1
Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective
Review of certain C14 rates in modern awards
(C2019/5259)
JUSTICE ROSS, PRESIDENT MELBOURNE, 10 DECEMBER 2020
Review of the classification rates at the C14 rate in modern awards – introductory rates –
Next steps.
[1] This statement concerns the review of modern awards which have classification rates
at the C14 level which are either not transitional rates or where the transition period is not
specified.
[2] The issue first arose in the 2018-19 Annual Wage Review proceedings.1 In those
proceedings the Australian Council of Trade Unions (ACTU) and Australian Catholic
Bishops Conference contended that the Expert Panel should set the C14 rate at a level which
lifted certain hypothetical single-earner household types; that is, single earners in a couple
with one or two children, above the 60 percent relative poverty line. The Expert Panel rejected
that proposal, predominantly on the grounds that the size of the increase required to lift these
household types above the relative poverty line would run a significant risk of disemployment
and adversely affecting the employment opportunities of low-skilled and young workers.2 In
reaching its conclusion the Expert Panel also noted that the C14 rate was more often than not
a ‘stepping stone’ or transitional classification to higher-paid work:3
‘Low-paid employment is often temporary and can act as a ‘stepping stone’ to higher-paid
work. Almost two-thirds of workers who enter low paid employment leave within one year
and most move into higher paid work.i The C14 (or NMW) rate of $719.20 per week only
features in 45 of the 122 modern awards (details of which are set out in Appendix 1). In 39 of
those modern awards it is a transitional rate from which employees progress after a period…
In 8 of those modern awards the transition to a higher rate occurs after 38 hours of induction
training. In 18 of those modern awards the transition occurs after 3 months and the remaining
13 modern awards in which the NMW rate is transitional either other periods are specified or
the relevant classification appears to be transitional but no particular period is specified…
In the remaining 6 modern awardsii containing a C14 (or NMW) rate, the related classification
is not a transitional level. It is not clear why these 6 modern awards prescribe a rate at this
1 [2019] FWCFB 3500
2 Ibid at [344]
3 Ibid at [336] - [337]
[2020] FWC 6647
STATEMENT
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2019fwcfb3500.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2019fwcfb3500.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2019fwcfb3500.htm
[2020] FWC 6647
2
level, which is not a transitional rate. This is an issue which should be the subject of further
examination in the current 4 yearly Review of modern awards.
We would also observe that the remaining 77 modern awards only provide for wage rates
above the C14 or NMW rate.’ 4 (footnotes omitted)
[3] On 28 August 2019, I issued a Statement5 (the August 2019 Statement) concerning the
review of modern awards which have classification rates at the C14 level which are either not
transitional rates or where the transition period is not specified.
[4] As noted in the quote above, some 45 modern awards include a rate of pay at the C14
(or National Minimum Wage, NMW) rate which is currently $753.80 per week, calculated on
the basis of 38 ordinary hours, or $19.84 per hour. Some of those modern awards include
multiple classifications at the NMW rate. These 45 modern awards may be divided into 5
categories:
(i) 8 modern awards in which the transition to a higher classification level occurs
after 38 hours induction training;
(ii) 18 modern awards in which the transition occurs after 3 months;
(iii) 5 modern awards in which the C14 classification is transitional but a period
other than 3 months is specified;
(iv) 8 modern awards in which the C14 classification appears to be transitional but
no particular transition period is specified; and
(v) 6 modern awards in which the C14 classification level is not a transitional
level.
[5] In the August 2019 Statement, I expressed the provisional view that the 14 awards in
catgories (iv) and (v) be referred to a Full Bench for review. The review would consider
whether the C14 classifications in each award provides a fair and relevant safety net of terms
and conditions. Parties were invited to comment on the provisional view and the accuracy of
the list of awards. The relevant awards are set out below.
Category (iv) awards
Cement, Lime and Quarrying Award 20206
Concrete Products Award 2020
Meat Industry Award 2020
Oil Refining and Manufacturing Award 2020
Port Authorities Award 2020
Rail Industry Award 2020
Stevedoring Industry Award 2020
Category (v) awards
Air Pilots Award 2020
4 [2019] FWCFB 3500 at [337] – [341]
5 [2019] FWC 5863
6 The Cement and Lime Award 2010 has been amalgamated with the Quarrying Award 2010 to become the Cement, Lime
and Quarrying Award 2020.
[2020] FWC 6647
3
Broadcasting, Recorded Entertainment and Cinemas Award 2020
Dry Cleaning and Laundry Industry Award 2020
Funeral Industry Award 2020
Sugar Industry Award 2020
Travelling Shows Award 2020
[6] A number of unions and employer groups filed submissions7 in response to theAugust
2019 Statement.
[7] Conferences of interested parties were convened on 8 October 20198 and 29
November 2019.9 At the conferences the Media, Entertainment and Arts Alliance advised that
it would not be making an application in relation to the Broadcasting, Recorded
Entertainment and Cinemas Award 2020. The Construction, Forestry, Maritime, Mining and
Energy Union advised that10 it will not being making an application in relation to the Port
Authorities Award 2020 or the Stevedoring Industry Award 2020.
[8] A further Statement11 was issued on 2 December 2019 (the December 2019
Statement) outlining the next steps that were to be taken as follows:
The unions will make applications to vary the relevant awards in the manner they
propose;
The ACTU will coordinate the unions’ application process and advise my chambers
(by email to chambers.ross.j@fwc.gov.au) when that process is complete; and
Following this a further conference will be convened and the Commission will
prepare a background paper including the information set out at [7] of the Statement.
After all of the relevant applications have been filed the Commission will prepare a
background paper setting out the following information in relation to each contested
application:
o The pre modern awards which informed the making of the current
modern award.
o A comparison between the classification structure in the modern award
and the relevant pre modern awards.
o Whether there had been any recent work value assessments in respect of
any of the relevant pre modern awards.
[9] The December 2019 Statement invited the ACTU to provide a written request for
certain statistical information from the EEH survey it had foreshadowed and it did so in
7 United Voice – 26 September 2019, Australian Federation of Air Pilots – 27 September 2019, ABI and NSWBC - 27
September 2019 and 19 November 2020, Australasian Meat Industry Employees Union – 27 September 2019, The
Australian Workers’ Union – 27 September 2019, CFMMEU – Manufacturing Division – 27 September 2019, Australian
Industry Group – 27 September 2019 and 11 November 2020, Australian Manufacturing Workers’ Union – 3 October
2019, AFEI – 18 November 2020
8 Transcript 8 October 2019
9 Transcript 29 November 2019
10 Correspondence dated 29 November 2019
11 [2019] FWC 8159
https://www.fwc.gov.au/sites/rates-c14-review/2019fwc8159.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-corr-cfmmeu-muadiv-291119.pdf
https://www.fwc.gov.au/sites/rates-c14-review/081019_c20195259.htm
https://www.fwc.gov.au/sites/rates-c14-review/c20195259-sub-afei-181119.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-amwu-031019.pdf
https://www.fwc.gov.au/sites/rates-c14-review/c20195259-sub-aig-111119.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-aig-290919.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-cfmmeu-010919.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-awu-011019.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-awu-011019.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-amieu-010919.pdf
https://www.fwc.gov.au/sites/rates-c14-review/c20195259-sub-abinswbc-191119.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-abinswbc-270919.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-abinswbc-270919.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-afap-011019.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-uv-250919.pdf
mailto:chambers.ross.j@fwc.gov.au
https://www.fwc.gov.au/documents/sites/rates-c14-review/2019fwc8159.pdf
[2020] FWC 6647
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correspondence dated 19 December 2019. The Commission agreed to correspond with the
Australian Bureau of Statistics (ABS) and a copy of that correspondence can be found here. In
short, the corresponce requested that the ABS clarify:
whether the ACTU’s treatment of casual loading is appropriate; and
if a finer level of data can be analysed using data collected in the EEH survey but not
available as part of the microdata.
[10] A copy of the ABS’s response is annexed to this statement under Annexure A. The
ABS responded to the Commission that:
it considers the treatment of casual loading a reasonable approach in identifying and
adjusting for employees that receive casual loading; and
it does not consider the data requested suitable for release.
[11] As at today’s date no applications or requests for assistance have been received by the
Commission. The Commission does not propose to take any further steps in relation to this
issue on its own iniative at this time. The offer of assistance to facilitate discussions remains
open and interested parties may request such assistance by email to
chambers.ross.j@fwc.gov.au.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR725312
mailto:chambers.ross.j@fwc.gov.au
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-corr-fwc-240120.pdf
https://www.fwc.gov.au/documents/sites/rates-c14-review/c20195259-sub-actu-191219.pdf
[2020] FWC 6647
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Annexure A
i Ibid at para. 230.
ii Air Pilots Award 2010 (First officers and second pilots of Single engine UTBNI 1360 kg and Single engine 1360 kg-3359
kg are paid at the NMW (Schedule B.1.1). An aerial Application Pilot with less than 1000 hours of flying experience is
also paid at the NMW (Schedule D.9.1). It is noted that there additions to salary in B.1.3, B.1.4 and D.9.5 which may
mean that employees receive an amount greater than the NMW); Broadcasting, Recorded Entertainment and Cinemas
Award 2010 (A Grade 1 employee is paid at the NMW (cl. 14.3). Clause 14.2(a) suggests that there may not be any
employees paid at this rate under the award); Dry Cleaning and Laundry Industry Award 2010 (A Dry cleaning employee
level 1 is paid at the NMW level (cl. 14.1(a)); Funeral Industry Award 2010 (A grade 1 employee is paid at the NMW
level (cl. 14.1); Sugar Industry Award 2010 (The C14/L2-milling general operator is paid at the NMW level (cl. 40.1).
The BT1 rate (cl. 42.1) applies to ‘new starters’ who undertake a 3 month probation period) and Travelling Shows Award
2010 (A Grade 1 employee is paid at the NMW).
25 February 2020 Samantha Farmakis-Gamboni Director Modern Awards, Economics and Research Section Fair Work Commission Via email: Samantha.FARMAKIS-GAMBONI@fwc.gov.au
Dear Ms Farmakis-Gamboni, Request for Data - Survey of Employee Earnings and Hours Regarding your request relating to a Review of certain C14 rates in modern awards that is being heard before the President of the Commission, the Australian Bureau of Statistics (ABS) provides the following responses to the questions raised. a) Whether the treatment of casual loading is appropriate. The treatment for casual loading appears to be consistent with the approach used by many users of Employee
Eaming and Hours data to estimate the number of employees that are employed on a casual basis. Although there are unavoidable limitations with the treatment, given it relies on some assumptions, the ABS considers it a reasonable approach in identifying and adjusting for employees that receive casual loading. b) Whether the data can be made available at a finer level of detail, such as the ANZSIC 4-digit level. The Survey of Employee Earnings and Hours is not designed to produce high quality estimates at the ANZSIC 4- digit level. In addition to major caveats around the quality of estimates at this level, significant suppression of data would also be required to meet ABS confidentiality and disclosure obligations. As a result, the ABS would not consider these data suitable for release. The ABS will also provide further background information on suitability of the approach used in identifying the jobs in scope for the various awards via ANZSIC and ANZSCO categories for the Fair Work Commission to consider.
Kind regards David Taylor Director Employer Statistics Section Australian Bureau of Statistics
