1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – reasonable overtime
(AM2016/15)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
COMMISSIONER HUNT MELBOURNE, 17 SEPTEMBER 2018
4 yearly review of modern awards – plain language re-drafting – reasonable overtime.
Background
[1] Section 156(2) of the Fair Work Act 2009 (Cth) (the Act) requires the Commission to
review all modern awards every four years (the Review). As part of the Review this Full
Bench has been constituted to oversee a number of plain language projects.
[2] During proceedings related to the plain language re-drafting of the General Retail
Industry Award 2010 (the Retail award) an issue arose regarding the interaction between the
‘reasonable overtime’ provisions in clause 29.1 and s.62 of the Act. Clause 29.1 of the Retail
award is as follows:
‘29.1 Reasonable overtime
(a) Subject to clause 29.1(b) an employer may require an employee other than a casual
to work reasonable overtime at overtime rates in accordance with the provisions of this
clause.
(b) An employee may refuse to work overtime in circumstances where the working of
such overtime would result in the employee working hours which are unreasonable
having regard to:
(i) any risk to employee health and safety;
(ii) the employee’s personal circumstances including any family
responsibilities;
(iii) the needs of the workplace or enterprise;
(iv) the notice (if any) given by the employer of the overtime and by the
employee of their intention to refuse it; and
(v) any other relevant matter.’
[2018] FWCFB 5749
DECISION
E AUSTRALIA FairWork Commission
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[3] A similar issue arose in the plain language re-drafting of the Pharmacy Industry
Award 2010 (the Pharmacy award). In those proceedings the Full Bench adopted the agreed
position of the parties to delete the reasonable overtime clause from the Pharmacy award and
to insert the following note at the start of the overtime clause:
‘NOTE: Under the NES (see section 62 of the Act) an employee may refuse to work additional
hours if they are unreasonable. Section 62 sets out factors to be taken into account in
determining whether the additional hours are reasonable or unreasonable.’1
[4] The Commission issued statements on 22 December 20172 (the December Statement)
and 28 February 2018 (the February Statement)3 identifying additional awards that contained
the same ‘reasonable overtime’ provisions as in the Retail award. The Commission expressed
a provisional view that the reasonable overtime provisions in the awards listed at Attachment
A be deleted and note at [3] in all of those modern awards.4
[5] Interested parties were invited to makes submissions. Submissions were received from
the following parties:
Ai Group;5
AMWU;6
United Voice (UV);7
Master Electricians Australia (MEA);8
Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU);9 and
Australian Business Industrial and NSW Business Chamber (ABI).10
[6] In the December and February Statements the Commission proposed to deal with this
issue on the papers unless any party sought an oral hearing.11 No oral hearing was requested.
1 [2017] FWCFB 344 at [205]-[209], [2017] FWCFB 3337 at [3].
2 [2017] FWCFB 6884.
3 [2018] FWC 1244.
4 The SDA made submissions during the plain language re-drafting proceedings in relation to the Retail award but did not
make any specific submissions in relation to the December Statement.
5 Ai Group Submission – 22 February 2018; Ai Group Submission – 1 March 2018 (amended submission of 22 February
2018); Ai Group Submission – 9 March 2018.
6 AMWU Submission –16 March 2018.
7 United Voice Submission – 9 March 2018.
8 MEA Submission – 6 March 2018.
9 CFMEU C&G Submission – 19 March 2018.
10 ABI & NSWBC Submission – 19 March 2018.
11 [2017] FWCFB 6884 at [8]; [2018] FWC 1244 at [11].
https://www.fwc.gov.au/documents/decisionssigned/html/2018fwc1244.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb6884.htm
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-cfmeu-190318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-cfmeu-190318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-272-sub-uv-090318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-hospitality-090318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-corr-aig-010318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-220218.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2018fwc1244.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb6884.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb3337.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb344.htm#P311_30525
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[7] This decision provisionally determines the issue arising from the interaction between
reasonable overtime clauses at Attachment A and s.62 of the Act.
[8] In this decision, references to ‘clause 29.1’ mean references to clause 29.1 of the
Retail award (at [2] above) and the equivalent reasonable overtime clause in the awards listed
at Attachment A.
[9] The submissions addressed three separate issues with clause 29.1.
whether the express right of an employer to require employees to work reasonable
overtime contained in clause 29.1(a) should be retained;
whether the list of circumstances in which an employee may refuse to work
overtime in clause 29.1(b) should be retained; and
whether if the whole of clause 29.1 should be deleted and replaced with the note set
out at [3] above (the provisional view).
Issue 1: Clause 29.1 (a)
[10] Ai Group opposed the deletion of the express right in clause 29.1(a) on the basis that
the inclusion of an express right to require employees to work overtime dates back 70 years in
some awards. Ai Group submitted that a model term, upon which clause 29.1 is based, was
confirmed in Re Working Hours Case July 200212 and submitted the express right is an
important provision that is widely relied upon by employers and the Commission should not
depart from previous decisions, which decided to include the provision.13
[11] Ai Group proposed that the following clause and note be inserted into the overtime
clauses of awards at Attachment A:
‘XX. Subject to section 62 of the Act, an employer may require an employee to work reasonable
overtime at overtime rates.
NOTE: Under section 62 of the Act an employee may refuse to work additional hours if they
are unreasonable. Section 62 sets out factors to be taken into account in determining whether
the additional hours are reasonable or unreasonable.’14
[12] ABI also opposed the removal of clause 29.1(a), submitting that clause 29.1(a) is a
long-standing feature of awards and its removal would represent a substantive change.15
[13] MEA supported the submissions of the Ai Group.16
[14] MEA’s submission related to the Electrical, Electronic and Communications
Contracting Award 2010 (the Electrical award). MEA submitted that:
12 Re Working Hours Case July 2002 (2002) 114 IR 390.
13 Ai Group Submission – 22 February 2018 at paragraphs 11 and 14.
14 Ai Group Submission – 22 February 2018 at paragraph [6]; Ai Group Submission – 9 March 2018.
15 ABI & NSWBC Submission – 20 March 2018 at paragraph 2.5.
16 MEA Submission – 6 March 2018, paragraph 3.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-hospitality-090318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-220218.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-220218.pdf
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‘Retaining the provision that communicates to employees an employer may direct employees to
work reasonable overtime in the Electrical Modern Award is crucial in maintaining the rights
of the employer; particularly in an industry that relies heavily on attendance to emergency call
outs, to make an electrical installations safe for the public, or to allow for the continuation of a
business’s machinery. For example, in mining or manufacturing operations that operate 24
hours a day. We say that the removal of the provision / wording affects the ability of the
employer to be able to require employees to work overtime as section 62 of the Fair Work Act
does not communicate in our industry the importance of employers requirement to have
overtime completed.’17
[15] In support of its submission, MEA suggested that removal of the provision may result
in increased casualisation and reliance on labour hire to meet industry demands. MEA also
noted the restrictive shift provisions in the Electrical award and suggested that if the employer
right to require overtime were removed, then shiftwork provisions should be relaxed.18
[16] MEA also suggested that when the employer right to direct employees to work
overtime was removed from Western Australian State awards, it created increased uncertainty
in the Western Australian industrial relations system, which MEA believe has led to more
disputes.19 No data or evidence was provided in support of this contention.
[17] The AMWU opposed Ai Group’s proposed clause on the basis that it appears to
exclude the NES because:
‘to a lay person reading the clause, it expresses a clear intention to provide an employer with a
right to require an employee to work reasonable overtime. The note which refers the reader to s
62 doesn’t have any effect as a term of the Award.’20 The AMWU submit that the practical
effect would be to ‘seemingly exclude the NES entitlement and give the employer something
to point to which supports their direction to the employee’.21
[18] The AMWU proposes that the current clause 29.1(a) be deleted.
[19] ABI opposed the AMWU’s proposal to remove clause 29.1(a). ABI submitted clause
29.1(a) ‘…is the operative component permitting an employer to require an employee to work
reasonable overtime.’22 ABI submitted that this provision is a long-standing feature of some
awards and is not contained in the Act. Therefore, its removal would constitute a substantive
change.23
[20] MEA and ABI submitted that the employer right to require overtime to be worked
does not displace s.62 of the Act.24
17 MEA Submission – 6 March 2018, paragraph 4.
18 MEA Submission – 6 March 2018, paragraphs 8 - 10.
19 MEA Submission – 6 March 2018, paragraph 15.
20 AMWU Submission –16 March 2018, paragraph 10-11
21 AMWU Submission – 16 March 2018, paragraphs 5 – 6.
22 ABI & NSWBC Submission – 20 March 2018 at paragraph 2.5.
23 ABI & NSWBC Submission – 20 March 2018 at paragraph 2.5.
24 MEA Submission – 6 March 2018, paragraph 17; ABI & NSWBC Submission – 20 March 2018 at paragraph 4.3.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-replysub-mea-160318.pdf
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Issue 2: Clause 29.1 (b)
[21] ABI did not oppose the removal of clause 29.1(b) and its replacement with a note in
the same terms as the Pharmacy award submitting that the clause 29.1(b) factors are
essentially a re-statement of factors found at s.62(3) of the Act.25 In the alternative, ABI was
not opposed to the wording proposed by Ai Group.26
[22] The AMWU opposed deleting clause 29.1(b) if doing so would result in more weight
being given to employer friendly factors than would otherwise be the case under the current
award.27
[23] In the event that the Commission agreed with the proposition that deleting the current
clause 29.1 and relying on the NES would ‘result in more weight being given to employer
friendly factors than would otherwise’, then the AMWU submitted the current clause should
be deleted and replaced with the following clause:
‘29.1 Right to refuse additional hours
An employee may refuse to work overtime in circumstances where the working of such
overtime would result in the employee working hours which are unreasonable having regard
to:
(i) any risk to employee health and safety;
(ii) the employee’s personal circumstances including any family responsibilities;
(iii) the needs of the workplace or enterprise;
(iv) the notice (if any) given by the employer of the overtime and by the employee of
their intention to refuse it; and
(v) any other relevant matter.’
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[24] The CFMMEU supported the AMWU submission.29
Issue 3: The provisional view
[25] UV did not oppose removing clause 29.1 and replacing it with the note in accordance
with the provisional view expressed by the Commission.30 ABI did not support UV’s
submission.31
25 ABI & NSWBC Submission – 20 March 2018 at paragraph 2.4 and 4.3.
26 ABI & NSWBC Submission – 20 March 2018 at paragraph 2.4.
27 AMWU Submission – 16 March 2018, paragraph 49 – 64.
28 AMWU Submission – 16 March 2018, paragraph 64.
29 CFMEU C&G Submission – 19 March 2018.
30 UV Submission – 9 March 2018.
31 ABI & NSWBC Submission – 20 March 2018 at paragraph 3.3.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-272-sub-uv-090318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-cfmeu-190318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-abinswbc-200318.pdf
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[26] The AMWU did not oppose the provisional view if clause 29.1 replicates the NES and
there is no change in the legal position, but noted that the NES contains additional factors for
considering reasonableness to those listed in clause 29.1(b), some of which are ‘employer
friendly factors’.32 AMWU submitted that if deleting clause 29.1 would result in more weight
being given to employer friendly factors than would otherwise be the case under the current
award terms for reasonable overtime, the current clause 29.1(b) factors should be retained.33
[27] SDA made submissions in relation to the plain language re-drafting of the Retail
award. SDA did not support the proposed variation and requests that the current clause be
reinstated in the exposure draft.34 SDA relied on its submissions in relation to matter
AM2014/196 and 197 but does not specify which of the submissions from the part-time and
casual full bench proceedings it sought to rely on.
[28] Of the submissions SDA filed in matter AM2014/196 and 197, those filed on 13 May
2016 appear to be the most relevant to the question of reasonable overtime.35 SDA submitted
that the relevant award provision and the statutory framework provided little or no protection
for vulnerable casual employees. They submitted that casual employees do not currently have
an unqualified right to refuse to work overtime on the basis that there is no additional
remuneration. The lack of protection, they submitted, was not a ‘fair and relevant minimum
safety net of terms and conditions’ for the purposes of s.134 of the Act. SDA did not make
additional submissions in response to the December and February Statements.
Consideration
[29] The employer groups oppose the proposed removal of clause 29.1(a) on the basis that
this would remove the employer right to require an employee to work reasonable overtime
and would result in a substantive change in award conditions for employers. It is argued that
this would result in the removal of a long-standing award provision and result in an imbalance
of rights of employers and employees regarding the working of reasonable overtime. The
employer groups support deletion of clause 29.1(b) on the basis that it replicates the NES
entitlement.
[30] On the other hand, the AMWU and CFMMEU oppose the deletion of clause 29.1(b)
on the basis that additional ‘employer friendly’ factors that appear in the NES but not clause
29.1(b) would result in more weight being given to employer friendly factors when
determining the reasonableness of additional hours under the NES than there currently would
be under the award.
[31] The AMWU and CFMMEU also submitted that clause 29.1(a) should be deleted
because it has the practical effect of displacing the NES and would result in an imbalance of
rights in favour of the employer as employees would be unlikely to know that they could
refuse to work unreasonable additional hours.
32 AMWU submission – 16 March 2018, paragraph 49.
33 AMWU submission – 16 March 2018, paragraph 64.
34 SDA submission – 4 August 2017 at 142 – 143; SDA submission – 10 November 2017 at 26.
35 SDA Submission – 13 May 2016 at paragraph 37-42.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/common/am2014-197-sub-sda-130516.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-270-sub-sda-101117.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-270-sub-sda-040817.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-amwu-160318.pdf
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[32] The parties agree that the current reasonable overtime clauses are based on the model
clause arising from Re Working Hours Case July 2002,36 which is as follows:
‘X.1 Subject to clause X.2 an employer may require an employee to work reasonable overtime
at overtime rates.
X.2 An employee may refuse to work overtime in circumstances where the working of such
overtime would result in the employee working hours which are unreasonable having regard
to:
X.2.1 any risk to employee health and safety;
X.2.2 the employee’s personal circumstances including any family responsibilities;
X.2.3 the needs of the workplace or enterprise;
X.2.4 the notice (if any) given by the employer of the overtime and by the employee
of his or her intention to refuse it; and
X.2.5 any other relevant matter.’
[33] When determining the model clause, the Australian Industrial Relations Commission
(AIRC) Full Bench decided that the clause should:
balance considerations of both employers and employees in determining whether
additional hours are reasonable; and
include a reference to the ‘well-established’ right of an employer to require an
employee to work reasonable overtime.37
[34] Re Working Hours Case July 2002 was determined under a different legislative
regime. A reasonable overtime provision was first included into Federal Legislation as a part
of the Work Choices legislation and was retained, with some amendments, in the Act.
[35] Section 226 of the Workplace Relations Act 1996 (Cth) (the WR Act) provided:
‘Subdivision B—Guarantee of maximum ordinary hours of work
226 The guarantee
(1) An employee must not be required or requested by an employer to work more than:
(a) either:
(i) 38 hours per week; or
(ii) subject to subsection (3), if the employee and the employer agree in writing
that the employee’s hours of work are to be averaged over a specified averaging
36 Re Working Hours Case July 2002 (2002) 114 IR 390 at 394.
37 Re Working Hours Case July 2002 (2002) 114 IR 390 at 430 and 394.
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period that is no longer than 12 months—an average of 38 hours per week over
that averaging period; and
(b) reasonable additional hours.
Note 1: An employee and an employer may agree that the employee is to work less than 38
hours per week, or less than an average of 38 hours per week over the employee’s averaging
period.
Note 2: A requirement for an employee to work a particular number of hours may come, for
example, from an award or a workplace agreement.
Calculating the number of hours worked
(2) For the purposes of paragraph (1)(a), in calculating the number of hours that an employee
has worked in a particular week, or the average number of hours that an employee has worked
per week over an averaging period, the hours worked by the employee are taken to include any
hours of authorised leave taken by the employee during the week, or during that period.
Start of averaging period
(3) For the purpose of subparagraph (1)(a)(ii), if an employee starts to work for an employer
after the start of a particular averaging period that applies to the employee, that averaging
period is taken, in relation to the employee, not to include the period before the employee
started to work for the employer.
Reasonable additional hours
(4) For the purposes of paragraph (1)(b), in determining whether additional hours that
an employee is required or requested by an employer to work are reasonable additional
hours, all relevant factors must be taken into account. Those factors may include, but
are not limited to, the following:
(a) any risk to the employee’s health and safety that might reasonably be expected to
arise if the employee worked the additional hours;
(b) the employee’s personal circumstances (including family responsibilities);
(c) the operational requirements of the workplace, or enterprise, in relation to which
the employee is required or requested to work the additional hours;
(d) any notice given by the employer of the requirement or request that the employee
work the additional hours;
(e) any notice given by the employee of the employee’s intention to refuse to work the
additional hours;
(f) whether any of the additional hours are on a public holiday;
(g) the employee’s hours of work over the 4 weeks ending immediately before the
employee is required or requested to work the additional hours.
Note: An employee and an employer may agree that the employee may take breaks during any
additional hours worked by the employee.
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[36] Section 62 of the Act is based on s.226 of the WR Act and deals with maximum
weekly hours, as follows:
‘62 Maximum weekly hours
Maximum weekly hours of work
(1) An employer must not request or require an employee to work more than the following
number of hours in a week unless the additional hours are reasonable:
(a) for a full-time employee – 38 hours; or
(b) for an employee who is not a full-time employee – the lesser of:
(i) 38 hours; and
(ii) the employee's ordinary hours of work in a week.
Employee may refuse to work unreasonable additional hours
(2) The employee may refuse to work additional hours (beyond those referred to in paragraph
(1)(a) or (b)) if they are unreasonable.
Determining whether additional hours are reasonable
(3) In determining whether additional hours are reasonable or unreasonable for the purposes of
subsections (1) and (2), the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
working additional hours;
(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in which the
employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under
section 63 in a modern award or enterprise agreement that applies to the employee, or
with an averaging arrangement agreed to by the employer and employee under section
64;
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(j) any other relevant matter.
…’
[37] The Explanatory Memorandum to the Fair Work Bill 2008 (Explanatory
Memorandum) provides commentary on s.62 of the Act:
‘242. This Division establishes the maximum weekly hours for employees and also the
circumstances in which an employee may refuse a request or requirement to work
additional hours if the hours are unreasonable.
…
244. Subclause 62(1) provides that an employer must not request or require an
employee to work more than a specified number of hours in a week, unless the
additional hours are reasonable.
245. The specified hours are:
for a full-time employee – 38 hours; or
for an employee who is not a full-time employee – the lesser of 38 hours or the
employee’s ordinary hours of work in a week.
…
247. An employer may request or require an employee to work additional hours either
expressly or by implication (e.g., by setting tasks that could only be completed by the
employee working additional hours).’
[38] Paragraph 247 of the Explanatory Memorandum acknowledges that a requirement to
work additional hours may be a lawful and reasonable direction. But it is important to bear in
mind that s.62(1) is a prohibition which overrides any inconsistent express or implied
contractual right.
[39] The central proposition advanced by the employers in support of their position is that
award provisions giving employers the express right to require employees to work overtime
are ‘longstanding’ and the Commission should not depart from previous Commission
decisions. We note at the outset that there is an inherent contradiction in the submission put –
the employers argue in favour of the status quo and the application of precedent and then
advance an award term which departs from both.
[40] As mentioned in a number of decisions during the course of the Review, the nature of
modern awards under the Act is quite different from the awards made under previous
legislative regimes.38 In times past awards were made in settlement of industrial disputes. The
38 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [18]; Penalty Rates decision [2017] FWCFB
1001, Chapter 3.
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content of these instruments was determined by the constitutional and legislative limits of the
tribunal’s jurisdiction; the matters put in issue by the parties (i.e. the ‘ambit’ of the dispute)
and the policies of the tribunal as determined from time to time in wage fixing principles or
test cases. An award generally only bound the employers, employer organisations and unions
who had been parties to the industrial dispute that gave rise to the making of the award and
were named as respondents.
[41] Modern awards are very different to awards of the past. They are not made to prevent
or settle industrial disputes between particular parties. Rather, the purpose of modern awards,
together with the NES and national minimum wage orders, is to provide a safety net of fair,
relevant and enforceable minimum terms and conditions of employment for national system
employees (see ss.3(b) and 43(1)). They are, in effect, regulatory instruments that set
minimum terms and conditions of employment for the employees to whom the modern award
applies (see s.47).
[42] The Commission’s task in the Review is to determine whether a particular modern
award achieves the modern awards objective. If a modern award is not achieving the modern
awards objective then it is to be varied such that it only includes terms that are ‘necessary to
achieve the modern awards objective’ (s.138). In such circumstances regard may be had to the
terms of any proposed variation, but the focal point of the Commission’s consideration is
upon the terms of the modern award, as varied.
[43] In conducting the Review it is appropriate that the Commission take into account
previous decisions relevant to any contested issue. The particular context in which those
decisions were decided may be a cogent reason for not following a previous Full Bench
decision, for example the legislative context which pertained at that time may be materially
different from the Act. Re Working Hours Case July 2002 was decided in a markedly
different legislative context and is only of limited relevance to the determination of the matter
before us.
[44] The central issue before us is what sort of term is necessary to achieve the modern
awards objective (within the meaning of s.138) and which does not exclude any provision of
the NES.
[45] In our view the clause and accompanying note proposed by Ai Group does not provide
a ‘fair and relevant minimum safety net’ within the meaning of the modern awards objective.
Fairness in this context is to be assessed from the perspective of both employers and
employees; the proposed clause lacks the requisite balance.
[46] Nor are we attracted to the retention of clause 29.1(b) in its current form – it refers
only some of the s.62(3) considerations and its retention is apt to confuse. The AMWU’s
proposal is no better, it simply seeks to excise what it characterises as ‘employer friendly’
factors.
[47] The additional factors in s.62(3) that are not included in clause 29.1(b) are as follows:
‘(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
working additional hours;
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(g) the usual patterns of work in the industry, or the part of an industry, in which the
employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under
section 63 in a modern award or enterprise agreement that applies to the employee, or
with an averaging arrangement agreed to by the employer and employee under section
64.’
[48] The Explanatory Memorandum provides the following commentary about the s.62(3)
factors and makes specific reference to some of the new factors in the examples provided:
‘250. The relevance of each of these factors and the weight to be given to each of them will vary
according to the particular circumstances. In some cases, a single factor will be of great
importance and outweigh all others. Other cases will require a balancing exercise between
factors. For example:
There may be a situation where, although an employer provides advance notice of the
requirement to work additional hours and the requirement to work those hours is based on
the needs of the workplace, the hours are nonetheless unreasonable when the risks to
employee health and safety or the employee's family responsibilities are taken into account.
The significant remuneration and other benefits paid to a senior manager, together with the
nature of the role and level of responsibility, may be sufficient to ensure that additional
hours are reasonable in many cases.
The additional hours an employee is required to work may also be reasonable if the hours
are worked at a particular time and in a particular manner in order to meet the employer's
operational requirements, or are worked in accordance with a particular pattern or roster
that is prevalent in a particular industry, such as the fly-in-fly-out arrangements in the
mining industry. The fact that a requirement to work additional hours is set out in the offer
of employment accepted by an employee will also be relevant, though not determinative.’
[49] The addition of new factors in considering the reasonableness of additional hours was
plainly a deliberate decision of the legislature.
[50] It seems to us that there is a need to formulate a term which makes explicit both the
employers right to require an employee to work reasonable overtime and an employee’s right
to refuse to work unreasonable additional hours. In our view a clause in the following terms
satisfies that need:
x. Reasonable overtime – model term
x.1 Subject to s.62 of the Act and this clause, an employer may require an employee -
other than a casual - to work reasonable overtime hours at overtime rates.
x.2 An employee may refuse to work overtime hours if they are unreasonable.
x.3 Options 1, 2 or 3
[51] As noted above, there are three options in relation to clause X.3.
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[52] Option 1 would set out the factors in s.62(3), as follows:
Option 1
‘x.3 In determining whether overtime hours are reasonable or unreasonable for the purpose
of this clause the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates
or other compensation for, or a level of remuneration that reflects an
expectation of, working additional hours;
(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in
which the employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms
included under section 63 in a modern award or enterprise agreement that
applies to the employee, or with an averaging arrangement agreed to by the
employer and employee under section 64.’
[53] Option 2 would incorporate the factors in s.62(3) in a note, as follows:
Option 2
‘x.3 In determining whether overtime hours are reasonable or unreasonable for the purpose
of this clause the factors set out in s.62(3) of the Act are to be taken into account.
NOTE: The factors in s.62(3) are:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates
or other compensation for, or a level of remuneration that reflects an
expectation of, working additional hours;
http://www5.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s536d.html#penalty
http://www5.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s536d.html#penalty
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(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in
which the employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms
included under section 63 in a modern award or enterprise agreement that
applies to the employee, or with an averaging arrangement agreed to by the
employer and employee under section 64.
(j) any other relevant matter.’
[54] Option 3 is a clause in the following terms:
Option 3
‘x.3 In determining whether overtime hours are reasonable or unreasonable for the purpose
of this clause the factors set out in s.62(3) of the Act are to be taken into account.’
[55] Options 1 and 2 have the benefit of clarity – they clearly sets out the factors to be
taken into account without the need to refer to another instrument. Option 3 has the benefit of
brevity.
[56] Interested parties are invited to comment on whether options 1, 2 or 3 should be
included in the model term. Any submissions in respect of this issue are to be filed by 4pm on
Tuesday 2 October 2018. Submissions in reply are to be filed by 4pm on Tuesday 16
October 2018. All submissions are to be sent to amod@fwc.gov.au.
[57] A short oral hearing will be held at 2pm AEDT on Tuesday 23 October 2018 to
finalise this issue.
[58] Subject to the finalisation of clause X.3, it is our provisional view that the variation of
the awards in Attachment A to insert the model term to replace the existing reasonable
overtime provisions is necessary to achieve the modern awards objective. In reaching that
view we have taken into account the considerations in s.134(1)(a) to (h). The matters in
s.134(1)(a), (b), (c), (d), (e) and (h) are not relevant to the variation of these awards to insert
the model term. The variation is consistent with s.134(1)(da), insofar as it refers to the
working of additional hours at overtime rates. As to s.145(1)(f), we accept that such a
variation will give rise to some, albeit not significant, increase in regulatory burden. As to
s.134(1)(g) we are of the view that the variation of these awards in the manner proposed will
make them simpler and easier to understand by providing greater consistency between the
award term and the NES.
[59] Draft variation determinations will be published after clause X.3 has been finalised.
Our provisional view would only be displaced in respect of any particular award if it is
mailto:amod@fwc.gov.au
15
demonstrated that there are matters or circumstances particular to that award which compel
the conclusion that the achievement of the modern award objective for that award does not
necessitate the variation of the award to insert the model term. One such matter may be the
interaction between the model term and the existing award provisions relating to part time
employees.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR700337
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ATTACHMENT A
Building and Construction General On-site Award 2010, cl 36.1;
Cleaning Services Award 2010, cl 28.1;
Electrical, Electronic and Communications Contracting Award 2010, cl 26.1;
Fast Food Industry Award 2010, cl 26.4;
General Retail Industry Award 2010, cl 29.1;
Graphic Arts, Printing and Publishing Award 2010, cl 33.1;
Hair and Beauty Industry Award 2010, cl 31.1;
Hospitality Industry (General) Award 2010, cl 33.1
Joinery and Building Trades Award 2010, cl 30.1;
Manufacturing and Associated Industries and Occupations Award 2010, cl 40.2;
Pharmacy Industry Award 2010, note at cl 26;
Timber Industry Award 2010, cl 30.11.
