6
th
CPA Forecaster output reflects an analysis by the PGA that 6
th
CPA
will deliver substantial increases in dispensing remuneration, both in absolute terms and also
when compared to the remuneration trajectory under a hypothetical extension of 5
th
CPA
operation. The outputs from the 6
th
CPA Forecaster are dependent on the particular
characteristics of individual pharmacies and the extent to which those characteristics depart
from the ‘default’ settings.
[1797] There is one final aspect of Mr Armstrong’s evidence to which we wish to refer.
[1798] Annexure C to Mr Armstrong’s first statement
1687
sets out the results of the April 2014
‘Pharmacy Services Expectations Survey’. In its submission the PGA refers to one aspect of
the survey results, namely that ‘1 in 10 pharmacies intend to reduce trading by at least one
day per week due to revenue pressures’.
[1799] We note that the survey was conducted in advance of the PGA’s negotiations with the
Commonwealth for the 6
th
CPA and that the material accompanying the survey made it clear
that the PGA would use the survey results ‘to advocate for you to key decision makers’.
1688
We also note that, as submitted by the SDA,
1689
that the survey result referred to was
inconsistent with the PGA’s lay witness evidence.
[1800] We do not propose to place any weight on the survey data annexed to Mr Armstrong’s
statement. We accept the SDA’s critique of the survey and, importantly, that the data refers to
the expectations of pharmacy operators before the 6
th
CPA came into operation. Given the
timing of the survey, it is of very little relevance to the present proceeding and the
[2017] FWCFB 1001
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methodological limitations (together with the PGA’s lay witness evidence) cast doubt on the
reliability of the results.
[1801] We now turn to Ms Pezzullo’s evidence.
[1802] As mentioned earlier, Ms Pezzullo, Lead Partner and Director, Health Economic and
Social Policy, Deloitte Access Economics, provided a report titled: ‘The effect of the
Pharmacy Industry Award 2010 on community pharmacy in Australia 25 June 2015’
1690
(the
‘Pezzullo Pharmacy Report’).
[1803] The SDA called two expert witnesses who provided a critique of the Pezzullo
Pharmacy Report, Ms Bartley
1691
and Dr O’Brien,
1692
and Ms Pezzullo provided a subsequent
report responding to those criticisms.
1693
[1804] The Pezzullo Pharmacy Report relies on the results of an online survey of pharmacy
proprietors conducted during August 2014. Statistical and regression analysis was conducted
on the survey data. The analysis sought to assess the impact of the Pharmacy Award on wage
costs, trading hours, employment and working hours of proprietors.
[1805] The online survey was sent to 5,350 pharmacies across Australia, by the PGA and its
State branches. Responses were received from 302 pharmacies, a response rate of 5.6 per
cent.
[1806] The various methodological limitations of the online survey and regression analysis in
the Pezzullo Pharmacy Report are fully canvassed in the evidence of Ms Bartley and Dr
O’Brien and in the SDA’s written submissions of 21 March 2016 (at [514]–[561]). We only
propose to refer briefly to some of those limitations.
[1807] First, there are a number of reasons to doubt the results from the regression analysis.
As noted by Dr O’Brien and conceded by Ms Pezzullo,
1694
the variable capturing the effects
of the introduction of the Pharmacy Award does not accurately measure any effect flowing
from the implementation of the Pharmacy Award and is instead likely to capture other
prevailing factors that affected the pharmacy industry between 2009 and 2014. In effect, the
variable is merely an indicator of whether the year is 2009 or 2014 and cannot measure any
direct effect of the Pharmacy Award on the dependent variable chosen for analysis.
[1808] Second, in relation to the results of the online survey, the low response rate and even
lower sample size for some questions due to non-response, significantly limit the weight that
can be attributed to the results.
[1809] As noted by the SDA, the claimed sample size of 302 is misleading, as it represents
the number of survey responses that answered any of the survey questions. SDA noted that
none of the survey questions had 302 responses, with the average sample size across all
questions being around 175.
[1810] Regarding the qualitative component of the survey, the sample sizes for respondents to
these subjective questions were significantly lower than the total number of respondents to the
survey, with sample sizes decreasing to around 75 responses for certain questions and on that
basis, cannot be regarded as representative of community pharmacies.
[2017] FWCFB 1001
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[1811] Further, as the SDA noted, the data collection methodology was modified half way
through the survey (due to the low response rate), so that Banner Groups were asked to
provide responses for multiple pharmacies.
[1812] As the SDA submits, the responses from Banner Groups ‘appeared to be comprised of
“uniform” expressions of opinion’.
1695
This is significant because the responses from the
Banner Groups accounted for 25 per cent of survey responses. The SDA goes on to submit
that ‘it is impossible to rely upon the Banner Group proportion of the survey responses, and it
is impossible to disaggregate those responses from the total survey sample…The survey data
is polluted and unreliable’.
1696
There is considerable force in the SDA’s submission.
[1813] These issues raise concerns that the data from the survey were not representative of
community pharmacies, and in turn, that any analysis of that data would not yield robust
estimates.
[1814] In addition to the matters we have identified, a significant limitation of the Pezzullo
Pharmacy Report is that it is out of date and does not represent an accurate reflection of the
current state of community pharmacy in Australia. In particular, the report does not take into
account or analyse what Ms Pezzullo acknowledged to have been the ‘substantial changes’
brought about by the 6
th
CPA. Further, in the course of her evidence Ms Pezzullo maintained
that, in addressing the current state of the commercial position of the community pharmacy
sector, it is important to consider history and context, as well as analysing current events.1697
Ms Pezzullo accepted that her report was a ‘purely historical’ document.1698
(ii) The SDA
[1815] In opposing the claims to vary the Pharmacy Award the SDA called one lay witness, a
Pharmacy Assistant Level 2. The name, address and workplace are confidential per the Order
of Catanzariti VP of 25 February 2016.
1699
It is convenient to refer to this witness as SDA
Pharmacy witness 1.
SDA Pharmacy Witness 1
1700
[1816] The SDA Pharmacy witness has worked for her present employer for 24 years and
currently works on average of 25 hours per week as a part-time pharmacy assistant (a
Pharmacy Assistant Level 2) on a 4 weekly roster, as follows:
Weeks 1 & 3: Monday 9.00 am–5.00 pm (with an unpaid break of 1 hour); Friday
9.00 am–5.30 pm (with an unpaid break of 1 hour); Saturday 12.30 pm–9.00 pm
(with an unpaid break of 1 hour) and Sunday 12.30 pm–9.00 pm (with an unpaid
break of 1 hour) (29.5 hours in total).
Weeks 2 & 4: Monday 12.00 pm–9.00 pm (with an unpaid break of 1 hour); Friday
10.00 am–3.00 pm and Saturday 9.00 am–5.30 pm (with an unpaid break of 1 hour)
(20.5 hours in total).
[1817] As to the impact of working on Sundays the witness says:
‘I work on the weekends, particularly on Sundays, and on public holidays because of the penalty
rates. Sundays are normally the days on which my family has celebrations and I do not enjoy
[2017] FWCFB 1001
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missing out on these events. I’ve often also wished I could participate in a walking club or
attend our local agricultural shows and markets which are held on the weekends, most often on
Sundays.’
1701
[1818] At paragraphs 7 and 8 of her statement, the witness recounts her financial
circumstances and the impact upon her of a reduction in penalty rates:
‘Nearly all of my income is spent on the basics - electricity, gas, water and phone charges, strata
fees, council rates, the emergency services levy, registration costs for my car and insurance. I
spend what I can save on small luxuries or gifts for my grandchildren. I cannot afford private
health cover or contents insurance. If the penalty rates I receive were reduced, I would
experience a significant reduction in my take home pay and I would find it yet harder to
manage financially.’
1702
(iii) APESMA
[1819] APESMA also called one lay witness, a pharmacist, to give evidence before the
Commission. The company name, trading name, employee name and business address are
confidential per the Order of Catanzariti VP of 9 March 2016.
1703
It is convenient to refer to
this witness as APESMA Pharmacy Witness 1.
1704
APESMA Pharmacy Witness 1
1705
[1820] The APESMA Pharmacy witness is a full-time community pharmacist with almost 6
years post graduate experience. He does not work on weekends at present but after he
graduated he regularly worked on Saturdays for about 5 and a half years. He describes the
inconvenience of Saturday work and the disruption to his social activities in the following
terms:
‘When I worked at XXXXXXXXX I worked 41 Saturdays per year. I had one Saturday off
every month, excluding December when I worked every Saturday. I did not work Saturday by
choice. My boss did not want to work on Saturday so he rostered me on this day instead.
Weddings, engagement and birthday parties and the vast majority of social events for our
family and friends all occur more often on weekends and public holidays than during the
week. I used not to be able to attend many of these important events and I missed out on being
part of the lives of my close friends and relatives. Often, at family functions, my children used
to be seen without their father and my wife without her husband. This had a negative effect on
the relationship I had with many members of our extended family. It is only now that I have
stopped working on Saturdays that I am beginning to attend these functions and re-build these
relationships.’1706
[1821] The APESMA witness has never worked on a Sunday as a pharmacist
1707
and said that
he would find working weekends, especially Sundays and public holidays, ‘very disruptive’.
In particular:
‘Church services are almost universally held on weekends, the majority on Sundays. If I were
unable to attend Sunday church on a regular basis, it would have a significant effect on me and
also on my wife and children. I set an example for, encourage and have a responsibility for the
spiritual life of my family and Sundays are a vital part of allowing me to fulfil this role.
Working public holidays such as Christmas, Good Friday and Easter would also make it
difficult for me to participate in my family’s church community.
[2017] FWCFB 1001
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I am also involved in my local community theatre groups. In order for these groups to
function, they need a large group of people who are available to volunteer for several hours at
a time each week. Every production in which I have played some role has involved a regular
rehearsal on Sunday. If I had to work on Sunday, I would not be able to be part of these groups
and contribute to the social and creative wellbeing of my local community.’1708
The APESMA witness has not pursued other employment opportunities because they
involved working on Sundays
1709
and as to that choice he says: ‘It was one I felt I had to make
for the sake of my life and my family’.
1710
8.3.5 Consideration
(i) The Sunday penalty rate
[1822] We turn first to that part of the PGA’s claim which relates to the Sunday penalty rate.
[1823] The Pharmacy Award currently provides a 200 per cent loading for Sunday work (225
per cent for casuals). The PGA seeks to replace these provisions with rates payable at
different times of the day:
Before 7.00 am: 200 per cent for all employees,
Between 7.00 am and 9.00 pm: 150 per cent for all employees, and
Between 9.00 pm and midnight: 175 per cent for all employees
[1824] For reasons we set out later (at [1886]–[1892]), we propose to focus on the PGA’s
proposal in respect of the Sunday penalty rate between 7.00 am and 9.00 pm. At present the
award provides a rate of 200 per cent for work performed at this time and the PGA seeks to
reduce that rate to 150 per cent.
[1825] We propose to deal with the s.134 considerations first.
[1826] Section 134(1)(a) requires that we take into account ‘relative living standards and the
needs of the low paid’. A threshold of two-thirds of median full-time wages provides a
suitable benchmark for identifying who is ‘low paid’, within the meaning of s.134(1)(a). As
shown in Chart 55 (see [1459]) a substantial proportion of award-reliant employees covered
by the Pharmacy Award are ‘low paid’. A number of the higher classifications in the
Pharmacy Award were above the definition of ‘low paid’, namely the ‘Pharmacist’,
‘Experienced Pharmacist’, ‘Pharmacist in Charge’ and the ‘Pharmacist Manager’
classifications.
[1827] As stated in the PC Final Report, a reduction in Sunday penalty rates will have an
adverse impact on the earnings of those hospitality industry employees who usually work on a
Sunday. It is likely to reduce the earnings of those employees, who are already low paid, and
to have a negative effect on their relative living standards and on their capacity to meet their
needs. The evidence of the SDA lay witness provides an individual perspective on the impact
of the proposed changes.
[2017] FWCFB 1001
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[1828] As we have mentioned, the extent to which lower wages induce a greater demand for
labour on Sundays (and hence more hours for low-paid employees) will somewhat ameliorate
the reduction in income, albeit by working more hours. We note the Productivity
Commission’s conclusion that, in general, most existing employees would probably face
reduced earnings as it is improbable that, as a group, existing workers’ hours on Sundays
would rise sufficiently to offset the income effects of the penalty rate reduction.
[1829] The ‘needs of the low paid’ is a consideration which weighs against a reduction in
Sunday penalty rates. But it needs to be borne in mind that the primary purpose of such
penalty rates is to compensate employees for the disutility associated with working on
Sundays rather than to address the needs of the low paid. The needs of the low paid are best
addressed by the setting and adjustment of modern award minimum rates of pay (independent
of penalty rates).
[1830] We are conscious of the adverse impact of a reduction in Sunday penalty rates on the
earnings of pharmacy workers who work on Sundays and this will be particularly relevant to
our consideration of the transitional arrangements associated with any such reduction.
[1831] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’. A reduction in penalty rates is likely to increase the incentive for employees to
bargain, but may also create a disincentive for employers to bargain. It is also likely that
employee and employer decision-making about whether or not to bargain is influenced by a
complex mix of factors, not just the level of penalty rates in the relevant modern award.
[1832] The PGA submits that s.134(1)(b) is a ‘neutral’ consideration.
1711
[1833] It is important to appreciate that s.134(1)(b) speaks of ‘the need to encourage
collective bargaining’. As we are not persuaded that a reduction in penalty rates would
‘encourage collective bargaining’ it follows that this consideration does not provide any
support for a change to Sunday penalty rates.
[1834] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. Obtaining employment is the focus of
s.134(1)(c).
[1835] On the basis of the common evidence we conclude that a reduction in the Sunday
penalty rate in the Pharmacy Award is likely to lead to some additional employment, in terms
of additional persons employed and additional hours worked. We are fortified in that
conclusion by the evidence of the lay witnesses called by the PGA. As mentioned earlier, that
evidence supports the proposition that a lower Sunday penalty rate would increase the level
and range of services offered, with a consequent increase in employment (in terms of hours
worked by existing employees or the engagement of new employees)(see [1769])
[1836] This consideration lends support to a reduction in Sunday penalty rates.
[1837] In is convenient to deal with the considerations s.134(1)(d) and (f) together.
[2017] FWCFB 1001
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[1838] Section 134(1)(d) requires that we take into account ‘the need to promote flexible
modern work practices and the efficient and productive performance of work’. The PGA
submits that this consideration is not relevant to this review.
1712
[1839] Section 134(1)(f) requires that we take into account ‘the likely impact of any exercise
of modern award powers on business, including on productivity, employment costs and the
regulatory burden’.
[1840] It is self-evident that if the Sunday penalty rate was reduced then employment costs
would reduce. It was not contended that a reduction in the Sunday penalty rate would impact
on the regulatory burden. In addition to the impact on employment costs it is also apparent
that a reduction in the Sunday penalty rate would have other positive effects on business.
[1841] The evidence of the lay witnesses called by the PGA supports the proposition that the
current level of Sunday penalty rates has led employers to reduce labour costs associated with
Sunday trading by restricting the trading hours, lowering staffing levels or imposing service
delivery restrictions.
[1842] As to the likely impact of reduced Sunday penalty rates on productivity the PGA
submits:
‘The evidence reveals that Guild’s proposal will reduce employment costs and make it
profitable for community pharmacies to open for extended trading hours. This will
result in higher business productivity as the fixed costs of running a pharmacy such as
licenses, franchise fees leasing and rental costs, fittings and equipment, repairs,
insurance premiums etc, are spread over longer opening times and higher demand.’1713
[1843] As mentioned earlier, the Productivity Commission makes a similar point in noting
that there would be potential productivity improvements from a reduction in Sunday penalty
rates:
‘…as the fixed costs of running a business would be spread over greater opening times
and demand…’1714
[1844] We are satisfied that a reduction in penalty rates will have a positive effect on
business. This consideration lends support to a reduction in Sunday penalty rates.
[1845] Section 134(1)(da) requires that we take into account the ‘need to provide additional
remuneration’ for, relevantly, ‘employees working on weekends’. As mentioned earlier, an
assessment of ‘the need to provide additional remuneration’ to employees working in the
circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a range
of matters, including:
(i) the impact of working at such times or on such days on the employees concerned
(i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g. through
‘loaded’ minimum rates or the payment of an industry allowance which is
[2017] FWCFB 1001
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intended to compensate employees for the requirement to work at such times or
on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[1846] It is convenient to deal with matters (ii) and (iii) first.
[1847] As to matter (ii), the minimum wage rates in the Pharmacy Award do not already
compensate employees for working on weekends. We note that the Pharmacy Award makes
provision for annualised salary arrangements (for pharmacists only) under which a pharmacist
is paid a salary which is inclusive of, among other things, penalty rates for weekend work. An
annualised salary arrangement is subject to the proviso that the annual salary paid over a year
is sufficient ‘to cover what the employee would have been entitled to if all award entitlements
had been complied with when calculated on an individual basis according to the hours work’
(see clause 27.1 of the Pharmacy Award). But such arrangements are not the focus of the
matter referred to in (ii) above.
[1848] It is also relevant to observe that there are terms in the Pharmacy Award which
operate to minimise the incidence and impact of weekend work. In particular, clause 25.4
provides:
‘25.4 Rostering—Permanent employees
(a) The following roster requirements will apply to permanent employees:
(i) Ordinary hours will be rostered so as to provide an employee with two
consecutive days off each week or three consecutive days off in a two week
period.
(ii) Ordinary hours and any reasonable additional hours may not be rostered over
more than six consecutive days.
(iii) Ordinary hours may not be rostered over more than five days in a week,
provided that ordinary hours may be rostered on six days in one week where
ordinary hours are rostered on no more than four days in the following week.
(iv) An employee who regularly works Sundays will be rostered so as to have
three consecutive days off each four weeks and the consecutive days off will
include Saturday and Sunday.
(b) A requirement will not apply where the employee requests in writing and the
employer agrees to other arrangements, which are to be recorded in the time and wages
records. It cannot be made a condition of employment that an employee make such a request.
(c) An employee can terminate the agreement by giving four weeks’ notice to the
employer. The notice need not be given where the agreement terminates on an agreed date or
at the end of an agreed period. For the avoidance of doubt this provision does not apply to
part-time employees’ agreed pattern of work under clause 12.2.
[2017] FWCFB 1001
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(d) The rostering provision of clause 25.4(a)(iv) does not apply to a part-time employee
whose agreed hours under clause 12.2(b) provides that the employee will work on either or
both Saturday and Sunday each week and where the agreement provides that the employee
will have at least two consecutive days off work each week.’
[1849] We note that clause 25.4 does not apply to part-time or casual employees.
[1850] In relation to matter (iii), weekend work is a feature of the Pharmacy sector. As
mentioned earlier (see [1432]) enterprises in the Retail sector operate on an average of
6.2 days per week and just over 40 per cent of enterprises operate 7 days a week. As
mentioned earlier, the PGA lay evidence suggests that a substantial proportion of pharmacies
operate 7 days per week. The lay evidence related to 29 pharmacies, of which 25 operate
7 days a week
1715
(save that 9 of these pharmacies
1716
do not open on public holidays or only
open on a limited number of public holidays).
[1851] We now turn to matter (i), the extent of the disutility of, relevantly, Sunday work. In
addition to the findings set out in Chapter 6, the lay witness evidence led by the SDA and
APESMA (albeit limited) spoke to the adverse impact of weekend work on the ability of
pharmacy employees to engage in social and family activities.
[1852] We note that in the event Sunday penalty rates were reduced (but not removed
entirely) employees working on Sundays would still receive ‘additional remuneration’.
[1853] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’. Any reduction in Sunday penalty rates
would apply equally to men and women workers. For the reasons given earlier we regard
s.134(1)(e) as neutral to our consideration of the claims before us.
[1854] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’. We regard s.134(1)(g) as neutral to our consideration
of the claims before us. No party contended to the contrary.
[1855] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’.
[1856] The PGA submits that the penalty rate reductions it proposes will result in lower
employment costs which will lead to:
(a) higher capital utilisation placing downward pressure on average unit costs and prices
and therefore leads to lower inflation;
(b) more hours of work available for employees and therefore higher employment growth
and higher overall wages for employees; and
(c) lower health care costs because community pharmacies are more accessible to those in
need at times of need.
1717
[1857] In our view, the PGA’s submission significantly overstates the effects of the reduction
in employment costs consequent upon a reduction in penalty rates. The purported impact of
inflation, higher capital utilisation placing downward pressure on average unit costs and
[2017] FWCFB 1001
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prices and therefore leads to lower inflation, ignores the fact that the price for PBS medication
is controlled by the Commonwealth Government. As Mr Tassone observes in his statement,
‘[f]or the most part, pharmacies are price ‘takers’ not price ‘makers’’.
1718
[1858] The proposition that a reduction in penalty rates will lead to ‘higher overall wages for
employees’ (at [1856](b)) is predicated on the notion that lower wages will induce greater
demand for labour on Sundays and hence more hours for those employees who currently work
on Sundays. In our view, the additional hours provided are unlikely to offset the reduction in
income resulting from reduced penalty rates; at least not for all employees.
[1859] As mentioned earlier, the reduction in Sunday penalty rates is likely to lead to some
additional employment, in terms of additional persons employed and additional hours worked
by existing employees. It is also likely that such a change will result in ‘winners’ and ‘losers’.
For example, a change in the staffing mix on Sundays may result in some existing employees
receiving additional hours; others may experience no change in their hours or may be offered
less hours (as their labour is substituted by higher skilled labour).
[1860] We also note that the proposition advanced by the PGA is inconsistent with the
Productivity Commission’s conclusion that, in general, most existing employees would
probably face reduced earning as a consequence of reduced Sunday penalty rates as it is
improbable that, as a group, existing workers’ hours on Sundays would rise sufficiently to
offset the income effects of the penalty rate reduction.
[1861] As to the third point advanced by the PGA (see [1856](c) above), we accept that a
reduction in Sunday penalty rates is likely to lead to some additional operating hours on
Sundays and hence make community pharmacies ‘more accessible to those in need in times of
need’. That is, extending the operation hours of community pharmacies will improve across to
health care and is likely to improve the range of health care services available at particular
times (namely Sundays). This is a factor which supports a reduction in the Sunday penalty
rate. However, the proposition that this would result in ‘lower health care costs’ is simply
conjecture and the link to ‘lower health care costs’ is not made out on the evidence before us.
[1862] We have concluded that a detailed assessment of the impact of a reduction in Sunday
penalty rates in the Pharmacy Award on the national economy is not feasible on the basis of
the limited material before us.
[1863] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’, taking into account
the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into
account those considerations insofar as they are relevant to the matter before us.
[1864] The central issue in these proceedings is whether the existing Sunday penalty rate
provides a ‘fair and relevant minimum safety net’.
[1865] The PGA’s principal contention is that the existing penalty rate is inconsistent with the
modern awards objective and does not establish a ‘fair and relevant safety net of conditions of
employment’. In short, the existing Sunday penalty rate is not ‘proportional to the disability’.
In this context the PGA point to the fact that the existing Sunday loading (100 per cent) is
four times the loading for Saturday work (25 per cent).
[2017] FWCFB 1001
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[1866] As set out earlier, the PGA propose that the Sunday penalty rate be reduced from 200
per cent to 150 per cent for all employees (inclusive of the 25 per cent loading for casual
employees). No change is proposed to Saturday penalty rates.
[1867] It is implicit in the claim advanced that the PGA accepts the proposition that the
disutility associated with Sunday work is higher than the disutility associated with Saturday
work. If this was not the case then they would have proposed that the penalty rates for Sunday
and Saturday work be the same.
[1868] We note that the PC Final Report recommended that for full-time and part-time
employees the Sunday penalty rates be set at the higher rate of 125 per cent and the existing
Saturday penalty rate.
[1869] In the Pharmacy Award the existing Saturday penalty rate for full-time and part-time
employees is 125 per cent. Hence, if adopted the Productivity Commission recommendation
would result in the reduction of the Sunday penalty rate for full-time and part-time employees
from 200 per cent to 125 per cent.
[1870] As mentioned earlier, in the Review the Commission is not constrained by the terms of
a particular application, it may vary a modern award in whatever terms it considers
appropriate, subject to procedural fairness considerations. Accordingly, if we were satisfied of
the merit of doing so, it would be open to us to adopt the recommendation in the PC Final
Report (and reduce the Sunday penalty rate to 125 per cent). But as we are not satisfied of the
merit of doing so, we have decided not to adopt that course.
[1871] As set out in Chapter 6, there is a disutility associated with weekend work, above that
applicable to work performed from Monday to Friday. Further, generally speaking, for most
workers Sunday work has a higher level of disutility than Saturday work, though the extent of
that disutility is much less than it was in times past.
(iii) Saturday penalty rates and Morning and evening work Monday to Friday
penalties
[1872] Clause 26.2(c) of the Pharmacy Award deals with the loadings applicable to Saturday
work, as follows:
26.2 Overtime and penalty
(c) Saturday work
A loading of 100% (casuals 125%) will apply for hours worked before
8.00 am, and a loading of 25% (casuals 50%) will apply for hours of work
from 8.00 am to 6.00 pm on a Saturday. A loading of 50% (casuals 75%) will
apply from 6.00 pm to 9.00 pm, and a loading of 75% (casuals 100%) for hours
from 9.00 pm to midnight.
[1873] The PGA seeks to replace clause 26.2(c) with a provision which will:
[2017] FWCFB 1001
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Adjust the span of hours for the morning loading, so that it is paid for work
performed ‘before 7.00 am’ (rather than before 8.00 am) and reduce the current
loading paid to casuals, during this period from 225 per cent to 200 per cent (no
change in the loading for full-time and part-time employees, it remains at 200 per
cent).
Remove the current loading for work performed between 8.00 am and 6.00 pm, and
remove 6.00 pm and 9.00 pm and replace with a loading of 125 per cent for work
performed between 7.00 am and 9.00 pm for all employees.
Reduce the rate payable for work performed between 9.00 pm and midnight from
175 per cent (200 per cent for casuals) to 150 per cent for all employees.
[1874] Clause 26.2(b) of the Pharmacy Award deals with the loadings applicable for work
performed before 8.00 am between 7.00 pm to 9.00 pm and from 9.00 pm to midnight, as
follows:
26.2 Overtime and penalty
(b) Morning and Evening work Monday to Friday
A loading of 50% (casuals 75%) will apply for hours worked before 8.00 am and a
loading of 25% (casuals 50%) for hours between 7.00 pm to 9.00 pm. A loading of
50% will apply to hours worked from 9.00 pm to midnight (casuals 75%).
[1875] The PGA seeks to replace clause 26.2(b) with a provision which will:
Adjust the span of hours for the morning loading, so that it is paid for work performed
‘before 7.00 am’ (rather than before 8.00 am).
Remove the current 125 per cent loading (150 per cent for casuals) for work performed
between 7.00 pm and 9.00 pm.
Reduce the current loading for work performed between 9.00 pm and midnight, from 175
per cent (200 per cent for casuals) to 125 per cent (150 per cent for casuals).
[1876] For the reasons set out below, we have concluded that these elements of the PGA’s
claims should be the subject of further proceedings.
8.3.6 Conclusion
[1877] Based on the evidence before us and taking into account the particular considerations
identified in paragraphs 134(1)(a) to (h), insofar as they are relevant, we have concluded that
the existing Sunday penalty rate between 7.00 am and 9.00 pm is neither fair nor relevant. As
mentioned earlier, fairness in this context is to be assessed from the perspective of the
employees and employers covered by the modern award in question. The word ‘relevant’, in
the context of s.134(1), is intended to convey that a modern award should be suited to
contemporary circumstances. We have decided to reduce the Sunday penalty rate for full-time
and part-time employees (between 7.00 am and 9.00 pm), from 200 per cent to 150 per cent.
[2017] FWCFB 1001
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[1878] We now turn to the application of weekend penalty rates in the Pharmacy Award to
casual employees. The Pharmacy Award provides that casual employees are paid a casual
loading of 25 per cent.
[1879] Casuals are currently paid the applicable Saturday penalty rate plus the 25 per cent
casual loading. Further, the existing Sunday rate for casuals for work performed between 8.00
am and 6.00 pm is 225 per cent (that is the 200 per cent loading that applies to full-time and
part-time employees plus the 25 per cent casual loading). The PGA is seeking a Sunday
penalty rate for casuals (for work between 7.00 am and 9.00 pm) of 150 per cent, which is the
same as the proposed rate for full-time and part-time employees.
[1880] Casual loadings and weekend penalty rates are separate and distinct forms of
compensation for different disabilities. Penalty rates compensate for the disability (or
disutility) associated with the time at which work is performed.
[1881] The casual loading is paid to compensate casual employees for the nature of their
employment and the fact that they do not receive the range of entitlements provided to full-
time and part-time employees, such as annual leave, personal carer’s leave, notice of
termination and redundancy benefits. Importantly, the casual loading is not intended to
compensate employees for the disutility of working on Sundays.
[1882] As we have mentioned we have a preference for what the Productivity Commission
calls the ‘default’ approach to the interaction of casual loadings and weekend penalties. Under
this approach, the casual loading is added to the applicable weekend penalty rate when
calculating the Saturday and Sunday rates for casuals.
[1883] In our view, the casual loading should be added to the Sunday penalty rate when
calculating the Sunday rate for casual employees. We propose to adopt the Productivity
Commission’s ‘default’ approach. Accordingly, in the Pharmacy Award the Sunday rate for
casual employees for work performed between 7.00 am and 9.00 pm on Sundays will be 25 +
150 = 175 per cent.
[1884] The Sunday rate (7.00 am to 9.00 pm) for full-time and part-time employees will be
reduced to 150 per cent and the equivalent rate for casual employees will be reduced to 175
per cent.
[1885] We deal with the transitional arrangements associated with the reduction in the
Pharmacy Award Sunday penalty rate in Chapter 13 of our decision.
[1886] We now turn to the proposed loadings for work before 7.00 am and between 9.00 pm
and midnight, on weekends and Monday to Friday.
[1887] At this stage, we are not persuaded to make the changes proposed.
[1888] In relation to the proposed Sunday rates, we do not understand why additional
penalties should be imposed on Sunday work performed before 7.00 am and after 9.00 pm.
The current award terms provides for the same loading throughout the day – what then is the
logic behind providing different loadings for different times on a Sunday?
[2017] FWCFB 1001
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[1889] In this context, we note that the Retail Award provides that ordinary hours (for non-
shiftworkers)
1719
may be worked within the following spread of hours:
27.2 Ordinary hours
(a) Except as provided in clause 27.2(b), ordinary hours may be worked, within
the following spread of hours:
Days Spread of hours
Monday to Friday,
inclusive
7.00 am–9.00 pm
Saturday 7.00 am–6.00 pm
Sunday 9.00 am–6.00 pm
(b) Provided that:
(i) the commencement time for ordinary hours of work for newsagencies
on each day may be from 5.00 am;
(ii) the finishing time for ordinary hours for video shops may be until
12 midnight; and
(iii) in the case of retailers whose trading hours extend beyond 9.00 pm
Monday to Friday or 6.00 pm on Saturday or Sunday, the finishing time
for ordinary hours on all days of the week will be 11.00 pm.
(c) Hours of work on any day will be continuous, except for rest pauses and meal
breaks.
[1890] Overtime rates are prescribed for hours worked outside the span of hours (Retail
Award clause 29.2) and a penalty payment of an additional 25 per cent applies to ordinary
hours worked after 6.00 pm Monday to Friday (Retail Award clause 29.4(a) – this entitlement
does not apply to casuals).
[1891] The difference in the evening and morning penalty rate provisions between the Retail
Award and the Pharmacy Award requires further examination. This is particularly so given
the close alignment between the wages structure for Pharmacy Assistants (levels 1–4) and the
Retail Employee levels 1–4, as shown in Table 71 below.
[2017] FWCFB 1001
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Table 71
Comparison of the Pharmacy Award and Retail Award wage rates
Pharmacy Award wage rates Retail Award wage rates
17. Minimum weekly wages
Classifications Per week
$
Pharmacy Assistants
Level 1 738.80
Level 2 756.40
Level 3
783.30
Level 4 815.40
17. Minimum weekly wages
Classifications Per week
$
Retail Employee Level 1 738.80
Retail Employee Level 2 756.40
Retail Employee Level 3 768.20
Retail Employee Level 4 783.30
Retail Employee Level 5 815.40
[1892] The PGA’s claims in respect of Sunday work before 7.00 am and after 9.00 pm;
Saturday work and the morning and evening work penalties applying Monday to Friday, will
be the subject of further proceedings. A mention will be held shortly with interested parties to
discuss the further hearing of these matters.
[2017] FWCFB 1001
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9. Public Holiday Penalty Rates
9.1 Background
[1893] As mentioned in Chapter 3, the modern awards objective provides that the
Commission ‘must ensure that modern awards, together with the National Employment
Standards, provide a fair and relevant minimum safety net of terms and conditions’ (emphasis
added) (s.134(1)). The National Employment Standards (the ‘NES’) are set out in Part 2-2 of
the FW Act. The NES are 10 minimum standards that apply to all ‘national system
employers’ (see s.44). The NES are legislative minimum standards which cannot be excluded
by a modern award or enterprise agreement (s.55). Modern awards or enterprise agreements
may include terms permitted by the NES or terms that are ancillary or incidental to the
operation of an entitlement under the NES, or that supplement the NES (but only if those
terms are not detrimental to an employee in any respect, when compared to the NES) (see
s.55(2)–(4)). Relevantly for present purposes, Division 10 of Part 2-2 (ss.114–116) sets out
the NES provisions in respect of public holidays.
[1894] Section 114(1) establishes an entitlement to be absent on a day or part-day that is a
‘public holiday’ in the place where the employee is based for work purposes. Section 114(2)
provides that an employer may request an employee to work on a public holiday (if the
request is reasonable). An employee may refuse such a request if the request is not reasonable
or if the refusal is reasonable (s.114(3)). Section 114(4) sets out a non-exhaustive list of
matters to be taken into account when determining whether a request, or a refusal of a request,
to work on a public holiday is reasonable. The factors to be taken into account are:
(a) the nature of the employer’s workplace or enterprise (including its operational
requirements) and the nature of the work performed by the employee;
the employee’s personal circumstances, including family responsibilities;
(c) whether the employee could reasonably expect that the employer might request
work on the public holiday;
(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
work on the public holiday;
(e) the type of employment of the employee (e.g. full-time, part-time, casual or
shiftwork);
(f) the amount of notice in advance of the public holiday given by the employer
when making the request;
(g) in relation to the refusal of a request – the amount of notice in advance of the
public holiday given by the employee when refusing the request; and
(h) any other relevant matter.
[1895] Section 116 entitles an employee to payment when absent from work on a day or part-
day that is a public holiday. An employee is not entitled to any payment for absence on a
public holiday if they would not ordinarily have worked on that day.
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[1896] Section 115 sets out the meaning of ‘public holiday’ (only s.115(1) is relevant for
present purposes):
‘115 Meaning of public holiday
The public holidays
(1) The following are public holidays:
(a) each of these days:
(i) 1 January (New Year’s Day);
(ii) 26 January (Australia Day);
(iii) Good Friday;
(iv) Easter Monday;
(v) 25 April (Anzac Day);
(vi) the Queen’s birthday holiday (on the day on which it is celebrated in a
State or Territory or a region of a State or Territory);
(vii) 25 December (Christmas Day);
(viii) 26 December (Boxing Day);
(b) any other day, or part‑day, declared or prescribed by or under a law of a State or
Territory to be observed generally within the State or Territory, or a region of the State
or Territory, as a public holiday, other than a day or part‑day, or a kind of day or part‑
day, that is excluded by the regulations from counting as a public holiday.’
[1897] Section 115(1)(a) specifies 8 particular days as public holidays, throughout Australia.
Section 115(1)(b) provides that other days or part-days declared or prescribed by or under a
law of a State or Territory to be observed generally, or within a region of that State or
Territory, are also considered public holidays. Regulations may exclude a day or part-day (or
a kind of day or part-day) from the definition of a public holiday.
[1898] The number and timing of State and Territory declared public holidays vary depending
on the particular State and Territory. Further, there are different substitution and additional
day provisions that vary from one jurisdiction to the next. Table 72 below illustrates the
pattern of public holidays for 2017, including some that operate on a limited basis.
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Table 72
Public Holidays listed by State and Territory 2017
Date Holiday ACT NSW NT QLD SA TAS VIC WA
Holidays
Act 1958
Public
Holidays
Act 2010
Public
Holidays
Act 1981
Holidays
Act 1983
Holidays
Act 1910
Statutory
Holidays
Act 2000
Public
Holidays
Act 1993
Public and
Bank
Holidays
Act 1972
1-Jan New Year’s Day
2-Jan Additional Holiday
26-Jan Australia Day
13-Feb Regatta Day
6-Mar Labour Day
13-Mar Canberra Day
13-Mar
March Public
Holiday
13-Mar Eight Hours Day
13-Mar Labour Day
14-Apr Good Friday
15-Apr Easter Saturday
16-Apr Easter Sunday
17-Apr Easter Monday
18-Apr Easter Tuesday
*
1-May May Day
1-May Labour Day
25-Apr Anzac Day
5-Jun
Western Australia
Day
12-Jun Queen’s Birthday
7-Aug Bank Holiday
**
7-Aug Picnic Day
25-Sep
Family and
Community Day
25-Sep Queen’s Birthday
29-Sep
AFL Grand Final
Eve Holiday
2-Oct Labour Day
2-Oct Queen’s Birthday
7-Nov Melbourne Cup
24-Dec Christmas Eve
***
***
25-Dec Christmas Day
26-Dec Boxing Day
31-Dec New Year’s Eve
***
***
Notes:
Holidays provided by s.115(1)(a).
Additional State and Territory holidays (s.115(1)(b)).
* Only applies under certain awards or agreements and to the State public service
** Applies to banks and certain financial institutions
*** Part-day public holiday from 7pm to midnight
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[1899] In addition to the public holidays listed in the table above, some States and Territories
have additional public holidays particular only to certain regional areas. The NT has five
show days for different regions of the Territory.
1720
Regatta Day applies only to Hobart, while
employees from other regions in Tasmania who do not observe Regatta Day have a substitute
holiday called Recreation Day on 6 November 2017. Additionally, Tasmania has a number of
regional statutory holidays.
1721
Royal Queensland Show Day only applies to Brisbane;
1722
but
there are around 60 agricultural show public holidays in different regional areas of
Queensland.
1723
[1900] Additionally, South Australia and the NT have two part-day public holidays on
Christmas Eve and New Year’s Eve.
1724
[1901] The NES does not deal with the level of payment to be made to an employee who
works on a public holiday. For most employees the level of payment for work on a public
holiday is prescribed in a modern award or enterprise agreement. In respect of modern awards
s.139(1)(e)(ii) provides:
‘A modern award may include terms about any of the following matters:
…
(e) penalty rates, including for any of the following:
…
(ii) employees working on… public holidays.’
[1902] Further, the modern awards objective (s.134(1)) requires the Commission to take into
account:
‘(da) the need to provide additional remuneration for:
…
(iii) employees working on… public holidays.’
[1903] The contemporary standard for the public holiday penalty rate (250 per cent) was
initially set in 1970 by the NSW Commission in Court Session in re Electricians (State)
Award (No. 3).
1725
In the course of its judgment the Court observed that there was no element
of deterrence in the rate fixed
1726
and in increasing the public holiday penalty rate from 200
per cent to 250 per cent, said:
‘…we are all of the opinion that for the work in question some improvement in the
rate presently paid is justified… the employee who is required to work on such a day
is at present inadequately compensated for the deprivation or curtailment of his
holiday.’
1727
[1904] Each of the modern awards in these proceedings prescribes a penalty rate for work
performed on a public holiday, as summarised in Table 73 below.
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Table 73
Current public holiday penalty rates in the Hospitality and Retail awards
Award title
Public holiday penalty rates (%)
Full-time &
part-time
Casual
Hospitality Award (cl. 32) 250 275
Restaurant Award (cl. 34) 250 250
Clubs Award (cl. 29) 250 250
Retail Award (cl. 29) 250 275/250
1
Fast Food Award (cl. 30) 250 275
Pharmacy Award (cl. 31) 250 275
1
The public holiday penalty rate provisions for casuals are not clearly expressed in the Retail
Award. The FWO ‘Pay Guide’ to the award assumes casuals are paid 275 per cent on public
holidays, but see Modern Awards Review 2012 – Public Holidays [2013] FWCFB 2168 at
[141]–[150].
[1905] The creation of additional public holidays by States and Territories creates extra
obligations on the employers whose employees are covered by modern awards which
prescribe public holiday penalty rates.
[1906] The 2012 post-implementation review of the FW Act
1728
recommended capping the
number of public holidays each year (suggested at 11 days) for which penalty rates are
payable:
1729
‘The FW Act includes an entitlement under the NES to eight public holidays, as well as any
further days prescribed as public holidays under state or territory legislation, and provides a
right to be absent (subject to a reasonable request to work) and paid at the base rate on a public
holiday (ss. 114–116). Penalty rates for working on a public holiday are provided for in
industrial instruments, principally modern awards and enterprise agreements, rather than in the
FW Act. Modern awards and enterprise agreements typically provide for a penalty rate
payable for working on any public holiday…
A large number of employers indicated concern about arrangements for the payment of public
holidays. Employers’ concerns were generally about the ability for state and territory
governments to declare additional public holidays under s. 115 (1)(b) of the FW Act to those
provided under s. 115 (1)(a), and the resultant increase in wage costs due to penalty rates then
applying under modern awards. Some employer and employee representatives indicated that
the current system had resulted in confusion and called for a national standard to be
developed.
The ability for state and territory governments to declare additional public holidays has a fairly
significant impact on wages costs for employers who operate on such days, due to public
holiday penalty rates typically involving a loading of 200 per cent or 250 per cent of base rates
of pay (in recognition of the unsocial nature of working on such days).
Employers affected by the penalty rates typically include those operating in the hospitality,
retail and tourism sectors. Employers may alternatively elect that it is not economic to open on
[2017] FWCFB 1001
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the particular day (unless they are obliged to open on such days, due to, for example, lease
requirements), which would mean forgoing any takings for the particular day.
The issue of public holidays was identified as important for many stakeholders in submissions
and discussions with the Panel. Current arrangements have meant that the number of public
holidays in each jurisdiction can vary widely. For example, in 2012 the number is expected to
range from between 10 and 13 days, depending on the state or territory. The uncertainty with
current arrangements for employees and employers and the potential additional costs for
employers concerns the Panel. To overcome these concerns, the Panel’s view is that under the
NES, there should be a nationally consistent number of public holidays each year for which
penalty rates are payable, and that the number of days for which penalty rates are payable
should not be able to be increased by declaring additional or substitute days by state and
territory governments. This would not prevent employers and employees entering agreements
to provide for penalty rates to be payable on a greater number of public holidays, nor to
specify additional days as public holidays.
Recommendation 8: The Panel recommends that the Government consider limiting the
number of public holidays under the NES on which penalty rates are payable to a nationally
consistent number of 11.’
1730
[1907] We would also observe that the PC Final Report recommends that s. 115(1)(b) be
amended so that newly designated State and Territory public holidays1731 are not subject to
public holiday penalty rates
1732
or a paid day of leave.1733
[1908] The above recommendations have not been implemented.
[1909] We now turn to the applications to vary public holiday provisions in each of the
modern awards before us.
9.2 The Claims
[1910] The claims in relation to the Hospitality and Retail awards seek to vary the public
holiday penalty rates for full-time, part-time employees and casual employees, by various
amounts. There is very little consistency in respect of the claims advanced by the various
employer interests. For example, in the Restaurant Award RCI seeks a public holiday penalty
rate at 150 per cent for all employees, whereas ABI seeks a public holiday penalty rate of 200
per cent for full-time and part-time employees and no additional payment for casuals who
work on a public holiday (other than the 25 per cent casual loading).
[1911] The claim in relation to the Hospitality Award is quite different to the claims in respect
of the other modern awards before us.
[1912] The Hospitality Employers seek to introduce a two-tiered public holiday penalty rate
regime. The ‘first tier’ public holidays are those 8 public holidays specified in s.115(1)(a)
(that is, New Year’s Day; Australia Day; Good Friday; Easter Monday; Anzac Day; the
Queen’s Birthday holiday; Christmas Day and Boxing Day). Under the proposal advanced by
the Hospitality Employers work performed on these public holidays would attract loadings of
225 per cent (for full-time and part-time employees) and a 175 per cent loading (for casual
employees, inclusive of the 25 per cent casual loading).
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[1913] The ‘second tier’ public holidays are those public holidays declared or prescribed by
or under a law of a State or Territory to be observed generally within the State or Territory (or
a region of the State or Territory) as a public holiday. The Hospitality Employers claim refers
to these public holidays as ‘Additional holidays’. It is proposed that work performed on these
‘Additional holidays’ would attract a loading of 200 per cent (for full-time and part-time
employees). Casual employees would receive their 25 per cent casual loading for work
performed on an ‘Additional holiday’, but no additional payment.
[1914] The claims before us are summarised in the table below.
Table 74
Summary of public holiday penalty rates claims
Award title and claims
Clause
number
Public holiday
Full-time &
part-time
Casual
Hospitality Award
32 250 275
Claim by Hospitality Employers
-Tier 1 Public Holidays
-Tier 2 Additional holidays
225
200
175
125
Restaurant Award
34 250 250
Claim by RCI 150 150
Claim by ABI 200 125
Clubs Award 29 250 250
Claim by CAI 200 200
Retail Award 29 250 275/250
Claim by ABI 200 125
Fast Food Award 30 250 275
Claim by RCI 150 150
Claim by NRA 150 175
Pharmacy Award 31 250 275
Claim by PGA
200 125
[1915] The observations and conclusions which follow are directed at all of the above modern
awards, with the exception of the Clubs Award. We have decided to defer our consideration of
the public holiday penalty rates in the Clubs Award until other penalty rate claims in respect
of that award have been determined. As we observe in Chapter 9.4, one of the bases for
changing the public holiday penalty rates in the other awards before us is the concept of
proportionality. As the Sunday penalty rates in these awards have been reduced it is
appropriate to reconsider the relationship (or proportionality) between the Sunday and public
[2017] FWCFB 1001
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holiday penalty rates. At this stage there has been no determination in respect of the Sunday
penalty rate in the Clubs Award. It is convenient to refer to the 5 remaining awards as,
collectively, the Hospitality and Retail Awards.
[1916] The submissions advanced in support of the claims can be broadly summarised as
follows:
(i) The disability associated with working on public holidays varies according to
the particular public holiday. Certain public holidays appear to have universal
importance, but this is not a feature shared by all public holidays.
(ii) The ‘Rose Report’ supports the proposition that employees wish to be paid a
premium for working on public holidays and the premium is greater than that sought
for weekend work. Further, employees consider that the amount required to
compensate for the disabilities associated with working on public holidays is less
than the penalty rate currently prescribed for public holiday work in the Hospitality
and Retail Awards.
(iii) The existing public holiday penalty rate (250 per cent) was determined in a
context where employees could be compelled to work on a public holiday. Section
114(1) of the FW Act entitles all employees to a day off on a public holiday. Where
an employer requests the employee to work, the employee is protected by a
requirement that such a request is reasonable and, further, the employee can refuse
the request if it is reasonable to do so (see s.114(3)).
(iv) For a casual employee the decision to work on a public holiday is a voluntary
one and as such does not require compensation beyond the payment of the 25 per
cent casual loading.
(v) The current level of public holiday penalty rates adversely impacts on
decisions by employers to trade and engage employees on these days. (ABI relies on
the result of the Retail Survey in this regard) and reducing the penalty rate will
increase employment by increasing the hours offered to employees on public
holidays.
[1917] The ABI and Retail Employers rely on the evidence of Professor Rose to support their
claims for a reduction in the Sunday and public holiday penalty rates under the Retail Award.
Professor Rose’s report, titled ‘Value of Time and Value of Work Time during Public
Holidays, 3 July 2015’ (Rose Report) seeks to examine the importance and value employees
covered by the Restaurant Award and the Retail Award place on time including working on
public holidays. The research conducted by Professor Rose took the form of a survey
comprised of two discrete “choice experiments” designed to illicit the hourly rate for which
employees were willing to work during both a normal work week and during a week in which
one or more public holidays fell. We have dealt with the Rose Report, and the various
criticisms of it, in Chapter 6.2. Two aspects of the report are relevant for present purposes.
[1918] First, the Rose Report considered the level of knowledge employees had about
particular public holidays and the importance of each public holiday to them. Professor
Rose’s conclusions in respect of this issue are as follows:
[2017] FWCFB 1001
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‘Unsurprisingly Christmas Day and Easter holidays were the most commonly recalled holidays,
followed by ANZAC day, Australia day, the Queen’s birthday, and then New Year’s Day.
State specific public holidays received the lower average importance ratings than nationwide
public holidays. On average, Christmas day was rated the most important public holiday,
followed by News [sic] Year’s Eve, Boxing Day, ANZAC Day and then Australia Day. For
Easter, Good Friday was rated as being more important than Easter Monday on average. In a
similar vein to the unprompted recall task, respondents, respondents tended to rate state based
public holidays much lower than nationwide public holidays.’
1734
[1919] The second aspect of the Rose Report which is relevant for present purposes is the
value employees place on working at certain times, in particular public holidays. As to that
matter the Rose Report concludes:
‘The results of this modelling exercise suggest that the average threshold value of hourly pay
at which they would elect to work is actually the average level of pay currently being paid to
the sample. This suggests that the employees value their time at precisely their current wage
rate. Also based on the model results, it was found that on average, respondents value working
on Saturdays as being somewhere between 106 to 135 percent their current normal hourly pay,
and for working on Sundays somewhere between 126 and 165 percent of the average current
normal hourly pay rate. The hourly rate for working on a public holiday was valued as being
between 124 and 224 percent of the average current normal hourly pay rate, with the later
higher value being for working on a Public holiday that falls on a Sunday.’
1735
[1920] The Hospitality Employer’s principal contention in support of their proposed two-
tiered approach is that the current level of public holiday penalty rates deter employment on
public holidays and are neither fair nor relevant in the context of the contemporary hospitality
industry. It is accepted that there is a disability associated with working on public holidays
and that there is a need to compensate employees for that disability, however the Hospitality
Employers submit that:
‘…the additional remuneration for work on public holidays should be compensatory and
sufficient to induce employees to voluntarily work the days; however it should not discourage
opportunities for work. In short, it should not deter the hospitality employer from providing
employment.’
1736
[1921] The differential rates proposed in respect of the ‘Additional holidays’ are said to be
justified having regard to the following matters:
‘(a) The substantial costs and consequences of the current loading,
(b) The lesser significance of the additional days,
(c) The fact that additional days can be declared at any time by State and Territory
governments,
(d) The declaration of additional public holidays is not uniform across the States and
Territories (refer table of days in the outline of submissions filed 3 July 2015),
(e) That in the absence of working the day, the permanent employee is entitled to the
holiday without loss of ordinary pay.
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In contrast to the position of the permanent employee, the casual employee– by virtue of the
casual nature of the employment–is not entitled to the day as a holiday without loss of
ordinary pay. Therefore, there is no need to include such a component in the additional
remuneration for work on the additional day. The proposed rate of 125% takes into account
the casual nature of the employment. The rate will promote opportunities for employment on
these days. The evidence supports this.’
1737
[1922] United Voice and the SDA oppose the employer claims.
[1923] The SDA submits that, contrary to ABI’s contention, there is no proper basis for the
Commission to ‘review and reframe’ public holiday rate entitlements. The SDA advances the
following points in support of its position:
(i) the existing public holiday penalty rates have been stable for 30 to 40 years;
(ii) public holidays are a public recognition of events of community significance
and community participation;
(iii) the distinction between public holidays declared by State and Territory
governments compared with those declared by the Commonwealth is a distinction
without a difference for the purpose of penalty rates;
(iv) the arguments advanced in respect of the impact of weekend work, particularly
regarding asynchronicity and arrhythmia, and the inability to offset the impact
working on those days, have particular application to public holidays given their
limited and unique character.
[1924] As to the two-tiered proposal advanced by the Hospitality Employers, United Voice
submits:
‘The differential is illogical. If, as the AHA claims, penalty rates are required to compensate
employees for “the disability of the time at which work is performed,” then the disability is
experienced regardless of the nature of the public holiday. To suggest otherwise is to stray into
the area of subjective value judgments about which public holidays are ‘worth more’. The
perils of this approach can be illustrated with one example. Employers attribute the decline in
value of Sundays to, among other reasons, the decline in church attendance rates. But nearly
half the Commonwealth public holidays are explicitly religious holidays, including Good
Friday, Easter Monday, and Christmas Day. The AHA cannot, and should not, submit that
religion or the rest associated with traditionally religious days is irrelevant when considering
Sunday penalty rates, but is important when considering penalty rates for working on Good
Friday. Other examples are numerous: it is probable that few people could identify the
significance of Easter Monday (a Commonwealth holiday) compared to Easter Sunday (a state
holiday); republicans may object to celebrating the Queen’s Birthday but place a high value on
Labour Day; those concerned with indigenous rights may object to Australia Day as a day of
public celebration. Further, there is no basis for the AHA’s complaint about the
‘unpredictability’ of state or territory public holidays. Such days are set in advance and are
well known.’
1738
[1925] We also note that in the PC Final Report the Productivity Commission recommended
that: ‘The Fair Work Commission should not reduce penalty rates for existing public
holidays’,
1739
noting that, by definition:
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‘… genuine public holidays are intended to serve a special community role and, as such, there
are strong grounds to limit the expectation that they are for working. In that sense, the original
concept of deterrence continues to have relevance.’
1740
9.3 Consideration
[1926] We propose to deal with the s.134 considerations first.
[1927] Section 134(1)(a) requires that we take into account ‘relative living standards and the
needs of the low paid’. A threshold of two-thirds of median full-time wages provides a
suitable benchmark for identifying who is ‘low paid’, within the meaning of s.134(1)(a). As
mentioned earlier, a substantial proportion of award-reliant employees covered by the
Hospitality and Retail Awards are ‘low paid’.
[1928] The extent to which lower wages induce a greater demand for labour on public
holidays (and hence more hours for low-paid employees) will somewhat ameliorate the
reduction in income, albeit by working more hours. But it is improbable that, as a group,
existing workers’ hours would rise sufficiently to offset the income effects of the penalty rate
reduction.
[1929] The ‘needs of the low paid’ is a consideration which weighs against a reduction in
public holiday penalty rates. However, the primary purpose of such penalty rates is to
compensate employees for the disutility associated with working on public holidays rather
than to address the needs of the low paid.
[1930] Section 134(1)(b) requires that we take into account ‘the need to encourage collective
bargaining’. A reduction in public holiday penalty rates is likely to increase the incentive for
employees to bargain, but may also create a disincentive for employers to bargain. It is also
likely that employee and employer decision-making about whether or not to bargain is
influenced by a complex mix of factors, not just the level of penalty rates in the relevant
modern award.
[1931] We are not persuaded that a reduction in public holiday penalty rates would
‘encourage collective bargaining’, it follows that this consideration does not provide any
support for a change to Sunday penalty rates.
[1932] Section 134(1)(c) requires that we take into account ‘the need to promote social
inclusion through increased workforce participation’. Obtaining employment is the focus of
s.134(1)(c).
[1933] On the basis of the common evidence we conclude that a reduction in public holiday
penalty rates in the Hospitality and Retail Awards is likely to lead to some additional
employment. We are fortified in that conclusion by the employer lay witness evidence. That
evidence supports the proposition that lower public holiday penalty rates would increase the
level and range of services offered by some hospitality and retail enterprises, with a
consequent increase in employment (in terms of hours worked by existing employees or the
engagement of new employees).
[1934] It is convenient to deal with the considerations in s.134(1)(d) and (f) together.
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[1935] It is self-evident that if public holiday penalty rates were reduced then the employment
costs of those hospitality and retail businesses that trade and engage employees on public
holidays would reduce. This consideration supports a reduction in public holiday penalty
rates. As we have mentioned, s.134(1)(f) is not confined to a consideration of the impact of
the exercise of modern award powers on ‘productivity, employment costs and the regulatory
burden’. It is concerned with the impact of the exercise of those powers ‘on business’. In
addition to the impact on employment costs a reduction in public holiday penalty rates is also
likely to have other positive effects on business.
[1936] The evidence of the employer lay witnesses supports the proposition that the current
level of public holiday penalty rates has led some employers to reduce labour costs associated
with trading on public holidays by either not trading at all or restricting the availability of
services on public holidays.
[1937] The evidence of these lay witnesses also supports the proposition that lower public
holiday penalty rates would increase the level and range of services offered on public
holidays. On this basis, it may be said that a reduction in public holiday penalty rates will
promote flexible modern work practices. This consideration lends support to a reduction in
those penalty rates.
[1938] Section 134(1)(da) requires that we take into account the ‘need to provide additional
remuneration’ for, relevantly, ‘employees working on… public holidays’. As mentioned
earlier, an assessment of ‘the need to provide additional remuneration’ to employees working
in the circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a
range of matters, including:
(i) the impact of working at such times or on such days on the employees
concerned (i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already
compensates employees for working at such times or on such days (e.g.
through ‘loaded’ minimum rates or the payment of an industry allowance
which is intended to compensate employees for the requirement to work at
such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the
industry regulated by the particular modern award.
[1939] It is convenient to deal with matters (ii) and (iii) first.
[1940] As to matter (ii), the minimum wage rates in the Hospitality and Retail Awards do not
already compensate employees for working on public holidays. No party contended to the
contrary.
[1941] In relation to matter (iii), public holiday work is a not uncommon feature of the
Hospitality and Retail sectors.
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[1942] We now turn to matter (i), the extent of the disutility of, relevantly, working on public
holidays. In addition to the findings set out in Chapter 6, the lay witness evidence led by the
SDA and United Voice spoke to the adverse impact of public holiday work on the ability of
retail and hospitality sector employees to engage in social and familial activities.
[1943] We note that in the event public holidays penalty rates were reduced (but not removed
entirely) employees working on public holidays would still receive ‘additional remuneration’.
[1944] Section 134(1)(e) requires that we take into account ‘the principle of equal
remuneration for work of equal or comparable value’. Any reduction in public holidays
penalty rates would apply equally to men and women workers. For the reasons given earlier
we regard s.134(1)(e) as neutral to our consideration of the claims before us.
[1945] Section 134(1)(g) requires that we take into account ‘the need to ensure a simple, easy
to understand, stable and sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards’. We regard s.134(1)(g) as neutral to our consideration
of the claims before us. No party contended to the contrary.
[1946] Section 134(1)(h) requires that we take into account ‘the likely impact of any exercise
of modern award powers on employment growth, inflation and the sustainability, performance
and competitiveness of the national economy’. A detailed assessment of the impact of a
reduction in public holiday penalty rates in the Hospitality and Retail Awards on the national
economy is not feasible on the basis of the limited material before us.
9.4 Conclusion
[1947] The modern awards objective is to ‘ensure that modern awards, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions’, taking into account
the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into
account those considerations insofar as they are relevant to the matter before us. The central
issue is whether the public holiday penalty rates in the Hospitality and Retail Awards provide
a ‘fair and relevant minimum safety net’.
[1948] We have concluded that the existing public holiday penalty rates for full-time and
part-time employees in the Hospitality and Retail Awards are neither fair nor relevant. As
mentioned earlier, fairness in this context is to be assessed from the perspective of the
employees and employers covered by the modern award in question. The word ‘relevant’, in
the context of s.134(1), is intended to convey that a modern award should be suited to
contemporary circumstances.
[1949] As mentioned in Chapter 3, we accept that public holidays, by their nature, are
intended to serve a special community role and that the expectation (and practice) is that the
vast majority of employees do not work on public holidays. These features are relevant to the
determination of the level of compensation to be provided to employees who work on public
holidays. There is an additional disutility associated with working on a day when the vast
majority of other employees (and, it may be inferred, a substantial proportion of their friends
and family) are enjoying a day of leisure. Contrary to the views expressed by the Productivity
Commission, deterrence is not an appropriate consideration in setting public holiday penalty
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rates – the disutility associated with working on public holidays is a primary consideration in
setting the appropriate penalty rate.
[1950] Disutility can also be seen in relative terms. The disutility of working on public
holidays is greater than the disutility of working on Sundays (which in turn is greater than
Saturday work). The notion of relative disutility supports a proportionate approach to the
fixation of weekend and public holiday penalty rates.
[1951] As we mentioned earlier (at [893]), in a 1993 decision in relation to the Hotels,
Resorts and Hospitality Award 1992 (a predecessor award to the Hospitality Award)
Commissioner Gay applied a proportionality approach to the fixing of Saturday and Sunday
penalty rates:
‘The Saturday rate for ordinary time worked in this industry should be loaded over the
Monday to Friday rate, but not punitively so… The Sunday ordinary time rate should be less
than the overtime rate and yet appreciably more than the Saturday rate’.
1741
[1952] The concept outlined by the Commissioner may be extended to the fixation of public
holiday penalty rates – they should be higher than Sunday penalty rates, but not
disproportionately so.
[1953] The proportionality approach is consistent with the findings of the time valuation
modelling exercise in the Rose Report. It will be recalled that the model results were that, on
average, respondent employees value working on Saturdays as somewhere between 106 to
135 per cent of their current normal hourly pay, Sundays somewhere between 126 and 165
per cent, and working on a public holiday as being between 124 and 224 per cent. As
mentioned in Chapter 4.1, there are limitations to the Rose Report and the modelling results
should not be mechanistically applied as a means of fixing an appropriate penalty rate. But the
results do provide some insight into the relative disutility of Saturday, Sunday and public
holiday work.
[1954] In determining the appropriate penalty rate for public holiday work, we have had
regard to the level of Sunday penalty rates in the Hospitality and Retail Awards (after
applying the decisions we have made to reduce those rates).
[1955] We note that the disutility in relation to public holidays has been ameliorated
somewhat by the introduction of the statutory right to refuse to work on such days, on
reasonable grounds. Contrary to ABI’s submission, we would not characterise s.114(3) as
making public holiday work ‘voluntary’ (it is a limited right to refuse to work, on reasonable
grounds), but it is still a significant contextual matter which was not taken into account when
the existing 250 per cent penalty was set.
[1956] In addition, the Hospitality and Retail sectors have a number of features which
distinguish them from other industries. In particular, public holiday work is more common
and, on the evidence before us, reducing the public holiday penalty rate will increase
employment and have a number of positive effects on business.
[1957] The claims before us vary in respect of the public holiday penalty rate proposed for
full-time and part-time employees, and range from 150 per cent to 225 per cent. We accept
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that a degree of subjective judgement is involved in fixing an appropriate public holiday
penalty rate. Based on the evidence before us and taking into account the particular
considerations identified in paragraphs 134(1)(a) to (h), insofar as they are relevant, and all of
the considerations to which we have referred, we have decided to reduce the public holiday
penalty rates for full-time and part-time employees in the Hospitality and Retail Awards from
250 per cent to 225 per cent.
[1958] Further, we have concluded that the two-tiered approach advanced by the Hospitality
Employers lacks merit. We have considered the arguments advanced in support of the
proposal, but find them unpersuasive. The distinction sought to be drawn between those
public holidays expressly mentioned in s.115(1)(a) and the other days declared or prescribed
by or under a law of a State or Territory as a public holiday (s.115(1)(b)), is illusory.
[1959] It is relevant to observe that during the Transitional Review, various employer
interests sought to vary the Hospitality, Retail, Fast Food and Hair and Beauty Awards to
provide that where a public holiday falls on a weekend and an additional public holiday is
declared or gazetted, the public loading will only apply to the actual public holiday. In the
Modern Awards Review 2012 – Public Holidays decision,
1742
the Full Bench rejected these
applications, in the following terms:
‘Although the incidence and level of the public holiday penalties is a matter for the
Commission, the issue of additional public holidays arises directly from the scheme of the FW
Act and in particular, the NES reliance upon the State and Territory laws to establish the actual
days.
In its Award Modernisation decision concerning the making of the priority modern awards, the
Full Bench of the AIRC said in respect of public holidays that:
A number of requests were made that we supplement the public holiday entitlements
in the NES by including in awards some days that are observed as public holidays but
not gazetted as such. We have decided against that course as it is apparent that the
NES governs the question of the number of public holidays to which employees
should be entitled.”
The conclusions of that Full Bench remain apposite.’1743 (footnotes omitted).
[1960] Further, as noted in the 1994 Public Holidays Test Case decision, ‘the declaration of
public holidays, by whatever legal instrument, is the prerogative of the various
Governments’.
1744
[1961] We concur with the views expressed in the 1994 and 2012 decisions. This does not
mean that the number and standardisation of public holidays across Australia is not a
legitimate issue. Rather, it is one primarily for the Commonwealth, State and Territory
legislatures. In this context, we note that s.115(1)(b) provides, in effect, that particular State or
Territory declared public holidays can be excluded by regulation from counting as a public
holiday for the purpose of the FW Act. No such regulations have been made.
[1962] We now turn to the public holiday penalty rate for casuals. As shown in Table 73,
most (4 out of 5) of the Hospitality and Retail Awards under consideration currently provide
that casual employees receive the public holiday penalty rate prescribed for full-time and part-
time employees in addition to the 25 per cent casual loading.
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[1963] The effect of the claims advanced by ABI in respect of the Restaurant and Retail
Awards and the PGA in respect of the Pharmacy Award is that other than the 25 per cent
casual loading, casual employees would not be entitled to any additional payment for working
on a public holiday.
[1964] Further, the claims advanced by the Hospitality Employers (in respect of the
Hospitality Award) and RCI (in respect of the Restaurant and Fast Food Awards) provide a
lower public holiday penalty rate for casual employees, when compared to full-time and part-
time employees. The claim advanced by the Hospitality Employers is internally inconsistent
in this regard. For ‘tier 1’ public holidays the proposed penalty rates are 225 per cent (for full-
time and part-time employees) and 175 per cent for casuals – effectively a 150 per cent public
holiday penalty rate for casual employees. Yet for ‘tier 2’ ‘Additional holidays’ full-time and
part-time employees would be entitled to a penalty rate of 200 per cent (i.e. 25 per cent less
than the rate on tier 1 public holidays) and casuals receive no additional payment (other than
the casual loading). There is no logic to the position taken in respect of casuals working on
‘Additional holidays’. If the approach taken to tier 1 penalty payments was applied to
‘Additional holidays’ then casuals would be entitled to a loading of 150 per cent (inclusive of
the casual loading).
[1965] In support of its claim that casual employees receive no additional remuneration for
working on a public holiday (i.e. they only receive the 25 per cent casual loading), ABI
submits:
‘In respect of casual employment, as a matter of law, casuals are not obligated to accept any
particular shift and are not contractually guaranteed, nor required to undertake, ongoing work.
Casuals are further protected by the terms of s 114(1) of the FW Act which entitles a casual
employee a day off on a public holiday. In the submission of ACCI, ABI and NSWBC, this
means that under the FW Act, the decision to work on a public holiday for a casual employee
is a voluntary one, and not one which requires compensation beyond that which the employee
would be entitled to for their work. For those casual employees with no entitlement to payment
when not working, this means that performance of work on a public holiday should, in the
submission of ACCI, ABI and NSWBC, be paid out at 125%.’1745
[1966] We note that during the course of oral argument ABI and RCI appeared to retreat
somewhat from the proposition that casual employees should receive no additional
remuneration (apart from the 25 per cent casual loading) for working on public holidays.
1746
[1967] We also note that the proposition that casuals receive no additional compensation for
public holiday work is inconsistent with the concession made by all of the employer parties
that there is a disability associated with public holiday work and that employees should
receive additional remuneration to compensate for that disability.
[1968] ABI’s contention that the nature of casual employment means that working on public
holidays is voluntary and hence does not warrant additional remuneration, is unpersuasive.
[1969] While as a legal construct it is correct to characterise casual employment as being for
each engagement, as a practical matter the ‘choice’ to work at particular times or on particular
days is likely to be constrained by economic necessity. A casual who refuses to work at
particular times or on particular days may find that they are not offered any further shifts. The
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lay hospitality employee evidence confirms the constrained nature of the choice to be
exercised in these circumstances. It is also considered in Professor Altman’s evidence.
[1970] In any event, whether workers ‘choose’ to work on a public holiday or not, it is
common ground that there is a disutility associated with such work and that employees should
be compensated for that disutility.
[1971] The casual loading is paid to compensate casual employees for the nature of their
employment and the fact that they do not receive the range of entitlements provided to full-
time and part-time employees, such as annual leave, personal carer’s leave, notice of
termination and redundancy benefits. Importantly, the casual loading is not intended to
compensate employees for the disutility of working on public holidays.
[1972] In the Casual Loading Test Case Decision
1747
the Full Bench increased the casual
loading in the Metal Industries Award 1998, to 25 per cent, and said:
‘… we are satisfied that paid leave; long service leave; and a component covering differential
entitlement to notice of termination of employment and employment by the hour effects,
should constitute the main components to be assessed in determining casual loading…’
1748
[1973] The distinct purpose of the casual loading is also made clear from clause 13.1 of the
Hospitality Award:
‘The casual loading is paid as compensation for annual leave, personal/carer’s leave, notice of
termination, redundancy benefits and other entitlements of full-time or part-time employment’
[1974] A clause in similar terms is also found in the Restaurant Award, at clause 13.1.
[1975] As we have mentioned, in the PC Final Report the Productivity Commission
recommended that modern awards be amended to ensure that casual loadings are applied to
penalty rates in the same way across all awards. It stated:
‘For neutrality of treatment, the casual loading should be added to the penalty rate of a
permanent employee when calculating the premium rate of pay over the basic wage rate for
weekend work. This would make an employer indifferent, at the margin, between hiring a
permanent employee over a casual employee. It would also be consistent with the desirability
of ‘equal pay for equal’ work.’
1749
[1976] The PC Final Report sets out the three methods currently used for determining the rate
of pay for casual employees in the modern awards relevant to the penalty rates case. Each
method arrives at a different rate of pay for casual employees during times when weekend
penalty rates apply. The method preferred by the Productivity Commission is the ‘default’
approach where the casual loading is always set as a percentage of the ordinary/base wage
(and not the ordinary wage plus the penalty rate). The rate of pay for a casual employee is
therefore always 25 percentage points above the rate of pay for non-casual employees.
[1977] The PC Final Report argued that, in order for employers to be indifferent or neutral (at
the margin) in choosing between a permanent and casual employee,
1750
the ‘default’ method
should be preferred.
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[1978] The ‘default’ method proposed by the Productivity Commission also provides a casual
loading that is simple and easy to understand, consistent with s.134(1)(g) of the FW Act.
[1979] In our view, the casual loading should be added to the public holiday penalty rate
when calculating the public holiday rate for casual employees. We propose to adopt the
Productivity Commission’s ‘default’ approach. Accordingly, the public holiday rate for casual
employees in the Hospitality and Retail Awards will be 25 + 225 = 250 per cent.
[1980] The effect of our decision in respect of public holiday penalty rates is shown (in
marked up format) in Table 75 below.
Table 75
Proposed public holiday penalty rates in the Hospitality and Retail Awards
Award title
Public holiday penalty rates (%)
Full-time &
part-time
Casual
Hospitality Award (cl. 32)
250 225 275 250
Restaurant Award (cl. 34)
250 225 250
Clubs Award (cl. 29) 250 250
Retail Award (cl. 29) 250 225 275/250 250
Fast Food Award (cl. 30) 250 225 275 250
Pharmacy Award (cl. 31) 250 225 275 250
[1981] We acknowledge that a number of ancillary claims were advanced in respect of the
public holiday terms in some of the Hospitality and Retail Awards. The argument in respect
of these claims was very limited and we do not propose to determine those matters in this
decision. A conference will be convened in the coming weeks, to ascertain whether any of the
claims we have not dealt with are still being pressed. Any outstanding claims may be referred
to the Public Holidays Full Bench.
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10. The Right to Refuse Work
[1982] We now turn to the proposal that employees be granted a right to refuse to work on
Sundays.
[1983] In the course of their final written submissions, the SDA submits that while it opposes
any reduction in Sunday penalty rates in the Retail Award, should we be minded to vary the
award to reduce Sunday penalty rates then we should also vary the award to provide that work
on Sundays is voluntary.
1751
[1984] In support of this proposition, the SDA drew our attention to the proceedings of
SDAEA v $2 and Under and the two resulting decisions of the AIRC.
1752
As mentioned earlier
these decisions concerned an application by the SDA in 1998 for the grant of a roping-in
award of businesses in Victoria whose employees were covered by the minimum standards of
the Workplace Relations Act 1996 applying to Victorians.
1753
The decision in $2 and Under
(No. 1) roped some 17,000 employers into the coverage of the Victorian Shops Interim
Award.
1754
At the time, the Victorian Shops Interim Award included a provision at clause 19
that provided that ‘An employer shall not require any employee to work on a Sunday but an
employee may elect to work a Sunday’.
1755
The effect of this provision was that Sunday work
was voluntary, and an employer could not compel an employee to work on a Sunday
(although the employee could volunteer).
[1985] In deciding to grant the roping-in award, the AIRC departed from the established
conditions of the existing award in that, among other things, the following conditions were
imposed upon the newly roped-in enterprises:
ordinary hours could be worked on Sundays between 9.00 am and 6.00 pm; and
work during ordinary hours on Sunday was non-voluntary.
1756
[1986] As to these changes, the SDA submits:
‘Critically, the change from voluntary to non-voluntary Sunday work directly formed part of the
Commission’s assessment of the disability associated with working on that day. In referring to
the evidence as showing a “very substantial disability endured by persons working on a
Sunday, “ the majority identified that that disability:
… would be heightened in the context whereby provision is made in the roping-in award for
the non-voluntary working of ordinary hours on a Sunday.
The current provision of double time for Sunday under the modern Retail Award is based on
the same premise: Sunday work is not voluntary. The only relevant protection provided to
employees in respect of Sunday work is an entitlement to have one Sunday off in four. Similar
provisions in effect mandating a minimum number of Sundays off are of long standing under
previous retail awards.
This analysis demonstrates that the contemporary assessment of the disabilities associated
with Sunday work undertaken in $2 and under was premised in part on the important
recognition that Sunday work under the roping-in award would not be voluntary. On that (and
other bases) the Commission found double time to be the appropriate and fair payment to
compensate employees for the disabilities of working on that Sunday.
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It follows from the direct connection identified in $2 and under between double time for
Sunday work and such work being “non-voluntary” that, in the event that the Commission in
this Review determines to reduce Sunday penalty rates, it should also vary the Retail Award to
provide that the performance of ordinary hours of work on a Sunday be voluntary…’
1757
[1987] During the course of oral argument the Commission raised with the parties the option
of a suitably drafted award term providing an employee with the right to refuse to work on a
Sunday, on reasonable grounds.
1758
It was intended that such a term would be analogous to
s.114 of the FW Act, to which we have referred in Chapter 9: Public Holiday Penalty Rates.
Directions were issued on 29 April 2016 for the filing of written submissions in relation to
this matter.
[1988] Written submissions were filed by the various employer parties: the Retail Employers,
ABI, Ai Group, the Hospitality Employers, PGA, RCI, CAI and by the SDA and United
Voice.
[1989] The primary position of the various employer parties was that it was not necessary to
introduce any additional rights for employees that would constrain the use of Sunday labour.
[1990] ABI and the Retail Employers advanced an alternate position, in respect of the Retail
Award, in the event that their primary position was not accepted. The alternate position was
for the insertion of an award term providing employees with the right to refuse to work on
Sundays, on reasonable grounds, subject to various limitations including:
the alternate clause only applies to full-time and part-time existing employees classified at
level 3 or below;
in determining whether the refusal is reasonable the following factors are to be taken into
account:
(a) the nature of the employer’s workplace or enterprise (including its operational
requirements), and the nature of the work performed by the employee;
(b) the employee’s personal circumstances, including family responsibilities;
(c) whether the employee could reasonably expect that the employer might direct
work to be performed on the Sunday;
(d) the type of employment of the employee (for example, whether full-time, part-
time, casual or shiftwork);
(e) the amount of notice in advance of the Sunday given by the employer when
making the direction to work the Sunday;
(f) in relation to the refusal of a direction to work – the amount of notice given by
the employee when refusing the direction;
(g) any other relevant matter; and
where an employee refuses to work hours on a Sunday or Sundays and those hours form
part of the employee’s ordinary hours of work, the employer is not obliged to
[2017] FWCFB 1001
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pay the employee for the hours that have been refused, nor to provide that employee with
an equivalent number of hours at an alternative time in the employer’s roster.
[1991] In addition, the Retail Employers proposed that the alternate term have a finite life, of
2 years, and ABI proposed that the alternate term not apply to:
‘any employee who, prior to the employee’s commencement of employment (or upon the
commencement of this provision), was notified by the employer that he/she would be regularly
required to work on Sundays.’
[1992] The Hospitality Employers and CAI advanced a similar position to that put by the
Retail Employers and ABI, and proposed similar alternate clauses for insertion into the
Hospitality Award and the Clubs Award.
[1993] Ai Group, RCI and the PGA maintained their opposition to the insertion of any award
term into the Fast Food Award, the Restaurant Award and the Pharmacy Award, which
provided employees with a right to refuse to work on Sundays.
[1994] The SDA did not really engage with the proposition put – that is, that the right to
refuse Sunday work would be analogous to s.114 of the FW Act – and maintained the view
expressed in its earlier written submission, namely, that Sunday work be voluntary. The term
proposed by the SDA provided that:
‘… (ii) An employer shall not require any employee to work on a Sunday.
(i) An employee may, on the request of an employer, agree to work on a Sunday:
A on a single occasion;
B for a specified period of time; or
C on an ongoing basis.
(ii) An employee’s agreement to work on a Sunday must be recorded in writing. If
the agreement is to work on a Sunday for a specified period of time, the
relevant period is to be identified…’
1759
[1995] United Voice submits that:
‘… if the Commission is minded to include a clause in the hospitality modern awards that has
the effect of making Sunday work voluntary, then it should have regard to the evidence about
the nature of employee ‘choice’ to work on Sundays, and that the operation of any clause could
not offset the disutility of Sunday work. Further, any clause based on s.114 should not be
restricted in the manner sought by the employer parties, and should not replicate the criteria in
s.114(a), (c) and (d) if the clause is to have any practical value to employees.’
1760
[1996] We are not persuaded to vary the Retail Award to include a term of the type proposed
by the SDA. On the basis of the evidence before us (that weekend work is now a feature of
the Retail Sector) and having regard to the current terms of the award (which minimise the
incidence of Sunday work and provide full-time employees with 2 consecutive days off per
week or 3 consecutive days off in a 2 week period (see [1675]–[1676] above), we are not
satisfied that the term sought is necessary to achieve the modern awards objective.
[2017] FWCFB 1001
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[1997] Further, having regard to the submissions put (and having given the matter further
consideration) we do not propose to proceed with the insertion of an award term providing a
right to refuse Sunday work on reasonable grounds. On the material before us we are not
persuaded that such a term is necessary (within the meaning of s.138).
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11. Transitional Arrangements
[1998] A substantial proportion of the employees covered by the modern awards which are
the subject of these proceedings are ‘low paid’ (within the meaning of s.134(1)(a)). The award
variations we propose to make are likely to reduce the earnings of those employees and have a
negative effect on their relative living standards and on their capacity to meet their needs.
[1999] The evidence of the United Voice and SDA lay witnesses puts a human face on the
data and provides an eloquent individual perspective on the impact of the award variations.
Many of these employees earn just enough to cover weekly living expenses, saving money is
difficult and unexpected expenses produce considerable financial distress. We are conscious
of the adverse impact the award variations we propose to make upon these employees.
[2000] The immediate implementation of all of the variations we propose would inevitably
cause some hardship to the employees affected, particularly those who work on Sundays.
There is plainly a need for appropriate transitional arrangements to mitigate such hardship.
[2001] The extent of such transitional provisions depends on, among other things, the nature
of the modern award variation. The variations we propose fall into 3 categories: Sunday
penalty rates; public holiday penalty rates and late night penalties.
(i) Sunday penalty rates
[2002] We have decided to reduce the Sunday penalty rates in 4 of the modern awards before
us:
Award
Sunday Penalty Rate
Hospitality Award
full-time and part-time employees
(no change for casuals)
175 per cent 150 per cent
Fast Food Award
(Level 1 employees only)
Full-time and part-time employees
Casual employees
150 per cent 125 per cent
175 per cent 150 per cent
Retail Award
Full-time and part-time employees
Casual employees
200 per cent 150 per cent
200 per cent 175 per cent
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Award
Sunday Penalty Rate
Pharmacy Award
(7.00 am – 9.00 pm only)
Full-time and part-time employees
Casual employees
200 per cent 150 per cent
225 per cent 175 per cent
[2003] A substantial proportion of award-reliant employees covered by these modern awards
are low paid and the reductions in Sunday penalty rates are likely to reduce the earnings of
those employees who currently work on Sundays. As observed in the PC Final Report, the
extent of the reduction in earnings depends on the:
new regulated Sunday penalty rates for each relevant award;
extent to which some negotiated weekend wages might lie above a new lower
penalty rate for Sundays;
timing of new enterprise agreements, as any penalty rates in existing agreements
would continue to apply;
relative proportion of an employee’s time spent working on Sundays; and
extent to which lower wage rates induced greater demand for labour on Sundays.
1761
[2004] As to the last point, the Productivity Commission concludes that, in general, most
existing employees would probably face reduced earnings as it is improbable that, as a group,
existing workers’ hours on Sundays would rise sufficiently to offset the income effects of
penalty rate reductions.
[2005] Further, our decision to adopt the Productivity Commission’s proposal in respect of
the ‘neutral treatment’ of casual penalty rates for Sunday work has diminished the impact of
these changes on casual employees.
[2006] In the numerous submissions before us little attention was given to the implementation
of any variations to Sunday penalty rates arising from these proceedings. One exception was
the Productivity Commission ‘submission’. The PC Final Report recommends that
12 months’ notice of any change be given, rather than an extended transition process
involving staggered small changes to Sunday penalty rates:
‘… a particular concern in making any changes to penalty rates is that there will be significant
income effects for some people (chapter 14). That suggests an adjustment process so that
people can seek other jobs, increase their training and make other labour market choices. An
extended transition that involves staggered small changes to Sunday rates would replicate
some of the uncertainties and compliance costs associated with award modernisation.
Moreover, it would reduce the scope for new employment, increased hours of work for
existing employees, workload relief for owners, and the benefits from permanent/casual
substitution. A preferred approach would be to give advance notice of a change so that
employers and employees can review their circumstances, and then introduce the change in a
single step.
Part of this notice period will arise naturally from the workload associated with the FWC’s
broader suite of award assessment (chapter 8). It appears unlikely that any decision could be
[2017] FWCFB 1001
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practically implemented before early 2017. If an adjustment period of a year was added, this
would provide more than two years before changes were made.’
1762
[2007] We also note that some submissions
1763
alluded to the need to protect the take home
pay of workers affected by any changes to penalty rates. We deal later with the potential use
of ‘take home pay orders’.
[2008] We note that the general issue of transitional arrangements was considered during the
award modernisation process.
[2009] The creation of modern awards led to some award conditions increasing and others
decreasing. Transitional arrangements were put in place to mitigate the impact of these
changes on employers and employees. The matters which were the subject of transitional
arrangements included penalty rates.
1764
The Award Modernisation Full Bench decided to
generally phase in adjustments to penalty rates in 5 equal instalments, over a 5 year period:
‘[28] We have decided that phasing should apply both to increases in the specified wages and
conditions and reductions in those wages and conditions and in most cases will be in five equal
instalments. We have decided to utilise five instalments because that number was the one most
commonly selected by parties who supported phasing. It also appears to us to be simpler on the
balance to divide differential amounts or percentages by five, yielding five amounts of 20%,
than to utilise any other figure. We have also decided to provide for 12 months between
instalments. This will spread the impact of changes over almost the whole of the five year
period permitted by s.576T of the WR Act.
[29] A number of employers proposed that the introduction of new wages and conditions
should be delayed for a period to enable employers to make necessary arrangements. This
approach has merit. There should be adequate lead time to prepare for the operation of the
modern awards after their finalisation. In this regard we note that the Stage 4 awards are not
scheduled for publication until the end of 2009. There is another important consideration. As
we have indicated, the phasing arrangements will not apply to all changes in minimum
conditions. We consider it desirable that before phasing commences there be an opportunity
for employers and employees to come to terms with the other changes which might have a
significant impact. Yet another consideration is that Fair Work Australia is required to conduct
an annual review of minimum wages in modern awards and any increase resulting from such
review is to operate from 1 July in the year in question. There is some advantage in
synchronising the operation of the phasing provisions with increases in minimum wages.
[30] We have decided that phasing should commence on 1 July 2010. The effect will be that
where the phasing provisions are included in an award the pre-modern award conditions
relating to minimum wages, casual and part-time loadings, Saturday, Sunday, public holiday,
evening and other penalties and shift allowances will continue to apply until 1 July 2010 when
the modern award obligations will commence. Despite the fact that the legislation
contemplates the introduction of modern awards from 1 January 2010, a delay of six months in
the implementation of the phasing arrangements is reasonable when the range and nature of
the changes which will be required are properly taken into account. There will be a further
four instalments on 1 July of each year concluding on 1 July 2014. Consistent with s.287 of
the Fair Work Act, the changes in wages and conditions covered by the phasing arrangements
will operate from the first pay period on or after 1 July in each year.’
1765
[2010] We now turn to the issue of ‘take home pay orders’. In short, the purpose of a take
home pay order is to compensate an employee for any reduction in their pay as a result of the
[2017] FWCFB 1001
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making of a modern award or the transitional arrangements in a modern award. The relevant
statutory provisions are not without a degree of complexity.
[2011] Take home pay orders are dealt with in several sections of the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (the TPCA Act), as modified by the
Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (the
TP Regulations).
[2012] Item 9 of Schedule 5 to the TPCA Act provides that if the Commission 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 Commission may make a take home
pay order concerning the payment of an amount(s) to the employee(s) which the Commission
considers appropriate to remedy the situation. Item 9 limits the power to make a take home
pay order to orders remedying ‘modernisation related’ reductions in take home pay. Item 8(3)
sets out the circumstances where an employee suffers a ‘modernisation related’ reduction in
take home pay. Item 8(3) requires, relevantly, that the employee be employed in the same
position (or comparable position) that they were employed in immediately before the modern
award came into operation. Hence persons employed after the commencement of the modern
award are not eligible for an Item 9 take home pay order.
[2013] Part 3A of Schedule 5 was inserted by amendments to the TP Regulations made by the
Fair Work (Transitional Provisions and Consequential Amendments) Amendment Regulations
2010 (No. 1) (the TP Amendment Regulations).
[2014] Regulation 3B.04 of the TP Regulations modifies Schedule 5 of the TPCA Act by
inserting Part 3A, after Part 3. Item 13A(1) of Part 3A of Schedule 5 to the TPCA Act
provides that:
‘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 arrangements in relation to the award (whether or not the reduction in take-
home pay is a modernisation-related reduction in take-home pay).’1766
[2015] Item 13A(1) restricts the type of reduction that it applies to as one that occurs ‘as a
result of the making of a modern award or the operation of any transitional arrangements in
relation to the award’. Accordingly, it may be that it was not intended that awards would
include terms that allow for making of take-home pay orders in all circumstances. The
purpose of the amendments made by the TP Amendment Regulations is discussed in the
Explanatory Statement accompanying the TP Amendment Regulations.
[2016] The vast majority of modern awards (including the modern awards which are the
subject of these proceedings) include a clause in the following terms:
‘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.’
[2017] FWCFB 1001
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[2017] In a decision in the Review dealing with a range of common general drafting and
technical issues in respect of Group 1A and 1B awards the Commission decided that the take
home pay clause set out above would remain in all modern awards, until the next 4 yearly
review.
1767
[2018] Since 2010 about 140 applications have been made for take home pay orders
1768
(5 applications have been granted; 12 refused and the remainder either withdrawn, settled or
adjourned indefinitely). The most recent take home pay order was made on 13 November
2013
1769
and concerned the hourly rate of pay for a casual employee working on a Saturday
under the Social, Community, Home Care and Disability Services Industry Award 2010.
[2019] It is unclear whether ‘take home pay orders’ are an available option to mitigate the
impact of the reductions in Sunday penalty rates we propose. We would be assisted by
submissions from interested parties in respect of this issue and, in particular, the
Commonwealth (given that the issue raises a question as to the proper construction of the
statutory framework).
[2020] If ‘take home pay orders’ were available, and it was considered that they were
appropriate in these circumstances, then the period over which the reductions are to be phased
in may be shorter than it would otherwise be.
[2021] We have given some consideration to the form of the transitional arrangements to
apply to the reductions in Sunday penalty rates we propose. We have concluded that
appropriate transitional arrangements are necessary to mitigate the hardship caused to
employees who work on Sundays. We have not reached a concluded view as to the form of
those transitional arrangements and we propose to seek submissions from interested parties as
to that issue. For the assistance of those parties who wish to make submissions as to the form
of the transitional arrangements we express the following provisional views:
(i) Contrary to the views expressed by the Productivity Commission we do not
think it appropriate to delay making any changes to Sunday penalty rates for 12
months, at which time the reductions apply in full. The Productivity
Commission’s proposal imposes an unnecessary delay on the introduction of
any reduction in Sunday penalty rates and would give rise to a sharp fall in
earnings for some affected employees.
The Productivity Commission suggests that a 12 month delay would allow the
affected employees to ‘review their circumstances’ so that they ‘can seek other
jobs, increase their training and make other labour market adjustments’.
As we have mentioned, the employees affected by these changes are low paid
and have limited financial resources. It is unlikely that they will be able to
afford the costs associated with increasing their training.
Further, workers in the Accommodation and Food Services and Retail sectors
have lower levels of educational attainment than the total workforce,
1770
which
is likely to limit their capacity to obtain other employment. As noted in the
Peetz and Watson Report:
[2017] FWCFB 1001
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‘… while a majority of tertiary students who are employed work in either retail
or hospitality (i.e. accommodation and food services) industries, this does not
mean that most people who work in those industries are tertiary students. Nor
does it indicate that they are not in need …
Pay rates in retail therefore affect not only tertiary students but also a
significant number of other people who are likely to be dependent on earnings
from this industry as their principal or sole source of income.’
1771
(ii) If ‘take home pay orders’ are an available option then they may mitigate the
effects of a reduction in Sunday penalty rates. But we do not favour any
general ‘red circling’ term which would preserve the current Sunday penalty
rates for all existing employees. A consequence of such a term would be that
different employees of the one employer may be employed on different terms
and conditions. Such an outcome would add to the regulatory burden on
business (a relevant consideration under s.134(1)(f)).
(iii) The reductions in Sunday penalty rates should take place in a series of annual
adjustments on 1 July each year (commencing 1 July 2017) to coincide with
any increases in modern award minimum wages arising from Annual Wage
Review decisions.
(iv) As to the number of annual instalments, the 5 annual instalment process which
accompanied the making of the modern awards is too long for present
purposes. It will be recalled that the Award Modernisation Full Bench was
dealing with an array of award provisions that were the subject of transitional
arrangements including minimum wages, whereas we are only dealing with
one provision, Sunday penalty rates. It is likely that at least 2 instalments will
be required (but less than 5 instalments). The period of adjustment required
will depend on the extent of the reduction in Sunday penalty rates, the
availability of ‘take home pay orders’ and the circumstances applying to each
modern award. The most significant reduction is for full-time and part-time
employees covered by the Retail Award (from 200 per cent to 150 per cent), it
follows that a longer period of adjustment may be required in this award.
[2022] As we have mentioned, we will invite submissions in response to the provisional
views we have expressed.
(ii) Public holiday penalty rates
[2023] We have decided to reduce the public holiday penalty rate for full-time and part-time
employees (from 250 per cent to 225 per cent) in the following modern awards:
Hospitality Award
Restaurant Award
Fast Food Award
Retail Award
Pharmacy Award
[2017] FWCFB 1001
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[2024] The impact of these changes will be greater than the changes to late night penalties,
but less than the changes to Sunday penalty rates.
[2025] Balancing the need to provide some notice of these changes with our desire to avoid
the added complexity of transitional provisions where appropriate, we have decided that the
reduction in public holiday penalty rates will commence on 1 July 2017.
(iii) Late night penalties
[2026] We have decided to vary the late night penalties in the Fast Food Award and the
Restaurant Award. At present, both awards provide an additional payment of 15 per cent of
the standard hourly rate between midnight and 7.00 am.
1772
We have decided to vary the span
of hours which attract the 15 per cent loading such that it applies for work performed between
midnight and 6.00 am (not 7.00 am).
[2027] We have also decided to vary the Fast Food Award to provide that the 10 per cent
evening work loading applies to work between 10.00 pm and midnight (as is currently the
case in the Restaurant Award). It appears that the existing 9.00 pm threshold for the payment
of the evening work loading in the Fast Food Award was simply an error. At the time the
modern award was made the Full Bench clearly intended to align the evening penalty rate
provisions in the Fast Food and Restaurant Awards, but for whatever reason that intention
was incompletely implemented.
[2028] A substantial proportion of award-reliant employees covered by the Fast Food and
Restaurant Awards are low paid and the variations to the late night penalty provisions will
reduce the earnings of those employees, but not to a significant extent. The variations will
only effect those Fast Food and Restaurant Award employees who work between 6.00 am
and 7.00 am, and those Fast Food Award employees who work between 9.00 pm and
10.00 pm Further, the variations will only reduce the earnings of those employees for the
hours worked between 9.00 pm and 10.00 pm, and between 6.00 am and 7.00 am.
[2029] The limited impact of the variations and the need to ensure a ‘simple, easy to
understand… modern award system’ (s.134(1)(g)) have led us to conclude that it is not
necessary to prescribe transitional arrangements in respect of these variations. It is our
intention that, following a period of consultation, these variations will commence operation
on 27 March 2017.
[2017] FWCFB 1001
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[2017] FWCFB 1001
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12. Next Steps
[2030] This Chapter deals with the steps we propose to take to finalise the matters before us,
in particular:
the making of variation determinations in respect of the matters that have been
decided;
the process for making submissions about various provisional views we have
expressed in this decision;
the future conduct of the review of penalty rates in the Clubs Award;
the future conduct of the review of penalty rates in the Restaurant Award;
the future conduct of the review of penalty rates in the Pharmacy Award;
the proposed change in terminology: from ‘penalty rates’ to ‘additional
remuneration’;
the review of other modern awards; and
further consideration of the use of ‘loaded rates’.
(i) Variation determinations
[2031] Draft variation determinations in respect of the late night penalty provisions in the
Fast Food and Restaurant Awards will be published shortly. Interested parties will have 7
days to comment on the draft variation determinations before they are finalised.
[2032] As mentioned in Chapter 9, we have decided to reduce the public holiday penalty rate
for full-time and part-time employees (from 250 per cent to 225 per cent) in a number of
modern awards before us. These variations will commence on 1 July 2017. Draft variation
determinations will be published shortly. Interested parties will have 7 days to comment on
the draft variation determinations before they are finalised.
(ii) Provisional views
[2033] We have expressed some provisional views in respect of some of the matters before
us. For the convenience of interested parties, we set out these provisional views below.
Fast Food Award
[2034] In the Fast Food Award, it appears that there is a different method for calculating the
payment to casual employees for weekend work, depending on whether it is Saturday work or
Sunday work. (see [1403]–[1405]).
[2035] For Sunday work, the Productivity Commission’s ‘default’ approach is applied. But
for Saturday it appears that the Saturday work loading (25 per cent) is applied to the casual
rate of pay for ordinary hours (that is, the relevant minimum hourly rate of pay + the 25 per
[2017] FWCFB 1001
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cent casual loading). Hence in respect of Saturday work there is a degree of compounding by
applying a penalty upon a penalty.
[2036] At [1406] we express the provisional view that clause 25.5(a) be amended, as follows:
(iii) Saturday work
(iv) A 25% loading will apply for all hours of work on a Saturday for full-time and
part-time employees.
(v) A 50% loading will apply for all hours of work on a Saturday for casual
employees, inclusive of the casual loading.
[2037] The other matter in relation to the Fast Food Award concerns the NRA’s proposed
amendment to clause 26, Overtime. The proposed variation seeks the deletion of the last
sentence of clause 26: ‘Casual employees shall be paid 275% on a Public Holiday’. For the
reasons expressed at [1407], we express the provisional view that the last sentence of clause
26 be deleted.
[2038] Interested parties are to file written submissions in relation to the provisional views set
out at [1406]–[1408] by 4.00 pm Friday, 24 March 2017. If there are no objections to the
provisional views, final determinations will be published.
Transitional arrangements: Sunday penalty rate reductions
[2039] As mentioned in Chapter 11, we have concluded that appropriate transitional
arrangements are necessary in respect of the reductions in Sunday penalty rates we proposed
in order to mitigate the hardship cause to employees who work on Sundays.
[2040] We have not reached a concluded view on the form of these transitional arrangements
but have expressed the following provisional views:
(i) Contrary to the views expressed by the Productivity Commission we do not
think it appropriate to delay making any changes to Sunday penalty rates for 12
months, at which time the reductions apply in full. The Productivity
Commission’s proposal imposes an unnecessary delay on the introduction of
any reduction in Sunday penalty rates and would give rise to a sharp fall in
earnings for some affected employees.
The Productivity Commission suggests that a 12 month delay would allow the
affected employees to ‘review their circumstances’ so that they ‘can seek other
jobs, increase their training and make other labour market adjustments’.
As we have mentioned, the employees affected by these changes are low paid
and have limited financial resources. It is unlikely that they will be able to
afford the costs associated with increasing their training.
Further, workers in the Accommodation and Food Services and Retail sectors
have lower levels of educational attainment than the total workforce,
1773
which
[2017] FWCFB 1001
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is likely to limit their capacity to obtain other employment. As noted in the
Peetz and Watson Report:
‘… while a majority of tertiary students who are employed work in either
retail or hospitality (i.e. accommodation and food services) industries, this
does not mean that most people who work in those industries are tertiary
students. Nor does it indicate that they are not in need …
Pay rates in retail therefore affect not only tertiary students but also a
significant number of other people who are likely to be dependent on earnings
from this industry as their principal or sole source of income.’
1774
(ii) If ‘take home pay orders’ are an available option then they may mitigate the
effects of a reduction in Sunday penalty rates. But we do not favour any
general ‘red circling’ term which would preserve the current Sunday penalty
rates for all existing employees. A consequence of such a term would be that
different employees of the one employer may be employed on different terms
and conditions. Such an outcome would add to the regulatory burden on
business (a relevant consideration under s.134(1)(f)).
(iii) The reductions in Sunday penalty rates should take place in a series of annual
adjustments on 1 July each year (commencing 1 July 2017) to coincide with
any increases in modern award minimum wages arising from Annual Wage
Review decisions.
(iv) As to the number of annual instalments, the 5 annual instalment process which
accompanied the making of the modern awards is too long for present
purposes. It will be recalled that the Award Modernisation Full Bench was
dealing with an array of award provisions that were the subject of transitional
arrangements including minimum wages, whereas we are only dealing with
one provision, Sunday penalty rates. It is likely that at least 2 instalments will
be required (but less than 5 instalments). The period of adjustment required
will depend on the extent of the reduction in Sunday penalty rates, the
availability of ‘take home pay orders’ and the circumstances applying to each
modern award. The most significant reduction is for full-time and part-time
employees covered by the Retail Award (from 200 per cent to 150 per cent), it
follows that a longer period of adjustment may be required in this award, than
for the other awards before us.
[2041] We seek submissions from interested parties in respect of the above provisional views.
Further, as mentioned at [2019] it is unclear whether ‘take home pay orders’ are an available
option to mitigate the impact of the reductions in Sunday penalty rates we propose. We would
be assisted by submissions from interested parties in respect of this issue and, in particular,
the Commonwealth (given that the issue raises a question as to the proper construction of the
statutory framework).
[2042] Interested parties are to file written submissions in relation to the transitional
arrangements to apply to the reduction in Sunday penalty rates by 4.00 pm Friday, 24 March
2017, with reply submissions to be filed by 4.00 pm on Friday, 7 April 2017. The matter
will be listed for hearing in early May 2017.
[2017] FWCFB 1001
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[2043] The written submissions should address the provisional views expressed above (at
[2040]) and the issue of whether take home pay orders are an available option to mitigate the
impact of the reductions in Sunday penalty rates.
(iii) The Clubs Award
[2044] In Chapter 7.3.6 we conclude that CAI has not established a merit case sufficient to
warrant the variation of the Clubs Award. We also express the view that there are 2 options in
respect of the future conduct of the penalty rates review of the Clubs Award:
Option 1: determinations could be made revoking the Clubs Award and varying the
coverage of the Hospitality Award so that it covers the class of employers and
employees presently covered by the Clubs Award. Such a course would obviously
avoid the need for any further Review proceedings in respect of the Clubs Award.
Option 2: CAI and any other interested party could be provided with a further
opportunity to advance a properly based merit case in support of any changes they
propose in respect of weekend penalty rates.
[2045] At [1000] we express the provisional view that option 1 has merit and warrants further
consideration. We propose to provide an opportunity for interested parties to express a view
as to the future conduct of this aspect to these proceedings and, in particular, we invite
submissions on the two options set out above.
[2046] Short submissions setting out the position of the interested party are to be filed at
amod@fwc.gov.au by 4.00 pm Friday, 24 March 2017. We will list this matter for mention
on Tuesday, 28 March 2017.
(iv) The Restaurant Award
[2047] In Chapter 7.4.6 we conclude that RCI has not established a merit case sufficient to
warrant varying the Sunday penalty rates in this award.
[2048] We will provide RCI (and any other interested party) a further opportunity to seek to
establish that the weekend penalty rates in the Restaurant Award do not provide a ‘fair and
relevant minimum safety net’. In the event that a party wishes to take up this opportunity, it
will need to address the deficiencies in the case put to date, as set out above at [1142]–[1153].
In particular, any such case will need to:
provide material which would enable us to assess the impact of the variations
proposed (see [1151]);
provide evidence as to the effects (in terms of employment and service levels of the
reductions in Sunday penalty rates consequent on the Restaurants 2014 Penalty
Rates decision (see [1152]–[1153]);
provide a cogent argument as to why we should depart from the Restaurants 2014
Penalty Rates decision in respect of Sunday penalty rates; and
address the Productivity Commission submissions in relation to the payment of
casual loading in addition to weekend penalty rates.
mailto:amod@fwc.gov.au
[2017] FWCFB 1001
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[2049] In relation to the provision of additional evidence as to the effects of the 2014
reduction in Sunday penalty rates, we are not suggesting that quantitative evidence (or
‘natural experiment’ evidence) as to the impact of these changes is required. However we do
expect significantly more extensive lay evidence as to this issue than was presented in these
proceedings.
[2050] The RCI is to provide an indication as to whether it wishes to press its claim in light of
the comments above at [2047]–[2049], by filing correspondence at amod@fwc.gov.au by
4.00 pm Friday, 24 March 2017. We will list this matter for mention on Tuesday, 28 March
2017.
(v) Proposed change in terminology
[2051] The Hospitality Employers seek the removal of the reference to ‘penalty’ and ‘penalty
rates’ in clause 32 of the Hospitality Award and the insertion of references to ‘additional
remuneration’. A similar variation is proposed by the PGA in respect of the Pharmacy
Industry Award 2010.
[2052] The changes proposed appear to be sought on the basis that s.134(1)(da)(iii) of the FW
Act speaks of ‘the need to provide additional remuneration for … employees working on
weekends’. The changes proposed would also be consistent with the contemporary purpose of
‘penalty rates’. As mentioned in Chapter 3, the purpose of such rates is not to penalise
employers for rostering employees to work at such times, it is to compensate employees for
the disutility of working on weekends.
[2053] The submissions in respect of the proposed change in terminology were very limited.
Further, the change in terminology proposed is only advanced in respect of 2 modern awards.
The introduction of different expressions (which have the same meaning) in different modern
awards is apt to confuse. Such an outcome would not be consistent with ‘the need to ensure a
simple, easy to understand … modern award system’ (s.134(1)(g)). Further, if changes of the
type proposed were to be made then, prima facie, they should be made in all modern awards
which currently provide for ‘penalty rates’ (see generally [901]–[906]).
[2054] We invite further submissions in respect of this issue. As the issue potentially affects a
large number of modern awards it will be the subject of a separate statement and directions.
(vi) The Review of Other Awards
[2055] As mentioned in Chapter 5.2, the PC Final Report identified a number of
‘discretionary consumer service industries’ in which the appropriate level of regulated penalty
rates for Sunday work has been a highly contested issue, noting that:
‘The industries of greatest concern are hospitality, entertainment, retail, restaurants and cafes
(HERRC). These are industries where consumer expectations of access to services has
expanded over time so that the costs of penalty rates affect consumer amenity in ways they did
not when penalty rates were first introduced. Such industries are also important sources of
entry level jobs for, among others, relatively unskilled casual employees and young people
(particularly students) needing flexible working arrangements. The provision of discretionary,
and therefore demand responsive, services on weekends is less frequent in most other
mailto:amod@fwc.gov.au
[2017] FWCFB 1001
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industries, which is a key (but not only) rationale for a focus of concerns on the HERRC
industries. It is notable that the FWC is currently also considering appropriate penalty rates in
awards, and that their focus almost exactly matches the group of industries that the
Productivity Commission has identified as the most relevant.’
1775
[2056] As noted by the Productivity Commission the modern awards before us closely align
with the HERRC awards identified in the PC Final Report. The only 2 HERRC awards which
we have not dealt with are the Amusement, Events and Recreation Award 2010
(the AER Award) and the Hair and Beauty Industry Award 2010.
[2057] The AER Award was initially the subject of an application by Australian Federation of
Employers and Industries (AFEI) but the application was subsequently withdrawn on 26 June
2015. We note that the Sunday penalty rates in the award are 150 per cent for full-time and
part-time employees and 175 per cent for casual employees, which are consistent with the
rates we have determined for the Hospitality Award as part of this decision.
[2058] The Hair and Beauty Industry Award 2010 was the subject of a claim to reduce
Sunday penalty rates, by ABI, which was part of these proceedings. In correspondence dated
14 September 2016 ABI stated that its claim in respect of this award was no longer pressed.
The weekend penalty rates in the Hair and Beauty Industry Award 2010 are set out below:
Full-time/part-time
employee
Casuals
Sat Sun Sat Sun
133% 200% 133% 200%
[2059] The existing rates appear to raise issues about the level of the Sunday penalty rate and
the penalty rates applicable to casual employees.
[2060] It is appropriate that these rates be reviewed.
[2061] There would be significant practical impediments to the Commission acting on its own
motion to obtain relevant lay evidence. A proponent for change (and a contradictor) would be
a useful means of measuring that all of the relevant considerations were appropriately
canvassed.
[2062] We seek expressions of interest from employer organisations prepared to take on the
proponent role. Any such expressions of interest should be filed to amod@fwc.gov.au by
4.00 pm Friday, 24 March 2017. We assume that the SDA will appear as contradictor in any
subsequent proceedings. We will list this matter for mention on Tuesday, 28 March 2017.
(vii) Loaded rates
[2063] As mentioned in Chapter 4, in the Transitional Review a Full Bench
1776
dealt with a
number of applications to vary penalty rates in 5 modern awards, including the Hospitality
Award, Fast Food Award and Retail Award. In the course of its decision rejecting the various
claims, the Full Bench said:
mailto:amod@fwc.gov.au
[2017] FWCFB 1001
459
‘[329]… we consider that there is merit in the parties discussing the concept of incorporating
loaded rates within the General Retail and Fast Food awards.
[330] Any such loaded rates would need to recognise the application of the existing penalty
rates regime and apply fairly across the range of employees and working hours patterns that
might be considered as applicable to the concept. Subject to those considerations, our
preliminary view is that the establishment of loaded rates within these awards would have the
capacity to reduce the complexity of their application, particularly for small businesses.
[331] In order to explore this concept further, the Commission will facilitate some conciliation
discussions between the major parties with a view to seeking a degree of consensus.
Commissioner Hampton will convene a conference for this purpose in the near future.’
1777
[2064] A ‘loaded rate’ in this context refers to a rate which is higher than the applicable
minimum hourly rate specified in the modern award and is paid for all hours worked instead
of certain penalty rates (such as the penalty rates for Saturday and Sunday work).
[2065] Commissioner Hampton subsequently convened a conference of the parties to earlier
proceedings and provided a report to the Full Bench on 13 June 2013. The Commissioner’s
report indicated that, at least at that time, there was not a great deal of interest from the major
parties in pursuing the insertion of loaded rates into the awards under consideration. The
Commissioner concluded his report as follows:
‘Given the attitude of the major parties and the absence of specific proposals, I recommend to
the Full Bench that no further action be taken in relation to these particular matters as part of
the Modern Award Review 2012.’
1778
[2066] We note that the lack of enthusiasm at that time occurred in the context of the 2012
Transitional Review, with the prospect of a more comprehensive review of penalty rates
during the 4 yearly Review.
[2067] We agree with the view expressed by the Transitional Review Full Bench that there is
merit in considering the insertion of appropriate loaded rates into the relevant awards. We
note that the Hospitality Award already has a form of loaded rate. Clause 27.1 of that award
provides that an employer and employee can enter into an ‘alternative arrangement to the
payment of the minimum weekly wages, penalty rates and overtime payments prescribed in
the award. In essence, and subject to some important safeguards, an employer and employee
can enter into an agreement to pay a ‘loaded rate’ which is 25 per cent above the minimum
weekly wage instead of penalty rates and overtime.
[2068] We are not suggesting that a provision such as clause 27.1 of the Hospitality Award is
necessarily appropriate for other Hospitality and Retail awards. But subject to appropriate
safeguards, schedules to these awards could be developed which provide that if employee are
paid a higher (‘loaded’) rate of pay then they would not be entitled to certain penalty
payments. It seems to us that, subject to the inclusion of appropriate safeguards, schedules of
‘loaded rates’ may make awards simpler and easier to understand, consistent with the
consideration in s.134(1)(g).
[2017] FWCFB 1001
460
[2069] It is also relevant that the businesses covered by the modern awards before us are
predominately small businesses. About two-thirds of businesses in the Hospitality sector and
over half of the businesses in the Retail Sector are small businesses.
1779
[2070] Small businesses face a number of practical impediments to entering into enterprise
agreements. This is reflected in the positive correlation between business size and collective
agreement making. An increase in business size is associated with an increase in the
proportion of employees covered by collective agreements. As demonstrated by Chart 3 in the
June 2015 ‘4 yearly review of modern awards – Annual leave’ decision
1780
, which is
reproduced below, as Chart 63.
Chart 63
1781
Proportion of employees with their pay set by method of setting pay and
business size—May 2014
Note: Data on method of setting pay by business size exclude owner managers of incorporated
businesses.
[2071] Schedules of ‘loaded rates’ would allow small businesses to access additional
flexibility without the need to enter into an enterprise agreement.
[2072] The insertion of ‘loaded rates’ schedules into these modern awards may also have a
positive effect on award compliance.
[2073] The Fair Work Ombudsman (FWO) has reported significant levels of non-compliance
in the hospitality and retail awards which are the subject of these proceedings.
[2074] The FWO’s ‘National Hospitality Industry Campaign 2012-2014’ was developed in
response to a number of factors in the hospitality industry, including:
Given the size of the hospitality industry the campaign was split into 3 industry sub
categories and comprised of a communication program and an audit of businesses
0
10
20
30
40
50
60
70
80
90
100
Under 20
employees
20 - 49 employees 50 - 99 employees 100 - 999
employees
1 000 and over
employees
Per cent
Award only Collective agreement Individual arrangement
[2017] FWCFB 1001
461
for compliance with wages and record keeping obligations. The results of the audit
in each industry sub category are set out below.
o Accommodation, pubs, taverns and bars (Wave 1 Report)
1782
30 per cent of pubs, taverns and bars and 35 per cent of
accommodation businesses were found to be non-compliant;
Of the businesses in contravention, 53 per cent had monetary
contraventions (19 per cent of contraventions related to penalty rates).
o Restaurants, Cafes and Catering (Wave 2 Report)
1783
58 per cent of businesses had not met all of their workplace relations
obligations (46 per cent of businesses were not paying their employees
correctly)
o Takeaway Foods (Wave 3 Report)
1784
67 per cent of business had not met all of their workplace relations
obligations (47 per cent of businesses were not paying their employees
correctly).
[2075] Some of the observations made in these reports are particularly relevant for present
purposes. The Wave 3 Report notes (at p. 7):
‘The most commonly identified error related to wages (45%), specifically to underpayment of
hourly rates, whereas penalty rates and loadings were a lower proportion (15%). Fair Work
Inspectors (FWIs) found some businesses providing flat rates of pay for all hours worked, with
many advising they had adopted this practice to simplify their payroll process. In nearly one
third of cases, the hourly rate paid was not enough to cover hours attracting penalty rates and
loadings, resulting in additional errors.’
[2076] A similar observation was made in the Wave 2 Report ( at p. 7):
‘The most commonly identified errors were employers providing flat rates of pay for all hours
worked with many employers advising they had adopted this practice to simplify their payroll
process. In many cases the hourly rate paid was not enough to cover hours attracting penalties,
loadings or overtime.’
[2077] Similar FWO campaigns have been conducted in the retail sector and the results are
set out below:
National Retail Industry Campaign 2010-11
1785
o 26 per cent of employers were non-compliant (this percentage was
expected to rise due to a number of ongoing investigations into expected
breaches.
National Pharmacy Campaign 2012-13
1786
o 25 per cent of businesses were non-compliant;
[2017] FWCFB 1001
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Of the businesses in contravention, 76 per cent had monetary contraventions (most
related to wages, 54 per cent, followed by penalties and loadings, 22 per cent).
[2078] The Pharmacy report contained the following observation (at p. 13):
‘We also found some businesses were not paying pharmacists weekend penalty rates. Instead
they were paying an above Award flat-rate for all hours worked which we determined did not
result in any overall underpayment of entitlements.
However we found that pharmacy assistants that were being paid an above Award flat-rate for
all hours worked were being underpaid, especially where they worked many shifts that
attracted penalties.’
[2079] It appears from these FWO reports that some businesses in the Hospitality and Retail
sectors already provide ‘flat’ (or ‘loaded’) rates of pay, in order to simplify their payroll
process, but they underestimate the additional premium (or loading) required in order to
compensate employees for the loss of penalty rates, resulting in non-compliance.
[2080] In raising this matter, we are alive to the potential complexity involved in the task of
developing schedules appropriately for loaded rates. Determining an appropriate loaded rate
would not be straightforward. For example, an employee who worked the vast majority of
their hours on a weekend or late at night, when a penalty rate would apply, would require a
higher loaded rate than, say, an employee who worked the vast majority of their hours during
the ordinary spread of hours, Monday to Friday.
[2081] It has to be borne in mind that any loaded rate will remain part of the safety net and
will have to be fair and relevant.
[2082] To deal with this challenge it may be necessary to consider a number of loaded rates to
match particular roster configurations. It is likely that there are commonly used roster
configurations in the industries under consideration. So, by way, of example, there may be a
loaded rate struck for employees who work no more than two Saturdays in any 28 day cycle,
and another rate for employees who work every Sunday, but not Saturdays.
[2083] Any loaded rate and the associated roster configuration, would, of course, need to be
relevant to the needs of industry and employees. Accordingly, there would be benefit in
further engagement with interested parties as to the dominant roster patterns in the relevant
industries so that appropriate rates can be developed.
[2084] We envisage that the development of loaded rates will be an iterative process
undertaken in consultation with interested parties. That process will commence after we have
determined the transitional arrangements in respect of the reductions in Sunday penalty rates.
PRESIDENT
[2017] FWCFB 1001
463
Appearances:
C Acev for United Voice, Liquor and Hospitality Division.
L Izzo with J Arndt, E Baxter and N Ward for Australian Business Industrial and the New
South Wales Business Chamber.
L Izzo for Australian Chamber of Commerce and Industry.
J Baulch for The Association of Professional Engineers, Scientists and Managers, Australia.
S Moore QC (of counsel), T Borgeest, D Macken, A Forsyth (of counsel) and S Burnley for
the Shop, Distributive and Allied Employees Association.
N Tindley, C Brehas, S Elliffe and G Frankford for the National Retail Association.
N Tindley, P Wheelahan (of counsel) and M Brown for Master Grocers Australia.
C Dowling of (of counsel), K Burke (of counsel), R Robson and S Bull for United Voice.
E Van der Linden and R Cairney for the South Australian Employers Chamber of Commerce
and Industry trading as Business SA.
R Tait, H Carayannis, R Warren (of counsel) for Clubs Australia Industrial.
R Clancy and N Ward for the Australian Chamber of Commerce and Industry.
R Clarke , G Parkes and B Rauf (of counsel) for Restaurant & Catering Industrial.
S Crawford, J Gherjestani and G Starr for The Australian Workers’ Union.
H Dixon SC (of counsel) with A Gotting, L Cruden and V Paul for the Australian Industry
Group.
T Cush and S Forster for the Australian Amusement, Leisure and Recreation Association.
J Dolan, O Fagir and G Starr for the Australian Council of Trade Unions.
N Ward and S Elliffe for the Hair and Beauty Industry Association.
S Forster for the Australian Federation of Employers and Industry and the Drycleaning
Institute of Australia.
G Johnston for the Australian Meat Industry Council.
M Seck (of counsel) with S Wellard, J Light and J Stanton (of counsel) for The Pharmacy
Guild of Australia.
B O’Halloran for Deloitte Touche Tohmatsu.
[2017] FWCFB 1001
464
J Stanton (of counsel) with S Wellard and G Parkes for the Accommodation Association of
Australia; The Motor Inn, Motel and Accommodation Association.
J Stanton (of counsel) with S Wellard for the Australian Hotels Association.
L Svendson for the Health Services Union of Australia.
N Tindley and P Wheelahan (of counsel) for The Australian Retailers Association.
N Tindley for the Australian National Retail Association.
V Wiles for the Textile, Clothing and Footwear Union of Australia.
Hearing details:
Before the Full Bench:
2015.
Melbourne, Brisbane, Sydney, Canberra, Darwin, Adelaide, Perth, Hobart, Bathurst, Cairns,
Kununurra, Rockhampton (video hearing)
August 21;
September 8–11, 14–18, 22, 23, 25;
October 1, 12–15, 19–21, 26–30;
November 4–6;
December 15, 16, 21.
2016.
Sydney, Melbourne, Brisbane, Canberra and Adelaide (video hearing):
April 11–15;
September 28.
Before Commissioner Johns:
2015.
Melbourne, Canberra, Sydney (video hearing)
September 9;
October 26;
November 12.
Final written submissions:
ABI Submission re updated statistical reports, 4 February 2017.
Final reports published:
Updated industry profiles, 20 January 2017.
Printed by authority of the Commonwealth Government Printer
Price code AH, PR590365
[2017] FWCFB 1001
465
Endnotes
1 The term ‘Commission’ has been used to describe the Fair Work Commission and its predecessor bodies including the
Australian Industrial Relations Commission (AIRC) and Fair Work Australia.
2 [2014] FWCFB 916
3 [2014] FWCFB 916
4 Issues Paper, 4 Yearly Review of Modern Awards - Common issues, 24 February 2014
5 [2014] FWC 1790 at [10]; [2014] FWC 7742; [2014] FWC 8575
6 [2016] FWCFB 7285
7 [2014] FWC 9175 at [4]
8 Re: Amusement, Events and Recreation Award 2010, see correspondence from AFEI and AALRA dated 26 June 2015; re:
Dry Cleaning and Laundry Industry Award 2010, see correspondence from AFEI and the DIA dated 12 August 2015; re:
Hair and Beauty Industry Award 2010, see correspondence from ABI dated 14 September 2016.
9 [2015] FWC 1482
10 [2015] FWCFB 5357
11 [2014] FWC 9175 at [15]
12 See for example, Ai Group submission 8 February 2016 at [270]
13 [2016] FWCFB 285 at [9]
14 Adelaide Advertiser, The Australian, Australian Financial Review, Courier Mail (Brisbane), Canberra Times, Daily
Telegraph, Herald Sun, Hobart Mercury, The Age, NT News, Sydney Morning Herald and The West Australian
15 See contributions received from interested persons
16 See generally: Dawkins P, Rungie C and Sloan J (1986) ‘Penalty Rates and Labour Supply: Employee Attitudes to Non-
Standard Hours of Work’, 28 Journal of Industrial Relations, pp. 564–587; Jones S (1981) ‘Penalty Rates under Challenge’,
23 Journal of Industrial Relations, pp. 504–507; Queensland Industrial Conciliation and Arbitration Commission (1981)
Inquiry into Penalty Rates, QGIG, Vol. 1-08, 31 October, pp. 201–217; Productivity Commission, (2015) Workplace
Relations Framework, Final Report chapter 10 pp. 405–421
17 Productivity Commission, (2015) Workplace Relations Framework, Final Report chapter 15 p. 503
18 Ai Group final submission in reply –1 April 2016 at [6]
19 [2014] FWCFB 1996
20 [2014] FWCFB 1996 at [295]
21 CAI seeks to vary the Saturday penalty rates in the Clubs Award and the PGA seeks to vary the early morning and late
night penalties on Saturdays in the Pharmacy Award. For the reasons set out at [994], a sufficient merit case has not been
put in support of the changes proposed.
22 PC Final Report at p. 406
23 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017
24 Fair Work Commission, Australian Workplace Relations Study, 2014
25 PC Final Report, at p. 493
26 See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [4]; CIC Insurance Ltd v
Bankstown Football Club Ltd (1997) 187 CLR 384 at p. 408
27 See Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at [59]; Peabody
Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU) [2014] FWCFB 2042 at [26]–[37];
Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union (2012) 219 IR 139 at [16]–[19]
28 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]
29 See Prior v Sherwood (1906) 3 CLR 1054; R v Refshauge (1976) 11 ALR 471 at p. 475
30 (1998) 194 CLR 355 at [78] per McHugh, Gummow, Kirby and Hayne JJ; also see Taylor v The Owners – Strata Plan No
11564 253 CLR 531 at [65]–[66]
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwcfb916.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwcfb916.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/submissions/am20141_issuespaper_common_240214.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwc1790.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwc7742.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwc8575.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb7285.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwc9175.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-corro-afeiandanor-120815.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-sub-abinswbcandanor-140916.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwc1482.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb5357.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwc9175.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2016fwcfb285.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-contributions-ip.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-aig-010416.pdf
[2017] FWCFB 1001
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31 Ross v R (1979) 141 CLR 432 at [440]; Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453
at p. 479 per McHugh and Gummow JJ
32 (2009) 239 CLR 27 at [47]
33 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [85]. Although the Court’s observations were
directed at the expression ‘in its own right’ in Item 6(2A) of Schedule 5 of the Fair Work (Transitional Provisions and
Consequential Amendments) Act 2009 (Cth) they are apposite to s.156(5).
34 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [86]. While the Full Federal Court was
considering the meaning of the Item 6(2A) of Schedule 5 of the Fair Work (Transitional Provisions and Consequential
Amendments) Act 2009 (Cth) the observations are also apposite to s.156(5) of the FW Act, which is in substantially the
same terms.
35 4 Yearly Review of Modern Awards – Annual Leave [2016] FWCFB 3177 at [135]–[140]
36 [2014] FWCFB 1788 at [19]–[24] (the Preliminary Jurisdictional Issues Decision)
37 See Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35]
per Tracey J
38 Friends of Hinchinbrook Society Inc v Minister for Environment (No 3) (1997) 77 FCR 153; Australian Competition and
Consumer Commission v Leelee Pty Ltd [1999] FCA 1121; Edwards v Giudice [1999] FCA 1836; National Retail
Association v Fair Work Commission [2014] FCAFC 118
39 Shop Distributive and Allied Employees Association v $2 and Under (2003) 135 IR 1
40 Ibid at [11]. We note that Giudice J was in the minority in the result, but the observation cited is consistent with the views
of the majority at [124].
41 [2015] FWCFB 8200 at [272]
42 (1994) 55 IR 144 at [147]–[149]
43 Also see Re AIRC Ex parte Metal Trades Industry Association of Australia (1995) 62 IR 306 [331] per Keely J
44 Also see ‘Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces’, April 2007 at p. 7,
which states that awards play an important part in the safety net which will ‘underpin’ the collective bargaining system.
45 Under s.57A certain out worker terms in a clothing industry award may continue to apply.
46 ACCI, NSWBC and ABI joint reply submission – 1 April 2016, at [5.6]–[5.9]
47 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [18]
48 The Australian Industry Group re Manufacturing and Associated Industries and Occupations Award 2012 [2012] FWA
2556
49 Shop, Distributive and Allied Employees Associates v National Retail Association (No.2) (2012) 205 FCR 227
50 Ibid at [35]–[37] and [46]
51 See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR
227
52 SDA final written submissions – 21 March 2016, at [264], [339], [690]; United Voice final written submissions – 21 March
2016, at [18]; also see APESMA final written submissions – 21 March 2016, at [31]
53 [2014] FWCFB 1788 at [36]
54 [2014] FCAFC 118 at [111]–[114]
55 See generally: Dawkins P, Rungie C and Sloan J (1986) ‘Penalty Rates and Labour Supply: Employee Attitudes to Non-
Standard Hours of Work’, 28 Journal of Industrial Relations, pp. 564–587; Jones S (1981) ‘Penalty Rates under Challenge’,
23 Journal of Industrial Relations, pp. 504–507; Queensland Industrial Conciliation and Arbitration Commission (1981)
Inquiry into Penalty Rates, QGIG, Vol. 1-08, 31 October, pp. 201–217; Productivity Commission, (2015) Workplace
Relations Framework, Final Report chapter 10 pp. 405–421
56 [1947] 58 CAR 610 at [615]
57 Re Engine Drivers and General (State) Interim Award [1950] AR (NSW) 260 at [268]. Also see the FWC Background
Paper on Penalty Rates, 4 April 2016, for a discussion of other cases.
58 The Hotels, Resorts and Hospitality Industry Award 1992, Print K7601 at [56], 7 July 1993 per Gay C
59 PR941526, 3 December 2003 at [91]
60 Modern Awards Review 2012 – Penalty Rates [2013] FWCFB 1635 at [206]
61 AHA and AAA final written submissions – 3 February 2016, at [24]
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-abinswbcandanor-010416.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-SDA-21032016.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UV-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UV-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-APESMA-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-AAAandAHA-030216.pdf
[2017] FWCFB 1001
467
62 See ALDI Foods Pty Ltd v TWU (2012) 227 IR 120; Premier Pet Pty Ltd trading as Bay Fish v Brown (No 2) [2013] FCA
167; and Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875
63 Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25 at [173]
64 Productivity Commission, (2015) Workplace Relations Framework, Final Report chapter 15 p. 503
65 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [105]–[106]
66 Ibid at [109]; albeit the Court was considering a different statutory context, the observation at [109] is applicable to the
Commission’s task in the Review.
67 [2014] FWCFB 1788 at [33]–[34]
68 [2013] FWCFB 4000 at [361]
69 Ibid at [34], [362] and [419]
70 See discussion in the [2015] FWCFB 3500 at [315]–[316]
71 ABS, Employee Earnings, Benefits and Trade Union Membership, Australia, August 2013, Catalogue No. 6310.0
72 ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
73 ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0
74 The HILDA survey is a household-based panel study which began in 2001 and collects information on economic and
subjective well-being, labour market dynamics and family dynamics. Interviews are conducted annually with all adult
members of each household with 14 years of data (2001 to 2014) publicly available.
75 [2016] FWCFB 3500 at [365]–[369]
76 ABS, Characteristics of Employment, Australia, August 2015 Catalogue No. 6333.0, Table 9.1
77 ABS, Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0, Data Cube 5
78 [2016] FWCFB 3500 at [371]
79 Ibid at [372]
80 Ibid at [285]
81 Ibid at [397]
82 Ibid at [458]
83 Ibid at [377]–[389]
84 Ibid at [67] and [415]
85 See [2012] FWAFB 5000 at [222]
86 Buchanan J, Bretherton T, Frino B, Jakubauskas M, Schutz J, Garima V and Yu S (2013), Minimum wages and their role
in the process and incentives to bargain, Research Report 7/2013, Fair Work Commission, December, Melbourne at
p. xii
87 [2014] FWCFB 3500 at [472]
88 [2013] FWCFB 4000 at [100]–[102]
89 A point raised by United Voice in closing oral submissions: transcript at PN27844
90 For example, clause 27.1 of the Hospitality Industry (General) Award 2010 provides that non-managerial employees may,
by agreement between the employer and employee, be paid an annual salary of at least 25% or more above their
minimum weekly wage times 52. Such an annualised salary relieves the employer of the requirement to pay penalty rates
and overtime, provided the employee is not disadvantaged.
91 [2014] FWCFB 1996
92 Ibid at [295]
93 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
94 (1987) 16 FCR 167 at 184; cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR
499 at [62] and by Katzmann J in Construction, Forestry, Mining and Energy Union v Deputy President Hamberger
(2011) 195 FCR 74 at [103]
95 [2015] FWCFB 4466 at [172]
96 Common Exhibit 1 at p. 408
97 A point advanced by United Voice in closing oral submissions: transcript at PN27838
98 See ACCI, ABI and NSWBC final written submissions – 2 February 2016 at [35.5] and [35.6]
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-exh-commonexhibit1.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-ABINSWBCandACCI-020216.pdf
[2017] FWCFB 1001
468
99 Equal Remuneration Decision 2015 [2015] FWCFB 8200 at [192]
100 United Voice final written submissions – 21 March 2016 at [453]
101 Exhibit UV28 at Table 9 on p. 25
102 Ibid at Table 21 on p. 38
103 SDA final written submission – 21 March 2016 at [419]
104 See transcript at PN27671–PN27693 and subsequent ‘SDA note concerning para [419] of written submission’ dated
25 May 2016
105 See Exhibit SDA 39 Figure 8 on p. 23
106 See Exhibit SDA 36 Table 17 on p11, also see p. 22
107 ‘SDA Note concerning para [419] of written submission’ dated 25 May 2016
108 Exhibit SDA 36 at p. 16
109 Productivity Commission, What is productivity and how is it measured?, PC News, May 2015
110 Treasury submission to House of Representatives Standing Committee on Economics Inquiry into ‘Raising the level of
productivity growth in the Australian economy’, August 2009 at p. 3
111 [2012] FWAFB 7858 at [45]–[46]
112 [2015] FWCFB 620
113 [2015] FWCFB 1729
114 ACTU final written submissions, 21 March 2016 at [2]
115 SDA final written submissions, 21 March 2016 at [18]–[20]
116 Australian Education Union v Department of Education and Children’s Services (2012) 285 ALR 27 at [26]
117 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]
118 Municipal Officers’ Association of Australia v Lancaster (1981) 37 ALR 559 at p. 579; Bowling v General Motors Holden
Ltd (1980) 33 ALR 297 at [304]
119 Mills v Meeking (1990) 169 CLR 214 at [235] per Dawson J; R v L (1994) 49 FCR 534 at p. 538
120 Fair Work Act 2009 (Cth), s.2
121 [2015] FWCFB 8200
122 Ibid at [292]
123 (2010) 272 ALR 750 at [40]
124 Peabody Moorvale Pty Ltd v CFMEU [2014] FWCFB 2042 at [16]; SAAP v Minister for Immigration and Multicultural
and Indigenous Affairs (2005) 228 CLR 294, [68] per McHugh J; [136] per Gummow J; [173] per Kirby J and [204] per
Hayne J. Also see Corporation of the City of Enfield v Development Assessment Corporation (2000) 199 CLR 135 at [6],
[28] and [32]–[33] per Gleeson CJ, Gummow, Kirby and Hayne JJ
125 Ward v Williams (1955) 92 CLR 496 at p. 505; Re Metal Industry Award 1984 – Foreman and Supervisors and Other
Awards (No2) (1994) 56 IR 234; Re AIRC Ex parte Metal Trades Industry Association of Australia (1995) 62 IR 306 at
pp. 315–319 per Wilcox CJ and Beazley J, at [326] per Keely J; Shop, Distributive and Allied Employees Association v
National Retail Association (No2) (2012) 205 FCR 227 at [35] per Tracey J. See s.33(2A) Acts Interpretation Act 1901
(Cth)
126 O’Sullivan v Farrer (1989) 168 CLR 210 at [216] per Mason CJ, Brennan, Dawson and Gaudron JJ
127 See Preliminary Jurisdictional Issues decision [2014] FWCFB 1788 at [40]–[48]
128 Transcript at PN27249–PN27277
129 (1987) 9 NSWLR 719
130 Ibid at [722]–[724]
131 Donohue v The Director of Public Prosecutions (WA) [2011] WASCA 239; Maroondah City Council v Fletcher & Anor
[2009] VSCA 250
132 See Modern Awards Review 2012 [2012] FWAFB 5600 at [82]–[85]
133 Nguyen v Nguyen (1990) 169 CLR 245 at 269; also see Re v Moore; ex parte Australian Telephone and Phonogram
Officers’ Association (1982) 148 CLR 600
134 Re Furnishing Industry Association of Australia (Queensland) Limited Union of Employers, Print Q9115, 27 November
1998 per Giudice J, Watson SDP, Hall DP, Bacon C and Edwards C.
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UV-210316.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV28.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-SDA-21032016.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-250516.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA39.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-250516.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-ACTU-220316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-SDA-21032016.pdf
[2017] FWCFB 1001
469
135 (2003) 127 IR 205 at [48]
136 Re Furnishing Industry Association of Australia (Queensland) Limited Union of Employers, Print Q9115, 27 November
1998 per Giudice J, Watson SDP, Hall DP, Bacon C and Edwards C
137 [2014] FWCFB 1788 at [23]–[27]
138 [2015] FWCFB 620
139 [2015] FWCFB 1729
140 [2015] FWCFB 620 at [8]
141 [2015] FWCFB 620 at [40]
142 [2015] FWCFB 1729 at [142]–[143]
143 Ibid at [156] and [161]
144 [2014] FWCFB 1996 at [91]–[92]
145 SDA final written submissions – 21 March 2016 at [21]
146 United Voice final written submissions – 21 March 2016 at [33]
147 (2014) 253 CLR 531
148 Ibid at [38]
149 Also see JJ Richards and Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at [30] per Jessup J and at [33] per
Tracey J; Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU) [2014] FWCFB
2042 at [101]; Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16 at [71] per
Buchanan J (with whom Barker J agreed)
150 (1885) 29 ChD 50 at [58]
151 Applied in Evans v Bartlam [1937] AC 473 at 488 per Lord Wright and cited with approval in Kostokanellis v Allen
[1974] VR 596 and Dix v Crimes Compensation Tribunal [1993] 1 VR 297. Also see JJ Richards and Sons Pty Ltd v
FWA [2012] FCAFC 53 (20 April 2012) at [30] per Jessup J (with whom Tracey J agreed) and at [63] per Flick J (with
whom Tracey J agreed); Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union and Ors [2015] FWCFB 210 at [58]–[59]
152 Ai Group final submission in reply –1 April 2016 at [6]
153 4 yearly review of modern awards – Award Flexibility [2016] FWCFB 6178 at [60]–[61]
154 See Re Shop, Distributive and Allied Employees Association [2011] FWAFB 6251; (2011) 211 IR 462 at [24] per Lawler
VP, Watson SDP, Hampton C
155 [2008] AIRC 387
156 [2008] AIRCFB 550 at [10]
157 [2008] AIRCFB 618
158 Notional agreements preserving State awards (NAPSAs) were federal system instruments derived from awards previously
operating in State jurisdictions
159 See http://www.airc.gov.au/awardmod/research.htm
160 Minister’s Request, at para 4
161 [2008] AIRCFB 550, at [34]
162 [2008] AIRCFB 717
163 [2008] AIRCFB 1000, at [284]
164 [2008] AIRCFB 550
165 Award modernisation – Stage 2 modern awards, 2 September 2009, [2009] AIRCFB 800
166 [2009] AIRCFB 800
167 Cafes and Restaurants (South Australia) Award [AN150025], at cl. 6.5.1
168 Cafes and Restaurants (South Australia) Award [AN150025], at cl. 6.1.2
169 The Review does not include modern enterprise awards or State Reference Public Sector Awards
170 [2012] FWAFB 5600
171 [2012] FWAFB 5600 at [99]
172 [2012] FWAFB 5600 at [99]
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-SDA-21032016.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UV-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-aig-010416.pdf
http://www.airc.gov.au/awardmod/research.htm
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb550.htm
http://www.lexisnexis.com/au/legal/search/enhRunRemoteLink.do?A=0.43752957299894546&service=citation&langcountry=AU&backKey=20_T25512888450&linkInfo=F%23AU%23AIRCFB%23sel1%252008%25page%25717%25year%252008%25&ersKey=23_T25512888442
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb550.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2009aircfb800.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2009aircfb800.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb5600.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2012fwafb5600.htm
[2017] FWCFB 1001
470
173 [2013] FWCFB 1635
174 Additional applications to vary penalty rates in the Hair and Beauty Industry Award 2010 and the Food, Beverage and
Tobacco Manufacturing Award 2010 were also dealt with by this Full Bench
175 [2013] FWCFB 1635
176 [2013] FWCFB 1635 at [234]–[236]
177 [2013] FWC 7840
178 [2014] FWCFB 1996
179 NRA submissions and draft determination – 13 February 2015
180 NRA final written submissions – 8 February 2016, Part 1: Overview
181 [2016] FWCFB 6460 at [18]
182 [2016] FWCFB 7285
183 Exhibit ACTU 2
184 Exhibit PG 34
185 [2016] FWCFB 965
186 Ibid at [19]
187 PC Final Report at p. 406
188 Ibid at p. 411, Table 10.1
189 Ibid at p. 497
190 Ibid at p. 406
191 Ibid at p. 493
192 Ibid at p. 480–489
193 Ibid at pp. 455 and 458
194 See PC Final Report, Chapter 14 at pp. 461–465
195 PC Final Report at p. 461
196 Ibid at p. 465
197 See PC Final Report Chapter 14 at pp. 469–480
198 PC Final Report at p. 479
199 Ibid at pp. 480–489
200 Ibid at pp. 480–481
201 Ibid at p. 481
202 Ibid at p. 461
203 Ibid at p. 411
204 Ibid at p. 495
205 Ibid at p. 493
206 Ibid at p. 496
207 The casual loading is the subject of AM2014/197—Casual employment. SDA are seeking to have the full 25 per cent
casual loading plus penalty rate apply to weekend work, see Submission of 13 May 2016. Decision pending.
208 Given that their skills and patterns of work are identical.
209 PC Final Report at p. 393; Estimates based on HILDA release 13
210 Ibid at p. 394
211 Ibid at p. 396
212 Ibid at p. 404
213 Ibid at p. 503
214 Ibid
215 See ss.6 and 8 of the Productivity Commission Act 1998 (Cth) and the Terms of reference
216 [2016] FWCFB 965 at [22]
http://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb1635.htm
http://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb1635.htm
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-NRA-130215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-NRA-080216.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb6460.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb7285.htm
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-ACTU2.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG34.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb965.htm
https://www.fwc.gov.au/sites/awardsmodernfouryr/common/am2014-197-sub-sda-130516.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb965.htm
[2017] FWCFB 1001
471
217 S.156(5) of the FW Act
218 CCIWA final written submissions – 8 February 2016 at [6]–[14]
219 Ibid at [50]–[51]
220 Ibid, Appendix C, Question 5, at p. 5
221 Transcript at paras PN27578–PN27579
222 CCIWA final written submissions – 8 February 2016 at [3]
223 Busselton Chamber of Commerce and Industry final written submissions – 1 April 2016 at [17] and [21]
224 Ibid at [25]–[46]
225 CCIQ final written submission – 29 June 2015 at [4]
226 Ibid at [13]
227 Ibid at [25]
228 Ibid at [26]
229 Ibid at [27]–[28]
230 Ibid at [29]
231 Ibid at [38], [52]
232 Ibid at [34]
233 Ibid at [35]
234 Ibid at [41]
235 BSA final written submissions – 17 February 2016
236 VECCI final written submissions – 15 February 2016 at p. 2
237 See for example: Gosford City Chamber of Commerce & Industry final written submissions – 8 February 2016
238 Melissa Price, Federal Member for Durack, written submissions – 15 December 2015 at p. 1
239 Ibid at p. 2
240 Victorian Government final written submissions – 11 March 2016 at [6.1] on p. 34
241 Premier of Queensland final written submissions – 29 September 2016 at p. 2
242 Government of South Australia final written submissions – 22 August 2016 at p. 1.
243 ACT Government final written submissions – 21 March 2016 at p. 2
244 Anglican Diocese of Melbourne final written submissions – 17 February 2016 at pp. 3–4
245 Baptist Churches of NSW & ACT final written submissions – 12 February 2016 at pp. 1–2
246 Uniting Church in Australia, Burwood-Croydon Related Congregations final written submissions – 17 February 2016
247 Uniting Church in Australia, Synod NSW & ACT final written submissions – 17 February 2016 at p. 3
248 Catholic Archdiocese of Sydney, Justice Peace Office final written submissions – 12 February 2016 at pp. 1–2
249 Justice, Peace and Integrity of Creation Commission of the Australia and East Timor Leste Carmelite Order final written
submissions – 17 February 2016 at p. 2
250 Bosco Social Justice Group final written submissions – 16 February 2016
251 Federal Opposition final written submissions – 21 March 2016 at [4] and [64]
252 Ibid at [17] and [18]
253 Asian Women at Work final written submissions – 17 February 2016 at p. 1
254 National Foundation for Australian Women final written submissions – 15 March 2016
255 Skinner N and Pocock B (2014), ‘The Persistent Challenge: Living, Working and Caring in Australia in 2014’, The
Australian Work and Life Index, Centre for Work and Life University of South Australia.
256 Exhibit SDA 43
257 National Union of Students written submissions – 4 September 2015 at [4] and [5]
258 Curtin Student Guild final written submissions – 17 February 2016
259 Queensland Police Union of Employees final written submissions – 11 March 2016 at pp. 1–2
260 Ibid at p. 1
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-CCIWA-080216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-CCIWA-080216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014-306-sub-bcci-290316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-final-sub-CCIQ-091115.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-BusSA-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-VictorianchamberCI-150216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-GosfordCCCI-080216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-mp-114215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-VG-110316.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-sub-poq-280916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-sub-rau-220816.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-ACTGovt-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-AD-melb-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014303-sub-BC-NSWandACT-120215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-burwood-croydon-UC-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-UN-NSWandACT-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-JPO-160216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-JPO-160216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-JPO-160216.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-BSJG-160215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-FOS-210316.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-AWW-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-NatFoundForAusWomen-150316.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA43.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-NUS-040915.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-sub-CSG-170215.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-finsub-QPUE-110316.pdf
[2017] FWCFB 1001
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261 [2016] FWCFB 285
262 Adelaide Advertiser, The Australian, Australian Financial Review, Courier Mail (Brisbane), Canberra Times, Daily
Telegraph, Herald Sun, Hobart Mercury, The Age, NT News, Sydney Morning Herald and The West Australian.
263 See contributions received from interested persons
264 ABI, NSW BC, Ai Group, RCI, Clubs Australia, ARA, MGA, Retail Council, NRA
265 Joint employer review of contributions received from interested persons, filed 8 April 2016, updated and refiled 2 May
2016
266 Ibid at [4.1]
267 Australian Industry Group outline of submission on contributions – 29 April 2016 at [2]
268 United Voice submissions in response to employer submissions on interested persons’ contributions – 16 May 2016
269 SDA submissions concerning public contributions – 17 May 2016
270 United Voice submissions in response to employer submissions on interested persons’ contributions – 16 May 2016 at [9]
271 Ibid
272 SDA submissions concerning public contributions – 17 May 2016 at [5]
273 The SDA review only identified one contribution which expressed support for a reduction in penalty rates; see ibid at [7]
274 Ibid at [11]
275 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017
276 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017
277 Exhibit ABI 3 at p. 7
278 ABS, Labour Force, Australia, Dec 2016, Catalogue No. 6202.0
279 Exhibit ABI 3 at p. 5
280 Exhibit ABI 3 at p. 6
281 ABS, Labour Force, Australia, Nov 2016, Glossary; Exhibit Ai Group 15, p. 23
282 ABS, Labour Force, Australia, Dec 2016, Catalogue No. 6202.0
283 Exhibit ABI 3 at p. 6
284 ABS, Labour Force, Australia, Jan 2017, Catalogue No. 6202.0
285 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
Chart 2.2; ABS, Labour Force, Australia, Aug 2016, Catalogue No. 6202.0
286 ABS, Australian Labour Market statistics, July 2011, Catalogue No. 6105.0, Fact sheet: Employment classifications.
287 ABS, Census Dictionary, 2011, Catalogue No. 2901.0
288 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
Chart 2.6; ABS, Australian Labour Market Statistics, July 2014, Catalogue No. 6105.0; ABS, Characteristics of
Employment, Australia, August 2015, Catalogue No. 6333.0
289 Exhibit ABI 3 at p. 6
290 Exhibit ABI 3 at p. 6
291 Exhibit ABI 3 at pp. 3–4
292 Exhibit ABI 3 at p. 3; ABS, Labour Force, Australia, various years, Catalogue No. 6203.0, 6202.0
293 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
Chart 2.4; ABS, Labour Force, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
294 Common Exhibit 1 at p. 1120
295 Common Exhibit 1 at p. 1120, Figure F.2; ABS, Forms of Employment, Australia, various, Catalogue No. 6359.0;
Working (Time) Arrangements, various, Catalogue No. 6342.0
296 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
Tables 3.1–3.3; ABS, Forms of Employment, Australia, various, Catalogue No. 6359.0; ABS, Characteristics of
Employment, Australia, August 2015, Catalogue No. 6333.0
297 Common Exhibit 1 at p. 1116; ABS, Forms of Employment, Australia, November 2013, Catalogue No. 6359.0.
298 Common Exhibit 1 at p. 1117; ABS, Forms of Employment, Australia, November 2013, Catalogue No. 6359.0,
unpublished data.
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb285.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-contributions-ip.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-reviewofcontributions-employergroup-080416.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-aig-contributions-020516.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-uv-contributions-160516.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-contributions-170516.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-uv-contributions-160516.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-contributions-170516.pdf
[2017] FWCFB 1001
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299 Common Exhibit 1 at p. 1122; ABS, Forms of Employment, Australia, November 2013, Catalogue No. 6359.0
300 Exhibit Ai Group 15 at p. 24
301 HILDA survey, Waves 6 and 15
302 HILDA survey, Waves 6 and 15
303 ABS, Labour Force, Australia, various, Catalogue No. 6202.0, unpublished data
304 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
p. 21, Table 3.18; Exhibit SDA 36 at p. 7, Table 8
305 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
306 The ABS data shows that the proportion of employees that work on weekends has increased over a longer period,
although this highlights that the definition of employees affects the absolute proportions that work on weekends. The
ABS data shows that a narrower definition of employees, excluding OMIEs, leads to a lower proportion of employees
working on weekends. This makes sense as owner managers, or employers, may be more likely to work on weekends,
whether as part of normal hours or outside of normal hours. Another reason is that the HILDA survey asked whether
employees usually worked on weekends while the ABS surveys were confined to the reference week. This is also likely
to lead to a higher proportion of workers reporting that they work on weekends
307 ABS, Labour Force, Australia, various, Catalogue No. 6202.0, unpublished data
308 Common Exhibit 1 at p. 427
309 Common Exhibit 1 at p. 424
310 Common Exhibit 1 at p. 426, Figure 11.2
311 ABS, How Australians Use Their Time, 2006, Catalogue No. 4153.0
312 Bittman M (2005), ‘Sunday working and family time’, Labour & Industry, Vol. 16, No. 1, pp. 59–81. Two pages of the
paper were tended as Exhibit ABI 11, however, the paper is referred to in Exhibit UV 26 at paras 74–77; Exhibit ACTU 2
at para. 28.
313 Exhibit ABI 13
314 Bittman (2005) at p. 69
315 Bittman (2005) at p. 74
316 Bittman (2005) at p. 78
317 Exhibit ABI 13
318 Exhibit ABI 13 at p. 722
319 Exhibit UV 26 at para. 11, p. 16
320 Dr Muurlink Cross Examination, 4 November 2015, PN20991–PN21000
321 SDA final submission, 21 March 2016, at paras 350–351; United Voice final submission, 21 March 2016, at paras 353–
354
322 SDA final submission, 21 March 2016, at para. 349
323 Exhibit ABI 3 at p. 37
324 Exhibit ABI 3 at p. 38
325 Exhibit ABI 3 at p. 37
326 Exhibit UV 25
327 Exhibit UV 25 at para. 48
328 Exhibit UV 25 at para. 48
329 Exhibit ABI 3, p. 37; ABS, Time Use on Recreation and Leisure Activities, Australia, 2006, Catalogue No. 4173.0
330 CCIWA final submission, 8 February 2016, at pp. 17–18, para. 84 and Figures 3 and 4; Common Exhibit 1 at p. 437
331 Common Exhibit 1 at p. 438
332 Common Exhibit 1 at p. 437; ABS, How Australians Use Their Time, 2006, Catalogue No. 4153.0
333 Common Exhibit 1 at p. 437; ABS, How Australians Use Their Time, 2006, Catalogue No. 4153.0
334 SDA final submission, 21 March 2016, para. 352; Common Exhibit 1 at p. 437
[2017] FWCFB 1001
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335 Exhibit ABI 1
336 Exhibit ABI 1 at p. 21
337 Exhibit ABI 1 at p. 22
338 Exhibit Ai Group 26 at p. 3
339 Exhibit Ai Group 26 at p. 13
340 Exhibit Ai Group 29. Also referred to in Exhibit ABI 3 at p. 34
341 Exhibit ABI 3 at pp. 34–35
342 Exhibit ABI 3 at p. 35; Exhibit Ai Group 29
343 ACCI, ABI and NSWBC, 2 February 2016, at para. 19.3
344 United Voice submission in reply, statistical reports, 28 October 2016 at para. 10
345 Fair Work Commission, Changing work patterns, material to assist AM2014/305—Penalty rates case, January 2017,
p. 27; HILDA survey, Waves 4 and 14
346 Exhibit ABI 3 at p. 37
347 Exhibit Ai Group 26 at p. 13
348 Exhibit Ai Group 26 at p. 7
349 Exhibit Ai Group 26 at p. 7; ABS, Census of Population and Housing, 2006 and 2011.
350 Exhibit ABI 3 at p. 35
351 Exhibit Ai Group 26 at p. 4
352 Exhibit PG 34
353 Exhibit ACTU 2
354 Exhibit SDA 33
355 Exhibit PG 36
356 Exhibit ABI 1
357 Exhibit SDA 31
358 Exhibit ABI 2
359 Exhibit SDA 43
360 Exhibit UV26
361 Exhibit PG34, Annexure B
362 Exhibit PG 34 at pp. iii–iv
363 Exhibit PG 36 at p. 9
364 Exhibit PG 34 at pp. 27–28
365 Exhibit PG 34 at p. 29
366 Exhibit PG 34 at p. 29
367 Exhibit PG 34 at p. 40
368 Exhibit PG 34 at p. 40
369 Exhibit PG 34 at p. 30
370 Exhibit PG 34 at pp. 36–37
371 Exhibit SDA 33
372 Exhibit SDA 33 at para. 24
373 Exhibit SDA 33 at para. 25
374 SDA final submission, 21 March 2016, at para. 205(a); Exhibit SDA 33 at para. 26
375 Exhibit UV 27 at p. 2
376 Exhibit UV 27 at p. 5
377 Exhibit UV 27 at p. 5
378 SDA final submission, 21 March 2016, at para. 210(a); Exhibit PG 34 at p. 25; PN25538
379 Exhibit ACTU 2 at para. 9
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380 The report does not directly address public holidays as the literature is limited – see Exhibit UV 26 at para. 61
381 Exhibit UV 26 at para. 58
382 Exhibit UV 26 at para. 16
383 United Voice final submission, 21 March 2016, at para. 317
384 Dr Muurlink Cross Examination, 4 November 2015, PN20844–20855
385 Dr Muurlink Cross Examination, 4 November 2015, PN20808–PN20810
386 Dr Muurlink Cross Examination, 4 November 2015, PN21285
387 SDA final submission, 21 March 2016, at para. 307; United Voice final submission, 21 March 2016, at para. 328
388 United Voice final submission, 21 March 2016, at paras 238–309
389 Ai Group final submission, 8 February 2016, at paras 257.1–257.7
390 AHA and AAA final submission, 3 February 2016, at para. 256
391 ABI final submission, 2 February 2016, at para. 18.10
392 Dr Muurlink Cross Examination, 4 November 2015, PN20979
393 ABI final submission, 2 February 2016, at para. 18.10
394 Exhibit ABI 1 at (ii) and p. 44
395 Exhibit ABI 1 at p. 45
396 Exhibit ABI 1 at (ii)
397 Ibid
398 Written closing submissions on behalf of ACCI, NSWBC and ABI, 2 February 2015 at [22.4]
399 See Exhibit ABI 1 at p. 41
400 Exhibit SDA 31
401 Exhibit UV 25 at para. [49]–[53]
402 Transcript at PN9061
403 Exhibit SDA 31 at p. 7
404 Transcript at PN9184–PN9185
405 Exhibit SDA 31 at pp. 5–6
406 Exhibit ABI 1 at p. 42
407 Exhibit SDA 43
408 Exhibit SDA 43 at para. 3.
409 Exhibit SDA 43 at para. 4.
410 Exhibit SDA 43 at para 4. The 2014 AWALI survey was funded by an Australian Research Council Linkage grant in
partnership with the South Australian Government (through SafeWork SA) and the Commonwealth Government
(through the Department of Education).
411 Exhibit PG 31 at p. 10
412 Exhibit SDA 45 at p. 9
413 Professor Charlesworth examination, 15 December 2015, PN23552
414 Professor Charlesworth cross examination, 15 December 2015, PN23829–PN23832.
415 Exhibit SDA 45 at p. 8
416 Exhibit SDA 45 at p. 8
417 Exhibit SDA 45
418 Exhibit SDA 45 at pp. 27–28
419 SDA final submission, 21 March 2016, at para. 363; Exhibit SDA 45 at p. 29
420 Exhibit SDA 43 at para. 12; Professor Charlesworth cross examination, 15 December 2015, PN23660
421 Exhibit SDA 43 at [30]
422 Exhibit SDA 43 at para. 30. Statistically significant at the 5 per cent level.
423 Exhibit SDA 43 at para. 11
[2017] FWCFB 1001
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424 Exhibit SDA 43 at paras 33–34
425 Exhibit SDA 43 at para. 15
426 Exhibit SDA 43 at para. 13
427 Charlesworth cross examination, 15 December 2015, PN23652
428 Exhibit SDA 43 at para. 12
429 Exhibit SDA 45, p. 28, Tables 4-2a–4-2b
430 SDA final submission, 21 March 2016, at para. 286; United Voice final submission, 21 March 2016, at para. 332
431 ARA and others final submission, 12 February 2016, at para. 97
432 ARA and others final submission, 12 February 2016, at para. 96(e)
433 SDA final submission, 21 March 2016, at para. 224; Exhibit SDA 43 at para. 15, para. 34
434 SDA final submission, 21 March 2016, at para. 225; Exhibit SDA 43 at para. 31
435 ABI final submission, 2 February 2016, at para. 20.46
436 PGA final submission, 12 February 2016, at para. 134
437 PGA final submission, 12 February 2016, at paras 130–131
438 PGA final submission, 12 February 2016, at para. 126
439 PGA final submission, 12 February 2016, at para. 128
440 PGA final submission, 12 February 2016, at para. 132
441 PGA final submission, 12 February 2016, at para. 133
442 Common Exhibit 1 at pp. 439–443
443 Common Exhibit 1 at p. 439
444 Common Exhibit 1 at p. 440
445 Common Exhibit 1 at pp. 441–443
446 Common Exhibit 1 at p. 442
447 SDA final submission, 21 March 2016, at para. 359
448 SDA final submission, 21 March 2016, at para. 606
449 Exhibit SDA 43 at [10]–[11]. The 25 employees were the first people who were contacted by telephone and who agreed to
participate and included 16 females and 9 males.
450 Exhibit SDA 43 at para. 20
451 Exhibit SDA 43 at para. 6
452 Exhibit SDA 43 at para. 25; para. 31
453 Exhibit SDA 43 at para. 4
454 SDA final submission, 21 March 2016, at para. 294; Dr Macdonald cross examination, 15 December 2015, PN24459
455 SDA final submission, 21 March 2016, at para. 295
456 SDA final submission, 21 March 2016, at para. 296
457 ARA and others final submission, 12 February 2016 at para. 41; Exhibit Retail 11 at pp. 8, 28, 63, 94
458 ARA and others final submission, 12 February 2016, at para. 103(a); Exhibit Retail 11 at pp. 7, 15, 16, 21, 33, 41, 62, 64,
69, 73, 87, 93, 105, 117, 138, 148
459 ARA and others final submission, 12 February 2016, at para. 125; Exhibit Retail 11 at pp. 10, 11, 22, 28, 34, 44, 63, 96,
105
460 ARA and others final submission, 12 February 2016, at para. 106; Exhibit Retail 11 at pp. 23, 24, 65, 83
461 ARA and others final submission, 12 February 2016, at para. 126; Exhibit Retail 11 at pp. 17, 23
462 ARA and others final submission, 12 February 2016, at para. 133; Exhibit Retail 11 at p. 21
463 Ai Group final submissions at para 20.52
464 ABI final submission, 2 February 2016, at para. 20.52(c); PGA final submission, 12 February 2016, at para. 140(b)
465 ABI final submission, 2 February 2016, at para. 20.52(d); Exhibit Retail 11
466 ABI final submission, 2 February 2016, at para. 20.52
467 PGA final submission, 12 February 2016, at para. 140(c)
[2017] FWCFB 1001
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468 PGA final submission, 12 February 2016, at para. 140(d)
469 Exhibit Retail 2 at p. 75
470 Exhibit Retail 2 at pp. 65, 68
471 Exhibit Retail 2 at p. 66
472 Exhibit Retail 2 at pp. 69–70
473 Exhibit ABI 3
474 Exhibit UV 24
475 Exhibit UV 25
476 Exhibit ABI 4 and Exhibit ABI 5
477 Exhibit Retail 12
478 Exhibit ABI 3 at pp. 23–24
479 Exhibit ABI 3 at pp. 26–27
480 Exhibit ABI 3 at pp. 27–28
481 Exhibit ABI 3 at p. 31
482 SDA final submission of 21 March 2016 at p. 31, para. 87; United Voice final submission of 21 March 2016 at p. 41, para.
131; Exhibit UV 24 at p. 5
483 Exhibit UV 25 at p. 6, para. 10
484 Exhibit UV 25 at p. 6, para. 10
485 SDA final submission of 21 March 2016 at p. 31, para. 88; United Voice final submission of 21 March 2016 at p. 41, para.
132
486 SDA final submission of 21 March 2016 at p. 32, para. 89; United Voice final submission of 21 March 2016 at p. 41, para.
133
487 SDA final submission of 21 March 2016 at p. 31, para. 85; United Voice final submission of 21 March 2016 at p. 40, para.
129
488 ABI final submission at p. 67, para. 27.10; Exhibit ABI 4 at p. 6
489 SDA final submission of 21 March 2016 at p. 32, para. 90; United Voice final submission of 21 March 2016 at p. 42, para.
134.
490 ABI final submission at p. 67, para. 27.11; Exhibit ABI 4 at p. 7.
491 SDA final submission of 21 March 2016 at p. 35, para. 99; United Voice final submission of 21 March 2016 at p. 45, para.
143; Common Exhibit 1 at p. 479, fn 160; Lewis P (2014), ‘Paying the penalty? The high price of penalty rates in
Australian restaurants’, Agenda, Vol. 21, No. 1, pp. 5–26.
492 SDA final submission of 21 March 2016 at pp. 38–39, para. 111; United Voice final submission of 21 March 2016 at
p. 48, para. 155
493 Transcript, 1 October 2016, at PN11192–PN11193
494 United Voice final submissions at para 164
495 SDA final submission of 21 March 2016 at para. 121; United Voice final submission of 21 March 2016 at para. 165
496 Exhibit ABI 3 at p. 30
497 SDA final submission of 21 March 2016 at p. 46, para. 128; United Voice final submission of 21 March 2016 at p. 56,
para. 172; Transcript, 1 October 2015, PN10945, PN10957
498 Exhibit UV 24 at paras 16–17; Appendix B
499 Exhibit UV 25 at para. 34
500 Exhibit UV 25 at para. 34
501 SDA final submission of 21 March 2016 at para. 122; United Voice final submission of 21 March 2016 at para. 166
502 Exhibit ABI 5 at p. 25
503 PC Final Report at p. 475
504 SDA final submission of 21 March 2016 at p. 44, para. 124; United Voice final submission of 21 March 2016 at p. 54,
para. 168; Exhibit UV 24 at p. 7, para. 20
505 Exhibit UV 25 at p. 17, para. 34
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506 Exhibit SDA 39 at p. 16
507 Exhibit SDA 39 at p. 8
508 Exhibit SDA 39 at pp. 3–4
509 Exhibit SDA 39 at p. 13
510 Exhibit SDA 39 at p. 13
511 Exhibit SDA 39 at p. 4
512 Exhibit SDA 39 at p. 4
513 Exhibit SDA 39 at p. 4
514 Exhibit SDA 39 at p. 28
515 Exhibit Retail 12 at para. 2.2
516 Exhibit Retail 12 at para. 3.5
517 Exhibit Retail 13 at para. 3.3
518 Revisions were made to include time and state-based trends and to disentangle the effects from the introduction of the
GST (Exhibit SDA 55 at paras 9–11)
519 Exhibit SDA 55 at para. 13
520 Exhibit SDA 55 at para. 14
521 ABI final submission at para. 27.30
522 ABI final submission at para. 27.30
523 Ai Group final submission at paras 262.4–262.5
524 ABI final submission at para. 27.34
525 ABI final submission at para. 27.42
526 Ai Group final submission at para. 262.6
527 SDA final submission at para. 270
528 ABI final submission at para. 27.35. These factors include sales margins and operating profits between employers;
workcover premiums and payroll tax; business confidence; changes in energy costs and changes in any other costs
associated with running a business.
529 SDA final submission at para. 271
530 Exhibit Retail 13 at para. 2.1
531 SDA final submission at para. 273
532 Ai Group final submission at para. 262.3
533 Exhibit SDA 39 at p. 17
534 Exhibit SDA 39 at p. 18
535 Exhibit UV 25 at p. 18, para. 38
536 Exhibit UV 25 at pp. 19–20, paras 40–44
537 Exhibit UV 25 at p. 11, para. 22
538 Exhibit UV 25 at p. 11, para. 22
539 Exhibit UV 25 at p. 11, para. 22
540 Exhibit ABI 5 at p. 13
541 Transcript PN11288–PN11289
542 Transcript PN11293–PN11295
543 Transcript PN11407–PN11409
544 PN11693
545 Common Exhibit 1 at p. 469
546 Transcript, 1 October 2016, PN11294; PN11693
547 [2016] FWCFB 3500 at [492]
548 Exhibit UV 25 at para. 20
549 Exhibit ABI 3 at p. 22
[2017] FWCFB 1001
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550 We note that while the claims to vary the Fast Food Award were dealt with as part of the Retail group during proceedings,
the ABS treats fast food as part of the hospitality sector; accordingly analysis of the fast food industry has been included
in this chapter.
551 Award Reliance Survey 2013 data manual: https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-
user-manual.pdf and Australian Workplace Relations Study 2014
552 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
553 Fair Work Commission, Modern awards and relevant ANZSIC classes
554 ABS, Australian National Accounts: National Income, Expenditure and Product, Jun 2016, Catalogue No. 5206; ABS, Business
Indicators, Australia, Jun 2016, Catalogue No. 5676.0; ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to
Jun 2015, Catalogue No. 8165.0; ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0; ABS, Labour
Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
555
ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015, Catalogue No. 8165.0
556 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
557 Fair Work Commission, Australian Workplace Relations Study, 2014
558 ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
559 Fair Work Commission, Award Reliance Survey, 2013
560 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
561 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
562 The market sector includes all industries except for Public administration and safety, Education and training and Health
care and social assistance
563 ABS, Estimates of Industry Multifactor Productivity, 2014–15, Catalogue No. 5260.0.55.002
564 ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015, Catalogue No. 8165.0
565 Fair Work Commission, Australian Workplace Relations Study, 2014
566 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
567 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
568 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
569 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
570
ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
571 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
572 ABS, Participation, Job Search and Mobility, Australia, February 2015, Catalogue No. 6226.0
573 Fair Work Commission, Australian Workplace Relations Study, 2014
574 HILDA survey Wave 15, 2015
575 ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
576 ABS, Average Weekly Earnings, Australia, May 2016, Catalogue No. 6302.0
577
ABS, Microdata: Employee, Earnings and Hours, Australia, May 2014, Catalogue No. 6306.0.55.001
578 ABS, Wage Price Index, Australia, Jun 2016, Catalogue No. 6345.0
579 Fair Work Commission, Australian Workplace Relations Study, 2014
580 MA000009; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
581 MA000058; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
582 MA000119; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
583 MA000003; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
584 Department of Employment, Trends in Federal Enterprise Bargaining, June quarter 2016,
https://www.employment.gov.au/trends-federal-enterprise-bargaining
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf
https://www.fwc.gov.au/resources/research/australian-workplace-relations-study
https://www.fwc.gov.au/awards-and-agreements/minimum-wages-conditions/annual-wage-reviews/previous-wage-reviews/annual-w-27
https://www.employment.gov.au/trends-federal-enterprise-bargaining
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585 [2008] AIRCFB 550 at [34]
586 [2008] AIRCFB 1000 at [117]–[119]
587 [2008] AIRCFB 1000 at [117]
588 AHA National Office submission – 1 August 2008, para 81; LHMU – Draft award 1 August 2008, cl. 4.2.1, 5.6
589 AP783479CRV
590 Print K3966
591 Exposure Draft—Hospitality Industry (General) Award 2010
592 Exposure Draft—Hospitality Industry (General) Award 2010, cl. 32.1(d)
593 HMAA submissions—regarding exposure draft –10 October 2008, p. 7
594 Modern Award—Hospitality Industry (General) Award 2010, published 19 December 2008, cl. 32.1
595 [2008] AIRCFB 1000
596 Ibid [7]–[8]
597 United Voice submissions on award modernisation – 3 June 2016, para 26
598 Transcript – 22 June 2008, at PN66–PN67
599 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
600 ABS, Census of Population and Housing, 2011
601 Note this includes casual employees who work less than 35 hours per week
602 Exhibit AHA 14, Exhibit AHA 15
603 Exhibit AHA 37, Exhibit AHA 38
604 Exhibit AHA 71, Exhibit AHA 72
605 Exhibit AHA 20, Exhibit AHA 21
606 Exhibit AHA 22, Exhibit AHA 23
607 Exhibit AHA 65, Exhibit AHA 66
608 Exhibit AHA 30, Exhibit AHA 31
609 Exhibit AHA 73, Exhibit AHA 74
610 Exhibit AHA 75, Exhibit AHA 76
611 Exhibit AHA 7, Exhibit AHA 8
612 Exhibit AHA 53, Exhibit AHA 54
613 Exhibit AHA 67, Exhibit AHA 68
614 Exhibit AHA 26, Exhibit AHA 27
615 Exhibit AHA 1, Exhibit AHA 2
616 Exhibit AHA 45, Exhibit AHA 46
617 Exhibit AHA 63, Exhibit AHA 64
618 Exhibit AHA 39, Exhibit AHA 40
619 Exhibit AHA 43, Exhibit AHA 44
620 Exhibit AHA 61, Exhibit AHA 62
621 Exhibit AHA 55, Exhibit AHA 56
622 Exhibit AHA 57, Exhibit AHA 58
623 Exhibit AHA 41, Exhibit AHA 42
624 Exhibit AHA 28, Exhibit AHA 29
625 Exhibit AHA 69, Exhibit AHA 70
626 Exhibit AHA 32, Exhibit AHA 33
627 Exhibit AHA 16, Exhibit AHA 17
628 Exhibit AHA 34, Exhibit AHA 35, Exhibit AHA 36
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb550.htm
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/hospitality/Submissions/AHA_National_submission.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Draft/HIMA_Draft_award.doc
https://www.fwc.gov.au/documents/consolidated_awards/ap/ap783479/asframe.html
http://www.airc.gov.au/awardmod/databases/hospitality/Exposure/Hospitality_Exposure_Draft.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Exposure/Hospitality_Exposure_Draft.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Submissions/HMAA%20_submissions_ED.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Modern/hospitality.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Decisions/2008aircfb1000.htm
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-UV-030616.pdf
http://www.airc.gov.au/awardmod/databases/hospitality/Transcripts/220609AM200881.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA15.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA15.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA37.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA38.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA71.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA72.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA20.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA21.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA22.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA23.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA65.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA66.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA30.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA31.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA73.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA74.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA75.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA76.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA7.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA8.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA53.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA54.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA67.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA68.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA26.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA27.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA1.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA2.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA45.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA46.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA63.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA64.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA39.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA40.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA43.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA44.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA61.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA62.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA55.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA56.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA57.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA58.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA41.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA42.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA28.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA29.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA69.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA69.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA32.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA33.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA16.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA17.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA34.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA35.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA36.pdf
[2017] FWCFB 1001
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629 Exhibit AHA 51, Exhibit AHA 52
630 Exhibit AHA 83, Exhibit AHA 84
631 Exhibit AHA 47, Exhibit AHA 48
632 Exhibit AHA 77, Exhibit AHA 78
633 Exhibit AHA 10, Exhibit AHA 11
634 Exhibit AHA 59, Exhibit AHA 60
635 Exhibit AHA 49, Exhibit AHA 50
636 Exhibit AHA 12, Exhibit AHA 13
637 Exhibit AHA 3, Exhibit AHA 4
638 Exhibit AHA 81, Exhibit AHA 82
639 Exhibit AHA 24, Exhibit AHA 25
640 Exhibit AHA 5, Exhibit AHA 6
641 Exhibit AHA 79, Exhibit AHA 80
642 Exhibit AHA 18, Exhibit AHA 19
643 Data in Chart 30 is based on the following Exhibits filed by the Australian Hotels Association (AHA)–AHA62 (W1),
AHA31 (W2), AHA18 (W3), AHA81 (W4), AHA56 (W5), AHA6 (W6), AHA81 (W7), AHA66 (W8), AHA44 (W9),
AHA64 (W10), AHA48 (W11), AHA13 (W12), AHA70 (W13), AHA17(W14), AHA80 (W15), AHA11(W16), AHA40
(W17), AHA23 (W18) (W19), AHA21 (W20), AHA27 (W21), AHA2 (W22), AHA33 (W23), AHA50 (W24), AHA46
(W25), AHA58 (W26), AHA60 (W27), AHA4 (W28), AHA29 (W29), AHA25 (W30), AHA36 (W31), AHA35 (W32),
AHA8 (W33), AHA72 (W34), AHA76 (W35), AHA15 (W36), AHA54 (W37), AHA84 (W38), AHA74 (W39), AHA42
(W40), AHA42(W41)
644 Each of the witnesses marked with an asterisk (*) gave evidence that they were responsible for employees across a
number of establishments. For the purposes of this graph the average number of employees per establishment has been
inserted. W1 gave evidence that he was responsible for 231 employees over 8 establishments with no breakdown per
establishment. W2 gave evidence that he was responsible for 500 employees over 12 establishments with no breakdown
per establishment. W3 gave evidence that he was responsible for 133 employees over 3 establishments with the following
breakdown per establishment 54, 51 and 65. It is noted that this breakdown does not add up to 133. W18 gave evidence
that she was responsible for 449 employees over 7 establishments with the following breakdown per establishment: 50,
95, 78, 56, 42, 72 and 56. W20 gave evidence that she was responsible for 64 employees over 3 establishments with no
breakdown per establishment. W25 gave evidence that he was responsible for 182 employees over 7 establishments with
no breakdown per establishment. Witness 31 gave evidence that he was responsible for 72 employees over 2
establishments with the following breakdown per establishment 26 and 36. Witness 38 gave evidence that he was
responsible for 329 employees over 4 establishments with the following breakdown per establishment 76, 62, 36 and 44.
Witness 39 gave evidence that he was responsible for 54 employees over 2 establishments with the following breakdown
per establishment 29 and 25
645 Data in Chart 31 is based on the following Exhibits filed by the Australian Hotels Association (AHA)–AHA62 (W1),
AHA31 (W2), AHA18 (W3), AHA81 (W4), AHA56 (W5), AHA6 (W6), AHA81 (W7), AHA66 (W8), AHA44 (W9),
AHA64 (W10), AHA48 (W11), AHA13 (W12), AHA70 (W13), AHA17(W14), AHA80 (W15), AHA11(W16), AHA40
(W17), AHA23 (W18) (W19), AHA21 (W20), AHA27 (W21), AHA2 (W22), AHA33 (W23), AHA50 (W24), AHA46
(W25), AHA58 (W26), AHA60 (W27), AHA4 (W28), AHA29 (W29), AHA25 (W30), AHA36 (W31), AHA35 (W32),
AHA8 (W33), AHA72 (W34), AHA76 (W35), AHA15 (W36), AHA54 (W37), AHA84 (W38), AHA74 (W39), AHA42
(W40), AHA42(W41)
646 Each of the witnesses marked with an asterisk (*) did not provide evidence of their experience.
647 Transcript at PN5278–PN5341
648 Transcript at PN5365–PN5422
649 Transcript at PN3403–PN3561
650 United Voice, Outline of Closing Submissions 21 March 2016 at paras 417 and 422
651 Exhibit AHA1, Witness Statement of Kasie Ferguson at para 15
652 Exhibit AHA1, Witness Statement of Kasie Ferguson at para 15
653 Exhibit AHA16 Witness Statement of Fiona McDonald at para 16
654 Exhibit AHA 51 Witness Statement of Sue Marie Mitchell at para 17
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA51.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA52.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA83.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA84.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA46.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA48.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA77.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA78.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA10.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA11.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA59.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA60.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA49.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA50.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA12.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA13.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA3.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA4.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA81.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA82.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA24.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA25.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA5.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA6.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA79.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA80.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA18.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-AHA19.pdf
[2017] FWCFB 1001
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655 Exhibit AHA 51 Witness Statement of Sue Marie Mitchell at para 17
656 Exhibit AHA12 Witness Statement of Dean William Trengove at para 12c
657 Exhibit AHA12 Witness Statement of Dean William Trengove at para 12c
658 Employed 28 staff covered by the Award as at 30 June 2015: see Exhibit AHA6 Supplementary Statement of Colin Waller
at para 3
659 Exhibit AHA5 Witness Statement of Colin Waller at para 19
660 Exhibit AHA5 Witness Statement of Colin Waller at para 19
661 Witness Statement of Helen Sergi AHA10 para 12
662 Exhibit AHA32 Witness Statement of Keith McCallum para 10
663 Exhibit AHA26 Witness Statement of John Andrew Dowd paras 15 and 20
664 Exhibit AHA37 Witness Statement of Graham Annovazzi para 16
665 Exhibit AHA39 Witness Statement of Ian Green paras 7 and 12
666 Exhibit AHA53 Statement of Will Cordwell paras 9–10
667 Exhibit AHA59 Witness Statement of Peter Sullivan para 6
668 Exhibit AHA3 Witness Statement of David Gibson para 9
669 Exhibit AHA73 Witness Statement of Michael Burke paras 8 and 12
670 Exhibit AHA77 Witness Statement of Jim Ryan para 17
671 Exhibit AHA79 Witness Statement of Peter Williams paras 10–11
672 Exhibit AHA30 Witness Statement of Andrew Bullock at para 12
673 Exhibit AHA26 Witness Statement of John Andrew Dowd at paras 16, 18
674 Exhibit AHA51 Witness Statement of Sue Marie Mitchell at paras 12, 16
675 Exhibit AHA7 Witness Statement of Susan Cameron paras 4 and 15
676 Exhibit AHA71 Witness Statement of Timothy Bilston at para 13
677 Exhibit AHA7 Witness Statement of Susan Cameron at para 15
678 Exhibit AHA67 Witness Statement of Daniel Cronin at para 15 and 16
679 Exhibit AHA18 Witness Statement of Ashleigh Winn
680 Transcript, at PN1649
681 Exhibit AHA30 Witness Statement of Andrew Bullock para 16
682 Ibid at para 17
683 Employed 120 staff covered by the Award as at 30 June 2015: see Exhibit AHA48 Supplementary Statement of David
Ovenden at para 3
684 Transcript at PN6085
685 Exhibit AHA61 Witness Statement of Albert Hakfoort para 5
686 Exhibit AHA75 Witness Statement of Tony Cakmar para 12
687 Exhibit AHA37 Witness Statement of Graham Annovazzi at paras 18 and 19
688 Exhibit AHA71 Witness Statement of Timothy Michael Fletcher Bilston at para 12
689 Ibid at para 13
690 Ibid at para 14
691 Ibid at para 17
692 Exhibit AHA30 Witness Statement of Andrew Bullock at para15
693 Exhibit AHA75 Witness Statement of Tony Cakmar at para10
694 Exhibit AHA26 Witness Statement of John Andrew Dowd at para 16, 18
695 Exhibit AHA45 Witness Statement of Patrick Gallagher at para 8
696 Exhibit AHA61 Witness Statement of Albert Hakfoort at paras 6–9.
697 Exhibit AHA51 Witness Statement of Sue Marie Mitchell at para 12
698 Exhibit AHA83 Witness Statement of Michelle Morrow at para 37 and 38.
699 Exhibit AHA12 Witness Statement of Dean Trengove at para 12a
700 Ibid at para 12b
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701 Exhibit AHA10 Witness Statement of Helen Sergi paras 8 and 9
702 Exhibit AHA 73 Witness Statement of Michael Burke paras 15–19
703 Exhibit AHA3 Witness Statement of Philip Tudor at para 13
704 Exhibit AHA24 Witness Statement of Samantha Walder at para 11 and 12
705 Exhibit AHA79 Witness Statement of Peter Rodney Williams at para11
706 Exhibit AHA 14 Witness Statement of Vanessa Anderson paras 12–13
707 Exhibit AHA28 Witness Statement of Rick Lovell para 17–18
708 Exhibit AHA41 Witness Statement of Michael Karney paras 6 and 13
709 Exhibit AHA45 Witness Statement of Patrick Gallagher paras 8–14
710 Exhibit AHA 67 Witness Statement of Daniel Cronin paras 17–20
711 Exhibit AHA 73 Witness Statement of Michael Burke paras 15–19
712 Exhibit AHA51 Witness Statement of Sue Mitchell paras 12–13
713 Exhibit AHA59 Witness Statement of Peter Sullivan paras 6–9
714 Ibid at para 11
715 Exhibit AHA65 Witness Statement of Darren Lea Brown paras 17–20
716 Exhibit AHA79 Witness Statement of Peter Williams paras 8, 11–12
717 Exhibit AHA81 – Witness Statement of Belinda Usher para 13
718 Exhibit AHA1 Witness Statement of Kasie Ferguson at para 18; Transcript 8 September 2015, PN734
719 Exhibit AHA10 Witness Statement of Helen Sergi at para 13; Transcript 8 September 2015, PN1211
720 Transcript 8 September 2015, PN1217
721 Transcript 22 September 2015, PN7974
722 Transcript 8 September 2015, PN1011
723 Transcript 8 September 2015, PN997–1000
724 Exhibit AHA79 Witness Statement of Peter Rodney Williams at para 13
725 Exhibit AHA73 Witness Statement of Michael Burke paras 21 and 24
726 Exhibit AHA53 Statement of Will Cordwell para 15–16
727 Exhibit AHA79 Witness Statement of Peter Williams para 13
728 Transcript 16 September 2015, PN6085
729 Exhibit AHA49 Witness Statement of Mel Tait para 16
730 Transcript 8 September 2015, PN1089
731 Exhibit AHA61 Witness Statement of Albert Hakfoort at para 16
732 Exhibit AHA 20 Witness Statement of Joanne Blair para 15
733 Exhibit AHA45 Witness Statement of Patrick Gallagher para 16
734 Exhibit AHA81 Witness Statement of Belinda Usher para 15
735 Exhibit AHA14 Witness Statement of Vanessa Anderson at para 18
736 Exhibit AHA20 Witness Statement of Joanne Blair at para 15
737 Exhibit AHA75 Witness Statement T Cakmar at para 14
738Transcript 22 September 2015, PN7782–PN7784
739 Transcript 17 September 2015, PN6589
740 Exhibit AHA59 Witness Statement of Peter Sullivan at para 18
741 Exhibit AHA30 Witness Statement of Andrew Bullock para 19 and 20
742 Statement of Susan Cameron Exhibit AHA7
743 PN1144
744 Exhibit AHA41 Witness Statement of Michael Karney para 14
745 Exhibit AHA12 Witness Statement of Dean William Trengove at para 14; Transcript 9 September 2015, PN1363 an
PN1380
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746 Transcript 9 September 2015, PN1849–PN1850
747 Transcript 16 September 2015, PN6085
748 Exhibit AHA12 Witness Statement of Dean William Trengove at para 14; Transcript 9 September 2015, PN1363 and
PN1380
749 Exhibit AHA7 Witness Statement of Susan Cameron para 21
750 Exhibit AHA43 Witness Statement of Darren Gunn at para 23
751 Exhibit AHA49 Witness Statement of Mel Tait para 18
752 Exhibit AHA43 Witness Statement of Darren Gunn at para 20
753 Exhibit AHA16 Witness Statement of Fiona McDonald at para 24; Transcript 9 September 2015, PN1555
754 Exhibit AHA34 Witness Statement of Samuel McInnes para 28
755 Exhibit AHA51 Witness Statement of Sue Mitchell para 22
756 Exhibit AHA57 Witness Statement of Peter Johnston para 16
757 Transcript 22 September 2015 , PN7305
758 Exhibit AHA61 Witness Statement of Albert Hakfoort at para 16
759 Ibid para 12
760 Exhibit UV 11
761 Exhibit UV 18
762 Exhibit UV 9
763 Exhibit UV 19
764 Exhibit UV 16
765 Exhibit UV 17
766 Exhibit UV 20
767 Exhibit UV11 Witness Statement of Sean Davis at para 20
768 Transcript, 23 September 2015, PN8576–PN8577
769 Exhibit UV11 Witness Statement of Sean Davis at para 21–28
770 Exhibit UV 11 at para 38
771 Transcript, 23 September 2015, PN8512–PN8517
772 Transcript, 23 September 2015, PN8525–PN8528. Also see PN8579 where Mr Davis says that he makes it known that he
is available for weekend and public holiday shifts.
773 Transcript, 23 September 2015, PN8585–PN8586
774 Exhibit UV18 Witness Statement of Steven Petrov at paras 15–16
775 Exhibit UV18 Witness Statement of Steven Petrov at paras 22–27
776 Exhibit UV18 at paras 35–36
777 Ex.UV9 Witness Statement of Steven Petrov at paras 19.
778 Exhibit UV9, Witness Statement of Andrew Sanders at para 33
779 Exhibit UV9, Witness Statement of Andrew Sanders at paras 24–26
780 Exhibit UV9 Witness Statement of Andrew Sanders at para 35–36, 38.
781 Transcript at PN8145–PN8146, PN8150 and PN8174–PN8176
782 Exhibit UV19 Witness Statement of Jan Syrek at paras 10–12
783 Exhibit UV19 Witness Statement of Jan Syrek at paras 20–30
784 Exhibit UV19 Witness Statement of Jan Syrek at paras 24
785 Exhibit UV19 Witness Statement of Jan Syrek at paras 43–44
786 Exhibit UV16 Witness Statement of Carol Gordon at paras 22
787 Exhibit UV17 Witness Statement of Amit Gounder at paras 8–10
788 Exhibit UV17 Witness Statement of Amit Gounder at paras 14–15
789 Exhibit UV17 Witness Statement of Amit Gounder at paras 23
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV11.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV18.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV9.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV19.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV16.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV17.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV20.pdf
[2017] FWCFB 1001
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790 Exhibit UV20 Witness Statement of Rachel-Lee Louise Zwarts at paras 4, 7
791 Exhibit UV20 Witness Statement of Rachel-Lee Louise Zwarts at paras 13–14
792 Exhibit UV20 Witness Statement of Rachel-Lee Louise Zwarts at paras 15–18
793 Exhibit UV 20 at paras 26–28
794 United Voice final written submissions, dated 21 March 2016 at para 121
795 Exhibit UV16 Witness Statement of Carol Gordon
796 Exhibit UV16 Witness Statement of Carol Gordon at paras 19, 28, 36–37
797 Exhibit UV16 at paras 39, 40
798 AHA/AAA written submissions, 3 February 2016 at para 337
799 United Voices final submissions, at para 417
800 United Voice Final Submissions at para 216
801 Ibid, at para 218
802 (1959) 101 CLR 298 at 321, at [312] per Menzies J
803 Café v. Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280, at [287]
804 Jones v. Dunkel, op. cit., at 308, WN (Pt 1) (NSW) 557 at [582]; Whitehorn v. R (1983) 152 CLR 657 at 690 per Dawson
J.
805 See generally Tamayo v Alsco Linen Service Pty Ltd, Print P1859, 4 November 1997.
806 [2014] FWCFB 1996 (citations omitted)
807 (1959) 101 CLR 298 at 321
808 Ibid at 321
809 Ibid at 312
810 Ibid at 321
811 Card D, ‘Do minimum wages reduce employment? A case study of California, 1987–1989’, Industrial and Labor
Relations Review, vol. 46, no. 1, 1992, pp. 38–54
812 Draft Report, p. 821–822 and Appendix C
813 at p. 23
814 Ibid at para 344
815 United Voice Outline of Closing Submissions, at para 8
816 SDA, Submissions, 21 March 2016, at para 636, also see para 645
817 Productivity Commission Report, Effects on Business Profitability, pp. 466–467
818 AHA/AAA final written submissions dated 3 February 2016 at para 46
819 PC Final Report at p. 496
820 AHA/AAA final written submissions, 3 February 2016, at para 26
821 Print K7601, 6 May 1993
822 Re: Metal, Engineering and Associated Industries Award (2000) 110 IR 247
823 Ibid at [196]
824 United Voice, Outline of Closing Submissions, 21 March 2016 at paras 426–427
825 [2008] AIRCFB 1000 at [113]
826 [2008] AIRCFB 1000 at [113]
827 See Clubs Australia’s submission at pp. 4–5.
828 [2009] AIRCFB 450 at [100]–[101]
829 [2009] ARCFB 826
830 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
831 ABS, Census of Population and Housing, 2011
832 Note this includes casual employees who work less than 35 hours per week
http://www.airc.gov.au/awardmod/databases/general/submissions/ca_sub.doc
[2017] FWCFB 1001
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833 Exhibit CAI1; Transcript at PN2663–PN2803
834 Exhibit CAI2 and CAI3; Transcript at PN2845–PN2939. Also see Exhibit UV1; Transcript at [2893]
835 Exhibit CAI4; Transcript at [2947]
836 Exhibits CAI5 and CAI6; Transcript at [2951]–[3029]
837 Exhibits CAI7 and CAI8; Transcript at [3043]–[3166]. Also see Exhibit UV3 at [3106]
838 We note that Annexure C is also relevant, but it is specific to NSW and is based on essentially the same survey instrument
which provided the national data set out in Annexure B).
839 Transcript PN2729
840 Exhibit CAI1, Annexure B, p. 109
841 Ibid, pp. 103–104
842 Ibid, pp. 22–23; Figure 2.8
843 Ibid, pp. 26–27; Figure 2.14
844 Ibid, Table 3.2, p. 31
845 Ibid, p. 41–42
846 Ibid, p. 42
847 The figure of 96,000 in [937] differs from the figure in [919] as the scope of the ‘clubs’ industry as defined by the ABS is
different to that used in the KPMG report.
848 Exhibit CAI1 Annexure B
849 KPMG analysis of Club Census 2011 responses
850 Ibid, p. 86; Table 6.6
851 Ibid, Table 6.7, p. 87
852 Ibid, Table 6.12, p. 91
853 Exhibit CAI4
854 Exhibit CAI4 at paras 4 and 5
855 Transcript PN2240–PN2256
856 Exhibit CAI5, at para 3
857 Exhibit CAI5, at paras 7 and 13
858 Exhibit CAI5, at paras 14 and 16
859 [2015] FWCA 5786
860 Coffs Ex Services Memorial and Sporting Club Enterprise Agreement 2015, at clause 4.1
861 Exhibit UV3; Transcript PN3063–PN3106
862 Exhibit CAI7, at para 14
863 See Transcript PN3108–PN3137. Also see Mr Casu’s re-examination at PN3141–PN3160
864 Exhibit CAI2, at para 2
865 Exhibit CAI3 at paras 2-3
866 Transcript [2902]-[2905]; Exhibit CAI2
867 Transcript [2932]-[2934]
868 Exhibit CAI2, at para 16; Transcript PN2913–PN2922
869 Transcript [2912]-[2916]
870 Exhibit UV5; Transcript PN3561–PN3645
871 Exhibit UV6; Transcript PN3656–PN3746
872 Exhibit UV7; Transcript PN3748–PN3856
873 Exhibit UV5
874 Transcript, at PN3603–PN3607
875 Exhibit UV5, at paras 9 and 10
876 Transcript, at PN3623–PN3627
[2017] FWCFB 1001
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877 Exhibit UV5, at para 18
878 Exhibit UV6
879 Exhibit UV6, at para 19
880 Exhibit UV6, para 20
881 Exhibit UV6, paras 29–34
882 Exhibit U7
883 Exhibit UV7, paras 18–26
884 Transcript at PN26756–PN26759]
885 See para 24 of the Outline of Final Submissions on behalf of Clubs Australia Industrial, dated 14 October 2015
886 Ibid at para [8](b)
887 Transcript at PN26729, Exhibit CAI1 para 5
888 Productivity Commission (2015), Productivity Commission Inquiry Report: Workplace Relations Framework, vol.1, no.
76, at p. 493
889 Ibid at p. 495
890 [2014] FWCFB 1996, at [65]–[87]
891 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
892 Note this includes casual employees who work less than 35 hours per week
893 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
894 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
895 Exhibit ABI 3 at p. 15; derived from ABS (2008), Café, Restaurant and Catering Services, Australia, Catalogue No.
8655.0, Gargano (2015), Restaurants in Australia Industry Report, IBISWorld, and Gargano (2015), Café and Coffee
Shops in Australia Industry Report, IBISWorld
896 Confidentiality Order, Vice President Catanzariti, 25 February 2016
897 Exhibit RCI 7
898 Exhibit RCI 18
899 Exhibit RCI 19
900 Exhibits RCI 8 and 9; Transcript at PN3881–PN3995
901 Transcript at PN3902–PN3906
902 Transcript at PN3907–PN3908
903 Exhibit RCI 8, paras 10–12
904 Transcript at PN3956–3959
905 Transcript at PN3962
906 Transcript at PN3962–PN3964
907 Transcript at PN3977–3983 and 3988
908 Transcript at PN3989
909 Exhibit RCI 10 and 11; Transcript at PN3996–PN4065
910 Transcript at PN4028–4036
911 Exhibit RCI 11 at paras 5–7
912 Transcript at PN4044–PN4053
913 Transcript at PN4055–PN4058
914 Transcript at PN4059–PN4061
915 Exhibits RCI 12 and 13, Transcript at PN4084–PN4147
916 Exhibit RCI 13 at para 10
917 Transcript at PN4117–PN4121
918 Exhibit RCI 13 at para 12
https://www.fwc.gov.au/sites/awardsmodernfouryr/250216-Confidentiality-Order-RCI.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-RCI7.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-RCI18.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-RCI19.pdf
[2017] FWCFB 1001
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919 Transcript at PN4105–PN4111
920 Transcript at PN4122–4128
921 Exhibit RCI 14 and 15; Transcript at PN4167–4243
922 Transcript at paras 4179–4191
923 Transcript at paras 4210–4211
924 Transcript at para 4216
925 Ibid at paras 4221–4223
926 Ibid at paras 4224–4227 and 4233
927 Exhibits RCI 16 and 17; Transcript at paras 4259–4497
928 Exhibit RCI 16, Transcript at paras 4366–4379
929 Transcript at paras 4453–4456
930 Exhibit RCI 17 at paras 10, 12 and 13
931 See Transcript at paras 4434–4447
932 RCI Final Written Submissions 3 February 2016 at para 51
933 Exhibit RCI 18 at Appendix 1, p. 6
934 Ibid at Appendix 1, p. 7
935 Ibid at Appendix 1, p. 11
936 Ibid at Appendix 1, p. 12
937 Ibid at Appendix 1, p. 13
938 Ibid at Appendix 1, p. 14
939 Ibid at Appendix 1, p. 12
940 Ibid at Appendix 1, p. 13
941 Ibid at Appendix 1, p. 15
942 Ibid at Appendix 1, p. 16
943 Statement of James Parker, para 15(j)
944 Transcript at PN4525
945 Transcript at PN4597
946 Transcript at PN4597
947 Transcript at PN467–PN4672
948 Transcript at PN4673
949 Transcript at PN4676
950 Transcript at PN4685–4686
951 Transcript at PN4699–PN4705
952 PC Final Report at p. 473
953 Transcript at PN4861
954 Transcript at PN4862
955 Transcript at PN4871
956 Exhibit RCI 19 at para. 6
957 Transcript at PN4934
958 Transcript at PN4941
959 See Exhibit SDA 33
960 Exhibit SDA 33 at para. 43.1
961 Exhibit SDA 33 at para. 43.2
962 Exhibit SDA 33 at para. 43.4
963 Exhibit SDA 33 at para. 43.5
964 Exhibit SDA 33 at para. 45
[2017] FWCFB 1001
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965 UV final submission at paras 223–224
966 UV final submission at para. 227
967 UV final submission at para. 237
968 PC Final Report p. 473
969 PC Final Report at p. 473
970 PC Final Report at p. 473
971 PC Final Report at pp. 473–474
972 Exhibit RCI5
973 Exhibit RCI5 at p70
974 Exhibit RCI5 at p72
975 Exhibit RCI5 at p72
976 Exhibit UV 10
977 Exhibit UV 12
978 Exhibit UV 13
979 Exhibit UV 14
980 Exhibit UV 10 at paras 15–17
981 Exhibit UV 10 at para 27
982 Transcript at PN8412
983 Transcript at PN8408
984 Transcript at PN8468
985 Transcript at PN8415–PN8417
986 Transcript, at PN8430–PN8433
987 Exhibit UV 12 at para 35, also see paras 23–38
988 Transcript at PN8662–PN8663
989 Transcript at PN8665–PN8668
990 Exhibit UV 15 at paras 44–45
991 Exhibit UV13, at [8]–[13]
992 Exhibit UV 13 at paras 17–21
993 Transcript at PN8777–PN8778
994 Transcript at PN8784
995 Exhibit UV 13 at paras 35, 36 and 38
996 Transcript at PN8797
997 Transcript at PN8798
998 Exhibit UV 14 at paras 14–15
999 Transcript at PN8865–PN8867
1000 Exhibit UV 14 at paras 21–25
1001
1. Meat Industry Award 2010 [MA000059]; Waste Management Award 2010 [MA000043]; Racing Industry Ground Maintenance Award
2010 [MA000014]
2. Aquaculture Industry Award 2010 [MA000114]; Poultry Processing Award 2010 [MA000074]; Silviculture Award 2010 [MA000040];
Wine Industry Award 2010; Wool Storage, Sampling and Testing Award 2010 [MA000044]
3. Aged Care Award 2010 [MA000018]; Aluminium Industry Award 2010 [MA000060]; Animal Care and Veterinary Services Award 2010
[MA000118]; Asphalt Industry Award 2010 [MA000054]; Broadcasting and Recorded Entertainment Award 2010 [MA000091]; Cement
and Lime Award 2010 [MA000055]; Children’s Services Award 2010 [MA000120]; Coal Export Terminals Award 2010 [MA000045];
Concrete Products Award 2010 [MA000056]; Corrections and Detention (Private Sector) Award 2010 [MA000110]; Cotton Ginning Award
2010 [MA000024]; Dredging Industry Award 2010 [MA000085]; Educational Services (Schools) General Staff Award 2010 [MA000076];
Fitness Industry Award 2010 [MA000094]; Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073]; Gardening and
Landscaping Services Award 2010 [MA000101]; Health Professionals and Support Services Award 2010 [MA000027]; Higher Education
Industry—General Staff—Award 2010 [MA000007]; Horticulture Award 2010 [MA000028]; Hydrocarbons Industry (Upstream) Award
2010 [MA000062]; Joinery and Building Trades Award 2010 [MA000029]; Journalists Published Media Award 2010 [MA000067]; Labour
Market Assistance Industry Award 2010 [MA000099]; Local Government Industry Award 2010 [MA000112]; Manufacturing and
Associated Industries and Occupations Award 2010 [MA000010]; Marine Tourism and Charter Vessels Award 2010 [MA000093]; Meat
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV10.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV12.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV13.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-UV14.pdf
[2017] FWCFB 1001
490
Industry Award 2010 [MA000059]; Medical Practitioners Award 2010 [MA000031]; Mining Industry Award 2010 [MA000011]; Mobile
Crane Hiring Award 2010 [MA000032]; Nursery Award 2010 [MA000033]; Oil Refining and Manufacturing Award 2010 [MA000072];
Pastoral Award 2010 [MA000035]; Pest Control Industry Award 2010 [MA000097]; Port Authorities Award 2010 [MA000051]; Ports,
Harbours and Enclosed Water Vessels Award 2010 [MA000052]; Premixed Concrete Award 2010 [MA000057]; Professional Diving
Industry (Industrial) Award 2010 [MA000108]; Rail Industry Award 2010 [MA000015]; Salt Industry Award 2010 [MA000107]; Seafood
Processing Award 2010 [MA000068]; Security Services Industry Award 2010 [MA000016]; Social, Community, Home Care and Disability
Services Industry Award 2010 [MA000100]; Sporting Organisations Award 2010 [MA000082]; Sugar Industry Award 2010 [MA000087];
Supported Employment Services Award 2010 [MA000103]; Surveying Award 2010 [MA000066]; Transport (Cash in Transit) Award 2010
[MA000042]; Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089]; Water Industry Award 2010 [MA000113];
Wine Industry Award 2010; Electrical, Electronic and Communications Contracting Award 2010 [MA000025]
4. Airport Employees Award 2010 [MA000049]; Ambulance and Patient Transport Industry Award 2010 [MA000098]; Business Equipment
Award 2010 [MA000021]; Educational Services (Schools) General Staff Award 2010 [MA000076]; Higher Education Industry—General
Staff—Award 2010 [MA000007]; Quarrying Award 2010 [MA000037]; Road Transport and Distribution Award 2010 [MA000038]; Timber
Industry Award 2010 [MA000071]; Racing Industry Ground Maintenance Award 2010 [MA000014]
5. Aboriginal Community Controlled Health Services Award 2010 [MA000115]; Airline Operations—Ground Staff Award 2010
[MA000048]; Banking, Finance and Insurance Award 2010 [MA000019]; Building and Construction General On-site Award 2010
[MA000020]; Car Parking Award 2010 [MA000095]; Cemetery Industry Award 2010 [MA000070]; Clerks—Private Sector Award 2010
[MA000002]; Contract Call Centres Award 2010 [MA000023]; Dry Cleaning and Laundry Industry Award 2010 [MA000096]; Educational
Services (Post-Secondary Education) Award 2010 [MA000075]; Electrical Power Industry Award 2010 [MA000088]; Fire Fighting Industry
Award 2010 [MA000111]; Funeral Industry Award 2010 [MA000105]; Gas Industry Award 2010 [MA000061]; General Retail Industry
Award 2010 [MA000004]; Graphic Arts, Printing and Publishing Award 2010 [MA000026]; Hair and Beauty Industry Award 2010
[MA000005]; Health Professionals and Support Services Award 2010 [MA000027]; Higher Education Industry—General Staff—Award
2010 [MA000007]; Hospitality Industry (General) Award 2010 [MA000009]; Legal Services Award 2010 [MA000116]; Mannequins and
Models Award 2010 [MA000117]; Marine Towage Award 2010 [MA000050]; Medical Practitioners Award 2010 [MA000031];
Miscellaneous Award 2010 [MA000104]; Pharmacy Industry Award 2010 [MA000012]; Plumbing and Fire Sprinklers Award 2010
[MA000036]; Registered and Licensed Clubs Award 2010 [MA000058]; Restaurant Award 2010 [MA000119]; Stevedoring Industry Award
2010 [MA000053]; Storage Services and Wholesale Award 2010 [MA000084]; Telecommunications Services Award 2010 [MA000041];
Textile, Clothing, Footwear and Associated Industries Award 2010 [MA000017]; State Government Agencies Award 2010 [MA000121]
6. Health Professionals and Support Services Award 2010 [MA000027]; Pastoral Award 2010 [MA000035]
7. Pharmaceutical Industry Award 2010 [MA000069]
8. Architects Award 2010 [MA000079]; Higher Education Industry—General Staff—Award 2010 [MA000007]; Market and Social Research
Award 2010 [MA000030]
9. Cotton Ginning Award 2010 [MA000024]
1002 RCI Outline of Closing Submissions at [110]
1003 Transcript at PN26890–26891
1004 [2014] FWCFB 1996 at [10]
1005 Ibid at [18]
1006 [2014] FWCFB 1996
1007 [2014] FWCFB 1996 at [90]–[92]
1008 Ibid at [138] and [140]–[144]
1009 [2008] AIRCFB 550 at [31]
1010 [2008] AIRCFB 550 at [83]
1011 Ai Group draft Fast Food Award at cl. 7.6
1012 Ai Group submission, 1 August 2008 at [102.3]
1013 SDA submission, 1 August 2008, pp. 1–2
1014 SDA draft award, 1 August 2008, cl. 55
1015 Ibid, cl. 58.10
1016 Exposure Draft – Retail Industry Award 2010 – 12 September 2008, cl.29.2
1017 [2008] AIRCFB 717 at [84]–[92]
1018 Ai Group submission – 10 October 2008 at [84.6]
1019 [2008] AIRCFB 1000 at [283]–[286]
1020 Fast Food Industry Award 2010 – published 19 December 2008
1021 [2009] AIRCFB 645
1022 [2010] FWAFB 379
1023 [2010] FWAFB 379 at [26]
1024 Submission – Ai Group – award modernisation proceedings
1025 Submission – SDA – award modernisation proceedings
1026 SDA Final Submission, 21 March 2016 at [683]
1027 Ibid at [682]
https://www.fwc.gov.au/documents/decisionssigned/html/2014fwcfb1996.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2008aircfb550.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2008aircfb550.htm
http://www.airc.gov.au/awardmod/databases/retail/Submissions/AiGroup_fastfood_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/AiGroup_fastfood_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/SDA_submission.doc
http://www.airc.gov.au/awardmod/databases/retail/Draft/SDA_draft_award.doc
http://www.airc.gov.au/awardmod/databases/retail/Exposure/Retail_exposure_draft.pdf
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb717.htm
http://www.airc.gov.au/awardmod/databases/retail/Submissions/Aigroup_Submission_ED.pdf
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/retail/Modern/fast_food.pdf
http://www.fwa.gov.au/decisionssigned/html/2009aircfb645.htm
http://www.fwa.gov.au/decisionssigned/html/2010fwafb379.htm
http://www.fwa.gov.au/decisionssigned/html/2010fwafb379.htm
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-aig-100616.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sdafastfood-100616.pdf
[2017] FWCFB 1001
491
1028 Exhibits Ai Group 7 and Ai Group 8 at [19062]–[19152]. Also see Exhibits SDA27 and SDA28
1029 Exhibit Ai Group 6; PN18729–PN18825
1030 Exhibits Ai Group 11, Ai Group 32 and Ai Group 33; Transcript at PN19252– PN19357; Transcript at PN28436–
PN28519
1031 Exhibits Ai Group 1 and 2; Transcript at PN18458–PN18564. Also see Exhibits SDA23 and MFI 1
1032 Exhibits Ai Group 9 and Ai Group 10. Transcript at PN19157–PN19230. Also see Exhibits SDA29 and SDA30
1033 Exhibit Ai Group 23; Transcript at PN23168–PN23170
1034 Exhibit Ai Group 5; Transcript at PN18664–PN18710 . Also see Exhibits SDA24 and SDA25
1035 Exhibits Ai Group 21 and Ai Group 22; Transcript at PN23168–PN23170
1036 Exhibit Ai Group 20; Transcript at PN23168–PN23170
1037 Exhibits Ai Group 3, Ai Group 4 and Ai Group 30; Transcript at PN18590–PN18645; PN28236–28301
1038 Exhibit Ai Group 31; Transcript at PN28321–PN28426
1039 Exhibit Ai Group 17; Transcript at PN21494
1040 Exhibits Ai Group 24 and Ai Group 25; Transcript at PN23168–PN23170
1041 Exhibit RCI20, Transcript at PN18838–PN18911. Also see Exhibit SDA26
1042 Exhibit RCI21, Transcript at PN19812–PN19851
1043 Affidavit of Marek Kopias, Exhibit Ai Group 21 at [13], and [5]–[10]
1044 Witness Statement of Gina Feast, Exhibit Ai Group 22 at [2], and [9]–[16]
1045 Exhibit Ai Group 11 at [16]
1046 Transcript, Ms Deasy’s evidence at PN19310–PN19312
1047 Ibid at PN19314–PN19317
1048 Exhibit Ai Group 11
1049 Exhibit Ai Group 21
1050 Exhibit Ai Group 23
1051 Exhibit Ai Group 11
1052 Exhibit Ai Group 17 and Transcript at PN21477–PN21663
1053 Exhibit SDA 33 and Transcript at PN21760–PN21813 and PN22073–PN22122
1054 Transcript at PN19272–PN19297
1055 Ibid at PN19349–PN19355
1056 Exhibit SDA34 at [8]
1057 Ibid at [14]
1058 Ibid at [19]
1059 Transcript at PN21628–PN21629 and PN21637
1060 Transcript at PN19316–PN19319 and PN19342–PN19348
1061 Transcript at PN19312–PN19313
1062 Exhibit SDA at [19]
1063 See generally Annexure AP 5 to Exhibit Ai Group 12 at [110]–[119]
1064 Ibid at [121]
1065 Exhibit Ai Group 11, Annexure AP 5
1066 Transcript at PN21785, PN21792 and PN21804
1067 Ibid at PN21805–PN21806
1068 Transcript at PN21623, PN21627 and PN21653
1069 Transcript, at PN19320–PN19322
1070 Transcript, at PN19322; Exhibit Ai Group 11, Annexure PAD 3 at [3]
1071 Exhibit SDA 34 at 20.1–20.2
1072 Transcript at PN21798
[2017] FWCFB 1001
492
1073 Transcript at PN19323
1074 Transcript at PN19323
1075 Ibid at PN19331
1076 Annexure PAD3 to Exhibit Ai Group 11
1077 Annexure PAD4 to Exhibit Ai Group 33
1078 Exhibit Ai Group 30 at [11], [13] and [15]
1079 Exhibit Ai Group 31 at [31], [33] and [35]
1080 A point conceded by Ms Deasy during cross-examination, see Transcript at PN28502.
1081 See Exhibit Ai Group 30 at 11, 13 and 15 and Exhibit Ai Group 31 at 31, 33 and 35
1082 SDA written submission 21 March 2016 at [658]
1083 Ibid at [660]
1084 Ibid at [661]–[662]
1085 SDA written submissions 21 March 2016 at [661]
1086 Ibid at [662]
1087 Exhibit SDA 56
1088 Ai Group’s submission in reply 1 April 2016 at [17]
1089 Transcript at PN21609
1090 Exhibit SDA 56
1091 Annexure AP3 to Exhibit Ai Group 17
1092 Ibid at [105], also see [131]
1093 Ibid at [106]
1094 Ibid at [169]
1095 Exhibit Ai Group 34
1096 Transcript at PN21516
1097 Exhibit Ai Group 17 Annexure AP-5 at [159]
1098 Ibid at [161]–[168] and Tables 1 and 2
1099 Ibid, see the notes to Table 2
1100 Ibid at [17]
1101 Ibid at [172]–[174] and [178]–[179]
1102 Ibid at [175] and [184]
1103 Ibid at [176] and [185]
1104 Transcript at PN21595–PN21603
1105 Ibid at PN21659–PN21661
1106 Transcript at PN21763
1107 Ai Group submission 1 April 2016 at [15]
1108 Submissions of the SDA on Exhibit Ai Group 34 dated 9 November 2016
1109 Submissions of Ai Group in Reply to Submissions of the SDA on Exhibit Ai Group 34, dated 16 November 2016
1110 Exhibit Ai Group 17
1111 Submissions of the SDA on Exhibit Ai Group 34 dated 9 November 2016 at paras 8 and 10–13
1112 Pratley Affidavit, Exhibit Ai Group 17, p. 58 Table 2
1113 Ibid at para 155; SDA/Ai Group Aide Memoire Exhibit SDA 56
1114 Dunn Amended Witness Statement (Exhibit Ai Group 1), par 18; Agostino First Witness Statement (Exhibit Ai Group 7),
par 23; Dando Amended Witness Statement (Exhibit Ai Group 6), par 16; Eagles First Witness Statement (Exhibit Ai
Group 9) para 18
1115 Exhibit SDA 56
1116 Exhibit Ai Group 3 at para 23
[2017] FWCFB 1001
493
1117 see Dando Amended Witness Statement (Exhibit Ai Group 6), par 34; Dando Cross-examination, 26 October 2015,
PN18734; Haydar Cross-examination, 26 October 2015, PN18667)
1118 see Limbrey First Witness Statement (Exhibit Ai Group 3), par 11 and Confidential Exhibit KTL-2; see also par 170 and
Confidential Exhibit KTL-3
1119 see Limbrey First Witness Statement (Exhibit Ai Group 3), par 12 and Confidential Exhibit KTL-2; see also Limbrey
First Witness Statement (Exhibit Ai Group 3), par 172 and Confidential Exhibit KTL-3
1120 see Eagles First Witness Statement, par 41; see also Agostino First Witness Statement (Exhibit Ai Group 7), par 45
1121 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
1122 Note this includes casual employees who work less than 35 hours per week
1123
Labour Force, Australia, Detailed – Electronic Delivery, Aug 2016, Catalogue No. 6291.0.55.001; ABS, Labour Force,
Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003; Deasy affidavit 10 August 2015.
1124 Exhibit ACTU 3. Also see transcript at PN23281–PN23445
1125 Exhibit ACTU 3 Table 1.13 on p21
1126 Exhibit ACTU 3 at para 6
1127 Ibid at para 11
1128 Ibid at para 37
1129 Ibid at para 42
1130 Ibid at pp. 28–29
1131 Ibid at para 53
1132 Ibid, Table 3.5 on p. 31
1133 ABS, Characteristics of Employment Australia, August 2015, Catalogue No. 6333.0, Table 7.1
1134 Exhibit Ai Group 11, Annexure PAD3, Table 11B
1135 Ibid, Table 12
1136 Ibid at Table 13
1137 Exhibit Ai Group 3 at paras 180–190
1138 See Exhibit Ai Group 31 at paras 46 and 56; Transcript at PN28371–PN28372
1139 Exhibit Ai Group 11, Annexure PAD3, Chart 20
1140 Ibid Chart 24
1141 Ibid Table 20A
1142 Ibid Table 24A
1143 Ibid Chart 25
1144 Ibid Table 14
1145 Ibid Chart 14A
1146 Ibid Tables 16 and 17
1147 See Exhibit Ai Group 33, Charts 201 and 202
1148 Ibid, Table 203
1149 [2016] FWCFB 6460
1150 Exhibit Ai Group 3 at [24]–[27]
1151 Exhibit Ai Group 31 at [11]
1152 Exhibit Ai Group 30 at [6]
1153 Exhibit Ai Group 31 at [30]
1154 Exhibit Ai Group 30, 8
1155 Exhibit Ai Group 31, 30
1156 Exhibit Ai Group 30, 11, 13 and 15
1157 Exhibit Ai Group 31, 31, 33 and 35
[2017] FWCFB 1001
494
1158 Exhibit Ai Group 30, paras 11, 13 and 15; Exhibit Ai Group 30, paras 31, 33 and 35.
1159 See Transcript at PN28554–PN28557
1160 Derived from Table 14A, Annexure PAD3 to Exhibit Ai Group 11
1161 Derived from Table 24A, Annexure PAD3 to Exhibit Ai Group 11
1162 Table 17C, Annexure PAD3 to Exhibit Ai Group 11
1163 Ibid, Table 14D
1164 See Dunn: Exhibit Ai Group 1 at [29]–[30] and [48]–[49]; Haydar: Exhibit Ai Group 5 at [30] and [35A]; Dando: Exhibit
Ai Group 6 at [24] and [32]; Agostino: Exhibit Ai Group 7 at [32] and [42]; and Eagles: Exhibit Ai Group 9 at [26] and
[37]
1165 See Dunn: Exhibit Ai Group 1 at [32]–[33] and [50]–[51]; Haydar: Exhibit Ai Group 5 at [31] and [36]; Dando: Exhibit
Ai Group 6 at [25] and [32]; Agostino: Exhibit Ai Group 7 at [33]–[34] and [43]–[44]; and Eagles: Exhibit Ai Group 9 at
[28]–[29] and [39]–[40]
1166 Exhibit Ai Group 3 at [168]–[173]
1167 See Exhibit Ai Group 3 at [174]–[176]
1168 See Annexure KTL 10 to Exhibit Ai Group 3
1169 Exhibit Ai Group 3 at [179]
1170 Also see Dunn: Exhibit Ai Group 1 at [63]; Haydar: Exhibit Ai Group 5 at [40] to [42]; Dando Exhibit Ai Group 6 at
[40]; Agostino: Exhibit Ai Group 7 at [51]–[52]; and Eagles: Exhibit Ai Group 9 at [47].
1171 See Transcript at PN18511–PN18516
1172 Exhibit SDA24
1173 Transcript at PN18789
1174 Exhibit SDA23 and MFI 1
1175 Exhibit SDA29 and 30, Transcript at PN19206
1176 Exhibit SDA 27 and 28, Transcript at PN19103
1177 Transcript at PN18696–PN18697
1178 Exhibit Ai Group 3 at paras 191–192
1179 Exhibit Ai Group 3 at para 192
1180 Dunn: Exhibit Ai Group 1 at [70]; Haydar: Exhibit Ai Group 5 at [47]–[48]; Dando: Exhibit Ai Group 6 at [43];
Agostino: Exhibit Ai Group 7 at [56]–[57]; and Eagles: Exhibit Ai Group 9 at [53]–[54]
1181 Exhibit Ai Group 1 at paras 69–70
1182 Exhibit SDA 56
1183 Exhibit Ai Group 3 at para 23; Exhibit Ai Group 31 at para 21
1184 see Dando Amended Witness Statement (Exhibit Ai Group 6), par 34; Dando Cross-examination, 26 October 2015,
PN18734; Haydar Cross-examination, 26 October 2015, PN18667)
1185 see Limbrey First Witness Statement (Exhibit Ai Group 3), par 11 and Confidential Exhibit KTL-2; see also par 170 and
Confidential Exhibit KTL-3
1186 see Limbrey First Witness Statement (Exhibit Ai Group 3), par 12 and Confidential Exhibit KTL-2; see also Limbrey
First Witness Statement (Exhibit Ai Group 3), par 172 and Confidential Exhibit KTL-3
1187 see Eagles First Witness Statement, par 41; see also Agostino First Witness Statement (Exhibit Ai Group 7), par 45
1188 Note this includes casual employees who work less than 35 hours per week
1189 Ibid at Table 13
1190 ABS, Characteristics of Employment Australia, August 2015, Catalogue No. 6333.0, Table 7.1
1191 Exhibit RCI 20 at para 8
1192 Transcript see para 18879
1193 Exhibit RCI 21 at para 8
1194 Transcript at para 19848
1195 Transcript at para 19849
1196 Ibid at para 190
[2017] FWCFB 1001
495
1197 RCI Final Submissions 3 February 2016 at para 101
1198 Exhibits RCI 20 and RCI 21
1199 A point raised by United Voice in closing oral submissions: Transcript at PN27844.
1200 Also see Dunn: Exhibit Ai Group 1 at [63]; Haydar: Exhibit Ai Group 5 at [40] to [42]; Dando Exhibit Ai Group 6 at
[40]; Agostino: Exhibit Ai Group 7 at [51]–[52]; and Eagles: Exhibit Ai Group 9 at [47].
1201 Derived from Table 14A, Annexure PAD3 to Exhibit Ai Group 11
1202 Derived from Table 24A, Annexure PAD3 to Exhibit Ai Group 11
1203 Table 17C, Annexure PAD3 to Exhibit Ai Group 11
1204 Ibid, Table 14D
1205 Exhibit Ai Group 3 at para 196
1206 Ibid at para 201
1207 NRA Final Submissions, 8 February 2016, at p. 25
1208 Exhibit SDA 35
1209 Exhibit SDA 36
1210 Fair Work Commission, Award Reliance Survey, 2013, data manual:
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf and Fair Work Commission,
Australian Workplace Relations Study, 2014: https://www.fwc.gov.au/creating-fair-workplaces/research/australian-
workplace-relations-study
1211 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012 Fair Work
Australia
1212 Fair Work Commission, Modern awards and relevant ANZSIC classes
1213 ABS, Australian National Accounts: National Income, Expenditure and Product, Jun 2016, Catalogue No. 5206; ABS,
Business Indicators, Australia, Jun 2016, Catalogue No. 5676.0; ABS, Counts of Australian Businesses, including
Entries and Exits, Jun 2011 to Jun 2015, Catalogue No. 8165.0; ABS, Employee Earnings and Hours, Australia, May
2016, Catalogue No. 6306.0; ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No.
6291.0.55.003
1214
ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015, Catalogue No. 8165.0
1215 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
1216 Fair Work Commission, Australian Workplace Relations Study, 2014
1217 Productivity Commission (2015) Workplace Relations Framework Final Report (Vol 1) p. 433
1218 ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
1219 Fair Work Commission, Award Reliance Survey, 2013
1220 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
1221 ABS, Australian Industry, 2014–15, Catalogue No. 8155.0
1222 ABS, Estimates of Industry Multifactor Productivity, 2014–15, Catalogue No. 5260.0.55.002
1223 ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015, Catalogue No. 8165.0
1224 Fair Work Commission, Australian Workplace Relations Study, 2014
1225 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1226 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1227 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1228 Exhibit SDA 36, p. 21
1229 Exhibit SDA 36, Table 13 on p. 10
1230 Exhibit SDA 36 at p. 12
1231 Ibid at pp. 12–13
1232 Ibid at p. 20
1233 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1234 Exhibit SDA 35, p. 68
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf
https://www.fwc.gov.au/creating-fair-workplaces/research/australian-workplace-relations-study
https://www.fwc.gov.au/creating-fair-workplaces/research/australian-workplace-relations-study
https://www.fwc.gov.au/awards-and-agreements/minimum-wages-conditions/annual-wage-reviews/previous-wage-reviews/annual-w-27
[2017] FWCFB 1001
496
1235 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1236 ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
1237 ABS, Participation, Job Search and Mobility, Australia, February 2015, Catalogue No. 6226.0
1238 Fair Work Commission, Australian Workplace Relations Study, 2014
1239 HILDA survey Wave 15, 2015
1240 Exhibit SDA 36, at pp. 7 and pp. 17–18
1241 ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
1242 Exhibit SDA 35, p. 29
1243 ABS, Average Weekly Earnings, Australia, May 2016, Catalogue No. 6302.0
1244 Exhibit SDA 35, p. 25
1245
ABS, Microdata: Employee, Earnings and Hours, Australia, May 2014, Catalogue No. 6306.0.55.001
1246 Exhibit SDA 35, p. 34
1247
ABS, Wage Price Index, Australia, Jun 2016, Catalogue No. 6345.0
1248 Fair Work Commission, Australian Workplace Relations Study, 2014
1249 Exhibit SDA 35, ‘Key Findings’ at vi and vii; also see Table 3.3 and Figure 3.2 (on p. 13) and see generally the summary
on pp. 29–30; section 5.1 at pp. 41–46 and section 6.3 at pp. 57–59
1250 MA000004; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
1251 MA000012; ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0 ABS, Survey of
Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
1252 Department of Employment, Trends in Federal Enterprise Bargaining, June quarter 2016,
https://www.employment.gov.au/trends-federal-enterprise-bargaining.
1253 [2008] AIRCFB 550 at [83]
1254 SDA submission – 1 August 2008, pp. 1–2
1255 SDA draft award – 1 August 2008, cl. 55
1256 Ibid, cl. 58.10
1257 Ibid, Recommendation 13 and Recommendation 14, page 48
1258 Submissions—Australian Retailers Association, 1 August 2008 at para 17.1
1259 Ibid, para 17.3 and Recommendation 15, page 49
1260 Submissions—Master Grocers Australia, 1 August 2008 at para 2
1261 Ibid
1262 Submissions—NRA and ANRA, 1 August 2008 at para 58
1263 Exposure Draft – Retail Industry Award 2010 – 12 September 2008, cl.29.2
1264 [2008] AIRCFB 717 at [84]–[92]
1265 [2008] AIRCFB 1000 at [283]–[286]
1266 [2009] AIRCFB 645
1267 [2010] FWAFB 305 at [18]
1268 [2010] FWAFB 305 at [18]–[19]
1269 Award Modernisation Request Variation – 26 August 2009
1270 [2009] AIRCFB 835 at [12]
1271 AP796250CRV
1272 $2 and under (No 1) PR926620 at [88]
1273 PR926620, 17 January 2003 (Giudice J, Watson SDP and Raffaelli C)
1274 Ibid at [78] and [100]–[101]
1275 Ibid at [89]
1276 PR941526, 3 December 2003, (Giudice J, Watson SDP and Raffaelli C)
1277 Ibid at [98], [116] and [119]
https://www.employment.gov.au/trends-federal-enterprise-bargaining
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb550.htm
http://www.airc.gov.au/awardmod/databases/retail/Submissions/SDA_submission.doc
http://www.airc.gov.au/awardmod/databases/retail/Draft/SDA_draft_award.doc
http://www.airc.gov.au/awardmod/databases/retail/Submissions/ARA_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/MGA_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/NRA_ANRA_joint_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Exposure/Retail_exposure_draft.pdf
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb717.htm
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb1000.htm
http://www.fwa.gov.au/decisionssigned/html/2009aircfb645.htm
https://www.fwc.gov.au/documents/fullbench/2010fwafb305.htm
https://www.fwc.gov.au/documents/fullbench/2010fwafb305.htm
http://www.airc.gov.au/awardmod/download/request_variation_09Nov09.pdf
http://www.airc.gov.au/consolidated_awards/ap/ap796250/asframe.html
https://www.fwc.gov.au/documents/decisionssigned/html/pr926620.htm
https://www.fwc.gov.au/documents/alldocuments/pr926620.htm
https://www.fwc.gov.au/documents/alldocuments/pr941526.htm
[2017] FWCFB 1001
497
1278 Ibid at [93]–[96]
1279 Ibid at [92]
1280 Ibid at [28]
1281 Ibid
1282 Submissions of SDA on Award Modernisation – 10 June 2016, at [19]
1283 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012, Fair Work
Australia.
1284 n.e.c. refers to not elsewhere classified
1285 ABS, Census of Population and Housing, 2011
1286 Note this includes casual employees who work less than 35 hours per week
1287 Exhibit ABI 3, Transcript at PN10566
1288 Exhibit ABI 1, Transcript at PN8973
1289 Exhibit ABI 9, Transcript at PN17432
1290 Exhibit Retail 3
1291 Exhibit Retail 4
1292 Exhibit Retail 5
1293 Exhibit Retail 8
1294 Exhibit Retail 6
1295 Exhibit Retail 7
1296 Exhibit Retail 2
1297 Exhibit Retail 3.
1298 Exhibit Retail 3 at para 10
1299 Exhibit Retail 3 at paras 11–14
1300 Transcript, at PN16008–PN16012
1301 Exhibit Retail 3 at [19]
1302 Transcript, at PN16160–PN16165
1303 See Exhibit Retail 3 at paras 20–21 and Attachments BB2
1304 Transcript, at PN16225
1305 Transcript, at PN16180
1306 Transcript, at PN16234
1307 Exhibit Retail 3 at [14]–[15]
1308 Ibid at para 15
1309 Exhibit Retail 3 at paras 11 and 28
1310 Transcript, at PN16072–PN16080
1311 Transcript, at PN16084–PN16096 and Exhibit SDA 12
1312 Ibid, at PN16264–PN16271
1313 [2012] FWAA 8612
1314 Transcript, at PN16283–PN16285
1315 Transcript at PN16253–PN16254
1316 Exhibit Retail 4
1317 Exhibit Retail 4 at para 13
1318 Exhibit Retail 4 at para 26
1319 Ibid at para 27
1320 Ibid at para 24
1321 Exhibit Retail 4 at para 25
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-100616.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-ABI3.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-ABI1.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-ABI9.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail3.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail4.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail5.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-exh-retail8.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail6.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail7.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-Retail2.pdf
[2017] FWCFB 1001
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1322 Ibid at para 28
1323 Exhibit Retail 4 at paras 31–32
1324 Transcript, at PN16423
1325 Transcript, at PN16437
1326 Exhibit Retail 5
1327 Ibid at para 7
1328 Transcript, at PN16618–PN16622
1329 Exhibit Retail 5 at para 19
1330 Transcript, at PN16679–PN16680
1331 Exhibit Retail 5
1332 Transcript, at PN16681
1333 Transcript, at PN16682–PN16684
1334 Transcript, at PN16687 and PN16692
1335 Transcript, at PN16690
1336 Exhibit Retail 8
1337 Exhibit Retail 8 at paras 6 and 9
1338 Ibid at para 12
1339 Ibid at paras 7 and 8
1340 Ibid at para 11
1341 Ibid at paras 15 and 16
1342 Exhibit Retail 8 at para 18
1343 Transcript at PN17192
1344 Exhibit Retail 8 at paras 14, 20 and 21
1345 Transcript at PN17132–PN17138 and PN17147–17148
1346 Exhibit Retail 6
1347 Exhibit Retail 6 at para 7
1348 Ibid at paras 16–17
1349 Ibid at para 18
1350 Ibid at para 19
1351 Transcript, at PN16973–PN16977
1352 Exhibit Retail 7
1353 Exhibit Retail 7 at paras 15–18
1354 Ibid at para 19
1355 Ibid at para 21. Also see transcript, at PN17038
1356 Transcript, at PN17063–PN17064
1357 Ibid at para 22
1358 Transcript, at PN17053
1359 SDA’s Final Submissions, 21 March 2016, at para 237
1360 Exhibit ABI 9
1361 Exhibit ABI 9 at [5]
1362 Baxter Cross-examination, 20 October 2015, PN17433
1363 Exhibit ABI 9 at [22]–[27]; ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 27.50
1364 Exhibit ABI 9 at [29]
1365 Exhibit ABI 9 at [32]
1366 Exhibit ABI 9 at [35(a)]
1367 Exhibit ABI 9 at [35(b)]
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1368 To be put into this category, respondents did not need to state “wages” (see PN17528–PN17529)
1369 Exhibit ABI 9 at [44]
1370 Exhibit ABI 9 at [59]
1371 Exhibit ABI 9 at [60]
1372 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 27.46
1373 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 27.47
1374 ARA and others final submission, 2 February 2016, at para. 84(b)
1375 ARA and others final submission, 2 February 2016, at para. 84(d)
1376 ARA and others final submission, 2 February 2016, at para. 92
1377 SDA final submission, 21 March 2016, at para. 228
1378 SDA final submission, 21 March 2016, at para. 229
1379 SDA final submission, 21 March 2016, at paras 229–230
1380 SDA final submission, 21 March 2016, at para. 232; [2013] FWCFB 4000 at [441]
1381 SDA final submission, 21 March 2016, at para. 233
1382 SDA final submission, 21 March 2016, at para. 234
1383 SDA final submission, 21 March 2016, at para. 235
1384 SDA final submission, 21 March 2016, at para. 236
1385 [2013] FWCFB 4000 at [441]
1386 Exhibit SDA 32
1387 Exhibit SDA 33, Exhibit SDA 34
1388 Exhibit SDA 31
1389 Exhibit SDA 35, Exhibit SDA 36
1390 Exhibit SDA 36
1391 Exhibit SDA 39, Exhibit SDA 40
1392 Exhibit SDA 43
1393 Exhibit SDA 43
1394 Exhibit Retail 2
1395 Exhibit Retail 2
1396 Exhibit Retail 2
1397 Exhibit Retail 2 at p. 95
1398 Exhibit Retail 2
1399 Exhibit SDA 32
1400 SDA final submission, 21 March 2016, at para. 326
1401 Exhibit SDA 32 at pp. 19–22
1402 Exhibit SDA 32 at p. 27
1403 Exhibit SDA 32 at pp. 27–28
1404 Exhibit SDA 32 at pp. 27–29
1405 Exhibit SDA 32 at pp. 29–33
1406 Exhibit SDA 32 at pp. 33–36
1407 Exhibit SDA 32 at pp. 37–38
1408 ARA and others final submission, 12 February 2016, at para. 85(a); Exhibit Retail 2 at pp. 29–30
1409 ARA and others final submission, 12 February 2016, at para. 85(b); Exhibit Retail 2 at p. 86
1410 ARA and others final submission, 12 February 2016, at para. 85(c); Exhibit Retail 2 at p. 87
1411 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 16.2; Exhibit Retail 2 at p. 12
1412 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 16.3; Exhibit Retail 2 at p. 12
1413 SDA final submission, 21 March 2016, at paras 192–193
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA32.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA33.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA34.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA31.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA35.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA39.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA40.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA43.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA43.pdf
[2017] FWCFB 1001
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1414 Common Exhibit 1 at p. 425, Figure 11.1
1415 Common Exhibit 1 at p. 425; unpublished data provided to the Productivity Commission from the ABS and based on
Campbell J & Chen L (2015), Improved Time varying Day Adjustment in SEASABS, ABS, Canberra
1416 Common Exhibit 1 at p. 426, Figure 11.2
1417 Common Exhibit 1 at p. 426; data from Aztec (2014) and information provided by the Shopping Centre Council of
Australia (sub. DR342, p. 1) for supermarkets and shopping centres respectively
1418 Common Exhibit 1 at p. 462
1419 Common Exhibit 1 at p. 463
1420 Common Exhibit 1 at p. 462
1421 Exhibit Retail 2 at pp. 60, 73
1422 Exhibit Retail 2 at p. 59
1423 Exhibit Retail 2 at p. 82
1424 Exhibit Retail 2 at p. 57
1425 Exhibit Retail 2 at p. 77
1426 Exhibit Retail 2 at p. 75
1427 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 17.9; Exhibit Retail 2 at pp. 63, 65
1428 ARA and others final submission, 12 February 2016, at paras 103(a), 104; Exhibit Retail 2 at pp. 63–72
1429 ARA and others final submission, 12 February 2016, at para. 103(f); Exhibit Retail 2 at p. 60
1430 ARA and others final submission, 12 February 2016, at para. 106; Exhibit Retail 2 at pp. 76, 91
1431 ARA and others final submission, 12 February 2016, at para. 107; Exhibit Retail 2 at pp. 77–78. Also ACCI, ABI and
NSWBC final submission, 2 February 2016, at para. 22.5
1432 ARA and others final submission, 12 February 2016, at para. 109; Exhibit Retail 2 at p. 75
1433 ARA and others final submission, 12 February 2016, at para. 116; Exhibit Retail 2 at p. 69
1434 ACCI, ABI and NSWBC final submission, 2 February 2016, at para. 17.10; Exhibit Retail 2 at p. 63
1435 ACCI, ABI and NSWBC final submission, 2 February 2016, at paras 17.12–17.13; Exhibit Retail 2 at p. 63
1436 ARA and others final submission, 12 February 2016, at paras. 133–134; Exhibit Retail 2 at pp. 64–65
1437 ARA and others final submission, 12 February 2016, at paras 38–39; Exhibit Retail 2 at p. 74, Figure 52
1438 ARA and others final submission, 12 February 2016, at para. 41; Exhibit Retail 2 at p. 67
1439 ARA and others final submission, 12 February 2016, at para. 42; Exhibit Retail 2 at p. 66
1440 Sands Cross-examination, 25 September 2015, PN9907
1441 Sands Cross-examination, 25 September 2015, PN9917–PN9924
1442 Sands Cross-examination, 25 September 2015, PN10028
1443 Sands Cross-examination, 25 September 2015, PN10031–PN10033
1444 See SDA Final Submissions, 21 March 2016 at paras 186–198; Also note that some of these submissions were
subsequently withdrawn: see Transcript at para 27526
1445 SDA final submission, 21 March 2016, at para. 190
1446 SDA final submission, 21 March 2016, at para. 191
1447 SDA final submission, 21 March 2016, at para. 196; Sands Cross-examination, 25 September 2015, PN10034–PN10035
1448 SDA final submission, 21 March 2016, at para. 197
1449 SDA final submission, 21 March 2016, at para. 194
1450 Exhibit Retail 2 at p. 62
1451 Exhibit Retail 2 at p. 75
1452 Exhibit Retail 2 at pp. 65, 68
1453 Exhibit Retail 2 at p. 66
1454 Exhibit Retail 2 at pp. 69–70
1455 Exhibit Retail 2 at p. 85
1456 Exhibit Retail 2 at p. 86
[2017] FWCFB 1001
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1457 Exhibit Retail 2 at p. 86
1458 Exhibit Retail 2 at p. 86
1459 Exhibit Retail 2 at p. 87
1460 Exhibit Retail 2 at pp. 87–88
1461 Exhibit Retail 2 at p. 88
1462 ARA and others final submission, 12 February 2016, at para. 84(a); Exhibit Retail 2 at pp. 85–86
1463 ARA and others final submission, 12 February 2016, at para. 84(b); Exhibit Retail 2 at p. 86
1464 ARA and others final submission, 12 February 2016, at para. 84(c); Exhibit Retail 2 at p. 86
1465 ARA and others final submission, 12 February 2016, at para. 84(d); Exhibit Retail 2 at p. 86
1466 ARA and others final submission, 12 February 2016, at para. 84(e); Exhibit Retail 2 at pp. 86, 92–93
1467 ARA and others final submission, 12 February 2016, at para. 84(f); Exhibit Retail 2 at p. 86
1468 ARA and others final submission, 12 February 2016, at para. 84(g); Exhibit Retail 2 at p. 86
1469 ARA and others final submission, 12 February 2016, at para. 84(g); Exhibit Retail 2 at p. 73
1470 ARA and others final submission, 12 February 2016, at para. 84(h); Exhibit Retail 2 at pp. 61, 86, 89
1471 ARA and others final submission, 12 February 2016, at para. 90; Exhibit Retail 2 at p. 91
1472 ARA and others final submission, 12 February 2016, at paras 92–93; Exhibit Retail 2 at pp. 90–91
1473 ARA and others final submission, 12 February 2016, at para. 95; Exhibit Retail 2 at p. 81
1474 ACCI, ABI and NSWBC final submission, 2 February 2016, at paras 27.64; Exhibit Retail 2 at p. 60–61
1475 Transcript, at PN9890–PN9891
1476 Transcript, at PN9943–PN9952
1477 See Common Exhibit 1 at pp. 424–425; Barron: Exhibit Retail 3, at paras 14 and 15; Goddard: Exhibit Retail 4, at paras
19 and 21; d’Oreli: Exhibit 8, at para 13
1478 For example, Goddard: Exhibit Retail 4 at paras 11 and 12; Gough: Exhibit Retail 5 at para 11, Antonieff: Exhibit Retail
6 at para 9, Daggett: Exhibit Retail 7 at para 9; and d’Oreli: Exhibit Retail 8 at para 11.
1479 For example, Barron: Exhibit Retail 3 at para 12; Goddard: Exhibit Retail 4 at para 13, and d’Oreli: Exhibit Retail 8 at
para 12
1480 For example, Barron: Exhibit Retail 3 at paras 12 and 18; Daggett: Exhibit Retail 7 at para 19(b)
1481 Exhibit ABI 9 at [29]
1482 To be put into this category, respondents did not need to state “wages” (see PN17528–PN17529)
1483 For example, Barron: Exhibit Retail 3 at para 12; Gough: Exhibit Retail 5 at para 19(b) and Daggett: Exhibit Retail 7 at
para 19(a)
1484 For example, Barron: Exhibit Retail 3 at para 26; Antonieff: Exhibit Retail 6 at para 18(b)
1485 For example, Antonieff: Exhibit Retail 6 at para 17 and Daggett: Exhibit Retail 7 at para 19(f)
1486 For example, Barron: Exhibit Retail 3 at paras 12, 13 and 28; d’Oreli: Exhibit Retail 8 at para 14
1487 For example, Barron: Exhibit Retail 3 at paras 15 and 18; Goddard: Exhibit Retail 4 at paras 13 and 14; and d’Oreli:
Exhibit Retail 8 at para 21
1488 See Antonieff: Exhibit Retail 6 at para 19 and Daggett: exhibit Retail 7 at para 21
1489 For example, Barron: Exhibit Retail 3 at paras 13, 27 and 28; Goddard: Exhibit Retail 4 at paras 31–32
1490 Transcript at PN17208
1491 Order of Catanzariti VP, 3 March 2016
1492 Exhibit SDA 32
1493 Exhibit SDA 33, Exhibit SDA 34
1494 Exhibit SDA 31
1495 Exhibit SDA 35, Exhibit SDA 36
1496 Exhibit SDA 36
1497 Exhibit SDA 39, Exhibit SDA 40
1498 Exhibit SDA 43
https://www.fwc.gov.au/sites/awardsmodernfouryr/common/AM2014305-order-SDA-030316.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA32.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA33.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA34.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA31.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA35.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA39.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA40.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA43.pdf
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1499 Exhibit SDA 43
1500 Exhibit SDA 16
1501 Exhibit SDA 16 at para 14
1502 Exhibit SDA 16 at paras 13, 15 and 16
1503 Transcript at PN17946; also see PN17879–PN17918
1504 Exhibit SDA 17
1505 Exhibit SDA 17 at paras 4, 8 and 9
1506 Transcript at PN18003–PN18004
1507 Transcript at PN18034–PN18038
1508 Exhibit SDA 17 at 4 and 10
1509 Exhibit SDA 18
1510 Transcript at PN17991–17993
1511 Exhibit SDA 18
1512 Transcript at PN18087
1513 Transcript at PN18088
1514 Exhibit SDA 18 at para 6, 12 and 13
1515 Exhibit SDA 19
1516 Transcript at PN18146–PN18153
1517 Exhibit SDA 19 at paras 11, 12 and 16
1518 Transcript at PN18193
1519 Exhibit SDA 19 at paras 14 and 15
1520 Transcript at PN18156
1521 Exhibit SDA 20
1522 Transcript at PN18229
1523 Ibid at PN18232
1524 Exhibit SDA 20 at paras 7, 8, 12 and 13
1525 Transcript at PN18252–PN18254
1526 Exhibit SDA 21
1527 Transcript at PN18278
1528 Exhibit SDA 21 at para 11
1529 Transcript at PN18282
1530 Exhibit SDA 21 at para 12 and 13
1531 Exhibit SDA 22
1532 Transcript at PN18337–PN18339
1533 Exhibit SDA 22 at paras 10–12
1534 See para [1628] above
1535 ABI writing closing submissions, 2 February 2016, at para 32.5
1536 For example, Barron: Exhibit Retail 3 at para 12; Goddard: exhibit Retail 4 at para 13, and d’Oreli: Exhibit Retail 8 at
para 12
1537 For example, Barron: Exhibit Retail 3 at paras 12 and 18; Daggett: Exhibit Retail 7 at para 19(b)
1538 Exhibit ABI 9 at [29]
1539 To be put into this category, respondents did not need to state “wages” (see PN17528–PN17529)
1540 For example, Barron: Exhibit Retail 3 at para 12; Gough: Exhibit Retail 5 at para 19(b) and Daggett: Exhibit Retail 7 at
para 19(a)
1541 For example, Barron: Exhibit Retail 3 at para 26; Antonieff: Exhibit Retail 6 at para 18(b)
1542 For example, Antonieff: Exhibit Retail 6 at para 17 and Daggett: Exhibit Retail 7 at para 19(f)
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1543 For example, Barron: Exhibit Retail 3 at paras 12, 13 and 28; d’Oreli: Exhibit Retail 8 at para 14
1544 For example, Barron: Exhibit Retail 3 at paras 15 and 18; Goddard: Exhibit Retail 4 at paras 13 and 14; and d’Oreli:
Exhibit Retail 8 at para 21
1545 See Antonieff: Exhibit Retail 6 at para 19 and Daggett: exhibit Retail 7 at para 21
1546 For example, Barron: Exhibit Retail 3 at paras 13, 27 and 28; Goddard: Exhibit Retail 4 at paras 31–32
1547 Exhibit SDA 36, at p. 7 and pp. 17–18
1548 See [1567]
1549 Exhibit Retail 2 at p. 75
1550 Exhibit Retail 2 at pp. 65, 68
1551 Exhibit Retail 2 at p. 66
1552 Exhibit Retail 2 at pp. 69–70
1553 ABI written closing submissions, 2 February 2016, at para 39
1554 Transcript at PN26991–PN26994
1555 ABI Additional Submission, 2 May 2016 at para 2(a)
1556 Common Exhibit 1 at p. 497
1557 Common Exhibit 1, Vol 1, p. 497
1558 [2008] AIRCFB 550 at [83]
1559 SDA submission – 1 August 2008, pp. 1–2
1560 SDA draft award – 1 August 2008, cl. 55
1561 Ibid, cl. 58.10
1562 PGA submission – 1 August 2008
1563 PGA draft award – 1 August 2008, cl. 16.1
1564 Exposure Draft – Retail Industry Award 2010 – 12 September 2008, cl.29.2
1565 [2008] AIRCFB 717 at [84]–[92]
1566 APESMA submission – 10 October 2008, para 11
1567 PGA submission – 10 October 2008, para 39–40
1568 PGA further submission – 23 October 2008
1569 Ibid, table 1 p. 4
1570 Ibid, para 7
1571 [2008] AIRCFB 1000 at [283]–[286]
1572 Pharmacy Industry Award 2010 – published 19 December 2008
1573 PGA submissions – 29 May 2009, Part 1 – p. 4
1574 PGA submissions – 29 May 2009
1575 Award Modernisation Request Variation – 26 August 2009
1576 [2009] AIRCFB 835 at [12]
1577 [2009] AIRCFB 978 at [2]
1578 [2009] AIRCFB 978 at [17] and [23]
1579 [2010] FWAFB 662 at [10]–[12]
1580 SDA submission - award modernisation proceedings – 10 June 2016, para 38
1581 PGA submissions - award modernisation proceedings – 9 June 2016
1582 Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the
Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012, Fair Work
Australia
1583 ABS, Census of Population and Housing, 2011
1584 Exhibit PG 35
1585 Exhibit PG 35 at p. 9
1586 IBISWorld (2014), Pharmacy in Australia: in search of a remedy, IBISWorld Industry report G4271a
http://www.airc.gov.au/awardmod/databases/retail/Submissions/SDA_submission.doc
http://www.airc.gov.au/awardmod/databases/retail/Draft/SDA_draft_award.doc
http://www.airc.gov.au/awardmod/databases/retail/Submissions/PGA_further_submission.pdf
http://www.airc.gov.au/awardmod/databases/retail/Draft/PGA_draft_award.DOC
http://www.airc.gov.au/awardmod/databases/retail/Exposure/Retail_exposure_draft.pdf
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb717.htm
http://www.airc.gov.au/awardmod/databases/retail/Submissions/APESMA_Submission_ED.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/PGA_Submission_ED.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/PGA_submission2_ed.pdf
http://www.airc.gov.au/awardmod/databases/retail/Decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/retail/Modern/pharmacy.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/PGA_trans_retail_pharm.pdf
http://www.airc.gov.au/awardmod/databases/retail/Submissions/PGA_trans_retail_pharm.pdf
http://www.airc.gov.au/awardmod/download/request_variation_09Nov09.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sdafastfood-100616.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-pga-090616.pdf
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1587 Exhibit PG 35 at p. 11
1588 Exhibit PG 2
1589 Exhibit PG 3
1590 Exhibit PG 4
1591 Exhibit PG 5
1592 Exhibit PG 6
1593 Exhibit PG 7
1594 Exhibit PG 8
1595 Exhibit PG 9
1596 Exhibit PG 10
1597 Exhibit PG 11
1598 Exhibit PG 12
1599 Exhibit PG 13
1600 Exhibit PG 14
1601 Exhibit PG 15
1602 Exhibit PG 16
1603 Exhibit PG 17
1604 Exhibit PG 18
1605 Exhibit PG 19
1606 Exhibit PG 20
1607 Exhibit PG 22
1608 Exhibit PG 23
1609 Exhibit PG 24
1610 Exhibit PG 25
1611 Exhibit PG 22
1612 Mr Heffernan, PN13334, PN13338. Mr Chong, PN13946–13948, Logan PN15234, El-Ahmad PN14350–PN14351
1613 See for example: PN14552 and PN15162
1614 See for example: Transcript at PN12928–PN12929, PN12291–122293, PN14915–PN14916, PN14919–PN14926,
PN15149, PN15175 and PN15220.
1615 See cross-examination of Mr Da Rui Transcript at PN13064; Mr Heffernan at PN13313; Mr Quinn On at PN13413; Mr
Tassone at PN12167; Ms Spiro at PN14673.
1616 SDA submissions, 21 March 2016 at para 518
1617 Ibid at para 563
1618 Exhibit PG 15 at para 11
1619 Exhibit PG 9 at paras 28–29
1620 See Annexure C to the PGA’s Submissions in reply and Exhibits PG 15, 18, 20, 22 and 23
1621 Exhibit PG 22 at para 5
1622 Exhibit PG 6 at paras 12–13
1623 Exhibit PG 9 at paras 12–13 and 17
1624 Exhibit PG 12 at paras 14 and 22
1625 Exhibit PG 13 at para 18
1626 Exhibit PG 18 at paras 10 and 12
1627 Exhibit PG 19 at para 19
1628 Exhibit PG 3 at paras 12 and 16
1629 Exhibit PG 4 at paras 37 and 39
1630 Exhibit PG 5 at paras 15 and 21
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG2.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG3.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG4.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG5.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG6.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG7.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG8.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG9.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG10.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG11.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG12.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG13.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG14.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG15.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG16.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG17.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG18.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG19.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG20.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG22.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG23.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG24.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG25.pdf
[2017] FWCFB 1001
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1631 Exhibit PG 7 at para 21
1632 PN13532
1633 Exhibit PG 10 at paras 11–12
1634 Exhibit PG 12 at para 21
1635 Exhibit PG 14 at para 30
1636 Exhibit PG 18 at para 24
1637 Exhibit PG 22 at paras 12–13
1638 Exhibit PG 8 at paras 30–31
1639 Exhibit PG 12 at para 26
1640 Exhibit PG 13 at para 19
1641 Exhibit PG 14 at para 31
1642 Exhibit PG 20 at paras 17 and 19
1643 Exhibit PG 2 at paras 27–29 and 19 and PN12146
1644 PN12441
1645 Exhibit PG 3 at paras 19–20
1646 Transcript at PN12615–12616
1647 Transcript at PN12531
1648 Exhibit PG 4 at paras 31, 45 and 47
1649 PN12977 and PN12978
1650 Exhibit PG 6 at paras 17–18
1651 Exhibit PG 8 at paras 33–35
1652 Exhibit PG 9 at paras 32–34
1653 Exhibit PG 10 at para 21 and 27
1654 Exhibit PG 11 at paras 25–26 and PN14297
1655 Exhibit PG 12 at paras 32 and 34
1656 PN14684
1657 Exhibit PG 15 at paras 24–25
1658 Exhibit PG 16 at para 30
1659 PN14921
1660 Exhibit PG 17 at para 17
1661 Exhibit PG 19 at paras 22–23
1662 Exhibit PG 20 at paras 2223
1663 Exhibit PG 22 at paras 17–18
1664 Exhibit PG 5 at paras 23–24
1665 Exhibit PG 6 at paras 17–18
1666 Exhibit PG 8 at paras 33–35
1667 Exhibit PG 10 at para 21 and 27
1668 Exhibit PG 12 at paras 32 and 34
1669 Exhibit PG 14 at paras 36–37
1670 Exhibit PG 19 at paras 22–23
1671 Exhibit PG 20 at paras 2223
1672 Exhibit PG 22 at paras 17–18
1673 Exhibit PG 25 at p. 5
1674 Exhibits PG 29 and PG 30
1675 Exhibit PG 35
1676 Exhibit PG 34
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG29.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG30.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG35.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-PG34.pdf
[2017] FWCFB 1001
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1677 Exhibit PG 29 at para 33
1678 See Transcript at PN22292
1679 Annexure A to Exhibit PG 29
1680 Transcript at PN22314
1681 PN22323–PN22324; Exhibit SDA-37
1682 PN22330
1683 PN22268
1684 Exhibit SDA 38.
1685 Transcript at PN22374–PN22377
1686 PN22299–PN22317; PN22401–PN22431
1687 Exhibit PG29
1688 Also see Mr Armstrong’s evidence at Transcript PN22478
1689 SDA Submissions, 21 March 2016, at para 472
1690 Exhibit PG 35
1691 Exhibit SDA 33
1692 Exhibit SDA 41
1693 Exhibit PG 36
1694 Exhibit PG 36 at p. 19
1695 SDA final submission at p. 180, para. 543
1696 SDA final submission at p. 180, para. 545
1697 Transcript at PN24749
1698 Transcript at PN24753
1699 Order of Catanzariti VP, 25 February 2016
1700 Exhibit SDA 15
1701 Exhibit SDA 15 at para 8
1702 Exhibit SDA 15 at paras 7 and 8
1703 Order of Catanzariti VP, 9 March 2016
1704 Exhibit APESMA 1
1705 Exhibit APESMA 1
1706 Exhibit APESMA 1 at paras 8–9
1707 Transcript at para 19789
1708 Exhibit APESMA 1, at paras 11–12
1709 Transcript at para 19798
1710 Transcript at para 19799
1711 PGA Final Submissions at para 171
1712 PGA Final Submissions at para 174
1713 Ibid at para 177
1714 PC Final Report at p. 465
1715 See Exhibits PG 2, PG 4, PG 5, PG 7–PG 15 and PG 18–PG 25
1716 See Exhibits PG 3, PG 6, PG 13, PG 16, PG 17, PG 18–PG 20 and PG 23
1717 PGA Final Submissions at para 179
1718 Exhibit PG 2 at para 20
1719 Shiftwork provisions are set out in clause 30 of the Retail Award
1720 Public Holidays Act 1981 (NT), s.6
1721 Statutory Holidays Act 2000 (Tas), s.5
1722 Holidays Act 1983 (Qld), s.4
https://www.fwc.gov.au/sites/awardsmodernfouryr/250216-Confidentiality-Order-ARA-NRA-MGA.pdf
https://www.fwc.gov.au/sites/awardsmodernfouryr/AM2014305-Confidentiality-Order-APESMA-090316.pdf
[2017] FWCFB 1001
507
1723 Queensland Government, ‘2017 Show Holiday Dates’, Public, School and Show Holidays,
https://www.qld.gov.au/recreation/travel/holidays/show/, accessed 20 January 2017.
1724 See Fair Work Ombudsman, ‘List of Public Holidays’, https://www.fairwork.gov.au/leave/public-holidays/list-of-
public-holidays, accessed: 20 January 2017.
1725 [1990] AR (NSW) 305
1726 Ibid, at [318]
1727 Ibid, at [321]
1728 McCallum, R, Moore, M and Edwards, J (2012), Towards more productive and equitable workplaces: an evaluation of
the Fair Work legislation, Australian Government, Canberra.
1729 McCallum, R, Moore, M and Edwards, J (2012), Towards more productive and equitable workplaces: an evaluation of
the Fair Work legislation, Australian Government, Canberra, at p. 103.
1730 Ibid, pp. 102–103
1731 The report recommended that existing State and Territory holidays should be grandfathered: Australian Government
Productivity Commission (2015), Workplace Relations Framework: Productivity Commission Inquiry Report Volume 1,
No. 76, at p. 21.
1732 Australian Government Productivity Commission (2015), Workplace Relations Framework: Productivity Commission
Inquiry Report Volume 1, No. 76, at p. 55, Recommendation 16.2; also at p. 540, Recommendation 16.2.
1733 The report recommended that sick, annual or other forms of existing leave entitlements that applied on the date of the
new State public holiday should still apply: Australian Government Productivity Commission (2015), Workplace
Relations Framework: Productivity Commission Inquiry Report Volume 1, No. 76, at p. 21.
1734 Exhibit ABI1, at [45]
1735 Ibid
1736 AHA and AAA submissions, 3 February 2016, at [48]
1737 AHA and AAA submissions, 3 February 2016, at [333]–[334]
1738 United Voice closing submissions, 21 March 2016, at [415]
1739 Common Exhibit 1 at p. 503
1740 Common Exhibit 1
1741 Print K7601, 6 May 1993
1742 [2013] FWCFB 2168
1743 [2013] FWCFB 2168 at [109]–[112]
1744 Print L4534, 4 August 1994 (Hancock ADP, MacBean SDP and O’Shea C) on p. 19
1745 Written closing submissions filed on behalf of ACCI, NSWBC and ABI, 2 February 2016
1746 See transcript at PN26445–PN26455 and PN26829
1747 Re: Metal, Engineering and Associated Industries Award (2000) 110 IR 247
1748 Ibid at [196]
1749 Common Exhibit 1 at p. 496
1750 Given that their skills and patterns of work are identical
1751 SDA Final Submissions – 21 March 2016, para 42
1752 $2 and under (No 1) PR926620; $2 and under (No 2) PR941526
1753 Workplace Relations Act 1996, Part XV
1754 $2 and under (No 1) PR926620
1755 Shop, Distributive & Allied Employees’ Association – Victorian Shops Interim Award 2000
1756 $2 and under (No 2) PR941526, at [123]
1757 SDA Final submissions – 21 March 2016, at paras 69–72
1758 Transcript at PN26991–PN26999 and PN27564–PN27568
1759 SDA submission – SDA submissions – right to refuse to work on a Sunday – 16 May 2016 at [3]
1760 Submissions of United Voice on the Right to Refuse Sunday Work, 16 May 2016 at para 5
1761 Common Exhibit 1 at pp. 480–481
https://www.qld.gov.au/recreation/travel/holidays/show/
https://www.fairwork.gov.au/leave/public-holidays/list-of-public-holidays
https://www.fairwork.gov.au/leave/public-holidays/list-of-public-holidays
https://www.fwc.gov.au/sites/awardsmodernfouryr/am2014305-sub-sda-160516.pdf
[2017] FWCFB 1001
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1762 Common Exhibit 1 at p. 495
1763 Federal Opposition Submission to the Fair Work Commission Review of Modern Awards – Penalty Rates, 21 March
2016 at paras 17 and 18
1764 [2009] AIRCFB 800 at [39] and [243]
1765 [2009] AIRCFB 800 at [28]–[30]
1766 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) sch 5 pt 3A item 13A(1), as
modified by the TP Regulations, reg 3B.04(2)
1767 [2014] FWCFB 9412 at [16]
1768 126 applications under Schedule 5, Item 9; 3 applications under Schedule 5, Item 12 and 11 applications under Schedule
5, item 13B. The majority of these applications have been made by an individual while others were made by unions on
behalf of a class of employees.
1769 Melinda Hunt v Interchange Australia [2013] FWC 8813. The most recent decision was issued on 29 March 2016; it
dismissed 5 applications on the basis that the applicants had not suffered a modernisation-related reduction in take-home
pay, [2016] FWC 1884.
1770 See Industry Profile – Accommodation and food services, pp. 31–32, Figure 5.2 and Industry Profile – Retail trade, p. 43,
Figure 5.2
1771 Exhibit SDA 36 at p. 20
1772 We note that there is some doubt about the outer limit of the span of hours in the Fast Food Award, see [1335]
1773 See Industry Profile – Accommodation and food services, pp. 31–32, Figure 5.2 and Industry Profile – Retail trade, p. 43,
Figure 5.2
1774 Exhibit SDA 36 at p. 20
1775 PC Final Report at p. 406
1776 [2013] FWCFB 1635
1777 Ibid at [329]–[331]
1778 [2013] FWC 3712 at [5]
1779 See Table 17 at [698] and Table 50 at [1417]
1780 [2015] FWCFB 3406 at [299]–[300]
1781 ABS, Employee Earnings and Hours, Australia, May 2014, Catalogue No. 6306.0
1782 Fair Work Ombudsman, ‘National Hospitality Campaign 2012–2015: Accommodation, pubs, taverns and bars’,
November 2013, http://www.fairwork.gov.au/ArticleDocuments/714/National-hospitality-campaign-report.pdf.aspx
1783 Fair Work Ombudsman, ‘National hospitality industry campaign report 2014–2015: Restaurants, Cafes and Catering
(Wave 2 Report)’, June 2015, http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-
industries-national-hospitality-industry-campaign-report.docx.aspx
1784 Fair Work Ombudsman, ‘National hospitality industry campaign report 2015–2016: Takeaway foods (Wave 3 Report)’,
March 2016, http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-foods-
report.docx.aspx
1785 Fair Work Ombudsman, ‘National retail industry campaign report 2010–2011’, November 2011,
http://www.fairwork.gov.au/ArticleDocuments/714/Retail-Industry-Campaign-Final-Report.pdf.aspx
1786 Fair Work Ombudsman, ‘•National pharmacy campaign report 2012–2013’ December 2013,
http://www.fairwork.gov.au/ArticleDocuments/714/National-Pharmacy-Campaign-Report.docx.aspx
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-profile-accommandfood-fwc-200117.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am2014305-profile-retailtrade-fwc-200117.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014305-Exh-SDA36.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb1635.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2015fwcfb3406.htm
http://www.fairwork.gov.au/ArticleDocuments/714/National-hospitality-campaign-report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-foods-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-foods-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/Retail-Industry-Campaign-Final-Report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/National-Pharmacy-Campaign-Report.docx.aspx
[2017] FWCFB 1001
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Attachment A—List of Witnesses
Party/witness Exhibit no.
Transcript
reference
Notes
Australian Business Industrial and the New South Wales Business Chamber
Expert witnesses
Emily Baxter ABI 9 PN17432
Professor John Rose ABI 1; ABI 2 PN8973
Professor Phil Lewis ABI 3; ABI 4;
ABI 5; ABI 6
PN10566
Australian Industry Group
Expert witnesses
Patricia Deasy Ai Group 11;
Ai Group 32;
Ai Group 33
PN19252; PN28457;
PN28458
Dr Andrew Pratley Ai Group 17 PN21494
Lay witnesses
Julie Toth Ai Group 24;
Ai Group 25
PN23168-23170 Not required for
cross-examination
Marcus Dunn Ai Group 1;
Ai Group 2
PN18458
Krista Limbrey Ai Group 3;
Ai Group 4;
Ai Group 30
PN18590; PN28236
Ayman Haydar Ai Group 5 PN18664
Adam Dando Ai Group 6 PN18729
Nicola Agostino Ai Group 7;
Ai Group 8
PN19062
David Eagles Ai Group 9;
Ai Group 10
PN9172
Mallika Krishnamurthy Ai Group 20 PN23168-23170 Not required for
cross-examination
Marek Kopias Ai Group 21;
Ai Group 22
PN23168-23170 Not required for
cross-examination
Gina Feast Ai Group 23 PN23168-23170 Not required for
cross-examination
Domit Makhoul Ai Group 31 PN28321
[2017] FWCFB 1001
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Party/witness Exhibit no.
Transcript
reference
Notes
Australian Hotels Association
Lay witnesses
Kasie Ferguson AHA 1; AHA 2 PN700
Philip Tudor AHA 3; AHA 4 PN779
Colin Waller AHA 5; AHA 6 PN896
Susan Cameron AHA 7; AHA 8 PN1078
Helen Sergi AHA 10; AHA 11 PN1197
Dean Trengove AHA 12; AHA 13 PN1346
Vanessa Anderson AHA 14; AHA 15 PN1456-1457
Fiona McDonald AHA 16; AHA 17 PN1511-1512
Ashleigh Winn AHA 18; AHA 19 PN1645-1646
Joanne Lesley Blair AHA 20; AHA 21 PN1787
Jackie Booth AHA 22; AHA 23 PN 1890-1891
Samantha Walder AHA 24; AHA 25 PN2023
John Andrew Dowd AHA 26; AHA 27 PN3195-3196
Richard Lovell AHA 28; AHA 29 PN3042
Andrew Bullock AHA 30; AHA 31 PN5274-5275
Keith McCallum AHA 32; AHA 33 PN5360
Samuel McInnes AHA 34; AHA 35;
AHA36
PN5461-5463
Graham Annovazzi AHA 37; AHA 38 PN5582
Ian Green AHA 39; AHA 40 PN5631-5632
Michael Kearney AHA 41; AHA 42 PN5683
Darren Gunn AHA 43; AHA 44 PN5754
Patrick Gallagher AHA 45; AHA 46 PN5822
David Ovenden AHA 47; AHA 48 PN6032
Mel Tait AHA 49; AHA 50 PN6114
Sue Mitchell AHA 51; AHA 52 PN6202
Will Cordwell AHA 53; AHA 54 PN6255
Colin Johnson AHA 55; AHA 56 PN6293
Peter Johnston AHA 57; AHA 58 PN6357
Peter Sullivan AHA 59; AHA 60 PN6411
[2017] FWCFB 1001
511
Party/witness Exhibit no.
Transcript
reference
Notes
Albert Hakfoort AHA 61; AHA 62 PN6452
David Gibson AHA 63; AHA 64 PN6614
Darren Lea Brown AHA 65; AHA 66 PN7211
Daniel Cronin AHA 67; AHA 68 PN7258
Dennis Madden AHA 69; AHA 70 PN7334-7335
Timothy Bilston AHA 71; AHA 72 PN7557
Michael Burke AHA 73; AHA 74 PN7623
Tony Cakmar AHA 75; AHA 76 PN7698
Jim Ryan AHA 77; AHA 78 PN7812-7813
Peter Williams AHA 79; AHA 80 PN7853
Belinda Usher AHA 81; AHA 82 PN7933
Michelle Morrow AHA 83; AHA 84 PN8038; 8039
Clubs Australia
Industrial
Lay witnesses
Richard Tait CAI 1 PN2676
John Dellar CAI 2; CAI 3 PN2845
Gwyn Rees CAI 4 PN2947 Not required for
cross-examination
Jeffrey Cox CAI 5; CAI 6 PN2970
Anthony Casu CAI 7; CAI 8 PN3060
Pharmacy Guild of
Australia
Expert witness
Lynne Pezzullo PG 34; PG 35;
PG 36
PN24505-24507;
PN24513-24520
Lay witnesses
Sharlene Wellard PG 1 PN6802
Anthony Tassone PG 2 PN12161
Paul Keane PG 3 PN12496
Angelo Pricolo PG 4 PN12854
Gregory Da Rui PG 5 PN13020
David Heffernan PG 6 PN13296
[2017] FWCFB 1001
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Party/witness Exhibit no.
Transcript
reference
Notes
Quinn On PG 7 PN13404
Samantha Kourtis PG 8 PN13617
Kin Chong PG 9 PN13745
Lia Mahony PG 10 PN14132
Hassan El-Ahmad PG 11 PN14258
Michael Farrell PG 12 PN14394
Trent Playford PG 13 PN14528
Craig Bird PG 14 PN14574
Michelle Spiro PG 15 PN14660
Peter Crothers PG 16 PN14867
John Cagney PG 17 PN14975
Dean Pollock PG 18 PN15060
Timothy Logan PG 19 PN15200
Patrick Costigan PG 20 PN15287
Maria Xynias PG 22 PN15740
Ian Lewellin PG 23 PN15855
Georgina Twomey PG 24 PN16463
Andrew Topp PG 25 PN17245
Stephen Armstrong PG 29; PG 30 PN22256
Australian Retailers Association , National Retail Association and the Master Grocers
Association
Expert witness
Dr Sean Sands Retail 1; Retail 2 PN6914; PN9881
Lay witnesses
Barry Barron Retail 3 PN15974
Heath Goddard Retail 4 PN16315
Graeme Gough Retail 5 PN16603
Chris Antonieff Retail 6 PN16711
Belinda Daggart Retail 7 PN16992
Jorge-Daniel Leroy
d’Oreli
Retail 8 PN17123
[2017] FWCFB 1001
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Party/witness Exhibit no.
Transcript
reference
Notes
Restaurant and Catering Industrial
Expert witnesses
John Hart RCI 7 PN3339 Not required for
cross-examination
James Parker RCI 18 PN4510
Carlita Warren RCI 19 PN4826
Lay witnesses
RCI Witness 1*
RCI Witness 2*
RCI Witness 3*
RCI Witness 4*
RCI Witness 5*
RCI fast food witness 1*
RCI fast food witness 2*
ACTU
Expert witness
Professor Raymond
Markey
ACTU 2 PN19910
Dr Martin O’Brien ACTU 3 PN23295
APESMA
Lay witness
APESMA Witness 1 APESMA 1 PN19763
SDA
Expert witnesses
Kevin Kirchner
SDA 32 PN21460
Not required for
cross-examination
Helen Bartley SDA 33; SDA 34 PN21703; PN21717
Professor Morris Altman SDA 31
PN19370
Dr Ian Watson SDA 35; SDA 36 PN22153; PN22164
Professor David Peetz SDA 36 PN22164 Not required for
cross-examination
Serena Yu SDA 34; SDA 40
SDA 55
PN22542-22548;
PN25877
[2017] FWCFB 1001
514
Party/witness Exhibit no.
Transcript
reference
Notes
Dr Martin O’Brien SDA 41; SDA 42 PN23270; PN23280
Professor Sara Charlesworth SDA 43; SDA 44 PN23498; PN23514
Dr Fiona Macdonald SDA 43 PN23498
Lay witnesses
SDA witness 1*
SDA witness 2*
SDA witness 3*
SDA witness 4*
SDA witness 5*
SDA witness 6*
SDA witness 7*
SDA witness 8*
United Voice
Expert witnesses
Keith Harvey UV 15 PN8904 Not required for
cross-examination
Professor Jeff Borland UV 25 PN11586
Professor John Quiggin UV 24 PN11253
Dr Olav Muurlink UV 26; UV 27 PN20709;
PN20727
Professor Damien Oliver UV 28 PN21346
Lay witnesses
Mary Quirk UV 5 PN3561
Wayne Jones UV 6 PN3707
Damien Cooper UV 7 PN3773
Andrew Sanders UV 9 PN8130
William King UV 10 PN8368
Sean Davis UV 11 PN8505
Angus Lonergan UV 12 PN8653
Jennifer Miller UV 13 PN8735
Alexandra Kindness UV 14 PN8855
[2017] FWCFB 1001
515
Party/witness Exhibit no.
Transcript
reference
Notes
Carol Gordon UV 16 PN8906 Not required for
cross-examination
Amit Gounder UV 17 PN8908 Not required for
cross-examination
Steven Petrov UV 18 PN8912 Not required for
cross-examination
Jan Syrek UV 19 PN8916 Not required for
cross-examination
Rachel-Lee Zwarts UV 20 PN8920 Not required for
cross-examination
* Subject of confidentiality order.
[2017] FWCFB 1001
516
Attachment B—Research reference list
Includes material available at 21 December 2015
1.1 Business performance
1. Atkins, T. (2011), Shop trading hours in Western Australia: A research report (University of
Western Australia, Perth).
2. Bewley, T. F. (1999), Why Wages Don’t Fall During a Recession (Harvard University Press,
Cambridge, MA., London).
3. Burgess, J. and Rasmussen, E. (2007), Too much of a good thing: Longer working hours in
Australia and New Zealand (The University of Auckland and the University of Newcastle).
4. Card, D. and Krueger, A. B. (1994), ‘Minimum Wage and Employment: A case study of the fast
food industry in New Jersey and Pennsylvania’, The American Economic Review, Vol. 84, No. 4,
pp. 772–793.
5. Clarke, P. (2014), ‘Pharmaceutical, pharmacists and profits: a health policy perspective’,
Australian Prescriber, Vol. 37, No. 5, pp.148–149.
6. Covick, O. and Kirchner, K. (2012), Economic conditions in the retail industry report (Flinders
University, Adelaide).
7. Ferraro, O. and Sands, S. (2010) ‘Retailers’ strategic responses to economic downturn: insights
from down under’, International Journal of Retail & Distribution Management. Vol. 38, No. 8, pp.
567–577.
8. Garnett, A., Hawtrey, K., Lewis P., and Treadgold, M. (2010), The Australian Economy: Your
Guide (Pearson Australia, Sydney).
9. Garnett A. and Lewis, P. (2010), ‘The Economy’, in Aulich, C. and Evans, M. (eds), The Rudd
Government (ANU E Press, Canberra, 2010).
10. Guala, F. (2012), ‘Reciprocity: Weak or Strong? What Punishment Experiments Do (and Do Not)
Demonstrate’, Behavioral and Brain Sciences, Vol. 35, No. 1, pp. 1–15.
11. Harding, G, Heady, B. and Warren, D. (2006), Families, Incomes and Jobs: A Statistical Report of
the HILDA Survey (Melbourne: Institute of Applied Economic and Social Research University of
Melbourne).
12. Kube, S., Marechal, M. A. and Puppe, C. (2013), ‘Do Wage Cuts Damage Work Morale?
Evidence from a Natural Field Experiment’, Journal of the European Economic Association, Vol.
11, No. 4, pp. 853–870.
13. Lewis, P. (2014), ‘Paying the penalty? The high price of penalty rates in Australian restaurants’,
Agenda, Vol. 21, No. 1, pp. 5–26.
14. Nicholson, M. (2013), ‘Preparing for the rising tide of price disclosure’, The Australian Journal of
Pharmacy, Vol. 94, No. 1113, pp. 45-48.
15. Peetz, D., (2003), Townsend and others, ‘Race Against Time: Extended Hours in Australia’,
Australian Bulletin of Labour, Vol. 29, No. 2, pp. 126–142.
16. Price, R. (2004), Checking out supermarket labour usage: The nature of labour usage and
employment relations consequences in a food retail firm in Australia, (PhD Thesis, Department of
Industrial relations, The Griffith Business School, Griffith University).
http://www.law.uwa.edu.au/research/ccr/shop-trading-hours-in-western-australia
http://www.law.uwa.edu.au/research/ccr/shop-trading-hours-in-western-australia
http://www.hup.harvard.edu/catalog.php?isbn=9780674009431
http://www.hup.harvard.edu/catalog.php?isbn=9780674009431
http://www.researchgate.net/publication/228458302_Too_much_of_a_good_thing_Longer_working_hours_in_Australia_and_New_Zealand
http://www.researchgate.net/publication/228458302_Too_much_of_a_good_thing_Longer_working_hours_in_Australia_and_New_Zealand
http://ideas.repec.org/a/aea/aecrev/v84y1994i4p772-93.html
http://ideas.repec.org/a/aea/aecrev/v84y1994i4p772-93.html
http://ideas.repec.org/a/aea/aecrev/v84y1994i4p772-93.html
http://www.australianprescriber.com/magazine/37/5/148/9
http://www.australianprescriber.com/magazine/37/5/148/9
http://www.pc.gov.au/inquiries/completed/retail-trade/submissions/submissions-test/submission-counter/sub006-retail-trade-attachment2.pdf
http://www.pc.gov.au/inquiries/completed/retail-trade/submissions/submissions-test/submission-counter/sub006-retail-trade-attachment2.pdf
http://www.emeraldinsight.com/doi/pdfplus/10.1108/09590551011057408
http://www.emeraldinsight.com/doi/pdfplus/10.1108/09590551011057408
http://www.emeraldinsight.com/doi/pdfplus/10.1108/09590551011057408
http://www.pearson.com.au/products/K-L-Lewis-Philip-Et-Al/The-Australian-Economy-your-guide/9781442529908?R=9781442529908
http://www.pearson.com.au/products/K-L-Lewis-Philip-Et-Al/The-Australian-Economy-your-guide/9781442529908?R=9781442529908
http://press.anu.edu.au/titles/australia-and-new-zealand-school-of-government-anzsog-2/rudd_citation/
http://press.anu.edu.au/titles/australia-and-new-zealand-school-of-government-anzsog-2/rudd_citation/
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146. Independent Pricing and Regulatory Tribunal (2008), Review of the Registered Clubs Industry in
NSW, June 2008 (New South Wales Government, Sydney).
147. New South Wales Government (2007), Reform of Shop Trading Hours in New South Wales: Part
4 of the Shops and Industries Act 1962, Better Regulation Office Issues Paper (New South Wales
Government, Sydney).
148. Organisation for Economic Cooperation and Development (OECD) (2015a) Key Short-Term
Economic Indicators: Harmonised Unemployment Rate (annual).
149. Productivity Commission (2011), Economic Structure and Performance of the Australian Retail
Industry (Inquiry Report No. 56, Australian Government, Canberra).
150. Productivity Commission (2014), Relative costs of doing business in Australia: Retail trade
(Productivity Commission Research Report, Australian Government, Canberra).
151. Tourism Research Australia (2013), Tourism businesses in Australia, June 2010 to June 2012.
1.6 Additional articles
1. Ahlburg, D. and Schumann, P. (1986), ‘Increased Penalty Rates for Overtime and Job Creation in
Australia’, The Journal of Industrial Relations, Vol. 28, No. 1, pp. 102–108.
2. Allan, C., Brosnan, P. and Walsh, P. (1998), ‘Non-standard Working-time Arrangements in
Australia and New Zealand’, International Journal of Manpower, Vol. 19, No. 4, pp. 234–249.
3. Bradley, L., Brown, K., Ling, S., Lingard, H. and Townsend, K. (2011), ‘Labouring for Leisure?
Achieving Work-life Balance through Compressed Working Weeks’, Annals of Leisure Research,
Vol. 14, No. 1, pp. 43–59.
4. Hamermesh, D. and Stancanelli, E. (2015), ‘Long Workweeks and Strange Hours’, ILR Review,
Vol. 68, No. 5, pp. 1007–1018.
http://www.health.gov.au/internet/main/publishing.nsf/Content/pharmacy-practice-incentives-program-data
http://www.health.gov.au/internet/main/publishing.nsf/Content/pharmacy-practice-incentives-program-data
http://ris.govspace.gov.au/files/2014/11/02_accessible-final_20141128.docx
http://ris.govspace.gov.au/files/2014/11/02_accessible-final_20141128.docx
http://ris.govspace.gov.au/files/2014/11/02_accessible-final_20141128.docx
http://6cpa.com.au/
http://www.industry.nsw.gov.au/__data/assets/pdf_file/0008/53684/VET_finalreport_20120810.pdf
http://www.industry.nsw.gov.au/__data/assets/pdf_file/0008/53684/VET_finalreport_20120810.pdf
http://www.fwc.gov.au/sites/wagereview2012/research/2_2012.pdf
http://www.fwc.gov.au/sites/wagereview2012/research/2_2012.pdf
http://www.fwc.gov.au/sites/wagereview2012/research/2_2012.pdf
http://www.fwc.gov.au/sites/wagereview2014/research/report6.pdf
http://www.fwc.gov.au/sites/wagereview2014/research/report6.pdf
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.pdf.aspx
http://www.ipart.nsw.gov.au/Home/Industries/Other/Reviews/Registered_Clubs/Review_of_the_NSW_Registered_Clubs_Industry/27_Jun_2008_-_Final_Report/Final_Report_-_Review_of_the_Registered_Clubs_Industry_in_NSW_-_June_2008
http://www.ipart.nsw.gov.au/Home/Industries/Other/Reviews/Registered_Clubs/Review_of_the_NSW_Registered_Clubs_Industry/27_Jun_2008_-_Final_Report/Final_Report_-_Review_of_the_Registered_Clubs_Industry_in_NSW_-_June_2008
http://pandora.nla.gov.au/pan/83604/20080422-1426/www.dpc.nsw.gov.au/__data/assets/pdf_file/0016/12643/BRO_website_-_Issues_Paper_-_Trading_Hours_-_230807.pdf
http://pandora.nla.gov.au/pan/83604/20080422-1426/www.dpc.nsw.gov.au/__data/assets/pdf_file/0016/12643/BRO_website_-_Issues_Paper_-_Trading_Hours_-_230807.pdf
http://pandora.nla.gov.au/pan/83604/20080422-1426/www.dpc.nsw.gov.au/__data/assets/pdf_file/0016/12643/BRO_website_-_Issues_Paper_-_Trading_Hours_-_230807.pdf
http://stats.oecd.org/?queryid=21760
http://stats.oecd.org/?queryid=21760
http://www.pc.gov.au/inquiries/completed/retail-industry/report
http://www.pc.gov.au/inquiries/completed/retail-industry/report
http://www.pc.gov.au/inquiries/completed/retail-trade/report
http://www.pc.gov.au/inquiries/completed/retail-trade/report
http://www.tra.gov.au/documents/Tourism_Businesses_in_Australia_June_10_to_June_12_FINAL_Oct13.pdf
http://jir.sagepub.com/content/28/1/102.abstract
http://jir.sagepub.com/content/28/1/102.abstract
http://www.emeraldinsight.com/doi/abs/10.1108/01437729810220419
http://www.emeraldinsight.com/doi/abs/10.1108/01437729810220419
http://www.tandfonline.com/doi/abs/10.1080/11745398.2011.575046
http://www.tandfonline.com/doi/abs/10.1080/11745398.2011.575046
http://www.tandfonline.com/doi/abs/10.1080/11745398.2011.575046
http://ilr.sagepub.com/content/68/5/1007
http://ilr.sagepub.com/content/68/5/1007
[2017] FWCFB 1001
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5. International Labour Organization (2011), Working Time in the Twenty-first Century (Report for
discussion at the Tripartite meeting of experts on Working-time arrangements, International
Labour Office, Geneva).
6. Jenkins, S. and Osberg, L. (2004), ‘Nobody to Play with?’ in D. S. Hamermesh and G. A. Pfann
(eds.) The Economics of Time Use (Contributions to Economic Analysis, Volume 271), Emerald
Group Publishing Limited, pp. 113–145.
7. King, S. (1993), ‘Penalty Rates and Enterprise Bargaining’, Australian Economic Review, Vol. 26,
No. 4, pp. 58–64.
8. Kirby, D., (1992), ‘Employment in Retailing: Unsociable Hours and Sunday Trading’, International
Journal of Retail & Distribution Management, Vol. 20, No. 7, pp. 19–29.
9. Lee, S., McCann, D. and Messenger, J. (2007), ‘Working Time around the World: Trends in
Working Hours, Laws and Policies in a Global Comparative Perspective’ (International Labour
Office, Geneva).
10. Lim., C and Young, C. (2014), ‘Time as a Network Good: Evidence from Unemployment and the
Standard Workweek’, Sociological Science, Vol. 1, pp. 10–27.
11. Mayer, W. and Trent, C. (2014), ‘Working the Night Shift: the Impact of Compensating Wages
and Local Economic Conditions on Shift Choice’, Economics Research International, vol. 2014,
pp. 1–15.
1.7 Additional books
1. Charlesworth, S. and Pocock, B. (2015), ‘Job Quality and Work-life: Unsocial Working Hours,
Casual Work and Work-life Outcomes in Australia’ in C. Warhurst and A. Knox (eds.) Job Quality
in Australia, Federation Press.
2. Hart, R. (2004), The Economics of Overtime Working (Cambridge University Press, Cambridge).
http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_161734.pdf
http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_161734.pdf
http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_161734.pdf
http://www.emeraldinsight.com/doi/abs/10.1016/S0573-8555%2804%2971005-6
http://www.emeraldinsight.com/doi/abs/10.1016/S0573-8555%2804%2971005-6
http://www.emeraldinsight.com/doi/abs/10.1016/S0573-8555%2804%2971005-6
http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8462.1993.tb00811.x/abstract
http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8462.1993.tb00811.x/abstract
http://www.emeraldinsight.com/doi/abs/10.1108/09590559210022371
http://www.emeraldinsight.com/doi/abs/10.1108/09590559210022371
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_104895.pdf
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_104895.pdf
http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publication/wcms_104895.pdf
https://www.sociologicalscience.com/time-network-good/
https://www.sociologicalscience.com/time-network-good/
http://www.hindawi.com/journals/ecri/2014/632506/
http://www.hindawi.com/journals/ecri/2014/632506/
http://www.hindawi.com/journals/ecri/2014/632506/
http://www.federationpress.com.au/bookstore/book.asp?isbn=9781862879669
http://www.federationpress.com.au/bookstore/book.asp?isbn=9781862879669
http://www.federationpress.com.au/bookstore/book.asp?isbn=9781862879669
http://www.cambridge.org/us/academic/subjects/economics/labour-economics/economics-overtime-working?format=HB
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Attachment C—Penalty rates in pre-reform instruments
1. Hospitality Group
1.1 Hospitality Industry (General) Award 2010 [MA000009]
Sunday Public holiday
All employees F/T &P/T Casual
Modern Hospitality Industry (General) Award 2010 [MA000009] 175 250 275
Federal The Hospitality Industry - Accommodation, Hotels, Resorts and
Gaming Award 1998 AP783479CRV
175 250 275
NSW Hotel Employees (State) Award AN120249 200 300 300
Qld Hotels, Resorts and Accommodation Industry Award - State - South-
Eastern Division 2002 AN140147
175 250 250
Hotels, Motels, Resorts and Accommodation Award - State
(Excluding South-East Queensland) 2005 AN140146
150 250 250
SA Hotels, Clubs, Etc., Award AN150066 Front of house - 200
Back of house - 175
250 150
1
Tas Hotels, Resorts, Hospitality and Motels Award AN170047 175 250 250
WA Hotel and Tavern Workers’ Award 1978 AN160174 150 250 225
1 Note casual employees under this award are paid a standard loading of 50% for all time worked Monday to Sunday (other than overtime).
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000009/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000009/default.htm
http://www.airc.gov.au/consolidated_awards/AP/AP783479/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN120249/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN140147/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN140146/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN150066/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN170047/asframe.html
http://www.airc.gov.au/consolidated_awards/AN/AN160174/asframe.html
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1.2 Restaurant Industry Award 2010 [MA000119]
Sunday Public holiday
F/T &
P/T
Casual
L1–2
Casual
L3–6
F/T & P/T Casual
Modern Restaurant Industry Award 2010
[MA000119]
150 150 175 250 250
Federal Liquor and Accommodation Industry -
Restaurants - Victoria - Award 1998
AP787213CRV
175 175 175 250 275
NSW Restaurants, &c., Employees (State) Award
AN120468
150 - - 250 -
Qld Hospitality Industry - Restaurant, Catering
and Allied Establishments Award - South-
Eastern Division 2002 AN140144
150
123 123 250* 173
Cafe Restaurant and Catering Award - State
(Excluding South-East Queensland) 2003
AN140052
150 200 200 250* 250
SA Cafes and Restaurants (SA) Award
AN150025
200
220 220 200
after 8 hrs-300-
200
Delicatessens, Canteens, Unlicensed Cafes
and Restaurants Etc Award AN150170
200
220 220 200 200
Tas Restaurant Keepers Award AN170086 175
175 175 250 250
WA Restaurant, Tearoom and Catering
Workers’ Award, 1979 AN160276
150 150 150 250 225
* Labour Day – different rate cl. 7.6.2
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000119/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000119/default.htm
http://www.fwc.gov.au/consolidated_awards/AP/AP787213/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN120468/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN140144/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an140052/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN150025/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN150170/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN170086/asframe.html
https://www.fwc.gov.au/documents/consolidated_awards/an/an160276/asframe.html
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1.3 Registered and Licensed Clubs Award 2010 [MA000058]
Saturday Sunday Public holiday
F/T & P/T Casual All e/ees F/T & P/T Casuals
Modern Registered and Licensed Clubs
Award 2010 [MA000058]
150 150 175 250 –
Federal AP787060CRV - Licensed Clubs
(Victoria) Award 1998
150 150 175 250 (all e/ees) 150
NSW Club Employees (State) Award
AN120136
150 150 175 250 (all e/ees) –
Club Managers’ (State) Award 2006
AN120138
– – – 250 (all e/ees) –
Qld Club Employees’ Award - State
(Excluding South-East Queensland)
2003 AN140072
150 150 150
Casual stewards/
stewardesses
chief stewards,
stewards/
stewardesses,
cellarpersons –
200
250 (all e/ees)*
(labour day –
different rate cl.
7.6.2)
–
Clubs Etc. Employees’ Award -
South East Queensland 2003
AN140073
125 150 175 250 (all e/ees)*
(labour day –
different rate cl.
7.6.2)
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000058/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000058/default.htm
https://www.fwc.gov.au/documents/consolidated_awards/ap/ap787060/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an120136/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an120138/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an140072/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an140073/asframe.html
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Saturday Sunday Public holiday
F/T & P/T Casual All e/ees F/T & P/T Casuals
Modern Registered and Licensed Clubs
Award 2010 [MA000058]
150 150 175 250 –
SA Hotels, Clubs, Etc., Award
AN150066
150
Casual- 150
See cl. 4.2
re casual
employees
Casual –
150
F/T & P/T
Front of house:
200
Back of house:
175
Casual–150
Other employees-
250
Front of house
F/T & P/T on
Good Friday or
Christmas Day –
300
150
Tas Licensed Clubs Award AN170057 125
(Employed
after 1 Dec
94, 150% if
employed
prior)
150 175 250 250
WA Club Workers’ Award, 1976
AN160082
150 150 150 250 (all e/ees) 225
* Labour Day – different rate cl. 7.6.2
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000058/default.htm
https://www.fwc.gov.au/documents/consolidated_awards/an/an150066/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an170057/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an160082/asframe.html
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2. Retail Group
2.1 General Retail Industry Award 2010 [MA000004]
Sunday Public Holiday
All e/ees F/T & P/T Casual
Modern General Retail Industry Award 2010 [MA000004] 200 250 250
Federal Shop, Distributive and Allied Employees Association -
Victorian Shops Interim Award 2000 AP796250
200 250 250
Retail, Wholesale and Distributive Employees (NT)
Award 2000 AP794741
200 250 250
Retail and Wholesale Industry - Shop Employees -
Australian Capital Territory - Award 2000 AP794740
150 250 250
NSW Retail Services Employees (State) Award AN120470 Propagators and/or Gardeners and
Garden Hands and Shiftworkers—
200
Other employees—150
250 250
Qld Retail Industry Award - State 2004 AN140257 Non-Exempt shops—200
Independent Retail Shops and
Exempt Shops—150
Other employees—175
250 of the part-
time hourly rate
250 of the
casual rate
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000004/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000004/default.htm
http://www.fwa.gov.au/consolidated_awards/ap/ap796250/asframe.html
http://www.fwa.gov.au/consolidated_awards/ap/ap794741/asframe.html
http://www.fwa.gov.au/consolidated_awards/ap/ap794740/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/an120470/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN140257/asframe.html
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Sunday Public Holiday
All e/ees F/T & P/T Casual
Modern General Retail Industry Award 2010 [MA000004] 200 250 250
SA Retail Industry (SA) Award AN150130 Retail Outdoor Salespersons: 200
Establishments open after 12.30pm
on Sat:
Casual—170 of the min casual rate
Full-time & part-time—160
Cafés, canteens and restaurants:
Casual—220 (overtime)
Full-time & part-time—200
(overtime)
200 200
Tas Retail Trades Award AN170088 200 250 270 (excl
transport
workers)
WA Shop and Warehouse (Wholesale and Retail
Establishments) State Award 1977, The AN160292
200 250 250
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000004/default.htm
http://www.fwa.gov.au/consolidated_awards/an/AN150130/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN170088/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN160292/asframe.html
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2.2 Fast Food Industry Award 2010 [MA000003]
Sunday Public Holiday
F/T & P/T Casual F/T & P/T Casual
Modern Fast Food Industry Award 2010 [MA000003] 150 175 250 275
Federal National Fast Food Retail Award 2000
AP806313
NSW – 150
Other states –
175
NSW – 150
Other states –
175
250 250 plus casual
loading in
cl.12.1
NSW Shop Employees (State) Award AN120499 150 150 250
Except
Melbourne Cup
day
250
Except
Melbourne Cup
day
Qld Fast Food Industry Award - South Eastern Division
2003 AN140113
Full-time – 125 123 250 273
Fast Food Industry Award - State (Excluding South-
East Queensland ) 2003 AN140114
Full-time – 150 175 250
(Labour Day –
different rate cl.
7.6.2)
250
SA Delicatessens, Canteens, Unlicensed Cafes and
Restaurants Etc Award AN150170
200
220 200 200
Tas Restaurant Keepers Award AN170086 175 175 250 250
WA Fast Food Outlets Award 1990 AN160127 200 (see cl.9(2)) 200 (see
cl.9(2))
200 200
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000003/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000003/default.htm
http://www.fwa.gov.au/consolidated_awards/ap/ap806313/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN120499/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN140113/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN140114/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN150170/asframe.html
http://www.fwa.gov.au/consolidated_awards/AN/AN170086/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN160127/asframe.html
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2.3 Pharmacy Industry Award 2010 [MA000012]
Sunday Public Holiday
Time F/T & P/T Casual F/T & P/T Casual
Modern Pharmacy Industry Award 2010 [MA000012] All hours 200 225 250 275
Federal Community Pharmacy Award 1998
AP773671
7am -
midnight
VIC; SA –
200
NSW; QLD;
TAS; WA –
150
VIC; SA –
220
NSW; QLD;
TAS; WA –
170
VIC; SA –
200
NSW; ACT;
QLD – 250
TAS; WA –
150
VIC; SA – 220
NSW; ACT;
QLD – 270
TAS; WA –
170
7am - 8.30 am;
6pm -
midnight
ACT – 200 ACT – 220 – –
8.30am – 6pm ACT –150 ACT – 170
Chemists (Australian Capital Territory) Award
2000 AP772207
8.30am – 6pm 150 150 250 125
6am – 8.30am;
6pm -
midnight
200
Shop, Distributive and Allied Employees
Association - Victorian Pharmacy Assistants
Award 2000 AP796289
All time 200 See table in
cl.11.3.2(b)
300 See table in
cl.11.3.2(c)&(d)
S.D.A Western Australian Community
Pharmacy - Pharmacy Assistants Award 2000
AP806529
All time – – 200 222
NSW Community Pharmacy (State) Award 2001
AN120152
7am –
midnight
150 170 250 270
Qld Pharmacy Assistants’ Award - State 2003
AN120416
All time 200 125 250 125
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000012/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000012/default.htm
http://www.fwa.gov.au/consolidated_awards/ap/ap773671/asframe.html
http://www.fwa.gov.au/consolidated_awards/ap/ap772207/asframe.html
http://www.fwa.gov.au/consolidated_awards/ap/ap796289/asframe.html
http://www.fwa.gov.au/consolidated_awards/ap/ap806529/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN120152/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN120416/asframe.html
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Sunday Public Holiday
Time F/T & P/T Casual F/T & P/T Casual
SA Retail Pharmaceutical Chemists Award
AN150131
All time 200 220 200 220
Tas Retail Pharmacy Award AN170087 150 170 150 170
WA Retail Pharmacists’ Award, 2004 AN160277 7am- midnight 125 145 150 170
http://www.fwc.gov.au/documents/consolidated_awards/an/AN150131/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN170087/asframe.html
http://www.fwa.gov.au/consolidated_awards/an/AN160277/asframe.html
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Attachment D—Terms of reference for Productivity Commission inquiry—
Workplace Relations Framework
The terms of reference was stated as follows:
The Productivity Commission will assess the performance of the workplace relations
framework, including the Fair Work Act 2009, focussing on key social and economic
indicators important to the wellbeing, productivity and competitiveness of Australia
and its people. A key consideration will be the capacity for the workplace relations
framework to adapt over the longer term to issues arising due to structural adjustments
and changes in the global economy.
In particular, the review will assess the impact of the workplace relations framework
on matters including:
unemployment, underemployment and job creation
fair and equitable pay and conditions for employees, including the maintenance of a
relevant safety net
small businesses
productivity, competitiveness and business investment
the ability of business and the labour market to respond appropriately to changing
economic conditions
patterns of engagement in the labour market
the ability for employers to flexibly manage and engage with their employees
barriers to bargaining
red tape and the compliance burden for employers
industrial conflict and days lost due to industrial action
appropriate scope for independent contracting.
In addition to assessing the overall impact of the workplace relations framework on
these matters, the review should consider the Act’s performance against its stated aims
and objects, and the impact on jobs, incomes and the economy. The review should
examine the impact of the framework according to business size, region, and industry
sector. It should also examine the experience of countries in the Organisation for
Economic Co-operation and Development.
The workplace relations framework encompasses the Fair Work Act 2009, including
the institutions and instruments that operate under the Act; and the Independent
Contractors Act 2006.
The review will make recommendations about how the laws can be improved to
maximise outcomes for Australian employers, employees and the economy, bearing in
mind the need to ensure workers are protected, the need for business to be able to
grow, prosper and employ, and the need to reduce unnecessary and excessive
regulation.
The Productivity Commission will identify and quantify, as far as possible, the full
costs and benefits of its recommendations.
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An overarching principle for any recommendations should be the need to ensure a
framework to serve the country in the long term, given the level of legislative change
in this area in recent years.
In conducting the review, the Productivity Commission will draw on the full spectrum
of evidence sources including, but not limited to:
Australian Bureau of Statistics data and publications
data sources maintained by other relevant Government bodies, including but not
limited to the Department of Employment, Fair Work Commission and Fair Work
Ombudsman
employers or their representatives
employees or their representatives
academia
special interest groups.
The review should also identify gaps in the evidence base where further collection
may assist in the analysis of the overall performance and impact of the system.
Source: PC Final Report, pp. v–vii
[2017] FWCFB 1001
537
Attachment E—List of Cases
1947 Weekend Penalty Rates Case [1947] 58 CAR 610
1994 Public Holidays Test Case decision Print L4534, 4 August 1994
4 yearly review of modern awards – Annual leave [2015] FWCFB 3406
4 yearly review of modern awards – Annual leave [2016] FWCFB 3177
4 yearly review of modern awards – Award flexibility [2016] FWCFB 6178
4 yearly review of modern awards – Award stage – Group 1A and 1B awards – [2014] FWC
8575
4 yearly review of modern awards – Award stage – Group 3 and 4 awards – [2014] FWC
9412
4 yearly review of modern awards – Common issue – Award flexibility [2015] FWCFB 4466
4 yearly review of modern awards – Common issues [2014] FWC 1790
4 yearly review of modern awards – Common issues [2014] FWC 7742
4 yearly review of modern awards – Issues paper [2014] FWCFB 916
4 yearly review of modern awards – Penalty rates [2014] FWC 9175
4 yearly review of modern awards – Penalty rates [2015] FWC 1482
4 yearly review of modern awards – Penalty rates [2015] FWCFB 5357
4 yearly review of modern awards – Penalty rates [2016] FWCFB 285
4 yearly review of modern awards – Penalty rates [2016] FWCFB 965
4 yearly review of modern awards – Penalty rates [2016] FWCFB 6460
4 yearly review of modern awards – Penalty rates [2016] FWCFB 7285
4 yearly review of modern awards: Preliminary Jurisdictional Issues Decision
[2014] FWCFB 1788
Alcan (NT) Alumina Pty Ltd v Commissioner for Territory Revenue (Northern Territory)
(2009) 239 CLR 27
ALDI Foods Pty Ltd v Transport Workers’ Union of Australia (2012) 227 IR 120
Annual Wage Review 2011-12 [2012] FWAFB 5000
Annual Wage Review 2012–13 [2013] FWCFB 4000
Annual Wage Review 2013–14 [2014] FWCFB 3500
Annual Wage Review 2013–14 [2015] FWCFB 3500
Annual Wage Review 2015–16 [2016] FWCFB 3500
Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121
Australian Education Union v Department of Education and Children’s Services (2012) 285
ALR 27
Award modernisation [2008] AIRCFB 387
[2017] FWCFB 1001
538
Award modernisation [2008] AIRCFB 550
Award modernisation [2008] AIRCFB 618
Award modernisation [2008] AIRCFB 717
Award modernisation [2008] AIRCFB 1000
Award modernisation [2009] AIRCFB 345
Award modernisation [2009] AIRCFB 645
Award modernisation [2009] AIRCFB 835
Award modernisation – Stage 2 modern awards [2009] AIRCFB 800
Award modernisation – Stage 3 modern awards [2009] AIRCFB 450
Award modernisation – Stage 3 modern awards [2009] AIRCFB 462
Bowling v General Motors Holden Ltd (1980) 33 ALR 297
Café v. Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280
Cetin v Ripon Pty Ltd (T/as Parkview Hotel) (2003) 127 IR 205
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 272 ALR 750
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384
Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union (2012) 219 IR 139
Commissioner of Stamp Duties v Permanent Trustee Co. Ltd (1987) 9 NSWLR 719
Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298
Construction, Forestry, Mining and Energy Union v Deputy President Hamberger (2011) 195
FCR 74
Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16
Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (2013) 248
CLR 619
Corporation of the City of Enfield v Development Assessment Corporation (2000) 199 CLR
135
Dix v Crimes Compensation Tribunal [1993] 1 VR 297
Donohoe v The Director of Public Prosecutions (WA) [2011] WASCA 239
Edwards v Giudice [1999] FCA 1836
Elias v Federal Commissioner of Taxation (2002) 123 FCR 499
Equal Remuneration Decision 2015 [2015] FWCFB 8200
Esso Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union and Ors [2015] FWCFB 210
Evans v Bartlam [1937] AC 473
Friends of Hinchinbrook Society Inc v Minister for Environment (No 3) (1997) 77 FCR 153
Gardner v Jay (1885) 29 Ch D 50
[2017] FWCFB 1001
539
JJ Richards and Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53
Jones v Dunkel (1959) 101 CLR 298
Kostokanellis v Allen [1974] VR 596
Maroondah City Council v Fletcher & Anor [2009] VSCA 250
Melinda Hunt v Interchange Australia [2013] FWC 8813
Mills v Meeking (1990) 169 CLR 214
Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24
Modern Awards Review 2012 [2012] FWAFB 5600
Modern Awards Review 2012 – Penalty Rates [2013] FWCFB 1635
Modern Awards Review 2012 – Public Holidays [2013] FWCFB 2168
Municipal Officers’ Association of Australia v Lancaster (1981) 37 ALR 559
3177
National Retail Association v Fair Work Commission [2014] FCAFC 118
Nestle Australia Ltd v Federal Commissioner of Taxation (1987) 16 FCR 167
Nguyen v Nguyen (1990) 169 CLR 245
O’Sullivan v Farrer (1989) 168 CLR 210
Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU)
[2014] FWCFB 2042
Premier Pet Pty Ltd trading as Bay Fish v Brown (No 2) [2013] FCA 167
Prior v Sherwood (1906) 3 CLR 1054
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
R v L (1994) 49 FCR 534
R v Refshauge (1976) 11 ALR 471
Re Australian Industrial Relations Commission; Ex parte Metal Trades Industry Association
of Australia (1995) 62 IR 306
Re Clarkson; ex parte Australian Telephone and Phonogram Officers’ Association (1982)
148 CLR 600
Re Engine Drivers and General (State) Interim Award [1950] AR (NSW) 260
Re Fast Food Industry Award 2010 [2010] FWAFB 305
Re Fast Food Industry Award 2010 [2010] FWAFB 379
Re Furnishing Industry Association of Australia (Queensland) Limited Union of Employers,
Print Q9115, 27 November 1998
Re: Metal, Engineering and Associated Industries Award (2000) 110 IR 247
Re Metal Industry Award 1984 – Foreman and Supervisors and Other Awards (No2) (1994)
56 IR 234
Re Noel Bartone [2014] FWC 2402
[2017] FWCFB 1001
540
Re Owens and Ors [2016] FWC 1884
Re Pharmacy Industry Award 2010 [2010] FWAFB 662
Re Pharmacy Industry Award 2010 [2009] AIRCFB 978
Re R v Moore; ex parte Australian Telephone and Phonogram Officers’ Association (1982)
148 CLR 600
Re Restaurant and Catering Association of Victoria [2014] FWCFB 1996
Re Restaurant and Catering Australia and Ors [2013] FWC 7840
Re Security Services Industry Award [2015] FWCFB 620
Re Shop, Distributive and Allied Employees Association [2011] FWAFB 6251
Re Shop, Distributive and Allied Employees’ Association and $2 and Under and Ors (2003)
135 IR 1
Re Stevedoring Industry Award [2015] FWCFB 1729
Review of Wage Fixing Principles – August 1994 (1994) 55 IR 144
Ross v R (1979) 141 CLR 432
SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR
294
Sagona v R & C Piccoli Investments Pty Ltd [2014] FCCA 875
Schweppes Australia Pty Ltd v United Voice – Victoria Branch [2012] FWAFB 7858
Shop, Distributive and Allied Employees Association v $2 and Under and Ors (2003) 135 IR
18200
Shop, Distributive and Allied Employees Association v National Retail Association and Anor
(No. 2) (2012) 205 FCR 227
Tamayo v Alsco Linen Service Pty Ltd, Print P1859, 4 November 1997
Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531
The Australian Industry Group re Manufacturing and Associated Industries and Occupations
Award 2012 [2012] FWA 2556
The Hotels, Resorts and Hospitality Industry Award 1992, Print K7601, 7 July 1993
Ward v Williams (1955) 92 CLR 496
Whitehorn v. R (1983) 152 CLR 657
[2017] FWCFB 1001
541
Additional References
ABS, Australian Industry, 2014–15, Catalogue No. 8155.0.
ABS, Australian National Accounts: National Income, Expenditure and Product, Jun 2016,
Catalogue No. 5206
ABS, Average Weekly Earnings, Australia, May 2016, Catalogue No. 6302.0.
ABS, Business Indicators, Australia, Jun 2016, Catalogue No. 5676.0
ABS, Characteristics of Employment, Australia, August 2015, Catalogue No. 6333.0
ABS, Survey of Employee, Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
ABS, Census of Population and Housing, 2011, Catalogue No. 2049.0
ABS, Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015,
Catalogue No. 8165.0
ABS, Employee Earnings and Hours, Australia, May 2016, Catalogue No. 6306.0
ABS, Employee Earnings, Benefits and Trade Union Membership, Australia, August 2013,
Catalogue No. 6310.0
ABS, Estimates of Industry Multifactor Productivity, 2014–15, Catalogue No. 5260.0.55.002
ABS, Labour Force, Australia, Detailed, Quarterly, Aug 2016, Catalogue No. 6291.0.55.003
ABS, Microdata: Employee, Earnings and Hours, Australia, May 2014, Catalogue No.
6306.0.55.001.
ABS, Participation, Job Search and Mobility, Australia, February 2015, Catalogue No.
6226.0
ABS, Wage Price Index, Australia, Jun 2016, Catalogue No. 6345.0.
Buchanan J, Bretherton T, Frino B, Jakubauskas M, Schutz J, Garima V and Yu S (2013),
Minimum wages and their role in the process and incentives to bargain, Research Report
7/2013, Fair Work Commission, December, Melbourne
Card D, ‘Do minimum wages reduce employment? A case study of California, 1987–1989’,
Industrial and Labor Relations Review, vol. 46, no. 1, 1992, pp. 38–54.
Dawkins P, Rungie C and Sloan J (1986) ‘Penalty Rates and Labour Supply: Employee
Attitudes to Non-Standard Hours of Work’, 28 Journal of Industrial Relations,
Department of Employment, Trends in Federal Enterprise Bargaining, June quarter 2016,
https://www.employment.gov.au/trends-federal-enterprise-bargaining
Jones S (1981) ‘Penalty Rates under Challenge’, 23 Journal of Industrial Relations
‘Forward with Fairness: Labor’s plan for fairer and more productive Australian workplaces’,
April 2007
Fair Work Commission Background Paper on Penalty Rates, 4 April 2016
Fair Work Commission, Award Reliance Survey 2013 data manual:
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf
Fair Work Commission, Australian Workplace Relations Study 2014:
https://www.fwc.gov.au/creating-fair-workplaces/research/australian-workplace-relations-
study
https://www.employment.gov.au/trends-federal-enterprise-bargaining
https://www.fwc.gov.au/documents/sites/wagereview2015/research/AR-data-user-manual.pdf
https://www.fwc.gov.au/creating-fair-workplaces/research/australian-workplace-relations-study
https://www.fwc.gov.au/creating-fair-workplaces/research/australian-workplace-relations-study
[2017] FWCFB 1001
542
Fair Work Commission, Spreadsheets with modern awards & relevant ANZSIC classes listed:
Annual wage review 2012-13, https://www.fwc.gov.au/awards-and-agreements/minimum-
wages-conditions/annual-wage-reviews/previous-wage-reviews/annual-w-27
Fair Work Ombudsman, ‘National Hospitality Campaign 2012-2015: Accommodation, pubs,
taverns and bars’, November 2013,
http://www.fairwork.gov.au/ArticleDocuments/714/National-hospitality-campaign-
report.pdf.aspx
Fair Work Ombudsman, ‘National hospitality industry campaign report 2014-2015:
Restaurants, Cafes and Catering (Wave 2 Report)’, June 2015,
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-
industries-national-hospitality-industry-campaign-report.docx.aspx
Fair Work Ombudsman, ‘National hospitality industry campaign report 2015-216: Takeaway
foods (Wave 3 Report)’, March 2016,
http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-
foods-report.docx.aspx
Fair Work Ombudsman, ‘National pharmacy campaign report 2012-2013’, December 2013,
http://www.fairwork.gov.au/ArticleDocuments/714/National-Pharmacy-Campaign-
Report.docx.aspx
Fair Work Ombudsman, ‘National retail industry campaign report 2010-2011’, November
2011, http://www.fairwork.gov.au/ArticleDocuments/714/Retail-Industry-Campaign-Final-
Report.pdf.aspx
HILDA survey Wave 15, 2015
IBISWorld (2014), Pharmacy in Australia: in search of a remedy, IBISWorld Industry report
G4271a.
Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012 ‘Analysing modern
award coverage using the Australian and New Zealand Industrial Classification 2006: Phase
1 report’, Research Report 2/2012 Fair Work Australia
Productivity Commission, (2015) Workplace Relations Framework, Final Report
Queensland Industrial Conciliation and Arbitration Commission (1981) Inquiry into Penalty
Rates, QGIG, Vol. 1-08
Research Report 2/2012, Analysing modern award coverage using the Australian and New
Zealand Standard Industrial Classification 2006: Phase 1 report, M Preston, A Pung, E
Leung, C Casey, A Dunn and O Richter (Minimum Wages and Research Branch – Fair Work
Australia)
Skinner N and Pocock B (2014) ‘The Persistent Challenge: Living, Working and Caring in
Australia in 2014’. The Australian Work and Life Index, Centre for Work and Life University
of South Australia)
Stewart et al ‘Creighton & Stewart’s Labour Law’(2016) 6
th
Edition, Federation Press:
Sydney
Treasury submission to the House of Representatives Standing Committee on Economics
Inquiry into raising the level of productivity growth in the Australian economy, August 2009
https://www.fwc.gov.au/awards-and-agreements/minimum-wages-conditions/annual-wage-reviews/previous-wage-reviews/annual-w-27
https://www.fwc.gov.au/awards-and-agreements/minimum-wages-conditions/annual-wage-reviews/previous-wage-reviews/annual-w-27
http://www.fairwork.gov.au/ArticleDocuments/714/National-hospitality-campaign-report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/National-hospitality-campaign-report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/wave-2-restaurants-cafes-catering-industries-national-hospitality-industry-campaign-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-foods-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/hospitality-campaign-wave-3-takeaway-foods-report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/National-Pharmacy-Campaign-Report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/National-Pharmacy-Campaign-Report.docx.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/Retail-Industry-Campaign-Final-Report.pdf.aspx
http://www.fairwork.gov.au/ArticleDocuments/714/Retail-Industry-Campaign-Final-Report.pdf.aspx
[2017] FWCFB 1001
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Attachment F—List of figures, charts and tables
List of tables
Table 1
Weekend Penalty Rates
Table 2 Proposed public holiday penalty rates in the Hospitality and Retail awards
Table 3A Proportion of employees who work on weekends, by industry
Table 3B Structure and operations, 2014
Table 4 Penalty rate arrangements for selected modern awards
Table 5 Days of the week and number of days worked in all jobs, employees,
November 2008, November 2013, and August 2015
Table 6 Who works on weekends?, November 2013
Table 7 Whether usually worked weekends, all employed persons
Table 8 Type of work schedule
Table 9 Proportion of employees who work on weekends, by industry
Table 10 Proportion of employees who work on weekends, by selected industry
subdivisions and groups
Table 11 Average time spent on leisure activities, 2006, minutes per day
Table 12 Frequency of attendance at religious services
Table 13 Most valuable weekend day – all weekend workers
Table 14 AWALI scores and Sunday work, all and retail employees
Table 15 Modern awards ‘mapped’ to ANZSIC class
Table 16 Economic indicators of Accommodation and food services
Table 17 Percentage of businesses by business size, June 2015
Table 18 Wages and salaries, sales and service income, and industry value added by
business size, 2014–15
Table 19 Market and competition, 2014
[2017] FWCFB 1001
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Table 20 Methods of setting pay, non-managerial employees, May 2016
Table 21
Top 10 modern awards used in Accommodation and food services, percentage
of award-reliant organisations, 2013
Table 22 Structure and operations, 2014
Table 23 Average annual growth rate of employed persons, by full/part-time status,
August 2–11 to August 2016
Table 24
Composition of employed persons, August 2016
Table 25
Employed persons by age, August 2016
Table 26
Average hours actually worked in all jobs, by full/part-time status, August
2016
Table 27
Employed persons by employment type in main job, August 2016
Table 28
Employees with and without paid leave, August 2016
Table 29 Prevalence and types of shiftwork arrangements, 2014
Table 30
Current work schedule in main job, employed persons, 2015
Table 31
Employees by rate of pay, May 2016
Table 32
Average weekly earnings, May 2016
Table 33 Percentage of employees who receive penalty rates, by method of setting pay,
2014
Table 34 Labour force characteristics of the Hospitality industry (general), ABS Census,
9 August 2011
Table 35 Profits and losses in selected industries
Table 36 Labour force characteristics of the Clubs (Hospitality) industry class, ABS
Census, 9 August 2011
Table 37 Distribution of employment type
Table 38 Volunteer type
Table 39 Comparison of the Clubs Award and the Hospitality Award’s Classifications
Table 40 Penalty rate arrangements in Hospitality and Clubs Awards
[2017] FWCFB 1001
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Table 41 Labour force characteristics of the Cafes and restaurants industry class, ABS
Census 9 August 2011
Table 42 Cafes and restaurant industry, 2014–15
Table 43 McDonald’s and Hungry Jack’s – employee by level and status
Table 44 Labour force characteristics of the Takeaway food services industry class, ABS
Census 9 August 2011
Table 45 Comparison between Ai Group employee survey and all industries from the
ABS Labour Force survey, July 2015
Table 46 Renting Situation and Financial Hardship (percentage)
Table 47 Number of McDonald’s and Hungry Jack’s employees by age and
classification
Table 48 Modern awards ‘mapped’ to ANZSIC class
Table 49 Economic indicators of the Retail sector
Table 50 Percentage of businesses by business size, June 2015
Table 51 Wages and salaries, sales and service income, and industry value added by
business size, 2014–15
Table 52 Market and competition, 2014
Table 53 Methods of setting pay, May 2016
Table 54 Top 10 modern awards used in the Retail sector, percentage of award-reliant
organisations, 2013
Table 55 Structure and operations, 2014
Table 56 Average annual growth rate of employed persons, by full/part-time status and
industry group of main job, August 2011 to August 2016
Table 57 Composition of employed persons, August 2016
Table 58 Employed persons by age, August 2016
Table 59 Average hours actually worked in all jobs, by industry group of main job and
full/part-time status, August 2016
Table 60 Employed persons by employment type in main job, August 2016
[2017] FWCFB 1001
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Table 61 Employees with and without paid leave, August 2016
Table 62 Prevalence and types of shiftwork arrangements, 2014
Table 63 Current work schedule in main job, employees, 2015
Table 64 Employees by rate of pay, May 2016
Table 65 Average weekly earnings, May 2016
Table 66 Percentage of employees who receive penalty rates, by method of setting pay,
2014
Table 67 Labour force characteristics of General retail industry, ABS Census 9 August
2011
Table 68 Allocated labour hours
Table 69 Turnover per labour hour
Table 70 Labour force characteristics of the Pharmaceutical, cosmetic and toiletry goods
retailing industry class, ABS Census 9 August 2011
Table 71 Comparison of the Pharmacy Award and Retail Award wage rates
Table 72 Public Holidays listed by State and Territory 2017
Table 73 Current public holiday penalty rates in the Hospitality and Retail Awards
Table 74 Summary of public holiday penalty rates claims
Table 75 Proposed public holiday penalty rates in the Hospitality and Retail Awards
[2017] FWCFB 1001
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List of charts
Chart 1 Participation rate—male and female, per cent, 1978–2014
Chart 2 Composition of employment, per cent of total employed, 1978–2014
Chart 3 Proportion of employment by full-time and part-time status and average
monthly hours worked, August 1991 to August 2016
Chart 4 Proportion of total employment by employment type, 1995, 2005 and 201
Chart 5 Casual employment, per cent of employees
Chart 6 Proportion of total employment by employment type, 1995, 2005 and 2015
Chart 6 Proportion of total employment by industry, 1975 to 2014
Chart 7 Proportion of total employment by industry, 1990–91, 2000–01 and 2015–16
Chart 8 Patterns of working weekends over time, employees, 1993 to 2013
Chart 9 Patterns of work by the day, share of the employed working on given days, per
cent, November 2013
Chart 10 Relative growth in Saturday and Sunday work, percentage change in numbers
employed, 2008 to 2013
Chart 11 Who do people spend time with, deviation of hours per day on weekend from
the average weekday, per cent
Chart 12 What do people do with their time, deviation of hours per day on weekend
from the average weekday, per cent
Chart 13 Regular church attenders, per cent of population
Chart 14 Change in proportion of people reporting no religion between 2006 and 2011
by age group in 2011
Chart 15 Degree to which employees ‘often’ or ‘almost always’ experience impacts
work
Chart 16 A model of the scale effect
Chart 17 Profit margins, 2012–13 to 2014–15
Chart 18 Wages and salaries as a percentage of total expenses, 2012–13 to 2014–15
Chart 19 Average annual growth rates of labour and multifactor productivity, 2003–04
to 2014–15
[2017] FWCFB 1001
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Chart 20 Business survival rates, by employment size, June 2011 to June 2015
Chart 21 Duration of employment with current employer/business in Accommodation
and food services, February 2015
Chart 22 Distribution of hourly total cash earnings, adult employees, May 2014
Chart 23 Annual growth in Wage Price Index, June quarter 2011 to June quarter 2016
Chart 24 Comparison of minimum weekly wages in the Hospitality Industry (General)
Award 2010 and two-thirds of median full-time earnings
Chart 25 Comparison of minimum weekly wages in the Registered and Licensed Clubs
Award 2010 and two-thirds of median full-time earnings
Chart 26 Comparison of minimum weekly wages in the Restaurant Industry Award
2010 and two thirds of median full-time earnings
Chart 27 Comparison of minimum weekly wages in the Fast Food Industry Award 2010
and two-thirds of median full-time earnings
Chart 28 Average annualised wage increases for federal enterprise agreements approved
in the quarter, June quarter 2011 to June quarter 2016
Chart 29 Hospitality Employers’ evidence – size of enterprises by location
Chart 30 Hospitality Employers’ Witnesses: Employees per establishment
Chart 31 Hospitality Employers’ Witnesses: Years of experience
Chart 32 Types of clubs in Australia
Chart 33 Spread of clubs across Australia
Chart 34 Average employees per club
Chart 35 Modern awards with spread of hours – start times
Chart 36 Cumulative percentage of sample versus population
Chart 37 Impact of working on a Saturday on spending time with family/friends
Chart 38 Impact of working on a Sunday on spending time with family/friends
Chart 39 Impact of working on Saturdays on spending time with family/friends by age
(group brackets)
Chart 40 Impact of working on Sundays on spending time with family/friends by age
(group brackets)
[2017] FWCFB 1001
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Chart 41 How travelling to work on a Sunday compares to other days of the week
Chart 42 Preferred days to work by age (individual brackets)
Chart 43 Willingness to work some or more hours on a Sunday, if offered
Chart 44 Number of McDonald’s and Hungry Jack’s employees by age and
classification
Chart 45 Reported Incident Data by Day of the Week: 1 May 2014 to 17 May 2015
Chart 46 NA book numbers by day of the week, Jasie Pty Ltd 1 May 2015 – 31 July
2015
Chart 47 Profit margins, 2012-13 to 2014-15
Chart 48 Wages and salaries as a percentage of total expenses by subdivision, 2012-13
to 2014-15
Chart 49 Average annual growth rates of labour and multifactor productivity, 2003-04 to
2014-15
Chart 50 Business survival rates, by employment size, June 2011 to June 2015
Chart 51 Duration of employment with current employer/business in the Retail sector,
February 2015
Chart 52 Distribution of hourly total cash earnings, adult employees, May 2014
Chart 53 Annual growth in Wage Price Index, June quarter 2011 to June quarter 2016
Chart 54 Comparison of minimum weekly wages in the General Retail Industry Award
2010 and two-thirds of median full-time earnings
Chart 55 Comparison of minimum weekly wages in the Pharmacy Industry Award 2010
and two-thirds of median full-time earnings
Chart 56 Average annualised wage increases for federal enterprise agreements approved
in the quarter, June quarter 2011 to June quarter 2016
Chart 57 Retailing trends by the weekday, share of weekly retail sales, 1982 to 2014
Chart 58 Growth and significance of shopping by weekdays
Chart 59 Longer weekend opening hours, Victoria and Western Australia, 2012–2013
Chart 60 PGA evidence – size and location of pharmacies
[2017] FWCFB 1001
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Chart 61 PGA Witnesses: Employees per establishment
Chart 62 Number of Pharmacies
Chart 63 Proportion of employees with their pay set by method of setting pay and
business size—May 2014
[2017] FWCFB 1001
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CORRIGENDUM:
This published decision incorporates the following corrections to the document issued on
23 February 2017:
1. At [55] and [2002], the current Sunday penalty rate for a casual employee under the
Pharmacy Award has been corrected to show 225 per cent (instead of 200 per cent).
2. At [1889] the reference to clause 1.1(b) has been corrected to clause 27.2(b).
3. The appearances for the Pharmacy Guild of Australia on page 463 have been
corrected.
4. The chart references in Endnotes 643 and 645 have been corrected.
Dated 8 March 2017
