1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Plain language – standard clauses
(AM2016/15)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
COMMISSIONER HUNT
MELBOURNE, 20 JULY 2017
4 yearly review of modern awards – plain language – standard clauses
[1] This statement provides an update about the plain language re-drafting of standard
clauses following a series conference held before Commissioner Hunt.
[2] In a Statement issued by the Full Bench on 15 July 20161 a number of clauses were
identified as ‘standard clauses’ to be re-drafted as part of the Plain language re-drafting
common issue.2 The standard clauses subject of re-drafting are:
A. Award flexibility;
B. Consultation about major workplace change;
C. Consultation about changes to rosters or hours of work;
D. Dispute resolution;
E. Termination of employment;
F. Redundancy;
G. Transfer to low paid job on redundancy; and
H. Employee leaving during redundancy notice period.
[3] Draft standard clauses were published on 9 August 20163 and submissions were
invited.
[4] Submissions were received from the following parties:
Australian Council of Trade Unions (ACTU);
Australian Industry Group (Ai Group);
Australian Business Industrial and NSW Business Chamber (ABI and NSWBC);
Australian Chamber of Commerce and Industry (ACCI);
Australian Manufacturing Workers’ Union (AMWU);
Business SA;
Construction, Forestry, Mining and Energy Union (CFMEU);
Housing Industry Association (HIA);
National Farmers’ Federation (NFF);
Private Hospital Industry Employers' Associations (PHIEA);
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E AUSTRALIA FairWork Commission
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Shop, Distributive and Allied Employees’ Association (SDA); and
Textile, Clothing and Footwear Union of Australia (TCFUA).
[5] Interested parties had further opportunity to comment on the clauses at a series of
conferences held before Commissioner Hunt on 23 November 2016 (the November
conference), 23 January 2017 (the January conference) and 11 April 2017 (the April
conference). The plain language expert, who drafted the standard clauses, attended the
conference on 23 January 2017. All the clauses listed in paragraph [2] were discussed, except
clause B. Clause B was discussed during the April conference only.
[6] After the January conference the draft standard clauses were updated to reflect the
outcome of discussions at that conference. The revised standard clauses were re-published as
Attachment B to a Statement issued on 27 March 2017.4
[7] The revised standard clauses, as set out in this statement, reflect the outcome of the
April conference. The standard clauses have been amended to incorporate the agreed positions
of interested parties. The agreed positions are tracked in red text.
[8] This statement discusses the revised standard clauses that reflect the outcome of the
April conference. There remain a number of issues in contention between the parties. We will
deal with the issues in contention on a clause by clause basis and provide the expert’s
comments in relation to the revised standard clauses.
Clause A—Award flexibility (renamed Individual flexibility arrangements)
[9] The award flexibility clause was inserted into all modern awards as a result of the
award modernisation process in 2008. The award modernisation full bench identified that an
award flexibility clause was a priority and published a model award flexibility clause as
attachment C to a decision5 in June 2008. The model clause was varied in a decision6 of
December 2008. Modern awards which included the award flexibility clause came into effect
on 1 January 2010. The award flexibility clause was varied on 12 March 20107 and as part of
the Transitional review.8
[10] The plain language re-draft of clause A—Individual flexibility arrangements was
discussed at the November, January and April conferences. The revised standard clause A is
set out below.
[11] As mentioned above, changes agreed between the parties as a result of the April
conference are in red.
A. Individual flexibility arrangements
A. 1 Despite anything else in this award, an employer and an individual employee
may agree to vary the application of the terms of this award relating to any of
the following:
(a) arrangements for when work is performed; or
(b) overtime rates; or
(c) penalty rates; or
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(d) allowances; or
(e) annual leave loading.
NOTE: Arrangements for when work is performed include such matters as
hours of work, rostering arrangements and breaks.
A.2 An agreement must be one that is genuinely made by the employer and the
individual employee without coercion or duress.
A.3 An agreement may only be made after the individual employee has
commenced employment with the employer.
A.4 An agreement may only be made in order to meet the genuine needs of the
employer and the employee.
A.5 Either the employer or the employee may initiate the making of an agreement.
A.6 An employer who wishes to initiate the making of an agreement must:
(a) give the employee a written proposal; and
(b) if the employer is aware that the employee has, or should reasonably
be aware that the employee may have, limited understanding of
written English, take reasonable steps (including providing a
translation in an appropriate language) to ensure that the employee
understands the proposal.
A.7 An agreement must result in the employee being better off overall at the time
the agreement is made than if the agreement had not been made.
A.8 An agreement must do all of the following:
(a) state the names of the employer and the employee; and
(b) identify the award term, or award terms, the application of which is to
be varied; and
(c) set out how the application of the award term, or each award term, is
varied; and
(d) set out how the agreement results in the employee being better off
overall at the time the agreement is made than if the agreement had
not been made; and
(e) state the date the agreement is to start.
A.9 An agreement must be:
(a) in writing; and
(b) signed by the employer and the employee and, if the employee is
under 18 years of age, by the employee’s parent or guardian.
A.10 Except as provided in clause A.9, an agreement must not require the approval
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or consent of a person other than the employer and the employee.
A.11 The employer must keep the agreement as a time and wages record and give a
copy to the employee.
A.12 The employer and the employee must genuinely agree, without duress or
coercion to any variation of an award provided for by an agreement.
A.13 An agreement may be terminated:
(a) at any time, by written agreement between the employer and the
employee; or
(b) by the employer or employee giving 13 weeks’ written notice to the
other party (reduced to 4 weeks if the agreement was entered into
before the first full pay period starting on or after 4 December 2013).
A.14 The period of notice required under clause A.13 is reduced to a period of not
more than 28 days if an agreement made under this clause does not meet a
requirement set out both in section 144(4) of the Act and in clause A.
A.15 An agreement terminated as mentioned in clause A.13(b) ceases to have effect
at the end of the period of notice required under that clause.
A.16 The right to make an agreement under clause A is additional to, and does not
affect, any other term of this award that provides for an agreement between an
employer and an individual employee.
[12] There are 6 outstanding contested issues in relation to clause A:
(i) Note at A.1
(ii) Word ‘only’ in A.4
(iii) Deletion of clauses A.5 and A.6
(iv) Amalgamation of clauses A.7 to A.9
(v) Note at A.8(d)
(vi) Inclusion of A.14 as a note or clause
(i) Note at A.1
[13] Ai Group submit that the note under clause A.1 is unnecessary.9 Further, if the note
includes hyperlinks to the clauses mentioned in the note, such as hours of work, hyperlinks
may be problematic because sometimes provisions relating to hours of work may appear in
more than one clause. Ai Group also submits that the note may be problematic in a standard
clause because clause titles are likely to vary in different awards.10 For example, not all
awards would include a ‘rostering arrangements’ clause.
[14] We are of the provisional view that the note should be deleted. Removing the note will
resolve the issue of referring to multiple clauses containing relevant provisions and
hyperlinking issues where clauses differ between awards. It will also allow for greater
consistency in standard clauses across all modern awards. Hyperlinked notes will be included
in annotated versions of the award only.
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(ii) Word ‘only’ in A.4
[15] In respect of clause A.4, ACCI submit that the word ‘only’ be removed so that A.4
more accurately reflects s.144(1) of the Fair Work Act 2009 (the Act).
[16] Clause A.4 is as follows:
‘An agreement may only be made in order to meet the genuine needs of the employer and the
employee.’ (emphasis added)
[17] Section 144 of the Act is as follows:
‘144 Flexibility terms
Flexibility terms must be included
(1) A modern award must include a term (a flexibility term) enabling an employee and his
or her employer to agree on an arrangement (an individual flexibility arrangement) varying
the effect of the award in relation to the employee and the employer, in order to meet the
genuine needs of the employee and employer.
Effect of individual flexibility arrangements
(2) If an employee and employer agree to an individual flexibility arrangement under a
flexibility term in a modern award:
(a) the modern award has effect in relation to the employee and the employer as
if it were varied by the flexibility arrangement; and
(b) the arrangement is taken, for the purposes of this Act, to be a term of the
modern award.
(3) To avoid doubt, the individual flexibility arrangement does not change the effect the
modern award has in relation to the employer and any other employee.
Requirements for flexibility terms
(4) The flexibility term must:
(a) identify the terms of the modern award the effect of which may be varied by
an individual flexibility arrangement; and
(b) require that the employee and the employer genuinely agree to any individual
flexibility arrangement; and
(c) require the employer to ensure that any individual flexibility arrangement
must result in the employee being better off overall than the employee would
have been if no individual flexibility arrangement were agreed to; and
(d) set out how any flexibility arrangement may be terminated by the employee or
the employer; and
(e) require the employer to ensure that any individual flexibility arrangement
must be in writing and signed:
(i) in all cases—by the employee and the employer; and
(ii) if the employee is under 18—by a parent or guardian of the
employee; and
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(f) require the employer to ensure that a copy of any individual flexibility
arrangement must be given to the employee.
(5) Except as required by subparagraph (4)(e)(ii), the flexibility term must not require that
any individual flexibility arrangement agreed to by an employer and employee under the term
must be approved, or consented to, by another person.’
[18] The ACCI submission was not opposed by Ai Group, SDA, and ABI and NSWBC.
[19] The AMWU and HSU opposed the deletion of the word ‘only’. The HSU submitted
that while s.144(1) of the Act does not use the word ‘only’, it does use the word ‘must’ which
implies that the clause must only be used in the circumstances mentioned in the clause. The
HSU submits that clause A.4 does not go beyond the terms of the Act.11
[20] The TCFUA submit that in 2012 the Full Bench considered research relating to
individual flexibility terms and discovered that there was widespread non-compliance with the
term. The TCFUA submit that for compliance, it would be helpful to include the word ‘only’
to clarify that the term can only be used in the circumstances mentioned.12
[21] During the award modernisation proceedings in 2008 it was common ground between
parties that agreement should be a genuine one and should be in writing.13 The following term
was proposed in the model clause at attachment C of the decision14 in June 2008 and became
award flexibility clause X.2 in all modern awards:
‘X.2. The employer and the individual employee must have genuinely made the agreement
without coercion or duress.’
[22] In 2013, a second sentence was added to clause X.2 after the sentence above as
follows:
‘X.2 The employer and the individual employee must have genuinely made the agreement
without coercion or duress. An agreement under this clause can only be entered into after the
individual employee has commenced employment with the employer.’15 (emphasis added)
[23] In respect of addition the additional sentence to clause X.2 above the Full Bench
noted:
‘[2] In addition to these variations one further variation was adopted in order to improve the
level of compliance with the requirements of the model flexibility term. The evidence
suggested that a significant proportion of IFAs were entered into before the individual
employee has commenced employment, contrary to the intent of the model flexibility term and
the Act. To address that issue we decided to insert the following words in the model flexibility
term:
“An agreement under this clause can only be entered into after the individual
employee has commenced employment with the employer”.’16
[24] It would appear that the compliance issues referred to by the TCFUA relate to the
second sentence of clause X.2, which are reflected in the proposed A.2.
[25] It seems to us that the issue raised by ACCI may be addressed by some restructuring
of the clause. In this regard we note that clause A.4 of the proposed award flexibility clause is
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awkwardly placed. Clause A.4 is based on s.144(1) of the Act and pertains to the purpose for
making an individual flexibility arrangement. It would seem more appropriate to include this
provision closer to the beginning of clause A.
[26] It is our provisional view that clause A be amended to more accurately align clause A
with s.144 of the Act as follows:
‘A. Individual flexibility arrangements
A.1 Despite anything else in this award, an employer and an individual employee may
agree to vary the application of the terms of this award relating to any of the following in order
to meet the genuine needs of the employee and the employer:
(a) arrangements for when work is performed; or
(b) overtime rates; or
(c) penalty rates; or
(d) allowances; or
(e) annual leave loading.
NOTE: Arrangements for when work is performed include such matters as hours of work,
rostering arrangements and breaks.
A.2 An agreement must be one that is genuinely made by the employer and the individual
employee without coercion or duress.
A.3 An agreement may only be made after the individual employee has commenced
employment with the employer.
A.4 An agreement may only be made in order to meet the genuine needs of the employer
and the employee.’
[27] Interested parties are invited to make submissions on the proposed amendment of
clause A.1 and proposed deletion of clause A.4 by 4.00 pm on Wednesday 9 August 2017.
(iii) Deletion of clauses A.5 and A.6
[28] Parties at the November conference discussed ACCI’s submission that clauses A.5 and
A.6 should be deleted. ACCI was not in attendance at the November conference. Parties
discussed ACCI’s submission that the inclusion of a description about the agreement making
process is unnecessary and is not a legislative requirement.17
[29] The proposed clause A.5 states:
‘A.5 Either the employer or the employee may initiate the making of an agreement.’
[30] Parties at the November conference agreed that there is no equivalent term to
clause A.5 in the current clause and that clause A.5 appeared to be intended to assist the lay
person about who could initiate agreement. Views were sought about whether parties regarded
proposed clause A.5 helpful.18
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[31] Parties at the November conference were ambivalent as to the inclusion of
clause A.5.19 Our provisional view is that clause A.5 is not necessary in order to meet the
modern awards objective and should be deleted.
[32] The proposed clause A.6 is as follows:
‘A.6 An employer who wishes to initiate the making of an agreement must:
(a) give the employee a written proposal; and
(b) if the employer is aware that the employee has, or should reasonably be aware
that the employee may have, limited understanding of written English, take
reasonable steps (including providing a translation in an appropriate language)
to ensure that the employee understands the proposal.’
[33] Clause X.7 is the equivalent term in the current provision and is as follows:
‘X.7 An employer seeking to enter into an agreement must provide a written proposal to
the employee. Where the employee’s understanding of written English is limited the
employer must take measures, including translation into an appropriate language, to
ensure the employee understands the proposal.’
[34] The SDA supports the retention of clause A.6 on the basis that removing it would be a
substantive change.20 While Ai Group initially supported the deletion of clause A.6, Ai Group
indicated it would give further consideration to the issue.21 Commissioner Hunt indicated that,
subject to the parties’ consideration, clause A.6 probably should be retained.22
[35] We agree with the provisional view expressed by Commissioner Hunt in the
November conference that clause A.6 should be retained. Proposed clause A.6 is a re-drafted
version of clause X.7 of current modern awards. Clause X.7 was included in the model award
flexibility clause by a decision in December 2008.23 The relevant paragraphs of that decision
are as follows:
‘[38] We have, however, made one addition to the model clause. The new subclause deals with
situations in which an employer wishes to enter an individual flexibility agreement. In such
situations the employer will be required to provide a written proposal to the employee. The
employer will also be required to take measures to ensure the employee understands the
proposal. The provision reads:
“An employer seeking to enter into an agreement must provide a written proposal to
the employee. Where the employee’s understanding of written English is limited the
employer must take measures, including translation into an appropriate language, to
ensure the employee understands the proposal.”
[39] We have noted the proposal in the Fair Work Bill that individual flexibility terms in
awards must require the employer to ensure that any individual flexibility arrangement must
result in the employee being better off overall than the employee would otherwise have been.
Should the Fair Work Bill be enacted in that form the model clause may require alteration to
reflect that requirement.’
[36] Clause X.7 is included in all modern awards and the clause has not been varied since it
was incorporated into the award flexibility term in December 2008. Clause X.7 is an
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important part of the safety net included in all modern awards. Clause X.7 met the modern
awards objective in 2010 and there is nothing presently before us that persuades us to depart
from that view.
[37] If ACCI, Ai Group or any other party wish to pursue deletion of clause A.6 they
should file submissions in support of their position by 4.00 pm on Wednesday 9 August
2017.
(iv) Amalgamation of clauses A.7 to A.9
[38] ACCI also proposed to consolidate clauses A.7 to A.9. Proposed clauses A.7 to A.9
state:
‘A.7 An agreement must result in the employee being better off overall at the time the
agreement is made than if the agreement had not been made.
A.8 An agreement must do all of the following:
(a) state the names of the employer and the employee; and
(b) identify the award term, or award terms, the application of which is to be
varied; and
(c) set out how the application of the award term, or each award term, is varied;
and
(d) set out how the agreement results in the employee being better off overall at
the time the agreement is made than if the agreement had not been made; and
(e) state the date the agreement is to start.
A.9 An agreement must be:
(a) in writing; and
(b) signed by the employer and the employee and, if the employee is under 18
years of age, by the employee’s parent or guardian.’
[39] ACCI proposed to consolidate A.7 to A.9 as follows:
‘A.X An agreement must:
(a) result in the employee being better off overall on its making than if the
agreement had not been made ;
(b) state the names of the employer and the employee;
(c) identify the award terms to be varied;
(d) set out how the award term, or each term, is varied;
(e) set out how the award term, or each term, is varied,
(f) state the date on which the agreement is to start;
(g) be signed by the employer and the employee and, if the employee is under 18
years of age, by the employee’s parent or guardian.’24
[40] ACCI submit that their proposal removes the requirement in proposed clause A.8(d) to
“show how the agreement results in the employee being better off overall on its making than
if the agreement had not been made”. ACCI submits that is not a requirement set out in s.144
of the Act and adds prescription and complexity to the provision and agreements made
pursuant to it. ACCI further submit that if clause A.8(d) is to remain, the words “show how”
should be replaced with “state”. 25
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[41] The ACCI submission is based on the original plain language re-draft of clause A.8(d)
(previously A.6(d)) published on the Commission’s website on 9 August 2016.26 The
9 August 2016 version of clause A.8(d) adopted the words “show how” as follows:
‘A.6 An agreement must do each of the following:
(a) state the names of the employer and the employee;
(b) identify the award term or terms to be varied;
(c) set out how the award term, or each term, is varied;
(d) show how the agreement results in the employee being better off overall on its
making than if the agreement had not been made;
(e) state the date on which the agreement is to start.’ (emphasis added)
[42] We note that clause A.8(d) has been updated to reflect an amendment proposed by
Ai Group and agreed to by parties at the November conference. The words “show how” were
replaced with “set out how” resulting from discussions during the November conference27 and
as set out at [38] above. We propose to adopt the terminology “set out how” as agreed in the
November conference and to amend clause A.8(d) to replace the words “set out” with “state”.
The word “state” is more consistent with other paragraphs in clause A.8.
[43] ACCI should advise the Commission about whether it intends to pursue its proposal to
consolidate clauses A.7 to A.9 by 4.00 pm on Wednesday 9 August 2017. Any party
wishing to make submissions to the proposed amendment of clause A.8(d) should be made by
4.00 pm on Wednesday 9 August 2017.
(v) Note at A.8(d)
[44] Clause A.8 states:
‘A.8 An agreement must do all of the following:
(a) state the names of the employer and the employee; and
(b) identify the award term, or award terms, the application of which is to be
varied; and
(c) set out how the application of the award term, or each award term, is varied;
and
(d) set out how the agreement results in the employee being better off overall at
the time the agreement is made than if the agreement had not been made; and
(e) state the date the agreement is to start.’
[45] In the expert’s drafting comments in a comparison of the Plain language draft standard
clauses published on 9 August 2016 the expert suggested that a note or definition about
“better off overall” would be beneficial.28 The wording suggested was based on wording used
on the Fair Work Ombudsman’s website at that time as follows:
‘It is the employer’s responsibility to ensure that the employee is better off overall than if there
was no IFA. The employer’s ‘better off overall’ assessment will usually involve comparing the
employee’s financial benefits under the IFA with the financial benefits under the applicable
award or enterprise agreement. The employee’s personal circumstances and any non-financial
benefits which are significant to the employee can also be considered.’
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[46] A note has never been included in any iteration of the Plain language draft standard
clauses. However, the possibility of including a note was discussed at the November
conference.
[47] All parties opposed inclusion of a note explaining the better off overall test in the
terms of the Fair Work Ombudsman definition as suggested in the drafting comments
published with the draft standard clauses of 9 August 2016.29 The proposed note raises
questions about why non-financial benefits in enterprise agreements have to be significant to
the employee and what “significant” means. The issue surrounding whether non-financial and
non-monetary benefits can included in agreements is strongly contested by the parties.
[48] Given the views of the parties we have concluded that a note should not be included
under clause A.8(d).
(vi) Inclusion of A.14 as a note or clause
[49] Parties have also raised concerns in relation to clause A.14. Proposed clause A.14 is
based on the wording of a note that appears under clause X.8(b) of the current clause. There
are conflicting views among the parties about whether this note should be converted to a
clause. Proposed clause A.14 is as follows:
‘A.14 The period of notice required under clause A.13 is reduced to a period of not more
than 28 days if an agreement made under this clause does not meet a requirement set
out both in section 144(4) of the Act and in clause A.’
[50] The note under the current clause X.8(b) is as follows:
‘NOTE: If any of the requirements of s.144(4), which are reflected in the requirements of this
clause, are not met then the agreement may be terminated by either the employee or the
employer, giving written notice of not more than 28 days (see s.145 of the Act).’
[51] Ai Group submits that clause A.14 should be a note rather than a new award derived
obligation30 and also submits that proposed clause A.14 includes additional requirements that
do not arise directly from s.144(4) of the Act which has the effect of giving either party a
greater right to terminate with only 28 days’ notice.31
[52] Ai Group submits that the note references the fact that if there is a failure to comply
with the requirements of s.144(4) of the Act the agreement can be terminated within 28 days’
notice under s.145(4) of the Act. It contends that the new draft says that you can terminate
with 28 days’ notice if there is failure to comply with s.144(4) of the Act or clause A. Ai
Group notes that under the Act, there is no requirement to state the names of the employer and
employee,32 nor is there a requirement to set out how the award term is varied or the date on
which the agreement is to start.33 Ai Group submit that it would be inappropriate for non-
compliance with one of these issues to give rise to a right to terminate an agreement in a much
shorter period of time than would otherwise be the case.34 Ai Group contend that this is a
substantive change and that the clause should be limited in scope to the requirements of
s.144(4) of the Act.
[53] NFF support the position of Ai Group and submit that clause A.14 goes beyond the
current note and s.144(4) of the Act.35 Ai Group’s position is opposed by the AMWU.36
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[54] During the November conference Commissioner Hunt suggested parties give further
consideration of the wording of the clause.37
[55] We will deal first with whether the contents of proposed clause A.14 should be a note
or a clause. The note under current clause X.8(b) was inserted during the transitional review
of modern awards in 2013 and was intended to simply alert the reader to the termination
provisions in s.145(4) of the Act.38
[56] We acknowledge that including the content of the note under clause X.8(b) of the
current term makes proposed clause A.14 an operative term. However, the proposed
clause A.14 does not confer any substantive rights or impose any obligations on parties.
Clause A.14 creates a termination provision which may be utilised in particular circumstances
intended to reflect those captured by s.145(4) of the Act. Where the provision resides, in the
Act or in modern awards or both, is a technical distinction which is of little practical
consequence. There is no prohibition on duplicating statutory requirements in modern awards
terms.
[57] We now turn to Ai Group’s second concern, namely whether clause A.14 gives rise to
additional requirements to those in s.144(4) of the Act.
[58] Sections 144(4) and (5) of the Act provide:
‘Requirements for flexibility terms
(4) The flexibility term must:
(a) identify the terms of the modern award the effect of which may be varied by
an individual flexibility arrangement; and
(b) require that the employee and the employer genuinely agree to any individual
flexibility arrangement; and
(c) require the employer to ensure that any individual flexibility arrangement
must result in the employee being better off overall than the employee would
have been if no individual flexibility arrangement were agreed to; and
(d) set out how any flexibility arrangement may be terminated by the employee or
the employer; and
(e) require the employer to ensure that any individual flexibility arrangement
must be in writing and signed:
(i) in all cases—by the employee and the employer; and
(ii) if the employee is under 18—by a parent or guardian of the
employee; and
(f) require the employer to ensure that a copy of any individual flexibility
arrangement must be given to the employee.
(5) Except as required by subparagraph (4)(e)(ii), the flexibility term must not require that
any individual flexibility arrangement agreed to by an employer and employee under the term
must be approved, or consented to, by another person.’
[59] Section 145(4) imports a termination provision into an award flexibility term which is
in addition to any other means of termination of an individual flexibility arrangement that the
flexibility term provides. Section 145 provides:
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‘145 Effect of individual flexibility arrangement that does not meet requirements of
flexibility term
Application of this section
(1) This section applies if:
(a) an employee and employer agree to an arrangement that purports to be an
individual flexibility arrangement under a flexibility term in a modern award;
and
(b) the arrangement does not meet a requirement set out in section 144.
Note: A failure to meet such a requirement may be a contravention of a provision of
Part 3-1 (which deals with general protections).
Arrangement has effect as if it were an individual flexibility arrangement
(2) The arrangement has effect as if it were an individual flexibility arrangement.
Employer contravenes flexibility term in specified circumstances
(3) If subsection 144(4) requires the employer to ensure that the arrangement meets the
requirement, the employer contravenes the flexibility term of the award.
Flexibility arrangement may be terminated by agreement or notice
(4) The flexibility term is taken to provide (in addition to any other means of termination of
the arrangement that the term provides) that the arrangement can be terminated:
(a) by either the employee, or the employer, giving written notice of not more
than 28 days; or
(b) by the employee and the employer at any time if they agree, in writing, to the
termination.’
[60] The requirements of s.144(4) of the Act apply to flexibility terms in modern awards,
not to individual flexibility arrangements made under a flexibility term. Section 144(5)
provides that a flexibility term must not require that any individual flexibility agreement
agreed to by an employer and employee under the flexibility term must be approved, or
consented to, by another person. Section 145 deals with the situation where an individual
flexibility agreement does not meet a requirement of s.144.
[61] We accept that there are some differences in language between the current note under
the current clause X.8(b) and proposed clause A.14. The note says “If any of the requirements
of sections 144(4), which are reflected in the requirements of this clause…” The note reads as
an observation rather than imposing a condition that the requirements must be found in both
s.144(4) of the Act and the current award flexibility clause in order to enliven s.145(4) of the
Act.
[62] The circumstances in which termination arrangements in s.145(4) operate are not free
from doubt and we have formed the provisional view that proposed clause A.14 be deleted
and a note inserted into the clause, in the following terms:
‘Note: If an employer and employee agree to an arrangement that purports to be an individual
flexibility arrangement under this award term and the arrangement does not meet a
requirement set out in s. 144 then the employee or the employer may terminate the
arrangement by giving written notice of not more than 28 days (see s.145 of the Act)’.
[2017] FWCFB 3745
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[63] Parties are invited to make further submissions in relation to the wording of the
proposed note by 4.00 pm on Wednesday 9 August 2017.
Clause B—Consultation about major workplace change
[64] The Consultation about major workplace change clause was inserted into all modern
awards as a result of the award modernisation process in 2008. In a decision39 of September
2008 the award modernisation Full Bench decided to impose an award obligation upon
employers to notify employees and their representatives of significant workplace change and
to discuss change. In a decision40 of December 2008, the Full Bench noted that a clause in
almost identical terms had appeared in most of the Commission’s award for many years and
no issue of substance had been raised concerning its operation during that period.
[65] The plain language re-draft of clause B—Consultation about major workplace change
was discussed at the April conference. The revised standard clause B—Consultation about
major workplace change reflects the agreed position of the interested parties following that
conference (in red) and is as follows:
B. Consultation about major workplace change
B.1 If an employer makes a definite decision to make major changes in
production, program, organisation, structure or technology that are likely to
have significant effects on employees (excluding changes otherwise provided for
by this award), the employer must:
(a) give notice of the changes to all employees who may be affected by
them and their representatives (if any); and
(b) as early as practicable, begin to discuss with affected employees and
their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes
on employees; and
(c) commence discussions as soon as practicable after a definite decision
has been made.
B.2 For the purposes of the discussion under clause B.1(b), the employer must
give in writing to the affected employees and their representatives (if any) all
relevant information about the changes including:
(a) their nature; and
(b) their expected effect on employees; and
(c) any other matters likely to affect employees.
B.3 Clause B.2 does not require an employer to disclose any confidential
information if its disclosure would be contrary to the employer’s interests.
B.4 The employer must promptly consider any matters raised by the employees or
their representatives about the changes in the course of the discussion under
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clause B.1(b).
B.5 In clause B:
significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s
workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or
locations; or
(g) job restructuring.
B.6 Where this award makes provision for alteration of any of the matters defined
at B.5, such alteration is taken not to have significant effect.
[66] The expert did not attend the April conference but provided comments on the parties’
consent position. The expert has raised two concerns with the parties agreed position:
(i) Clause B.1
(ii) Clause B.5 and deletion of clause B.6
(i) Clause B.1
[67] In respect of B.1, the expert noted that there is no need to refer to when to begin a
discussion if the requirement is that you discuss as soon as practicable. The following
amendment to clause B.1 is proposed:
‘Consultation about major workplace change
B.1 If an employer makes a definite decision to make a major change in production,
program, organisation, structure or technology excluding a change in any such matter that is
provided by for by the award (relevant change) that is are likely to have a significant effects
on employees, the employer must as soon as practicable after making that decision:
(a) give notice of the relevant change changes to all employees who may be
affected by it them and their representatives (if any); and
(b) discuss with affected employees and their representatives (if any):
(i) the introduction of the changes; and
(ii) their likely effect on employees; and
(iii) measures to avoid or reduce the adverse effects of the changes on
employees; and
(c) commence discussions.as soon as practicable after a definite decision has
been made.’
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[68] The expert also suggests that a more efficient approach would be to define the term
‘relevant change’ in clause B.1 as meaning ‘a change in production, program, organisation,
structure or technology excluding a change in any such matter that is provided for by the
award’. This will enable clause B.1 to refer to an employer making a definite decision to
make a relevant change that is likely to have a significant effect on employees and clause B.5
could then define ‘significant effect’.
[69] Parties are invited to comment on the proposed amendment to clause B.1 by 4.00 pm
on Wednesday 9 August 2017.
(ii) Clause B.5 and deletion of clause B.6
[70] The expert noted that the proposed clause B.6 is a deeming provision, focussing on the
effect of a change rather than a direct limitation on the kind of changes covered by the clause,
and that it would be preferable to provide for a limitation on the coverage of the clause at the
beginning of that clause. The original approach was to focus on the nature of the change and
not on its effect on employees.
[71] The expert proposed the following amendments to clauses B.5 and B.6, as a result of
amendment to clause B.1, in order to overcome the inclusion of a deeming provision
consistent with the Plain Language Guidelines:
‘B.5 In clause B:
significant effects, on employees, includes any of the following:
(a) termination of employment; or
(b) major changes in the composition, operation or size of the employer’s
workforce or in the skills required; or
(c) loss of, or reduction in, job or promotion opportunities; or
(d) loss of, or reduction in, job tenure; or
(e) alteration of hours of work; or
(f) the need for employees to be retrained or transferred to other work or
locations; or
(g) job restructuring.
B.6 Where this award makes provision for alteration of any of the matters defined at B.5,
such alteration is taken not to have significant effect.’
[72] Parties are invited to comment on the proposed amendments to clauses B.5 and B.6 by
4.00 pm on Wednesday 9 August 2017.
Clause C—Consultation about changes to the rosters or hours of work
[73] The consultation about changes to rosters or hours of work clause was inserted into all
modern awards as result of the Fair Work Amendment Act 2013 which amended the Fair
Work Act 2009 by inserting a new provision s.145A. Section 145A provides that all modern
awards must include a term requiring employers to consult employees about a change to their
regular roster or ordinary hours of work. The wording of the new consultation clause was
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noted at paragraph 107 of the decision41 issued on 23 December 2013 and modern awards
were varied on the same day to include the clause.
[74] The plain language re-draft of clause C was discussed at the January and April
conferences. The revised standard clause C is as follows:
C. Consultation about changes to rosters or hours of work
C.1 Clause C applies if an employer proposes to change the regular roster or
ordinary hours of work of an employee, other than an employee whose
working hours are irregular, sporadic or unpredictable.
C.2 The employer must consult with any employees affected by the proposed
change and their representatives (if any).
C.3 For the purpose of the consultation, the employer must:
(a) provide to the employees and representatives mentioned in clause C.2
information about the proposed change (for example, information
about the nature of the change and when it is to begin); and
(b) invite them to give their views about the impact of the proposed
change on affected employees (including any impact on their family
or caring responsibilities).
C.4 The employer must consider any views given under clause C.3(b).
C.5 Clause C is to be read in conjunction with any other provisions of this award
concerning the scheduling of work or the giving of notice.
[75] One issue remains outstanding in relation to clause C, namely the wording of clause
C.3(b).
[76] Ai Group submits that proposed clause C.3(b) now requires an employer to invite an
employee to give their views about the impact of the proposed change on any affected
employee and that this means the employer must invite an employee to express their views
about the impact on the family and caring responsibilities of another employee. Ai Group
submits that this is not the intended effect of the current clause. Rather, the current intention is
for the employees to provide views about the impact of the proposed change on them and
accordingly the words “affected employees” should not be included.42
[77] Ai Group acknowledged that the purpose of including the words “affected employees”
was to have regard to the fact that representatives were also invited to express views and
undertook to give the issue further consideration.43
[78] The expert has reviewed clause C.3(b) and has suggested the following amendment:
‘(b) invite the employees them to give their views about the impact of the proposed change
on them affected employees (including any impact on their family or caring
responsibilities) and also invite their representative (if any) to give their views about
that impact.’
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[79] Parties are invited to comment on the proposed amendment by 4.00 pm on
Wednesday 9 August 2017.
Clause D—Dispute resolution
[80] The dispute resolution clause was inserted into modern awards as a result of the award
modernisation process in 2008. In a decision44 in September 2008 the Full Bench decided to
include a clause intended to be simple, to emphasise the importance of resolution at the
workplace, to encourage parties to agree on a process that would suit them if the dispute
reached the Commission and to provide the Commission with the discretion and power to
ensure settlement of the dispute. The clause was finalised in a decision45 in December 2008.
The Full Bench noted that the operation of the clause was not intended to be confined to
issues concerning one employee only and that if the dispute affects a group of employee, for
the purposes of the procedure, each member of the group may be represented by the same
representative.
[81] The plain language re-draft of clause D—Dispute resolution was discussed during the
January and April conferences. The revised standard clause D—Dispute resolution is as
follows:
D. Dispute resolution
D.1 Clause D sets out the procedures to be followed if a dispute arises about a
matter under this award or in relation to National Employment Standards the
NES.
D.2 The parties to the dispute must first try to resolve the dispute at the workplace
through discussion between the employee or employees concerned and the
relevant supervisor.
D.3 If the dispute is not resolved through discussion as mentioned in clause D.2,
the parties to the dispute must then try to resolve it in a timely manner at the
workplace through discussion between the employee or employees concerned
and more senior levels of management, as appropriate.
D.4 If the dispute is unable to be resolved at the workplace and all appropriate
steps have been taken under clauses D.2 and D.3, a party to the dispute may
refer it to the Fair Work Commission.
D.5 The parties may agree on the process to be followed by the Fair Work
Commission in dealing with the dispute, including mediation, conciliation
and consent arbitration.
D.6 If the dispute remains unresolved, the Fair Work Commission may use any
method of dispute resolution that it is permitted by the Act to use and that it
considers appropriate for resolving the dispute.
D.7 A party to the dispute may appoint a person, organisation or association to
support or represent them in any discussion or process under clause D.
D.8 While procedures are being followed under clause D in relation to a dispute:
(a) work must continue in accordance with this award and the Act; and
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(b) an employee must not unreasonably fail to comply with any direction
given by the employer about performing work, whether at the same or
another workplace, that is safe and appropriate for the employee to
perform.
D.9 Clause D.8 is subject to any applicable work health and safety legislation.
[82] As mentioned above, changes agreed between the parties as a result of the April
conference are in red.
[83] There are two outstanding issues that arise in relation to clause D:
(i) Terminology – “party/parties” or “employer/employee” in clauses D.2, D.3,
D.4, D.5 and D.7
(ii) The Word process in clause D.7
(i) Terminology: ‘party/parties’ or ‘employer/employee’ in clauses D.2, D.3, D.4, D.5
and D.7
[84] Ai Group has raised a concern in relation to the terms “party/parties to the dispute” in
clauses D.2, D.3, D.4, D.5 and D.7. The current clause uses the terms “employer” and
“employee”. Ai Group opposes the references to an “employer or employee” being replaced
by the words “party/parties to the dispute” if there is any risk that the words could be read to
mean anything broader than an employer or an employee, for example, if those words are
interpreted to include a union that is representing its members. The concern was raised in the
context of a suggestion that clause D.7 either could or should extend to unions. Ai Group
submit that the words “party/parties to the dispute” should be replaced with employer and
employee to avoid introducing ambiguity into the clause.46
[85] The TCFUA oppose the position of Ai Group and submit that Ai Group proposal
would narrow the application of the dispute resolution procedure.47 The TCFUA also
expressed concern that the change in terminology may limit the union’s ability to bring a
dispute to the Commission in the union’s own name and sought the opportunity to look into
the clause further.48
[86] During the April conference Commissioner Hunt expressed a preference for using the
terms “an employer or an employee”49
[87] The expert has reviewed the submissions of the parties and proposes the following
amendments (as marked in red) to clause D:
‘D. Dispute resolution
D.1 Clause D sets out the procedures to be followed if a dispute arises between an
employer and one or more than one employee about a matter under this award or in
relation to the NES.
D.2 The employer and the employee or employees concerned parties to the dispute must
first try to resolve the dispute at the workplace through discussion between the
employee or employees concerned and the relevant supervisor.
[2017] FWCFB 3745
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D.3 If the dispute is not resolved through discussion as mentioned in clause D.2, the
employer and the employee or employees concerned parties to the dispute must then
try to resolve it in a timely manner at the workplace through discussion between the
employee or employees concerned and more senior levels of management, as
appropriate.
D.4 If the dispute is unable to be resolved at the workplace and all appropriate steps have
been taken under clauses D.2 and D.3, the employer or the employees concerned or
any one or more of the employees concerned, party to the dispute may refer it to the
Fair Work Commission.
D.5 The parties to the proceeding in the Fair Work Commission may agree on the process
to be followed by the Fair Work Commission in dealing with the dispute, including
mediation, conciliation and consent arbitration.
D.6 If the dispute remains unresolved, the Fair Work Commission may use any method of
dispute resolution that it is permitted by the Act to use and that it considers
appropriate for resolving the dispute.
D.7 An employer or an employee party to the dispute may appoint a person, organisation
or association to support or represent them in any discussion or process under clause
D.
…...’
[88] Parties are invited to comment on the proposed amendment to Clause D by 4.00 pm
on Wednesday 9 August 2017.
(ii) Word ‘process’ in clause D.7
[89] During the April conference some concern was expressed about inclusion of the
additional word “process” at D.7.50
[90] The expert has observed that the reference to ‘process’ in clause D.7 relates to the
process agreed upon in clause D.5.
[91] Parties are invited to comment on the word “process” in clause D.7 by 4.00 pm on
Wednesday 9 August 2017.
E. Termination of employment
[92] The termination of employment clause was inserted into all modern awards as a result
of the award modernisation process in 2008. In a decision51 in September 2008 the Full Bench
decided to include a clause which supplemented the NES by including provisions for notice
by employees and a job search leave entitlement. The clause was finalised in December
200852 and a new term was included dealing with the withholding of monies by the employer
should the employee fail to give the required notice of termination.
[2017] FWCFB 3745
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[93] The plain language re-draft of clause E—Termination of employment was discussed at
the January and April conferences. The revised standard clause E—Termination of
employment reflecting the agreed position of the interested parties (in red) is as follows:
Part X—Termination of employment and Redundancy
NOTE 1: The National Employment Standards set NES sets out requirements for
redundancy pay. See Part 2-2, Division 11, Subdivisions B and C of the Act.
NOTE 2: Clause B—Consultation about major workplace change sets out
requirements to consult about major workplace change, including changes that involve
redundancy.
E. Termination of employment
NOTE: The National Employment Standards set NES sets out requirements for notice
of termination by an employer. See sections 117 and 123 of the Act.
E.1 Notice of termination by an employee
(a) An employee must give the employer written notice of termination in
accordance with Table X—Period of notice of at least the period
specified in column 2 according to the period of continuous service of
the employee specified in column 1.
Table X—Period of notice
Column 1
Employee’s period of continuous service
with the employer at the end of the day
the notice is given
Column 2
Period of notice
Not more than 1 year 1 week
More than 1 year but not more than 3 years 2 weeks
More than 3 years but not more than 5 years 3 weeks
More than 5 years 4 weeks
NOTE: The notice of termination required to be given by an
employee is the same as that required of an employer except that the
employee does not have to give additional notice based on the age of
the employee.
(b) In paragraph (a) continuous service has the same meaning as in
section 117 of the Act.
(c) If an employee fails to give the period of notice required under
paragraph (a), the employer may deduct from any money due to the
employee on termination (under this award or the National Employment
Standards NES), an amount not exceeding the amount that the
employee would have been paid in respect of the period of notice not
given.
E.2 Job search entitlement
Where an employer has given notice of termination to an employee, the
https://www.fwc.gov.au/documents/documents/legislation/fw_act/FW_Act-01.htm#P1690_157724
[2017] FWCFB 3745
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employee must be allowed time off without loss of pay of up to one day for
the purpose of seeking other employment.
E.3 The time off under clause E.2 is to be taken at times that are convenient to the
employee after consultation with the employer.
[94] The expert has reviewed the consent position of the parties and has raised a drafting
concern regarding the inconsistency between clause E.1(c) and the explanation in column 1 of
the table.
[95] The expert has reviewed the consent position of the parties and notes that the
explanation proposed by interested parties for column 1 in E.1(c) is incorrect. He noted that
the intent is to give the employer the option of not making a full deduction. The expert
proposes that the following wording of E.1(c) be retained:
‘(c) If an employee fails to give the period of notice required under paragraph (a), the
employer may deduct from any money due to the employee on termination (under this
award or the NES), an amount not exceeding the amount that the employee would
have been paid in respect of the period of notice not given.’
[96] Parties are invited to comment on the proposed amendment to Clause E by 4.00 pm on
Wednesday 9 August 2017.
F. Redundancy
[97] The redundancy clause was inserted into all modern awards as a result of the award
modernisation process in 2008.53 The redundancy clause was finalised in a decision54 in
December 2008.
[98] The revised standard clause F—Redundancy reflects the agreed position of the
interested parties is as follows:
F. Redundancy
Redundancy pay is provided for in the NES.
[99] There are no outstanding issues in relation to Clause F—Redundancy.
G. Transfer to lower paid job on redundancy
[100] The clause regarding transfer to a lower paid job on redundancy was inserted into all
modern awards as a result of the award modernisation process as a term in the redundancy
provisions. In a decision55 in September 2008 the Full Bench set out a draft model provision
dealing with redundancy which contained provisions dealing with transfers to lower paid
duties. The clause was finalised in December 200856.
http://www.legislation.gov.au/Series/C2009A00028
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[101] The plain language re-draft of clause G—Transfer to lower paid job on redundancy
was discussed at the January and April conferences. The revised standard clause G—Transfer
to lower paid job on redundancy is as follows:
G. Transfer to lower paid job on redundancy
G.1 Clause G applies if the employer:
(a) no longer requires the duties being performed by an employee in a
role (the first role) to be performed by anyone; and
(b) decides to transfer the employee to a new role (the second role) at a
lower ordinary rate of pay.
G.2 The employer may:
(a) give the employee notice of the transfer of the same length as the
employee would be entitled to under section 117 of the Act as if it
were a notice of termination given by the employer; or
(b) transfer the employee without giving notice of transfer or before the
expiry of a notice of transfer.
G.3 If the employer acts as mentioned in paragraph G.2(b), the employee is
entitled to a payment of an amount equal to the difference between the
ordinary rate of pay of the employee in the first role and the ordinary rate of
pay of the employee in the second role for the period for which notice was not
given.
[102] As mentioned above, changes agreed between the parties as a result of the April
conference are in red.
[103] The equivalent current clause is as follows:
‘X.2 Transfer to lower paid duties
Where an employee is transferred to lower paid duties by reason of redundancy, the
same period of notice must be given as the employee would have been entitled to if
the employment had been terminated and the employer may, at the employer’s option,
make payment instead of an amount equal to the difference between the former
ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of
notice still owing.’
[104] There are 3 outstanding issues in relation to clause G:
(i) Change in terminology from “duties” to “job” in clause G.1
(ii) Proposed amendment to wording of clause G.2
(iii) “Ordinary rate of pay” in clause G.3
(i) Change in terminology from ‘duties’ to ‘job’ in clause G.1
[105] Ai Group raised concerns in relation the change in application of clause G.1 with the
change in terminology from “duties” to “job” in clause G.1 which occurred after the January
conference. The change Ai Group refers to is as follows:
[2017] FWCFB 3745
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‘G.1 Clause G applies if the employer:
(a) no longer requires the job (the old job) duties being performed by an employee in a
role (the first role) to be performed by anyone; and
(b) wishes decides to transfer the employee to a new job role (the second role) (the new
job) at a lower classification and lower hourly ordinary rate of pay.’57
[106] Ai Group submit that this clause used to apply when an employee was transferred to
lower paid duties by reason of redundancy and that under the new drafting the application is
narrower.58
[107] Ai Group seek to align the circumstances of when this clause would apply with the
definition of redundancy by introducing provision relating to where it might apply, or not
apply, and where it occurs due to the ordinary, customary turnover of labour. Ai Group have
not proposed alternative wording but referred to s.119(1) of the Act and seek wording that
more closely mirrors the Act.59
[108] Section 119(1) of the Act is as follows:
‘19 Redundancy pay
Entitlement to redundancy pay
(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s
employment is terminated:
(a) at the employer’s initiative because the employer no longer requires the job
done by the employee to be done by anyone, except where this is due to the
ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.’
[109] Ai Group submit that the Act talks about a job, rather than duties, which may be a
broader concept.60
[110] Ai Group further submit that the current clause applies where the employee is
transferred to lower paid duties by reason of redundancy, and the words ‘by reason of
redundancy’ have been taken out of the re-drafted clause. They say that the way clause G
defines redundancy is not appropriate and is inconsistent with the Act.61 Ai Group submit:
‘We wouldn't necessarily be opposed to some greater definition around what is the meaning of
redundancy for the purpose of the award, but the one that's been proffered is inappropriate, in
our view. It is a common problem that people don't know quite what is meant by the term,
redundancy, and industrial instruments, and it can have different meanings in different
agreements or in awards. We have a thought that aligning it to the Act was probably aligning it
to the underlying test case standard and appropriate, but I think the ACTU has a view that
within different awards, the meaning "redundancy" may mean different things…’62
[111] The ACTU submit that the definition in the Act is a definition for the purposes of
entitlement to redundancy pay and that:
[2017] FWCFB 3745
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‘There’s been some litigation about this, including there with that MUA case recently, which
has resulted in everybody who is made voluntarily redundant wanting to be made forcibly
redundant because of the different tax treatment of it. But it serves to illustrate the point that
what redundancy means in a particular context is variable, and so we wouldn't want to
constrain the definition of redundancy to those circumstances.”63
…
…the issue we took with the wording in the previous iteration of the model clause was that we
said it should be altered to not apply where the job was no longer required to be done by
anyone because of the ordinary and customary turnover of labour. So that’s an exception to
what is a redundancy under the Act and under the old test case, sort of standard. We said look,
if you’re going to define in the structure of the clause what is a redundancy, so when this
would apply, do it in a way that is consistent with the Act, and our submission, and I
appreciate this is contested, was that that is consistent with the origins of these award clauses,
and I might note that if you looked in the modern awards now there's a clause titled,
“Redundancy”, and it says redundancy pay is provided for in the NES, and then it uses the
term, redundancy, in the transfer to lower paid duties provision in that clause. So it does
suggest some consistency, but I accept that's probably just a product of the way these awards
have evolved. I think the difficulty is we just oppose, and the ACTU and Ai Group are going
to be completely opposed in the approach that should be taken. We think the definition of
redundancy, or the definition where this clause applies, should mirror the Act, if you will.’64
[112] The parties indicated that they would give further consideration to this issue and report
back to the Commission.
[113] Parties should provide submissions in relation to Clause G.1 by 4.00 pm on
Wednesday 9 August 2017.
(ii) Proposed amendment to wording of clause G.2
[114] The expert suggested the following revised wording for clause G.2(a) in order to
create a reference to minimum period as in s.117 of the FW Act:
‘G.2 The employer may:
(a) give the employee notice of the transfer of at least the same length as the employee
would be entitled to under section 117 of the Act as if it were a notice of termination
given by the employer; or’
[115] Parties are invited to provide submissions in relation to the proposed amendment
Clause G.2 by 4.00 pm on Wednesday 9 August 2017.
(iii) ‘Ordinary rate of pay’ in clause G.3
[116] Ai Group also raised issues in relation to the reference to “ordinary rate of pay” in
clause G.3. Clause G.3 is as follows:
‘G.3 If the employer acts as mentioned in paragraph G.2(b), the employee is entitled to a
payment of an amount equal to the difference between the ordinary rate of pay of the
employee in the first role and the ordinary rate of pay of the employee in the second
role for the period for which notice was not given.’
[2017] FWCFB 3745
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[117] Ai Group submit that the meaning of “ordinary rate of pay” is unclear and suggest it
should be substituted for “ordinary hourly rate of pay” which will be a defined term under the
modern awards. Ai Group is concerned that if the reference to ordinary rate of pay is retained,
it may suggest that it includes other amounts that might be payable during ordinary hours,
such as shift allowances or penalty rates on public holidays and that this would not be the
proper intent of these clauses. Ai Group submits that:
‘it was never intended to pick up all those other sorts of payments, and indeed, if it were it
would be extremely problematic in trying to work out how and which amounts to apply,
because of course during the period of notice, if you will, the employee may sometimes be a
shift worker and sometimes not; it just couldn't work.’65
[118] The following discussion took place during the April conference in relation to the term
“ordinary rate of pay”:
‘…in the exposure draft process of significant contest between the parties, because there was,
for example the Manufacturing Award, a proposal from a Full Bench that (indistinct)
constituted to replace that with the words, “applicable rate of pay”, and that’s unearthed a great
dispute between Ai Group and other employers and certain unions, because some parties
contend that this wording should capture shift allowances and so forth. The wording of this
clause is - - -
MR CLARKE: And it should.
MR FERGUSON: The wording of this clause is an issue that is in dispute between the parties
and I think - Ms Bhatt will correct me again if I’m wrong - the decision was made that this
would be dealt with by the plain English drafting Full Bench, so it is a matter for this
Full Bench to decide. I apologise for that. But it is ludicrous to think that you’ve got to
somehow work out the shift allowances that might apply during the period of the notice,
because of course that could change, and the employer could change that. No one has been able
to explain to me, and there’s been discussions between the parties, how that could possibly work
in practice. I don’t want to ventilate it here, but we’re suggesting we could push for the ordinary
hourly rate, which is just the classification rate, and on one view consistent with the old
redundancy case. We’re saying we would accept ordinary hourly rate, which would include
all-purpose allowances.’66
[119] The relevant clause of the Manufacturing and Associated Industries and Occupations
Award 2010 (the Manufacturing Award) is 23.3 which provides as follows:
‘23.3 Transfer to lower paid duties
Where an employee is transferred to lower paid duties by reason of redundancy the same
period of notice must be given as the employee would have been entitled to if the employment
had been terminated and the employer may, at the employer’s option, make payment instead
of an amount equal to the difference between the former ordinary time rate of pay and the new
ordinary time rate of pay for the number of weeks of notice still owing..’ (emphasis added).
[120] In paragraph [45] of the Group 1 Decision67 the issue of the term ‘ordinary time rate of
pay’ appearing in clause 23.3 of the Manufacturing award (clause 39.3 of the Manufacturing
award exposure draft) was referred to the plain language re-drafting common issue:
‘Clause 39.3 – Transfer to lower paid duties (renumbered clause 40.3) will be retained in the
form it was in prior to the October 2015 decision. We note that the parties have reserved their
[2017] FWCFB 3745
27
positions on this clause and will raise those in the process of making submissions with respect
to the clause as part of the plain language re-drafting of standard clauses in AM2016/15.’
[121] Parties should refer to the submissions of the parties in this issue in the manufacturing
award:
Ai Group submissions of 20 November 2015 and 7 December 2015;
AMWU submission of 13 December 2015; and
CFMEU submission of 4 December 2015.
[122] Parties should provide further submissions in relation to Clause G.3 and the term
“ordinary rate of pay” by 4.00 pm on Wednesday 9 August 2017.
H. Employee leaving during redundancy notice period
[123] The clause regarding employees leaving during a redundancy notice period was
inserted into all modern awards as a result of the award modernisation process as a term in the
redundancy provisions.
[124] Clause H—Employee leaving during redundancy notice period was discussed at the
January and April conferences. The revised standard clause H—Employee leaving during
redundancy notice period is as follows.
H. Employee leaving during redundancy notice period
H.1 An employee given notice of termination in circumstances of redundancy may
terminate their employment during the period of the notice.
H.2 The employee is entitled to receive the benefits and payments they would
have received under this award or the National Employment Standards NES had
they remained in employment until the expiry of the notice.
H.3 However, the employee is not entitled to be paid for any part of the period of
notice remaining after the employee ceased to be employed.
H.4 Job search entitlement
(a) Where an employer has given notice of termination to an employee in
circumstances of redundancy, the employee must be allowed paid time
off without loss of pay of up to one day each week during the period of
the notice for the purpose of seeking other employment.
(b) If an employee is allowed time off without loss of pay of more than one
day under paragraph (a), the employee must, at the request of the
employer, produce proof of attendance at an interview.
(c) A statutory declaration is sufficient for the purpose of paragraph (b).
(d) An employee who fails to produce proof when required under paragraph
(b) is not entitled to be paid for the time off.
(e) This entitlement applies instead of clause E.2.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201475-sub-cfmeu-041215.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201475-sub-amwu-131215.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM201475andors-sub-aig-071215.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM201475andOrs-sub-AIG-231115.pdf
[2017] FWCFB 3745
28
[125] As mentioned above, changes agreed between the parties as a result of the April
conference are in red.
[126] There are 2 contested issues in relation to clause H:
(i) Meaning of clause H.2
(ii) Period of notice in H.4
(i) Meaning of clause H.2
[127] Ai Group raised an issue in relation to clause H.2. After the January conference
clause H.2 was updated as follows:
‘H.2 The employee is entitled to receive the benefits and payments they would have
received under this award or the National Employment Standards had they
remained in employment until the expiry of the notice.’68
[128] Ai Group submit that wording now states that the employee is entitled to receive the
benefits and payments they would have received under the award or the NES had they
remained in employment until the expiry of the notice. Ai Group submit that the intention was
not to enable an employee to terminate during the redundancy notice period without giving
the required period of notice that the award otherwise requires and then to remove an
employer’s ability to withhold moneys from that employee. Ai Group submit that all this
clause should protect is the amount of redundancy pay that the employee would get.69 If the
employee doesn’t give the requisite period of notice, an amount could be deducted from their
severance pay but their redundancy pay would be preserved.70
[129] The ACTU described the way the provision worked as follows:
‘if somebody said all right, you’re going to be made redundant and I'm giving you five weeks’
notice, you know, because that's how long you've been here, and guess what, in three weeks'
time you click over to being an employee who’s served for nine years instead of eight years, so
you get more redundancy pay. So if the worker wants to leave early because they’ve got
another job or for whatever reason, you still calculate their redundancy pay as if he had stayed
there for eight years so that he doesn’t lose those extra - and I say that’s what this bit about had
they, you know, received the payments they received under this clause, you know, going back
to the time when the clause actually said how much redundancy pay you get, as if you’d
remained in employment till the expiry of the notice. So you were going to stay on for the full
x weeks of the severance pay period, then you would have clicked over to being an eight or
nine-year employee so you've got to get the bigger package. So you still get the bigger
package, even though you put your hand up to go early, but the consequence of putting your
hand up to go early is that you can’t insist on well I’m only working two weeks out of the
notice period so you have to pay me the other three. The boss says well no, I’m not going to
pay you the other three, that’s it; and in that situation, because the employer is in no way
obliged to make a payment in lieu of notice, they lose their rights to deduct from that
payment.’71
[2017] FWCFB 3745
29
[130] Ai Group differ in in their view about how the clause operates. Ai Group submit that
another clause entitles the employer to deduct an amount for the difference between the notice
given and the notice worked from whatever is payable to the employee under the award or the
NES, apart from redundancy pay.72
[131] The submissions of Ai Group are opposed by the SDA.73
[132] It became clear in the April conference that the issue raised in relation to clause H.2
remains highly contentious. Parties should provide further submissions in relation to
clause H.2 by 4.00 pm on Wednesday 9 August 2017.
(ii) Period of notice in H.4
[133] Ai Group raised a concern about whether the reference to the period of notice in clause
H.4(a) is a reference to the period of notice of termination. 74 Clause H.3 was amended as
follows after the January conference:
H.3 However, the employee is not entitled to be paid for any part of the period of notice
remaining after the employee ceased to be employed.
H.3 The requirement for the employer to pay the employee at the full rate of pay for the
hours the employee would have worked had the employee continued to be employed
until the end of the minimum period of notice is not affected by the early termination
of employment by the employee.
NOTE: See section 18 of the Fair Work Act for the meaning of “full rate of pay”.”75
[134] Ai Group submit that period of notice referred to in H.3 should be the period of notice
of termination that someone is entitled to under s.117 of the Act under s.117.
[135] Parties should provide further submissions in relation to Clause H.3 by 4.00 pm on
Wednesday 9 August 2017.
Next Steps
[136] This Statement provides an update about the status of standard clauses. A number of
provisional views have been expressed in relation to some issues and a number of contentious
issues have been identified and submissions have been invited from interested parties.
[137] Parties are invited to makes submissions regarding whether the outstanding issues
have been accurately characterised in this Statement. Submissions in respect of the issues in
accordance with paragraphs [27], [37], [43], [63], [69], [72], [79], [88], [[91], [96], [113],
[115], [122], [132] and [135] of the Statement are invited. Submissions are also invited in
respect of provisional views expressed and any residual issues.
[2017] FWCFB 3745
30
[138] Submissions should be filed by no later than 4.00 pm on Wednesday 9 August 2017.
[139] The matter will be set down for hearing in Sydney at 9:30am on 21 August 2017.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
Price code G, PR594604
1 [2016] FWC 4756 at [36]-[37]
2 AM2016/15
3 Standard clauses – plain language drafts and comparison table
4 [2017] FWCFB 1638
5 [2008] AIRCFB 550
6 [2008] FWCFB 1000
7 [2013] FWCFB 8859
8 [2013] FWCFB 8859
9 PN2768 of transcript of 11 April 2017 conference
10 Ibid
11 PN416-417 of transcript of 23 November 2016 conference
12 Ibid at PN 418
13 [2008] AIRCFB 550
14 Ibid, attachment C
15 [2013] FWCFB 8859 at [2]
16 Ibid
17 Ibid at PN420-431
18 Ibid at PN443-446
19 Ibid at PN446-463
20 Ibid at PN473
21 Ibid at PN475
22 Ibid at PN484
23 [2008] AIRCFB 1000
24 ACCI submission 29 September 2016, page 3
25 Ibid, pages 3 – 4
26 Plain language draft standard clauses, 9 August 2017 at page 2
27 PN536 to 544 of transcript of 23 November 2016 conference
28 Plain language draft standard clauses, 9 August 2017 at page 3
29 PN586 of transcript of 23 November 2016 conference; Plain language draft standard clauses, 9 August 2016
30 Ibid at PN868
31 PN847 of transcript of 23 November 2016 conference
32 Ibid at PN854
33 Ibid at PN858
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/201615-transcript-231116.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-standardclauses-comp-revised-09082016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/201615-transcript-231116.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-standardclauses-comp-revised-09082016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/201615-transcript-231116.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-standardclauses-comp-revised-09082016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-acci-290916.pdf
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb8859.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb550.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/201615-transcript-231116.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/11042017-am201615.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb8859.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb8859.htmhttps:/www.fwc.gov.au/documents/awardsandorders/html/pr994533.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2008aircfb1000.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2008aircfb550.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb1638.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-standardclauses-comp-revised-09082016.pdf
https://www.fwc.gov.au/awards-agreements/awards/modern-award-reviews/4-yearly-review/common-issues/am201615-plain-language?order=field_document_date&sort=desc
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwc4756.htm
[2017] FWCFB 3745
31
34 Ibid at PN859
35 Ibid at PN872
36 Ibid at PN883
37 Ibid at PN880
38 [2013] FWCFB 2170 at [188]
39 [2008] AIRCFB 717
40 [2008] AIRCFB 1000
41 [2013] FWCFB 10165
42 PN2793 of transcript of 11 April 2017 conference
43 Ibid at PN2802-2805
44 [2008] AIRCFB 717
45 [2008] AIRCFB 1000
46 PN2810 to 2814 of transcript of 11 April 2017 conference
47 Ibid at PN2815
48 Ibid at PN2825 to 2826
49 Ibid at PN2830 to 2868
50 Ibid at PN2830 to 2868
51 [2008] AIRCFB 717
52 [2008] AIRCFB 1000
53 [2008] AIRCFB 717
54 [2008] AIRCFB 1000
55 [2008] AIRCFB 717
56 [2008] AIRCFB 1000
57 Attachment B of [2017] FWCFB 1638
58 PN2915 of transcript of 11 April 2017 conference
59 Ibid at PN2916 to 2917
60 Ibid at PN2919
61 Ibid at PN2923 to 2925
62 Ibid at PN2925
63 Ibid at PN2943
64 Ibid at PN2946
65 Ibid at PN2967
66 Ibid at PN2969 to 2971
67 [2017] FWCFB 3177 at [45]
68 Attachment B of [2017] FWCFB 1638
69 PN3028 of transcript of 11 April 2017 conference
70 Ibid at PN3038 to 3038
71 Ibid at PN3049
72 Ibid at PN3050 to 3055
73 Ibid at PN3062
74 Ibid at PN3070-3089
75 Attachment B of [2017] FWCFB 1638
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb1638.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/11042017-am201615.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb1638.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2017fwcfb3177.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/11042017-am201615.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb1638.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb717.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb717.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb717.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/11042017-am201615.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb717.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/11042017-am201615.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb10165.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb1000.htm
http://www.airc.gov.au/awardmod/databases/general/decisions/2008aircfb717.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2013fwcfb2170.htm
