1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards—Annual leave—Black Coal Mining
Industry Award 2010
(AM2014/47)
JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER HAMPTON SYDNEY, 19 OCTOBER 2017
4 yearly review of modern awards - common issue - annual leave – timing of taking leave -
shutdown provision – Black Coal Mining Industry Award 2010.
1. Introduction
[1] This decision deals with the form of a ‘shutdown’ term in the Black Coal Mining
Industry Award 2010 (the Black Coal Award). It arises from a review of annual leave
provisions in modern awards more generally and should be read in conjunction with the
previous Decision issued on 27 March 20171 (March decision) and a Statement issued on 15
May 2017.2
[2] We propose to briefly deal with the background to the matter, the relevant history is
dealt with more extensively in the March decision.
[3] Clause 25 of the Black Coal Award deals with annual leave. Prior to the amendments
arising from the general review of annual leave terms the relevant provisions were subclauses
25.3, 25.4 and 25.10. Subclause 25.3 dealt with the accrual of annual leave and provided as
follows:
‘25.3 Accrual of annual leave
Employees, other than casual employees, accrue annual leave at the following rate:
For employees who would be entitled to
annual leave of:
Hours of annual leave for each
completed week of employment:
175 hours (5 weeks) 3.3654
210 hours (6 weeks) 4.0385’
[4] Clause 25.4 deals with the taking of annual leave:
‘25.4 When annual leave can be taken
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DECISION
E AUSTRALIA FairWork Commission
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(a) An employee with an annual leave entitlement, who wishes to take all or part
of that entitlement will, unless otherwise agreed between the employee and the
employer, give the employer at least 28 days’ notice in writing of the amount
of leave to be taken. The employer will grant that leave unless, in the
employer’s opinion, the operations of the mine will be affected.
(b) Unless otherwise agreed, annual leave will be taken within 12 months of the
date the employee received the annual leave entitlement.
(c) The employer may direct an employee to take all or part of an annual leave
entitlement provided at least 28 days’ notice in writing is given to the
employee.’ (emphasis added)
[5] Subclause 25.10 deals with the taking of annual leave during the shutdown of all or
part of an employer’s operations as follows:
‘25.10 Shutdown
(a) An employer that shuts down all or any part of its operation must give
employees at least 28 days’ notice of the shutdown or such shorter period as
agreed between the employer and the employees affected.
(b) Employees directly affected by the shutdown who have an entitlement to
annual leave may take all or part of that entitlement during the shutdown
period.
(c) Employees who are directly affected by the shutdown and who are not yet
entitled to sufficient annual leave may, during the shutdown period, take any
annual leave accrued in accordance with clause 25.8.’
[6] Arising from its review of annual leave provisions in modern awards the Commission
determined, relevantly, model clauses in respect of ‘excessive leave’ and ‘granting leave in
advance’. In the 4 yearly review of modern awards – Annual Leave decision of 22 September
2016 (September 2016 decision), we considered the terms of the Black Coal Award, in the
context of the model provisions and our earlier findings which led to the adoption of those
model terms. We found, in effect, that the broad right for the employer to direct the taking of
annual leave under clause 25.4(c), without other considerations and requirements, was not
consistent with s.93(3) of the Fair Work Act 2009 (Cth) (the Act). Section 93(3) provides:
‘A modern award or enterprise agreement may include terms requiring an employee, or
allowing an employee, to take paid annual leave in particular circumstances, but only if the
requirement is reasonable.’
[7] As a result, we decided to remove clause 25.4 and insert the model excess leave
provision.
[8] The draft determination issued by the Commission to give effect to the September
2016 decision included the new model excessive leave provision and noted the additional
provision for shutdown in clause 25.10 (which was to be re-numbered), but left the existing
shutdown provision in its original form.
[9] As we observed in the March 2017 decision,3 a general provision that permits the
employers under the Black Coal Award to direct that annual leave be taken on notice, without
other considerations and requirements, is not consistent with the scheme of the Act and with
s.93(3) in particular. However, a term permitting different arrangements for annual leave
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during a period of shutdown or close-down may be consistent with statutory framework,
depending on the terms of such a provision. We went on to state:
‘In our view, the terms of clause 25.10, when considered in the context of the Black Coal Award
as varied, means that in the event of a shutdown, where the employer had given notice,
employees could take all or part of their annual leave entitlement, or if there is not a sufficient
entitlement to cover the shutdown period they could (by agreement with the employer) take
leave in advance under clause 25.9. However there does not appear to be any capacity for the
employer to direct that annual leave be taken during the shutdown and no capacity for
employees to be placed on leave without pay – save that notice to take annual leave could be
given by the employer in circumstances where the requirements of the model excessive leave
provision have been met.’4
[10] The Coal Mining Industry Employer Group (CMIEG) proposed a revised shutdown
clause which included a power to direct an employee to take accrued paid annual leave during
a shutdown. The revised clause was considered in the March 2017 decision. In that decision
we concluded as follows:
‘There is significant potential for uncertainty and inconsistency arising from the present
provisions in the context of the model annual leave terms. While there is capacity for some
flexibility through the pursuit of enterprise agreements,5 the shutdown clause should be clear
and serve its evident purpose. For this reason, and having regard to how the shutdown clause
operated prior to the impending insertion of the model excessive leave provision, we consider
that there is some merit in the proposal now advanced by the CMIEG.
However we also accept that there is merit in the concerns by the Unions and that the
provision as proposed by the CMIEG is capable of being applied in a manner which is
inconsistent with s 93(3) of the FW Act. The imposition of some limitations upon the scope of
the provision is appropriate.’6
[11] We went on to express some provisional views as to the form of a revised shutdown
provision to be inserted into the Black Coal Award.
[12] The Construction, Forestry, Mining and Energy Union, Mining and Energy Division
(CFMEU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union known as the Australian Manufacturing Workers’ Union (AMWU) and The
Association of Professional Engineers, Scientists and Managers, Australia (APESMA)
(collectively, the Unions) opposed the amendment to the shutdown provision provisionally
determined in the March 2017 decision. The CMIEG broadly supported the Full Bench’s
provisional view.
[13] The parties subsequently agreed to some editorial changes to the provisional term (set
out at Annexure A to CMIEG submission of 18 May 2017). At a mention held on 4 August
2017 the CFMEU and the AMWU did not oppose the marked up changes7 but the unions did
object to those aspects of the provisional term which enabled an employer to direct an
employee to take unpaid leave or leave in advance in the event of a shutdown.
[14] In the Directions issued on 4 August 2017,8 the Commission provided a revised draft
clause for the parties to consider and make further submissions. The revised draft clause was
in the following terms:
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25.10 Shutdown
(a) Clause 25.10 applies if an employer intends to shutdown all or part of its
operation for a particular period (temporary shutdown period); and wishes to
require affected employees to take leave during that period.
(b) The employer must give the affected employees 28 days’ written notice of a
temporary shutdown period, or such shorter period as agreed between the
employer and the employees affected.
(c) The employer must give immediate written notice of a temporary shutdown
period to any employee who is engaged after the notice is given under
paragraph (b) and who will be affected by that period.
(d) The following applies to any affected employee during a temporary
shutdown period:
(i) if the employee has accrued an entitlement to paid annual leave the
employee may elect to take some or all of the leave during the temporary
shutdown period and may also elect to take leave without pay to cover any
part of the temporary shutdown period;
(ii) if the employee does not elect to take paid annual leave or leave
without pay to cover the whole of the temporary shutdown period, then
the employer may direct the employee to take a period of accrued paid
annual leave.
(e) A direction by the employer under clause 25.10(d)(ii):
(i) must be in writing; and
(ii) must be reasonable.
(f) The employee must take paid annual leave in accordance with a direction
under clause 25.10(d)(ii).
(g) In determining the amount of paid annual leave to which an employee has
accrued an entitlement, any period of paid annual leave taken in advance by the
employee, in accordance with an agreement under clause 25.9, to which an
entitlement has not been accrued is to be taken into account.
(h) When an employer shuts down all or part of its operation under this
provision, clauses 25.4 to 25.6 do not apply to employees directly affected by
the shutdown and this clause will apply.
[15] Interested parties filed further submissions in respect of the revised draft clause. We
have had regard to those submissions and to all of the previous submissions filed in respect of
this issue. A hearing took place on 10 October 2017.
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2. Submissions
[16] The CMIEG supports the insertion of a revised shutdown clause (set out at Annexure
A of its submissions of 11 September 2017), which is based on the revised draft clause
attached to our directions of 4 August 2017. The CMIEG proposed clause amends the revised
draft clause in two respects. First, it adds the following words at the end of clause 25.10(d)(i):
‘or annual leave in advance in accordance with clause 25.9 (or a combination of accrued annual
leave, annual leave in advance or leave without pay).’
[17] There is no opposition to the first amendment and we propose to adopt it.
[18] The second amendment is the insertion of a new Clause 25.10 (d)(iii) as follows:
‘(iii) if the employee has not accrued an entitlement to any paid annual leave sufficient to cover
any part of the temporary shutdown period, then the employee is taken to be on leave without
pay for the relevant period.’
[19] In support of its proposed shutdown clause the CMIEG relies on the results of a survey
conducted of company groups that participate in the CMIEG. Details of the survey and the
results are set out in the statement of David Gunzburg.9 The survey asks a range of questions
in respect of annual leave shutdown. Some nine company groups responded to the survey.
The survey respondents are major operators in the black coal mining industry in NSW and
Queensland, which collectively operate 55 mines employing approximately 28,000 workers.
[20] The CMIEG submits that the results of the survey demonstrate the following:
‘(a) Since 2010, seven of the nine company groups have had occasion to utilise annual
leave shutdowns.
(b) None of the company groups have adopted any change in approach to annual leave
shutdowns due to the introduction of the BCMI Award.
(c) Annual leave shutdowns have been utilised for a variety of reasons by the company
groups, including for the purpose of managing annual leave balances/provisioning; as
a result of market or economic considerations; due to stockpiles reaching or nearing
full capacity; as an alternative to standing-down employees; for the purpose of
undertaking maintenance shutdowns (eg. for major repairs and overhauls) and also
because of successive public holidays or peak requests for annual leave.
(d) The company groups have implemented shutdowns in a variety of ways, such as
across the whole of an operation (five respondents) and part of the operation (four
respondents), correspondingly affecting the whole of the workforce at the operation
(five respondents) or only part (four respondents).
(e) For employees who could not be usefully employed and who were not on a form of
leave, employees were on unpaid leave (three respondents) they were eventually
found work to perform in non-standard duties (one respondent), and for two of the
respondents the issue had never arisen as a form of paid leave was able to be
taken (including utilising annual leave in advance or employees performing
swapped shifts and work days in advance (ie. accruing TOIL to cover the period)).
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(f) There has been no reported disputation over annual leave shutdown from any of
the respondents.’10
[21] We deal later with the relevance of the survey evidence to the matters before us.
[22] The CFMEU, AMWU and APESMA oppose Clause 25.10 (d)(ii) of the revised draft
clause, that is the right of an employer to direct an employee to take a period of accrued paid
leave if the employee does not elect to take paid annual leave or leave without pay to cover
the whole of the temporary shutdown period. The unions also oppose the second amendment
proposed by the CMIEG, which requires employees to take unpaid leave in certain
circumstances.
[23] In particular the unions contend that the power to direct an employee to take a period
of accrued paid annual leave during a shutdown:
is inconsistent with the Full Bench’s decision dealing with the excessive leave
model term11 and seeks to give employers a broader entitlement during a
shutdown which is a power that has just been removed by the Commission; and
inconsistent with the ‘reasonableness’ requirement in s.93(3) of the Act.
3. Consideration
Direction to take paid annual leave
[24] It is convenient to deal first with the unions’ opposition to clause 25.10(d)(ii) of the
revised draft clause. This term allows the employer to direct an employee to take a period of
accrued paid annual leave if the employee does not elect to take paid annual leave or leave
without pay to cover the whole of the temporary shutdown period.
[25] Contrary to the unions’ submission this provision is not inconsistent with the Full
Bench’s decision dealing with the excessive leave model term. In the September 2016
decision we found that the broad right for the employer to direct the taking of annual leave
under clause 25.4(c) of the Black Coal Award was not consistent with s.93(3) of the Act:
‘Clause 25.4(c) is a term allowing for an employee to be required to take annual leave. The
power to include such a term in a modern award is s.93(3), which provides that the
requirement to take paid annual leave must be ‘reasonable’. An award term whereby an
employee can be directed to take all of part of their accrued paid annual leave on the provision
of 28 days’ notice in writing without other considerations and requirements is not ‘reasonable’
within the meaning of s.93(3).’12 (emphasis added)
[26] The September 2016 decision was dealing with a general right to direct an employee
to take a period of accrued paid annual leave. The present circumstance is quite different. We
are considering such a right in the context of a temporary shutdown. This distinction was
made clear in the March 2017 decision:
‘a general provision that permits the employers under the Black Coal Award to direct that
annual leave be taken on notice, without other considerations and requirements, is not
consistent with the scheme of the FW Act and with s.93(3) in particular. However, a term
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permitting different arrangements for annual leave during a period of shutdown or close-down
may be consistent with statutory framework, depending on the terms of such a provision.’13
[27] Subject to the requirement to take leave being reasonable, a modern award term which
provides that an employee can be required to take a period of accrued paid annual leave in the
context of a temporary shutdown is a term of the type contemplated by s.93(3) of the Act. We
are fortified in this conclusion by the terms of the Explanatory Memorandum to the Fair
Work Bill 2008 which states:
‘Subclause 93(3) permits terms to be included in an award or agreement that require an
employee, or that enable an employer to require or direct an employee, to take paid annual
leave in particular circumstances, but only if the requirement is reasonable. This may include
the employer requiring an employee to take a period of annual leave to reduce the employee’s
excessive level of accrual or if the employer decides to shut down the workplace over the
Christmas/New Year period.’14 (emphasis added)
[28] Nor do we accept the unions’ contention that the Black Coal Award did not permit an
employer to direct an employee to take paid annual leave during a shutdown. As we stated in
the March 2017 decision:
‘…We accept that the present shutdown provisions in the Black Coal Award do not directly
provide a right for an employer to direct that annual leave be taken. However, prior to the
insertion of the model clauses the provision had operated in conjunction with clause 25.4,
which gave such a right simply by the giving of notice. The context in which the shutdown
clause operated prior to the impending insertion of the model excessive leave provision has
now changed significantly.’15
[29] Finally, contrary to the argument advanced by the unions we are not persuaded that the
revised draft clause is inconsistent with the ‘reasonableness’ requirement in s.93(3). In that
regard we note the following features of the revised draft clause:
(i) The term only applies to temporary shutdowns.
(ii) The employer must give affected employees 28 days’ written notice of a
temporary shutdown period.
(iii) The power to direct an employee to take a period of accrued paid annual leave
only arises if the employee does not elect to take paid annual leave or leave
without pay to cover the whole of the temporary shutdown period.
(iv) A direction to take a period of accrued paid leave must be in writing and must
be reasonable.
[30] We are satisfied that the revised draft clause (and in particular clause 25.10 (d)(ii))
accords with the requirement of s.93(3) of the Act.
Unpaid leave
[31] As we have noted, there is a dispute as to whether an employer should have the power
to (in effect) direct an employee to take a period of unpaid leave in circumstances where the
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employee has not accrued sufficient paid annual leave to cover any part of a temporary
shutdown period.
[32] We accept that CMIEG’s proposed clause 25.10(d)(iii) – in respect of unpaid leave –
is capable of falling within the scope of s.139(1)(b), as being a matter ‘about’ ‘leave’. The
central question is whether such a term is necessary to achieve the modern awards objective.
[33] The CMIEG contends that an award term providing that employees with insufficient
paid leave (or who are unwilling to take paid annual leave in advance) are to be taken to be on
‘leave without pay’, is necessary for the shutdown clause to operate practically:
‘First, it may be accepted that the policy reasons underpinning annual leave shutdown
provisions are two-fold. For employees, a shutdown permits the taking of a break from work
which is indisputably beneficial to employees and their families by providing them rest and
recreation, and will have other benefits for work health and safety and morale. That annual
leave shutdowns are traditionally arranged for the Christmas/New Year and Easter period
(although not exclusively) also has a benefit for employees to participate in these holiday
seasons with family and friends. For employers, there is an obvious benefit in dealing with
annual leave provisioning, however there may be a range of other financial or operational
benefits, as has been referred to previously by the CMIEG.
The benefits for both employers and employees would be rendered nugatory if the clause does
not provide for, first, an ability to direct or require the taking of paid annual leave, and,
second, employees who have insufficient paid annual leave.
If the shutdown clause does not include these features, an ability of the employer to shutdown
its operations is unlikely to be able to be practically achieved. Put simply, in the absence of
such provisions in a shutdown clause, it might reasonably be expected that employees simply
would not choose to take paid annual leave (or elect to take unpaid leave) where they could
expect to continue receive pay regardless if the employer shutdown its operations and they did
not voluntarily elect to take the options. The employer would, accordingly be required to
either provide some form of work, which may well be of little value to either party where
operations are ceased, or permit the employee to not attend at the workplace and continue to
receive pay. If a clause was to operate in that way, it would reasonably be expected that the
purpose of the shutdown would be defeated, and would simply not be utilised by employers.
It may be added that, to the extent the union parties contend that this is the way in which the
current clause 25.10 is, both, properly construed and operates in practice (which is denied, and
does not accord with the evidence submitted by the CMIEG), that construction is absurd, and
such an operation is without foundation or evidence.
Second, it is apparent that the Commission has, at least historically, proceeded on the basis
that inclusion of terms in modern awards dealing with "leave without pay"/"unpaid leave" are
permissible. By way of example, the Commission has made a significant number of modern
awards containing annual leave shutdown clauses that provide for unpaid leave. It may be
accepted that, prima facie, those modern awards met the modern awards objective at the time
they were made.
Further, a majority of a Full Bench have come to a provisional view that unpaid family and
domestic violence leave ought to be provided for in modern awards. This would appear to
proceed on the same basis of the implicit acceptance that paid domestic violence leave was
permissible to be included in modern awards, because they were matters under section
139(1)(h) concerning “leave”.’16 (footnotes omitted)
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[34] The last point – concerning unpaid family and domestic violence leave – is not
relevant to the present proceeding.
[35] The second point, that a significant number of modern awards contain shutdown
clauses that provide for unpaid leave, is also of limited relevance. Section 156(5) provides
that in the 4 yearly review each modern award is to be reviewed in its own right. Further, as
acknowledged by the CMIEG’s representative, the provisions relied upon have not yet been
reviewed.
[36] The contention that a shutdown clause without the power to direct an employee with
insufficient accrued paid leave to take unpaid leave will be ineffective, is unsupported by the
evidence. The CMIEG contend that absent such a power the shutdown provision would be
rendered nugatory. Yet the current Black Coal Award – and the award as it was prior to the
general review of annual leave terms – contains no power to direct an employee to take
unpaid leave in such circumstances. Contrary to CMIEG’s submission there is no reasonable
basis for implying such a power into clause 25.10.
[37] In practice the absence of such an award provision has not given rise to the problems
suggested by CMIEG. In this regard we note the uncontested assertion by the CFMEU’s
advocate in the September 2016 proceedings, that in the context of a proposed temporary
shutdown:
‘the parties get together, they sit down and they sort it out. That’s what has happened in the past.
That is what happened when Glencore, I think last year, shut down for a week. Presumably,
that is what will happen in the future.’17
[38] We also observe that it would be open to the parties to address these issues in
enterprise bargaining and we note the following submission contained in the CMIEG’s
written submission of 26 October 2015, at paragraph 37:
‘There is a high incidence of enterprise agreements in the black coal mining industry and, to the
extent that there are concerns that the provisions of the BCMI Award are not appropriate or
sufficient in dealing with the taking of leave, those concerns can be addressed by an enterprise
agreement.’18
[39] Further it is common ground that shutdowns are an infrequent event in the black coal
mining industry and that there has been little or no disputation in respect of the
implementation of shutdowns.
[40] The CMIEG relies on the survey results in support of its proposed clause:
‘The results of the survey demonstrate that shutdowns remain a feature of the black coal
mining industry, are taken for a variety of circumstances, and that where they are implemented
employees take paid annual leave for the period of the shutdown or unpaid leave. The
proposed shutdown clause supported by the CMIEG (in Annexure A) would reflect this
practice in the industry.’19 (footnotes omitted)
[41] All of the survey respondents were covered by enterprise agreements. Such
agreements commonly cover production and engineering employees (mine workers); but there
are employees (support staff and employees in higher classifications) who are not covered by
enterprise agreements and who would be covered by the Black Coal Award.
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[42] Question six in the survey deals with ‘payment during shutdowns’:
‘6 During a shutdown if an employee cannot be usefully employed and they are not on
some form of paid leave which of the following is your practice:
tick if yes
They must take unpaid leave
They perform no work but are paid their normal wage (either base wage or as per
roster)
Has never arisen, employees have always been able to take paid leave of some type
Comments
[43] The results of the survey are set out at Attachment A. Only three of the six
respondents who answered question 6 said that ‘they must take unpaid leave’; Glencore,
Centennial and Anglo American. Three things may be said about these responses.
[44] Firstly, the results say nothing about the frequency of temporary shutdowns; the
number of workers affected; or the number of workers required to take unpaid leave.
[45] Second, each of the survey respondents are likely to have enterprise agreements
covering a substantial proportion of their workforce. Hence, for most of the respondents’
employees the arrangements in relation to temporary shutdowns are dealt with in an enterprise
agreement, not in the Black Coal Award. For example, the notation to the survey results in
respect of Anglo American states:
‘Must take paid leave or leave in advance providing company gives appropriate notice (eg 4
weeks’ in advance). One of our EA’s has a provision to consider leave without pay on a case
by case basis (ie future A/L bookings).’
[46] Third, consistent with the uncontested evidence of the CFMEU witnesses – Messrs
Williams, Pierce and Timbs – the Glencore shutdown was a unique event.
[47] Contrary to the submission advanced by CMIEG, we are not persuaded that a term
empowering an employer to (in effect) direct an employee to take unpaid leave where the
employee has not accrued sufficient paid annual leave to cover any part of a temporary
shutdown can reasonably be said to reflect industry practice.
[48] As mentioned earlier, the central question is whether CMEIG’s proposed term (clause
25.10 (d)(iii), see [18] above) is necessary to achieve the modern awards objective.
[49] Section 138 of the 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.’
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[50] In CFMEU v Anglo American Metallurgical Coal Pty Ltd (‘Anglo American’)20 the
Federal Court considered the expression ‘necessary to achieve the modern awards objective’
in s.138:
‘The words “only to the extent necessary” in s 138 emphasise the fact that it is the minimum
safety net and minimum wages objective to which the modern awards are directed. Other
terms and conditions beyond a minimum are to be the product of enterprise bargaining, and
enterprise agreements under Pt 2-4.’21
[51] In Anglo American the Court also discussed the nature of the Commission’s task in
conducting the 4 yearly review:
‘The terms of s 156(2)(a) require the Commission to review all modern awards every four years.
That is the task upon which the Commission was engaged. The statutory task is, in this
context, not limited to focusing upon any posited variation as necessary to achieve the modern
awards objective, as it is under s 157(1)(a). Rather, it is a review of the modern award as a
whole. The review is at large, to ensure that the modern awards objective is being met: that
the award, together with the National Employment Standards, provides a fair and relevant
minimum safety net of terms and conditions. This is to be achieved by s 138 – terms may and
must be included only to the extent necessary to achieve such an objective.
Viewing the statutory task in this way reveals that it is not necessary for the Commission to
conclude that the award, or a term of it as it currently stands, does not meet the modern award
objective. Rather, it is necessary for the Commission to review the award and, by reference to
the matters in s 134(1) and any other consideration consistent with the purpose of the
objective, come to an evaluative judgment about the objective and what terms should be
included only to the extent necessary to achieve the objective of a fair and relevant minimum
safety net.’22
[52] 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 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. 23 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.
[53] In the National Retail Association Case24 the Court said the following about s 134(1)
at 174-175 [109]-[110]:
[109] It is apparent from the terms of s 134(1) that the factors listed in (a) to (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.
[110] The relevant finding the FWC is called upon to make is that the modern award either
achieves or does not achieve the modern awards objective. The NRA’s contention that it was
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necessary for the FWC to have made a finding that the Retail Award failed to satisfy at least
one of the s 134(1) factors must be rejected.
[54] The objective is very broadly expressed25 and the matters which may be taken into
account are not confined to the s.134 considerations. As the Federal Court observed in Shop,
Distributive and Allied Employees Association v The Australian Industry Group (‘The Penalty
Rates Review’)26:
‘What must be recognised, however, is that the duty of ensuring that modern awards, together
with the National Employment Standards, provide a fair and relevant minimum safety net of
terms and conditions itself involves an evaluative exercise. While the considerations in
s 134(a)-(h) inform the evaluation of what might constitute a “fair and relevant minimum
safety net of terms and conditions”, they do not necessarily exhaust the matters which the
FWC might properly consider to be relevant to that standard, of a fair and relevant minimum
safety net of terms and conditions, in the particular circumstances of a review. The range of
such matters “must be determined by implication from the subject matter, scope and purpose
of the” Fair Work Act (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40;
(1986) 162 CLR 24 at 39-40).’27
[55] In support of its contention that the proposed clause is necessary to achieve the
modern awards objective the CMEIG relied on:
The terms of other modern awards in similar or related industries.
The shutdown clauses in other modern awards generally.
The shutdown provisions in enterprise agreements in the black coal mining industry.
The proposition that it is a common feature of legislative regimes dealing with
annual leave, that there be an ability for employers to direct the taking of annual
leave and, in the case of a shutdown, that employees with insufficient paid leave
accruals take leave on a proportionate basis/rate or leave without pay.
The amendment to clause 25.10 is necessary to ‘ensure a simple easy to understand
stable and sustainable modern award system’ (s. 134(1)(g)).
[56] The propositions advanced by the CMIEG support the variation of the Black Coal
Award to insert the revised draft clause (see [14]) with the addition of the agreed words at the
end of the clause 25.10(d)(i) (see [16]), but they do not provide the requisite support for the
CMIEG’s unpaid leave proposed term.
[57] As we have already mentioned, the fact that a significant number of modern awards
contain shutdown clauses that provide for unpaid leave is of limited relevance. The provisions
relied upon have not yet been reviewed and it is likely that they relate to circumstances
applicable to those particular awards.
[58] Nor are the legislative provisions relied upon persuasive. The proposed amendment of
clause 25.10 must be considered within the statutory framework of the Act.
[59] Further, contrary to the CMIEG’s submission, the terms of enterprise agreements in
the Black Coal Industry does not support the variation sought. The CMIEG submits:
[2017] FWCFB 5394
13
‘Third, shutdown provisions in enterprise agreements in the black coal mining industry (a
sample of which is set out in Annexure D to these submissions) commonly include both an
ability to direct or require employees to take leave, and placing employees onto leave without
pay leave. These may be seen to be features of shutdown clauses to ensure that they operate in
a practical way.’28
[60] The submission advanced suggests that the issue raised can be (and has been)
satisfactorily dealt with in enterprise bargaining. In such circumstances it is not readily
apparent why it is necessary to insert a term in this particular modern award dealing with the
requirement to take unpaid leave during a temporary shutdown.
[61] As to the proposition that the amendment of clause 25.10 is necessary to ensure that
the award is simple and easy to understand, we agree with the general sentiment expressed
(and we intend to amend clause 25.10), but the proposition advanced does not lead to the
conclusion that a power to direct the taking of unpaid leave is necessary to achieve the
modern awards objective.
[62] For the reasons given we do not propose to adopt the CMIEG’s proposal (clause 25.10
(d)(iii), see [18] above) in respect of unpaid leave. Our decision in this regard should be seen
in the context of the circumstances pertaining to the Black Coal Award. In particular we note
that the current award does not deal with unpaid leave and that shutdowns are an infrequent
event in the black coal mining industry.
Unpaid leave and service, public holidays
[63] We now turn to the amendments sought by the unions.
[64] The CFMEU, with the support of the AMWU and APESMA, propose that to the
extent that the shutdown clause in the Black Coal Award includes reference to unpaid leave,
two ancillary provisions should be included:
(i) the clause should expressly confirm that any period of unpaid leave is to count for
the purposes of service; and
(ii) an employee is entitled to any public holiday that falls during such a period.29
[65] In effect, the unions contend that employees in these circumstances should be treated
as if they were at work for the purpose of public holiday entitlements and calculating service
and that such provisions are required in order to achieve the modern awards objective.
[66] The CMIEG contend that the proposed provisions are not necessary given the
provisions of the Act which deal with these matters and the existing terms of the Black Coal
Award.
[67] We are not satisfied that it is appropriate to deal with the issue of service at this time.
The issue raised may have implications in the review of all shutdown terms in modern
awards. It is appropriate that it be considered in the context of a broader review of shutdown
terms. We now turn to the second of the unions’ proposals.
[2017] FWCFB 5394
14
[68] The payment for absence on public holidays is dealt with as part of the NES, in s.116:
116 Payment for absence on public holiday
If, in accordance with this Division, an employee is absent from his or her employment on a
day or part‑day that is a public holiday, the employer must pay the employee at the
employee’s base rate of pay for the employee’s ordinary hours of work on the day or part‑day.
Note: If the employee does not have ordinary hours of work on the public holiday, the
employee is not entitled to payment under this section. For example, the employee is not
entitled to payment if the employee is a casual employee who is not rostered on for the public
holiday, or is a part‑time employee whose part‑time hours do not include the day of the week
on which the public holiday occurs.
[69] The Black Coal Award largely reflects this aspect of the NES.30
[70] Section 89 of the Act also deals with public holidays during a period of paid annual
leave:
‘89 Employee not taken to be on paid annual leave at certain times
Public holidays
(1) If the period during which an employee takes paid annual leave includes a day or part-day
that is a public holiday in the place where the employee is based for work purposes, the
employee is taken not to be on paid annual leave on that public holiday.
… …’
[71] The Black Coal Award deals with the coincidence of a public holiday with a ‘Rostered
Day Off’ (RDO) in clause 23.6(f):
“(f) RDOs falling on a recognised public holiday
An employee who is entitled to an RDO which falls on a public holiday is, at the discretion of
the employer, to be either:
(i) paid at the employee’s classification rate; or
(ii) credited with one day for each such public holiday (payable at ordinary rates).”
[72] The Black Coal Award also defines an RDO in the following terms.
“rostered day off or RDO each mean any day on which an employee, by virtue of the
employee’s roster, is not rostered to attend for rostered hours of work and does not include
non-working days”.31
[73] The CMIEG submitted that an employee on leave in the context of a temporary
shutdown would still be on a rostered day off and that the award provisions, and s.116, should
be given their ordinary construction to deal with the issue. However, it also indicated that it
had no ‘violent objection’ to the inclusion of an express provision confirming the appropriate
entitlement.32
[2017] FWCFB 5394
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[74] As a general proposition, award provisions should not repeat or deal with issues
properly left to the NES and other provisions of the Act. However, in the case of this
particular award we consider that the issue should not be left to the somewhat uncertain
application of clause 23.6(f). Rather, the apparent common view of the major groups
participating in the review should be reflected in the shutdown provision. Further, the most
appropriate means to deal with the issue is, in effect, to confirm that where a relevant public
holiday falls during a period of absence, the day will be treated as a public holiday.
[75] Accordingly, we propose to include a term in the shutdown clause of this award to
confirm that where an employee is absent from work, on paid or unpaid leave as a result of a
shutdown, on a public holiday which would otherwise have been a working day for that
employee, the day will be treated as a public holiday.
4. Conclusion
[76] We are satisfied that the variation of the Black Coal Award to delete existing clause
25.10 and to insert the revised draft clause (as amended to add the words proposed by the
CMIEG to the end of clause 25.10 (d)(i), see [16] above, and to include a provision dealing
with public holidays, see [75] above) is necessary to ensure that the award achieves the
modern awards objective. As to the matters in s.134 (1)(a) – (h), insofar as they are relevant,
we are satisfied that the variation will promote flexible modern work practices and the
efficient and productive performance of work (s.134(1)(d)) and will ensure that the award is
simple and easy to understand (s.134(1)(g)).
[77] We are also satisfied that such a variation is consistent with the objects of the Act.
[78] The Black Coal Award will be varied according to a determination which will be
issued shortly. The variation will subsequently be replicated in the exposure draft.
[79] This decision concludes this matter in so far as it relates to the Black Coal Award, save
for any matter arising from the general review of shutdown terms.
PRESIDENT
Appearances:
D Gunzburg and T Sebbens for Coal Mining Industry Employer Group.
A Thomas for Construction, Forestry, Mining and Energy Union – Mining and Energy
Division.
A Devasia for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU).
A Guy for The Association of Professional Engineers, Scientists and Managers, Australia.
[2017] FWCFB 5394
16
Hearing details:
2017.
Melbourne;
9 October.
Final written submissions:
CMIEG: 11 September 2017
CFMEU: 3 October 2017
AMWU: 3 October 2017
Printed by authority of the Commonwealth Government Printer
Price code C, MA000001 PR596905
1 [2017] FWCFB 959
2 [2017] FWC 2662
3 [2017] FWCFB 959 at [30].
4 [2017] FWCFB 959 at [31].
5 [2016] FWCFB 6836 at [79].
6 [2017] FWCFB 959 at [32] – [33].
7 Transcript 4 August 2017 at [51]-[54] and [68]-[69]
8 Directions, Attachment A
9 Exhibit CMIEG1.
10 CMIEG submission 11 September 2017 at [33].
11 [2016] FWCFB 6838, at [76]
12 [2016] FWCFB 6836 at [76].
13 [2017] FWCFB 959 at [29].
14 [2016 FWCFB 3177 at [381].
15 [2017] FWCFB 959 at [30].
16 CMIEG submission 11 September 2017 at [50]-[55]
17 [2016] FWCFB 6836 at [77].
18 [2016] FWCFB 6836 at [78].
19 CMIEG submission 11 September 2017 at [35]
20 [2017] FCAFC 123.
21 Ibid at [23].
22 Ibid at [28] – [29].
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb6838.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwc2662.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb959.htm
[2017] FWCFB 5394
17
23 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.
24 National Retail Association v Fair Work Commission [2014] FCAFC 118
25 See Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35]
per Tracey J.
26 [2017] FCAFC 161.
27 Ibid at [48].
28 CMIEG submission 11 September 2017 at [76].
29 CFMEU written submission October 2017 at 120.
30 Clause 27.3 – as modified by the decision of the Full Bench in 4 yearly review of modern awards – award stage –
Exposure Drafts – Group 1C, 1D and 1E Awards [2015] FWCFB 7236.
31 Clause 3. Definitions and interpretation.
32 Transcript 9 October 2017 at PN132.
18
Attachment A
Attachment A
Survey of CMIEG Membes finalised 31/8/2017 Total Count Glencore Centennial Jellinbah Idemitsu 8MA Anglo Peabody South 32 Wes- American Energy farmers Have you had occasion to shut down operations 1 Since the commencement of the Black Coal Mining Award on 1 January 2010 X X X No - - - 2 Before the commencement of the BCMI Award No - 3 Did the introduction of the BCMI Award cause you to make any changes to the way in which you would pay employees during a shut down - - Yes No × - Reasons for shutting down - - - 4 Please indicate which (if any) of the following have been a reason for you instituting a shut down in the past Managing annual leave balances/provisioning x Market or economic considerations Stockpile reaching, or nearing, full capacity As an alternative to standing-down employees (eg. caused by Industrial action, breakdown for machinery or equipment, or stoppage of work for which the employer is not responsible) 3 Undertaking a maintenance shutdown (eg, for major repairs or overhauls) X Period of successive public holidays or peak request for leave |General operational requirements - maintenance / production continuity etc - Type of shut downs Other (describe) 5 Please Indicate which, or both, of these have applied where you have instituted a shut down in the past Whole of operation X Part of operation All of workforce in the ares affected x X Part of workforce in the area affected × Comments Nil - Payment during shutdowns 6 During a shutdown if an employee cannot be usefully employed and they are not on some form of paid leave which of the following is your practice They must take unpaid leave They perform no work but are paid their normal wage (either base See comments wage or as per roster) Has never arisen, employees have always been able to take paid leave of some type 2 × Comments Glencore: General practice is to require the taking of accrued paid leave (A/L or LSL). However, if not sufficient A/L accrual then for these days, either A/L will be made available in advance or may elect to take unpaid leave. Jellinboh: Some years the employees have elected to do shift swaps and work some days in advance to get the time off. Other years, some Individuals have required paid leave to be advanced for part of the time off during the shutdown period when they need to take annual leave. Anglo American: Must take paid leave or leave in advance providing Company gives appropriate notice (eg 4 weeks In advance). One of our EA's has a provision to consider leave without pay on a case by case basis (le future A/L bookings) South32: If no leave then required to work but work performed is often non-standard duties e.g. painting, cleaning etc, and often not meeting their full shift length. We sometime send them home early. Wesfarmers: If no leave available then either utilised onsite in another section of the mine, or employee undertook training Disputation over this issue 7 Have you had a dispute over the requirement to take unpaid leave during a shutdown if no paid leave is available? If so please provide details Yes No Use of unpaid leave more generally - 8 Is unpaid leave a form of leave which is used for other purposes at your operations Yes No x N - 8
