1
Fair Work Act 2009
s.160—Application to vary a modern award to remove ambiguity or uncertainty or correct an
error
Australian Industry Group
(AM2020/1)
DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT YOUNG
COMMISSIONER YILMAZ
MELBOURNE, 13 JANUARY 2021
Application to vary the Nurses Award 2010 to remove ambiguity or uncertainty or to correct
an error – Fair Work Act 2009 (Cth) s.157 and s.160.
[1] This decision concerns an application by the Australian Industry Group (AI Group) to
vary the Nurses Award 20101 (Nurses Award) pursuant to s.160, or in the alternative s.157, of
the Fair Work Act 2009 (Act).
Nature of the Application
[2] The application concerns the rate at which casual employees covered by the Nurses
Award are remunerated for:
the performance of overtime, pursuant to clause 28.1 of the Nurses Award;
ordinary hours performed on weekends, pursuant to clause 26 of the Nurses Award;
and
work performed on public holidays, pursuant to clause 32.1 of the Nurses Award.
[3] AI Group contends that the Nurses Award ought be varied to make clear that overtime,
weekend and public holiday rates payable to casual employees are calculated on a base hourly
rate exclusive of the casual loading (Cumulative Basis) and not on an hourly rate that includes
the casual loading (Compounding Basis).
[4] This contention is advanced on three bases.
[5] Firstly, AI Group contends that the relevant provisions of the Nurses Award are
ambiguous and/or uncertain, as the proper construction of the relevant provisions require rates
for overtime, weekends and public holidays to be determined on the Cumulative Basis.
1 MA000034
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DECISION
E AUSTRALIA FairWork Commission
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Accordingly, AI Group contend that the Nurses Award may be varied to remove this
ambiguity or uncertainty pursuant to s.160 of the Act.2
[6] Secondly, AI Group contends that the provisions of the Nurses Award concerning
overtime are erroneous, in the sense that they do not reflect the stated intention of the
Australian Industrial Relations Commission (AIRC) as to the manner in which the relevant
rates were to be calculated when the AIRC made the Nurses Award. Accordingly, AI Group
contends that the Nurses Award may be varied to correct this error pursuant to s.160 of the
Act.3
[7] Thirdly, and in the alternative, AI Group contends that the variation sought is
necessary to ensure that the Nurses Award meets the modern awards objective and may be
varied pursuant to s.157 of the Act.4
[8] The determination sought by the AI Group is set out at Annexure A to this decision
(Proposed Variations). Pursuant to s.165(2) of the Act, AI Group seek that the variations to
the Nurses Award operate retrospectively from 1 January 2010.5
[9] The Australian Nursing and Midwifery Federation (ANMF) opposes the variation6 and
submits that the Nurses Award is not ambiguous or uncertain, and does not contain any error.7
In relation to the modern awards objective, the ANMF submits that the maters sought to be
relied upon by AI Group are untested and not supported by evidence.8 The ANMF opposes
retrospective variation of the Nurses Award and submits that AI Group has not demonstrated
exceptional circumstances as is required under s.165(2).9
Statutory Framework
Section 160 and section 165
[10] Section 160 of the Act allows the Commission to make a determination varying a
modern award to remove ambiguity, uncertainty or to correct an error. It provides as follows:
(1) The FWC may make a determination varying a modern award to remove an
ambiguity or uncertainty or to correct an error.
(2) The FWC may make the determination:
(a) on its own initiative; or
2 AI Group Submissions at [7]-[8]
3 AI Group Submissions at [9]
4 AI Group Submissions at [12]
5 AI Group Submissions at [11]
6 ANMF Submissions in Reply at [4]
7 ANMF Submissions in Reply at [20]
8 ANMF Submissions in Reply at [97]
9 ANMF Submissions in Reply at [61]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
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(b) on application by an employer, employee, organisation or outworker entity
that is covered by the modern award; or
(c) on application by an organisation that is entitled to represent the
industrial interests of one or more employers or employees that are
covered by the modern award; or
(d) if the modern award includes outworker terms—on application by an
organisation that is entitled to represent the industrial interests of one or
more outworkers to whom the outworker terms relate.
[11] Section 165 provides as follows:
Determinations come into operation on specified day
(1) A determination under this Part that varies a modern award (other than a
determination that sets, varies or revokes modern award minimum wages) comes
into operation on the day specified in the determination.
Note 1: For when a modern award, or a revocation of a modern award, comes into
operation, see section 49.
Note: For when a determination under this Part setting, varying or revoking modern
award minimum wages comes into operation, see section 166.
(2) The specified day must not be earlier than the day on which the determination is
made, unless:
(a) the determination is made under section 160 (which deals with variation to
remove ambiguities or correct errors); and
(b) the FWC is satisfied that there are exceptional circumstances that justify
specifying an earlier day.
Determinations take effect from first full pay period
(3) The determination does not take effect in relation to a particular employee until
the start of the employee’s first full pay period that starts on or after the day the
determination comes into operation.
Section 157 and section 134
[12] Section 157 of the Act allows the Commission to make a determination varying a
modern award if the Commission is satisfied that making the determination or modern award
is necessary to achieve the modern awards objective. It provides as follows:
(1) The FWC may:
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(a) make a determination varying a modern award, otherwise than to vary
modern award minimum wages or to vary a default fund term of the award;
or
(b) make a modern award; or
(c) make a determination revoking a modern award;
if the FWC is satisfied that making the determination or modern award is necessary to
achieve the modern awards objective.
[13] The modern awards objective is set out in s.134(1) of the Act as follows:
(1) The FWC must ensure that modern awards, together with the National
Employment Standards, provide a fair and relevant minimum safety net of terms and
conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce
participation; and
(d) the need to promote flexible modern work practices and the efficient and
productive performance of work; and
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; and
(e) the principle of equal remuneration for work of equal or comparable value;
and
(f) the likely impact of any exercise of modern award powers on business,
including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable
modern award system for Australia that avoids unnecessary overlap of modern
awards; and
(h) the likely impact of any exercise of modern award powers on employment
growth, inflation and the sustainability, performance and competitiveness of
the national economy.
Relevant provisions of the Nurses Award
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[14] As at the time of hearing, the relevant provisions of the Nurses Award were as
follows:
10.4 Casual employment
(a) A casual employee is an employee engaged as such on an hourly basis.
(b) A casual employee will be paid an hourly rate equal to 1/38th of the weekly
rate appropriate to the employee’s classification plus a casual loading of 25%.
(c) A casual employee will be paid a minimum of two hours pay for each
engagement.
(d) A casual employee will be paid shift allowances calculated on the ordinary
rate of pay excluding the casual loading with the casual loading component
then added to the penalty rate of pay.
26. Saturday and Sunday work
26.1 Where an employee is rostered to work ordinary hours between midnight Friday
and midnight Saturday, the employee will be paid a loading of 50% of their ordinary
rate of pay for the hours worked during this period.
26.2 Where an employee is rostered to work ordinary hours between midnight
Saturday and midnight Sunday, the employee will be paid a loading of 75% of their
ordinary rate of pay for the hours worked during this period.
28.1 Overtime penalty rates
(a) Hours worked in excess of the ordinary hours on any day or shift
prescribed in clause 21—Ordinary hours of work, are to be paid as follows:
(i) Monday to Saturday (inclusive)—time and a half for the first two
hours and double time thereafter;
(ii) Sunday—double time; and
(iii) Public holidays—double time and a half.
(b) Overtime penalties as prescribed in clause 28.1(a) do not apply to
Registered nurse levels 4 and 5.
(c) Overtime rates under this clause will be in substitution for and not
cumulative upon the shift and weekend premiums prescribed in clause 26—
Saturday and Sunday work and clause 29—Shiftwork.
32.1 Payment for work done on public holidays
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(a) All work done by an employee during their ordinary shifts on a public
holiday, including a substituted day, will be paid at double time of their
ordinary rate of pay.
(b) Businesses that operate seven days a week shall recognise work performed
on 25 December which falls on a Saturday or Sunday and, where because of
substitution, is not a public holiday within the meaning of the NES with the
Saturday or Sunday payment (as appropriate) plus an additional loading of
50% of the employee’s ordinary time rate for the hours worked on that day. All
work performed on the substitute day by an employee will receive an additional
loading of 50% of the ordinary time rate for the hours worked on that day
instead of the rate referred to in clause 32.1.
(Relevant Clauses)
Approach to ambiguity or uncertainty under section 160
[15] The approach to an application under s.160(1) of the Act and the determination of
whether a provision is ambiguous or uncertain was considered in Re Tenix Defence Pty
Limited10 (Tenix). The decision in Tenix was in relation to s.170MD of the Workplace
Relations Act 1996 which provided that:
The Commission may, on application by any person bound by a certified agreement,
by order vary a certified agreement:
(a) for the purpose of removing the ambiguity or uncertainty…
[16] The wording of s.170(MD) is not dissimilar to that in s.160 of the Act such that the
reasoning in Tenix remains relevant to the current matter.
[17] The Full Bench in Tenix observed:
“[28] Before the Commission exercises its discretion to vary an agreement pursuant to
s.170MD(6)(a) it must first identify an ambiguity or uncertainty. It may then exercise
the discretion to remove that ambiguity or uncertainty by varying the agreement.
[29] The first part of the process - identifying an ambiguity or uncertainty – involves
an objective assessment of the words used in the provision under examination. The
words used are construed having regard to their context, including where appropriate
the relevant parts of a related award. As Munro J observed in Re Linfox – CFMEU
(CSR Timber) Enterprise Agreement 1997:
“The identification of whether or not a provision in an instrument can be said
to contain an ‘ambiguity’ requires a judgment to be made of whether, on its
proper construction, the wording of the relevant provision is susceptible to
more than one meaning. Essentially the task requires that the words used in the
provision be construed in their context, including where appropriate the
10 PR917548, 9 May 2002
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relevant parts of the ‘parent’ award with which a complimentary provision is
to be read.”
[30] We agree that context is important. Section 170MD(6)(a) is not confined to the
identification of a word or words of a clause which give rise to an ambiguity or
uncertainty. A combination of clauses may have that effect.
[31] The Commission will generally err on the side of finding an ambiguity or
uncertainty where there are rival contentions advanced and an arguable case is made
out for more than one contention.
[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion
as to whether or not the agreement should be varied to remove the ambiguity or
uncertainty. In exercising such a discretion the Commission is to have regard to the
mutual intention of the parties at the time the agreement was made.’”
(footnotes omitted)
[18] In Re. Public Service (Non Executive Staff – Victoria) (Section 170MX) Award 200011
(170 MX Decision) Senior Deputy President Polites provided clarity on the meaning of
‘uncertainty’ by adoption of the following definition:
“In that respect I respectfully adopt the submission made by the State of Victoria that
the term “uncertainty” means the quality of being uncertain in respect of duration,
continuance, occurrence, liability to chance or accident or the state of not being
definitely known or perfectly clear, doubtfulness or vagueness. Those are extracts for
the Concise Oxford Dictionary adopted by Commissioner Whelan in Re: Shop
Distributive and Allied Employees Association v. Coles Myer [Print R0368]. In my
view, as I have indicated, this provision clearly falls within that definition.”
[19] More recently in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining
and Energy Union12 a Full Court of the Federal Court of Australia made clear that the task
under an analogous provision pertaining to enterprise agreements (s.217) was not to interpret
a provision of the instrument to ascertain its legal meaning but rather to identify whether it is
ambiguous or uncertain.13 The Full Court said:
“. . . the identification of the true meaning of a provision is distinct from the question of
whether it is ambiguous or uncertain. Ambiguity exists when a provision in an
enterprise agreement is capable of more than one meaning. See in this respect the
discussion by Gray J of the concept of ambiguity in Printing & Kindred Industries
Union v Davies Bros Ltd (1986) 18 IR 444 at 449. The ambiguity may be apparent on
the face of the document or may become apparent only when extrinsic evidence is
adduced. A provision may be ambiguous even though it is capable of
interpretation: Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees
Union [2016] FWC 7256 at [8]. This means that it was not necessary for the FWC to
11 T3721, 24 November 2000
12 [2020] FCAFC 50
13 Ibid at [67]
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2020/50.html
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FWC/2016/7256.html#para8
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FWC/2016/7256.html
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interpret the 2016 Agreement in order to reach a conclusion concerning the presence of
ambiguity or uncertainty.”
There are practical consequences for the FWC’s ascertainment of ambiguity or
uncertainty for the purpose of s 217 being different in character from the interpretation
of an enterprise agreement. One is that there was no need for the FWC to feel
constrained in the matters to which it may have regard by the principles developed for
the interpretation of enterprise agreements. Moreover, the FWC is obliged, in
performing its functions or in exercising its powers in relation to a matter under the
FW Act, to take into account, amongst other things, “equity, good conscience and the
merits of the matter” – see s 578 of the FW Act. Furthermore, the FWC is not bound
by the rules of evidence and procedure in relation to a matter – see s 591 of the FW
Act. Each of those provisions applies to the discharge by the FWC of its functions
under s 217(1). The consequence is that, far from being precluded from having regard
to evidence of the parties’ common intention and to the history of cl 1.2, the Deputy
President was permitted to have regard to them as part of the “equity, good conscience
and the merits” of the matter.
The constraint to which the Deputy President erroneously felt he was subject had the
potential to be material in another way. In relation to s 170MD(6) of the WR Act, the
AIRC held that a “significant factor” for the Commission’s consideration in
determining whether to exercise its discretion to vary an enterprise agreement is “the
objectively ascertained mutual intention of the parties at the time the agreement was
made”: Re Australian and International Pilots Association at [17] (Watson VP).
It may well be the case that the mere existence of rival contentions as to the meaning
or application of a provision or provisions in an enterprise agreement is not sufficient
to indicate ambiguity or uncertainty for the purposes of s 217: Tenix Defence Systems
Pty Limited Certified Agreement 2001-2004 [2002] AIRC 531 at [49]. Instead, the
FWC is to consider the matter objectively: Beltana No. 1 Salaried Staff Certified
Agreement 2001 [2003] AIRC 608 at [23]. In that objective consideration, an
assessment of the matters relied upon for the competing contentions will be important,
including evidence that the parties to the agreement had a common understanding as to
the meaning of the terms they used in their agreement. A reading of the enterprise
agreement as a whole may indicate ambiguity or uncertainty in one or more of its
clauses. And, as was noted by the Full Bench in Tenix, “the [FWC] will generally err
on the side of finding an ambiguity or uncertainty where there are rival contentions
advanced and an arguable case is made out for more than one contention”, at [31].”14
[20] It is therefore first necessary to determine if the provisions sought to be varied are
ambiguous or uncertain. Such a conclusion usually requires there to be rival contentions and
an arguable case for one of the contentions. Uncertainty may also be established even if the
provisions at issue have a clear meaning and are not ambiguous. In Bianco Walling the Full
Court emphasised that though related, the words “ambiguous or uncertain” are not
synonymous. In this regard the Full Court said:
14 Ibid at [67]-[71]
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AIRC/2003/608.html#para23
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AIRC/2003/608.html
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AIRC/2002/531.html#para49
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AIRC/2002/531.html
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“Although there is some relationship between these meanings, the definitions indicate
that the two terms are not synonymous. There may, for example, be uncertainty in an
enterprise agreement even when its terms are not ambiguous. The uncertainty may
arise from the application of the unambiguous terms to a given set of circumstances.
The distinction between patent ambiguity (linguistic ambiguity) and latent ambiguity
(ambiguity in application) provides an illustration by analogy: see JW Carter, The
Construction of Commercial Contracts, 2013, Hart Publishing at [18-27].
Further, treating the two terms as having different meanings gives effect to the
principle that a court construing a statutory provision should strive to give meaning to
every word in the provision: Project Blue Sky Inc v Australian Broadcasting
Authority [1998] HCA 28; (1998) 194 CLR 355 at [71]”15
[21] It is only if this is the case that a variation to remedy that ambiguity or uncertainty
may be considered.
Are the Relevant Clauses ambiguous or uncertain?
[22] The Relevant Clauses were the subject of consideration by a Full Bench of the
Commission in Domain Aged Care (Qld) Pty Ltd v DPG Services Pty Ltd T/A Opal Aged
Care 16 (Domain Aged Care). The issue for determination in Domain Aged Care was whether
the 25% casual loading provided for in clause 10.4(b) of the Nurses Award was paid on all
hours worked, including where other loadings and penalties are paid. That is, whether the
Nurses Award provided for the calculation of rates of pay on the Cumulative or the
Compounding Basis. The Full Bench, affirming the decision at first instance, concluded that
the Nurses Award provided for the latter method of calculation. In so doing the Full Bench
said:
“[17] Clause 10.4(b) of the Award says that a casual employee will be paid an hourly
rate equal to 1/38th of the weekly wage plus a casual loading of 25%. On a plain
reading of the clause, the hourly rate includes the loading; the loaded casual rate is
the ‘ordinary rate of pay’. When a casual employee works ordinary hours on a
Saturday or Sunday, clause 26 of the Award requires the weekend loading to be
applied to the ordinary rate of pay. For casual employees, this rate is the casual rate.
The same is the case with the public holiday penalty in clause 32.1.
[18] Furthermore, clause 10.4(d) makes very clear that casual employees are paid
shift allowances on the ordinary rate of pay ‘excluding the casual loading’, with the
casual loading then added to the penalty rate of pay. No such exclusion is made in
respect of other penalties. Opal contended that it would be wrong to apply the
maximum expressio unius est exclusio alterius to this provision, and referred to the
Full Bench decision in AMWU v Berri Pty Limited which warned against too ready an
application of cannons of statutory interpretation to the task of construing an
enterprise agreement. However in our view, it is not so much a case of applying an
interpretative presumption but of reading clause 10.4 in an ordinary and logical way.
15 Ibid at [75]-[76]
16 Australian Nursing and Midwifery Federation v Domain Aged Care (Qld) Pty Ltd T/A Opal Aged Care [2019] FWCFB
1716
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1998/28.html#para71
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It is already clear that the ordinary rate for casuals is the loaded rate. Clause 10.4(d)
specifies a different arrangement in respect of shift allowances, because otherwise
they would have been subject to the general position that penalties are applied to the
loaded casual rate, and this was not intended to be the case of shift allowances. It is
also significant that clause 10.4(d) speaks of ‘the ordinary rate of pay excluding the
casual loading’, which also reaffirms that in the context of this clause, for casual
employees, the casual loading is part of the ordinary rate; otherwise it would not
make sense to speak of ‘excluding’ the casual loading from it.
[19] The Commissioner’s conclusion that overtime penalties are also paid on the
loaded casual rates of pay is in our view also correct. Clause 28.1 simply speaks of
‘time and a half for the first two hours and double time thereafter’ for Monday to
Saturday work, ‘double time’ for Sunday and ‘double time and a half for public
holidays.’ The relevant ‘time earnings’ for a casual under clause 10.4 include the
casual loading. Further, clause 28.1(c) provides that overtime rates are in substitution
for and are not cumulative upon shift and weekend premiums. Nothing is said of the
casual loading being excluded. We appreciate that this sub-clause is concerned with
applying one penalty to the exclusion of another, rather than precluding the
calculation of a penalty based on a loaded rate, which is the focus of the interpretative
controversy in this instance. Nonetheless, clause 28.1(c) is a limitation on the
interaction of different penalties, and nothing is said about confining the application
of the casual loading.
[20] In arguing against the construction above, Opal sought to rely on the Award
Modernisation decision of 2009, in which a Full Bench of the Australian Industrial
Relations Commission stated that it considered the correct approach to the calculation
of overtime for casual employees was to ‘separate the calculations and then add the
results together... rather than compounding the effect of the loadings’. The passage is
referable to four modern awards that the Commission was publishing in that decision
including the Nurses Award 2010. However, the explanation of the Commission for its
decision to make an award in particular terms cannot properly be used to defeat the
plain meaning of the instrument that it ultimately made. Section 160 of the Act
establishes a process whereby application can be made to the Commission to vary a
modern award to remove ambiguity or uncertainty or to correct an error. If a person
considers that the text of a modern award contains an error, an application can be
made under this provision to correct it.
[21] Opal also relied on the Award Modernisation Decision (AM2008/1-12) in which
the Full Bench said that ‘as a general rule, where penalties apply the penalties and the
casual loading are both to be calculated on the ordinary time rate.’ A general
statement such as this might be of some assistance in cases of ambiguity, but that is
not the case in the present matter. The relevant provisions are in our view clear.”17
(References omitted)
AI Group submissions on ambiguity and/or uncertainty
17 Australian Nursing and Midwifery Federation v Domain Aged Care (QLD) Pty Ltd T/A Opal Aged Care [2019] FWCFB
1716 at [17] – [21]
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[23] AI Group contends that the Full Bench erred in its construction of the Relevant
Clauses.18 In summary, AI Group contends that clause 10.4(b) creates an obligation to pay
casual employees a minimum hourly rate of 1/38th of the weekly rate and a separate 25%
casual loading. As such, it contends that the clause creates two distinct entitlements, separate
in nature.19 One is an hourly rate and one is a casual loading.20 It contends that a casual
employee’s “ordinary rate of pay” is therefore 1/38th of the applicable weekly rate of pay
specified in the Nurses Award21 and it is this hourly rate of pay which is used to calculate
amounts payable to casual employees22 under clause 26,23 28.124 and 32.1.25 It contends
therefore that the Full Bench was wrong to conclude that under clause 10.4(b) “the hourly
rate includes the loading”.26
[24] In support of its construction of the Relevant Clauses,27 AI Group relies upon a
Statement issued by a Full Bench of the AIRC in relation to the introduction of a casual
loading in the Award Modernisation process28 (Statement) and a subsequent decision of a Full
Bench of the AIRC 29 (AM2008/1-12) where the Full Bench said:
“In all the circumstances we have decided to confirm our earlier indication that we
would adopt a standard casual loading of 25 per cent. We make it clear that the
loading will compensate for annual leave and there will be no additional payment in
that respect. Also, as a general rule, where penalties apply the penalties and the
casual loading are both to be calculated on the ordinary time rate.”30
[25] AI Group submits31 that the “general rule” referred to by the Full Bench is consistent
with the reasoning of Watson VP in Re Aged Care Association Australia Ltd & Ors32 (Two
Year Review Decision) in which Watson VP rejected that the Compounding Method applied
and said:
“In my view, in the case of more than one loading applying, these provisions do not
require the penalty to be calculated as a percentage of the loaded rate. Rather they
require each penalty on the base rate and the addition of the derived amounts onto the
18 AI Group Submissions at [76]
19 AI Group Submissions at [78], [88]-[90]
20 AI Group Submissions at [89-90]
21 AI Group Submissions at [78]
22 AI Group Submissions at [79]-[81]
23 AI Group Submissions at [124]-[128]
24 AI Group Submissions at [134]-[140]
25 AI Group Submissions at [129-133]
26 AI Group Submissions at [88]
27 AI Group Submissions at [91]-[94]
28 Award Modernisation [2008] AIRCFB 717 at [20]
29 Award Modernisation [2008] AIRCFB 1000
30 Award Modernisation [2008] AIRCFB 1000 at [50]
31 AI Group Submissions at [95]
32 [2012] FWA 9420
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
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base rate. This reflects the normal notion that multiple penalties are often required to
be applied, but that penalties are not applied on penalties.33
…
The [casual] loading is not however applied to the loaded weekend rate. In my view
the same method of calculation applies to weekends as in the case of shift allowances.
Each penalty is calculated on the base rate. The resultant amounts are added
together.”34
[26] AI Group also relies upon the Award Modernisation decision of 200935 in which a Full
Bench of the AIRC stated that it considered the correct approach to the calculation of
overtime for casual employees was to “separate the calculations and then add the results
together…rather than compounding the effect of the loadings.”36 AI Group submits that the
construction of clause 10.4(b) advanced by it is consistent with the terms of the Nurses Award
more broadly,37 and with particular reference to the transitional arrangements for the
introduction of a casual loading contained in Schedule A of the Nurses Award.38
[27] AI Group submits that an ambiguity or uncertainty is established for the purposes of
s.160 by the divergent interpretations adopted in the Two Year Review Decision and Domain
Aged Care39 and an objective assessment of the terms of the Nurses Award.40
ANMF submissions
[28] The ANMF submits that AI Group is seeking to utilise s.160 to reagitate matters that
have already41 been determined by a Full Bench.42 It submits that the Full Bench in Domain
Aged Care determined that the Relevant Clauses were not ambiguous or uncertain43 and that
decision ought be followed.44 It says further that the contention that clause 10.4(b) provides
for two distinct entitlements is not supported by a plain reading of clause 10.4(d).45 It submits
that the use of the words “excluding” and “component” in clause 10.4(d) supports a
conclusion that the hourly rate referred to in clause 10.4(b) is a rate inclusive of the prescribed
hourly rate and the casual loading.46
33 [2012] FWA 9420 at [35]
34 [2012] FWA 9420 at [37]
35 AI Group Submissions at [96]-[99]
36 Award Modernisation [2009] AIRCFB 345 at [150]
37 AI Group Submissions at [101]
38 AI Group Submissions at [103]-[108], AI Group Reply Submissions at [36]-[39]
39 AI Group Submissions at [147]
40 AI Group Submissions at [149]-[154]
41 ANMF Submissions in Reply at [22]
42 ANMF Submissions in Reply at [30]
43 ANMF Submissions in Reply at [27], [32]
44 ANMF Submissions in Reply at [32]
45 ANMF Submissions in Reply [40]
46 ANMF Submissions in Reply at [36]-[39]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-290920.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
[2021] FWCFB 115
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[29] As to the Two Year Review Decision, the ANMF firstly submits that the decision was
“an award review exercise”,47 primarily addressing the contention that casual employees were
not entitled to a casual loading when working weekends. As such, it submits that the
comments of Watson VP relied upon were obiter dicta and of no precedent value.48 Secondly,
it submits that Watson VP’s view that the Cumulative Basis applied to the calculation of
weekend penalty rates was “mistaken” in light of the Full Bench decision in Domain Aged
Care.49 Thirdly, it submits that s.160 of the Act is not enlivened simply by the existence of
rival contentions. There must also be an arguable case made out for more than one
contention.50 It submits that Full Bench in Domain Aged Care considered the Relevant
Clauses and found that “the relevant provisions are in our view clear.”51
[30] In relation to Schedule A, the ANMF submits firstly, that Schedule A inserted model
provisions into most modern awards without change.52 Secondly, it submits that Schedule A
contained transitional provisions which no longer operate.53 Thirdly, it submits that when the
AIRC considered the Racing Clubs Events Award 2010, which did not contain separate
ordinary rates, penalties and loadings, it did not make any special provision and still inserted
the model provisions.54 In light of these matters, the ANMF submits that Schedule A has no
relevance55 and no weight should be placed on it.56
Consideration
Decision in Domain Aged Care
[31] For the reasons that follow we reject the submission that the Full Bench erred in its
construction of the Relevant Clauses in Domain Aged Care.
[32] Firstly, although the Commission is not bound by principles of stare decisis it has
generally followed previous Full Bench decisions.57 In Nguyen v Nguyen, in another context,
the High Court observed that:
“When a court of appeal holds itself free to depart from an earlier decision it should
do so cautiously and only when compelled to the conclusion that the earlier decision is
wrong. The occasion upon which the departure from previous authority is warranted
are infrequent and exceptional and pose no real threat to the doctrine of precedent
47 ANMF Submissions in Reply at [23]
48 ANMF Submissions in Reply at [23]
49 ANMF Submissions in Reply at [24]
50 ANMF Submissions in Reply at [29]
51 ANMF Submissions in Reply at [27]
52 ANMF Submissions in Reply at [44]-[45]
53 ANMF Submissions in Reply at [43]
54 ANMF Submissions in Reply at [47]
55 ANMF Submissions in Reply at [42]
56 ANMF Submissions in Reply at [48]
57 Inna Grabovsky v United Protestant Association of NSW Ltd T/A UPA [2018] FWCFB 4362 at [26]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
[2021] FWCFB 115
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and the predictability of the law: see Queensland v The Commonwealth (1977) 139
CLR 585 per Aickin J at 620 et seq”58
[33] Accordingly, we consider that we ought to depart from the decision in Domain Aged
Care with caution and only if we consider it plainly wrong.
[34] Secondly, we do not identify any error in the Full Bench’s construction of the
Relevant Clauses or reasoning in Domain Aged Care. The principles of construction of
Awards are well settled and were summarised by Rangiah J in Swissport Australia Pty Ltd v
Australian Municipal Administrative Clerical and Services Union (No 3)59(Swissport). It is
not necessary that they be repeated in full here. It is sufficient to note that construction of an
Award begins with the natural and ordinary meaning of the words in light of the Award’s
industrial context and purpose. The Full Bench in Domain Aged Care first considered the
plain reading of clause 10.4(b) and found that on a plain reading the hourly rate includes the
loading. It found that the loaded casual rate was therefore the “ordinary rate of pay.” As such,
the Full Bench concluded that this is the rate of pay to which the loading is applied under
clause 26 for ordinary hours worked on a weekend and under clause 32.1 for hours worked on
a public holiday. The Full Bench considered this construction to be supported by the language
of clause 10.4(d) which provides that casual employees are paid shift allowances on the
ordinary rate of pay “excluding the casual loading”, noting that no exclusion is made for other
penalties and that such an exclusion would not be necessary if the ordinary rate of pay did not
include the casual loading. As to clause 28.1, noting that the clause simply speaks of time
earnings, the Full Bench concluded that time earnings for casuals is the ordinary rate of pay
and therefore included the casual loading. The Full Bench considered that clause 28.1(c) is a
limitation on the interaction of different penalties and said nothing as to confining the
application of the casual loading. We do not consider that the Full Bench’s approach to, and
analysis of, the Relevant Clauses demonstrates any error in the application of the principles
set out in Swissport. Further, not only do we see no error, we consider the conclusion reached
to be entirely correct. Finally, we do not consider that Schedule A or any other provisions of
the Nurses Award more broadly lead to the conclusion that Domain Aged Care was wrongly
decided.
[35] Thirdly, the approach taken by the Full Bench in Domain Aged Care was endorsed by
a Full Bench in the 4 Yearly Review of Modern Awards – Overtime For Casuals Decision60
(AM2017/51) and in the 4 Yearly Review of Modern Awards – Overtime For Casuals
Decision (Final Determination) Decision (AM2017/51).61 In its Reply Submissions AI Group
submits that the Full Bench in the 4 Yearly Review of Modern Awards – Overtime For
Casuals Decision62 did not “endorse” Domain Aged Care.63 We reject that submission and
consider that the statement of the Full Bench that it saw “no basis to depart from the
approach taken in [Domain Aged Care]” and the application of the reasoning in Domain
Aged Care by the Full Bench in the matter before it, affords no other conclusion.
58 [1990] HCA 9; (1990) 169 CLR 245 at [21], 269
59 [2019] FCA 37
60 [2020] FWCFB 4350
61 [2020] FWCFB 5636 at [15-21]
62 [2020] FWCFB 4350
63 AI Group Reply Submissions at [48-53]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-290920.pdf
http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1990/9.html
[2021] FWCFB 115
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[36] Fourthly, submissions founded on there being a “general rule” as to the basis of
calculation of penalties for casual employees have previously been considered by a Full
Bench of this Commission and rejected. In the 4 Yearly Review of Modern Awards – Overtime
For Casuals Decision64 (AM2017/51) a Full Bench considered a submission that the AIRC
had adopted a standard approach or “general rule” as to the payment of the casual loading and
overtime penalty rates. That submission was, as is that of AI Group presently, that such a
general rule is ascertainable from the Statement in AM2008/1-12. The Full Bench rejected the
contention that there was any general rule as to the payment of casual loading and overtime
penalty rates, saying:
“While it is certainly the case that the 25% casual loading is, with a few exceptions,
the standard in modern awards, it cannot be said notwithstanding the above passage
that any standard or general approach was actually applied by the AIRC award
modernisation Full Bench concerning the relationship between the casual loading and
overtime penalty rates. The modern awards made as a result of the award
modernisation process are marked by a high degree of diversity in this respect, as will
become apparent in the analysis of the disputed awards. Some modern awards, at
least originally, did not provide for casual employees to receive overtime penalty rates
at all. Of those that provide for overtime penalty rate entitlements for casual
employees, they may be divided into three categories:
(1) awards where overtime penalty rates are payable in substitution for the
casual loading;
(2) awards where the casual loading and the overtime penalty rate are added
separately to the minimum hourly rate (the cumulative approach);
(3) awards where the overtime penalty rate is applied to an ordinary hourly
rate consisting of the minimum hourly rate and the casual loading (the
compounding approach).”65
[37] In its Reply Submissions AI Group submits that the Full Bench erred66 in 4 Yearly
Review of Modern Awards – Overtime For Casuals Decision67 and that its reasoning was
flawed.68 We reject that submission. In the 4 Yearly Review of Modern Awards – Overtime
For Casuals Decision (Final Determination) Decision (AM2017/51)69 the Full Bench referred
to the above decision and said that it is clear that the “general rule”, which is an expression of
the Cumulative Basis, was not actually applied in any general way to the awards made by the
AIRC award modernisation Full Bench. The Full Bench noted that there are many modern
awards in which the casual loading does not apply at all where overtime penalty rates apply,
notwithstanding this “general rule”, whilst on the other end of the spectrum, there are many
awards where it is beyond doubt that the casual loading is payable on overtime on a
Compounding Basis. The Full Bench concluded that it considered that:
64 [2020] FWCFB 4350
65 [2020] FWCFB 4350 at [6]
66 AI Group Reply Submissions at [47]]
67 [2020] FWCFB 4350
68 AI Group Reply Submissions at [61-65]
69 [2020] FWCFB 5636
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“…the AIRC award modernisation Full Bench never actually applied any “general
rule” to the interaction between the casual loading and overtime penalty rates in the
modern awards that it made.”70
[38] We see no basis upon which we ought to depart from those decisions.
[39] Fifthly, as to the Two Year Review Decision, firstly, for the reasons set out above, we
reject that there is any “general rule” as submitted by AI Group. Secondly, Watson VP’s
conclusion that clause 10.4 of the Nurses Award “required calculation of each penalty on the
base rate and the addition of the derived amounts on the base rate” was expressly rejected by
the Full Bench in Domain Aged Care, which has been endorsed by subsequent Full Bench
decisions of this Commission. Thirdly, we do not consider the conclusion reached by Watson
VP that the “same method of calculation applies to weekends as in the case of shift
allowances” to be correct. Clause 10.4(d) deals specifically, and exclusively, with the
calculation of shift penalties. It provides for a specific arrangement in relation to calculation
of those penalties in isolation. It therefore distinguishes the approach to be taken to the
calculation of shift penalties from the approach to be taken to the calculation of other
penalties. We reject that there is anything in a plain reading of the clause that allows for a
conclusion that the “same method of calculation applies”. For that reason we also reject AI
Group’s submission that the decision in Domain Aged Care was in error as it did not appear
to have taken the Two Year Review Decision into account.71
[40] Sixthly, the Full Bench’s statement in the Award Modernisation decision of 200972
that the correct approach to the calculation of overtime for casual employees under the Nurses
Award was to “separate the calculations and then add the results together…rather than
compounding the effect of the loadings” has also previously been considered by Full Benches
of this Commission. This statement was relied upon by the Respondent in Domain Aged Care
in arguing against the construction of clause 10.4 adopted by the Full Bench in that matter. In
rejecting that the statement led to an alternate construction, the Full Bench said:
“However, the explanation of the Commission for its decision to make an award in
particular terms cannot properly be used to defeat the plain meaning of the instrument
that it ultimately made.”73
[41] We have earlier found that we see no error in the Full Bench’s construction of the
Relevant Clauses and accordingly, adopt the statements of the Full Bench in this regard.
Further, the Full Bench’s conclusion that the statement could not defeat the plain meaning of
the Relevant Clauses was considered by a Full Bench in 4 Yearly Review of Modern Awards –
Overtime For Casuals Decision (Final Determination) Decision (AM2017/51) and
endorsed.74 Accordingly, we reject the submission that the statement leads to a conclusion that
the Full Bench in Domain Aged Care erred or that the statement’s asserted consistency with
70 [2020] FWCFB 5636 at [21]
71 AI Group Reply Submissions at [18]-[21] and [43]-[44]
72 Award Modernisation [2009] AIRCFB 345
73 Australian Nursing and Midwifery Federation v Domain Aged Care (Qld) Pty Ltd T/A Opal Aged Care [2019] FWCFB
1716
74 Ibid at [20]-[21]
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[2021] FWCFB 115
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the terms of the Nurses Award more broadly, including Schedule A of the Nurses Award,
results in the construction of the Relevant Clauses adopted by the Full Bench being in error.
[42] Finally, for completeness, we also do not consider that because a Modern Award
differs in some aspects from the provisions of pre-modern award instruments, ambiguity or
uncertainty is demonstrated.
Are the Relevant Clauses ambiguous or uncertain for the purposes of section 160?
[43] We reject the submission that there is ambiguity or uncertainty as a result of the
“divergent interpretations” adopted in the Two Year Review Decision and Domain Aged Care
and an objective assessment of the terms of the Nurses Award. Firstly, as set out above, we do
not accept the correctness of the views expressed by Watson VP in the Two Year Review
Decision. Secondly, the construction of the Relevant Clauses adopted in the Two Year Review
Decision was rejected by the Full Bench in Domain Aged Care, a decision with which we not
only concur but which has been endorsed in two subsequent Full Bench decisions. In these
circumstances, we do not consider it can be concluded that there are, in fact, “divergent
interpretations”. Thirdly, although the Full Bench in Domain Aged Care was concerned with
ascertaining the legal meaning of the Relevant Clauses for the purposes of assessing whether
an enterprise agreement passed the better off overall test (BOOT) it nevertheless found that
the Relevant Clauses were “clear” and not ambiguous.75 We agree with that conclusion. The
words are in our view clear. Fourthly, in our view, such a finding must also lead to the
conclusion that the Relevant Clauses are not uncertain, in the sense that they are not definitely
known or perfectly clear, doubtful or vague, as was articulated in the 170 MX Decision.
There is nothing in the unambiguous application of the Relevant Clause which results in any
uncertainty. The application of the Relevant Clauses has the Compounding Basis result.
Accordingly, we do not consider that there are rival contentions such as may give rise to any
ambiguity or uncertainty or that the unambiguous application of the Relevant Clause results in
some uncertainty for the purposes of s.160 of the Act.
[44] Further, even if it should be that the alternate construction of clause 10.4 pressed by
AI Group is a rival contention, more is required before s.160 is engaged. As the Commission
observed in Tenix (which appears to have been endorsed by the Full Court in Bianco
Walling76), it is also necessary that there be an arguable case for that contention made out. In
circumstances where the Relevant Clauses have now been the subject of consideration by
three Full Benches of this Commission, all of which have found that the Relevant Clauses
provide for the calculation of penalties for casual employees on a Compounding Basis, we do
not consider that it can be said that an arguable case for an alternate construction has been
made out. Accordingly, we reject that there is any ambiguity or uncertainty such as to enliven
s.160 of the Act.
Approach to error under section 160
75 Ibid at [21]
76 [2020] FCAFC 50 at [71]
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[45] In the 4 yearly review of modern awards – Vehicle Manufacturing, Repair Services
and Retail Award 201077 (Vehicle Award Decision) the Full Bench said in relation to whether
an error was established for the purpose of s.160:
“With respect to the SDA, this is not demonstrative of any error. It only demonstrates
that a methodology was used which the SDA, with the benefit of hindsight, would
prefer not to have been used. Nothing was placed before us to suggest that the AIRC
did not intend to use that methodology, or that some mathematical error was made in
calculating the rates in accordance with that methodology. We do not accept that
disagreement - even a well-founded disagreement - with a previous decision is
sufficient to establish an error for the purposes of s.160. What is necessary is to show
that some sort of mistake occurred, in that a provision of the award was made in a
form which did not reflect the tribunal’s intention.”78
[46] In light of the above, we consider that an error for the purposes of s.160 will arise if it
is established that the relevant provisions of the Nurses Award do not reflect the intention of
the AIRC’s Award Modernisation Full Bench.
AI Group submissions as to error
[47] AI Group submits, in the alternative, that the Nurses Award contains errors in relation
to the rate payable to casual employees for the performance of overtime.79 AI Group submits
that the Relevant Clauses do not reflect the AIRC’s intention and relies upon the statement
made in the Award Modernisation decision 200980 set out at paragraph [24] above.81 It
submits that in that decision the AIRC “expressly determined that the Cumulative Method of
calculation was to apply in respect of overtime and the casual loading”.82 It further submits
that this is consistent with the general approach determined by the AIRC as reflected in the
Statement.83 It submits that to the extent that the Nurses Award is read so as to require the
calculation of overtime rates for casual employees on the Compounding Basis a mistake
occurred and the relevant provisions are erroneous in the sense contemplated by the Vehicle
Award Decision.84
ANMF submissions
[48] The ANMF submits that there is no evidence that the Nurses Award does not reflect
the intention of the Award Modernisation Full Bench. In relation to the Award Modernisation
decision 2009, it says that the passages relied upon by AI Group do not particularise who had
raised the concerns, nor which awards they were raised in respect of. Further, it does not
identify to which award the approach was to apply.85
77 [2016] FWCFB 4418
78 [2016] FWCFB 4418 at [73]
79 AI Group Submissions at [161]
80 AI Group Submissions at [168]
81 AI Group Submissions at [162]
82 AI Group Submissions at [163]
83 AI Group Submissions at [163]
84 AI Group Submissions at [168]
85 ANMF Submissions in Reply at [51]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
[2021] FWCFB 115
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Consideration
Do the Relevant Clauses contain an error?
[49] We reject the submission that the overtime provisions of the Nurses Award do not
reflect the intention of the AIRC award modernisation Full Bench and therefore contain an
error for the purposes of s.160 of the Act. Firstly, for the reasons set out above, we reject the
submission that there was a general approach adopted by the AIRC award modernisation Full
Bench in relation to the payment of casual loading and overtime penalty rates. Secondly, the
passage relied upon by AI Group in the Award Modernisation decision 2009 does not identify
by whom concerns regarding the calculation of overtime for casuals had been raised, in
respect of which of the four awards being published at that time those concerns related or to
which of the four awards the Full Bench’s comments were directed. Thirdly, the four modern
awards that the Commission was publishing in that decision were the Nurses Award 2010, the
Aged Care Industry Award 2010 (Aged Care Award), the Health Professional and Support
Services Award 2010 (Health Award) and the Medical Practitioners Award 2010 (Medical
Practitioners Award). We consider it entirely unclear that any consistent approach was taken
in those awards to the question of payment of overtime for casual employees at the time of
publication. When the Aged Care Award first came into effect on 1 January 2010 it did not
provide an entitlement to overtime penalty rates for casual employees at all,86 whilst as
recently as 2017 a Full Bench considered that the provisions of the Health Award and the
Medical Practitioners Award were unclear as to the circumstances in which overtime was
payable to casual employees and at what rate.87 Accordingly, on the basis of the evidence
currently before the Commission, we do not consider it has been established that the Nurses
Award does not reflect the intention of the Award Modernisation Full Bench such that it
could be found that the overtime provisions of the Nurses Award are erroneous.
[50] For completeness, we note that AI Group also submits that 49 Federal and State pre-
modern awards preceded the Nurses Award.88 It submits that an analysis of the relevant pre-
modern awards89 supports the proposition that the critical mass of pre-modern awards
afforded an entitlement that was less beneficial than the Compounding Basis affords90 and
that remunerating casual employees on a Compounding Basis was not a widespread industry
practice.91 The ANMF submits that there were at least 66 pre-modern awards92 and submits
that AI Group’s analysis is erroneous.93
[51] It is not entirely clear what is said by AI Group to arise from these matters in the
present context, even if they be correct. However, should it be that error is sought to be
established by these matters,94 we reject that submission. Firstly, as conceded by AI Group in
86 Australian Municipal Clerical and Services Union [2014] FWCFB 379 at [23]
87 [2017] FWCFB 6417 at [5], Attachment A
88 AI Group Submissions at [57]
89 AI Group Submissions at [58]-[59]
90 AI Group Submissions at [60], see also AI Group Reply Submissions at [86]-[93]
91 AI Group Submissions at [61]
92 ANMF Submissions in Reply at [63]
93 ANMF Submissions in Reply at [65]-[94]
94 See AI Group Reply Submissions at [86]-[94]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-290920.pdf
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https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-290920.pdf
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its submissions, the interpretation of various pre-modern awards is not a matter to be
determined in this application.95 Secondly, in relation to the Nurses Award, the award
modernisation process required the modernisation of, even on AI Group’s own submissions,
at least 49 pre-modern awards. Further, also on AI Group’s own submissions, some pre-
modern awards dealt with payment of overtime for casuals on a Cumulative Basis and some
on a Compounding Basis. In this context, even if it be that most pre-modern awards provided
for overtime on a Cumulative Basis, an assertion that the Nurses Award does not reflect the
terms of some relevant pre-modern awards is insufficient in our view to establish that the
Relevant Clauses demonstrate error.
Retrospective variation
[52] Given our conclusions above, it is not necessary that we consider whether there are
exceptional circumstances such that the Nurses Award may be varied retrospectively pursuant
to s.165(2) of the Act.
Variation to achieve the modern awards objective
Approach to variation under section 157
[53] Section 157 of the Act empowers the Commission to make a determination varying a
modern award outside of a review of modern awards if it is satisfied that the making of the
determination is necessary to achieve the modern award objectives set out in s.134(1) of the
Act.
[54] In Shop, Distributive and Allied Employees Association v National Retail Association
(No.2),96 Tracey J considered the proper construction of the expression ‘the Commission is
satisfied that making [a determination varying a modern award] … is necessary to achieve the
modern awards objective’ in s.157(1) of the Act. His Honour held:
“The statutory foundation for the exercise of FWA’s power to vary modern awards is
to be found in s 157(1) of the Act. The power is discretionary in nature. Its exercise is
conditioned upon FWA being satisfied that the variation is “necessary” in order “to
achieve the modern awards objective”. That objective is very broadly expressed: FWA
must “provide a fair and relevant minimum safety net of terms and conditions” which
govern employment in various industries. In determining appropriate terms and
conditions regard must be had to matters such as the promotion of social inclusion
through increased workforce participation and the need to promote flexible working
practices.
The subsection also introduced a temporal requirement. FWA must be satisfied that it
is necessary to vary the award at a time falling between the prescribed periodic
reviews.
The question under this ground then becomes whether there was material before the
Vice President upon which he could reasonably be satisfied that a variation to the
95 AI Group Reply Submissions at [94]
96 Shop, Distributive and Allied Employees Associates v National Retail Association (No.2) (2012) 205 FCR 227
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Award was necessary, at the time at which it was made, in order to achieve the
statutory objective …
In reaching my conclusion on this ground I have not overlooked the SDA’s subsidiary
contention that a distinction must be drawn between that which is necessary and that
which is desirable. That which is necessary must be done. That which is desirable does
not carry the same imperative for action. Whilst this distinction may be accepted it
must also be acknowledged that reasonable minds may differ as to whether particular
action is necessary or merely desirable. It was open to the Vice President to form the
opinion that a variation was necessary.”97
[55] As to the modern awards objective, in 4 yearly review of modern awards –
Horticulture Award 201098 the Full Bench said:
“The modern awards objective is to ‘ensure that modern awards, together with the
National Employment Standards, provide a fair and relevant minimum safety net of
terms and conditions’, taking into account the particular considerations identified in
sections 134(1)(a) to (h) (the s.134 considerations). The objective is very broadly
expressed. 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. 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.
While the Commission must take into account the s.134 considerations, the relevant
question is whether the modern award, together with the NES, provides a fair and
relevant minimum safety net of terms and conditions.
…
The composite phrase ‘fair and relevant’ in the chapeau to s.134(1) involves broad
concepts. The perspectives of employers and employees and the contemporary
circumstances in which an award operates are circumstances which may be
considered, in addition to the s.134(a) to (h) matters and other relevant facts, matters
and circumstances, in determining whether a modern award, together with the NES,
provide a fair and relevant minimum safety net of terms and conditions.”99
AI Group submissions – fair and relevant minimum safety net
[56] AI Group firstly submits that the variations sought to the Nurses Award are fair
because they:
remove existing uncertainties and ambiguities and that would occur in a fair way;
97 Ibid at [35]-[37] and [46]
98 [2017] FWCFB 6037
99 [2017] FWCFB 6037 at [24]-[25] and [36], see also 4 yearly review of modern awards – Penalty Rates [2017] FWCFB
1001
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would ensure that employers are not exposed to claims or litigation;
would reflect “longstanding industry practice”;
would reflect the AIRC’s clear intent;
the Compounding Basis provides a windfall gain for casual employees and that is
unfair to employers;
the cost implications of the Compounding Basis may be unfair to casual employees
to the extent that it deters employers from engaging them or from engaging them to
perform overtime or work on weekends and public holidays.100
(collectively, the Fairness Submissions)
[57] It further submits that the variations would result in the Nurses Award providing a
safety net consistent with contemporary circumstances. It submits that the “vast majority of
modern awards” require calculation of rates for overtime, weekends and public holidays on
the Cumulative Basis.101 (Relevant Submissions).
AI Group section 134(1) submissions
[58] In relation to the considerations set out in s.134(1) of the Act, AI Group submit as
follows.
Section 134(1)(a) – relative living standards and the needs of the low paid
[59] AI Group submits that the variations sought would not have a substantial or material
impact on the relative living standards or needs of the low paid. Further, to the extent that the
variations induces a greater demand for casual labour during overtime, weekends and public
holidays, it submits that this would somewhat ameliorate any reduction in income. It submits
that s.134(1)(a) of the Act is a neutral consideration .102
Section 134(1)(b) – the need to encourage collective bargaining
[60] AI Group submits that the interpretation of the Relevant Clauses in Domain Aged
Care may deter employers from engaging in collective bargaining as Domain Aged Care has
“obvious ramifications” for the application of the BOOT. It submits that if the variations
sought were made and employers not exposed to the “uncertainty” of having enterprise
agreements assessed against the Nurses Award as interpreted by Domain Aged Care
employers may be encouraged to engage in enterprise bargaining. It submits that s.134(1)(b)
of the Act supports the grant of the current application.103
100 AI Group Submissions at [184(a)-(g)]
101 AI Group Submissions at [186]-[188]
102 AI Group Submissions at [193]- [194]
103 AI Group Submissions at [198]-[202]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
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Section 134(1)(c) – the need to promote social inclusion through increased workforce
participation
[61] AI Group submits that the Proposed Variations are self-evidently not inconsistent with
promoting social inclusion through increased workforce participation and may increase
workforce participation as the existing uncertainties, risks and employment costs associated
with the Compounding Basis may deter employers from engaging casual employees. It
submits that that s.134(1)(c) of the Act supports the grant of the current application.104
Section 134(1)(d) – the need to promote flexible work practices and the efficient and
productive performance of work
[62] AI Group submits that the uncertainty of the Relevant Clauses, coupled with the
decision in Domain Aged Care are apt to deter employers from engaging casual employees to
work overtime, weekends and public holidays. It submits that to the extent that this results in
inefficient allocation of labour, it is inconsistent with s.134(1)(d) of the Act. It submits that
the Proposed Variations are consistent with s.134(1)(d).105
Section 134(1)(da) – the need to provide additional remuneration for employees working
overtime, unsocial, irregular or unpredictable hours, weekends, public holidays and shifts
[63] AI Group submits that the Proposed Variations are clearly not inconsistent with
s.134(1)(da) of the Act. Further, AI Group submits that the need to provide additional
remuneration is satisfied by the Cumulative Basis. Finally, pursuant to the Full Bench
decision in 4 yearly review of modern awards – Penalty Rates106 s.134(1)(da) is not a
statutory directive for including additional rates of pay in an award for work performed in the
described circumstances. It submits that s.134(1)(da) is a neutral consideration.107
Section 134(1)(e) – the principle of equal remuneration for work of equal or comparable
value
[64] AI Group relies upon the comments of the Full Bench in 4 yearly review of modern
awards – Penalty Rates108 at paragraph [204] – [207] of that decision as to the construction of
s.134(1)(e) of the Act. It submits that s.134(1)(e) is a neutral consideration.109
Section 134(1)(f) – the likely impact of any exercise of modern award powers on business
including on productivity, employment costs and the regulatory burden
[65] AI Group submits that the grant of the application would have a positive impact on
business. It submits it would result in reduced employer costs, lower the BOOT threshold,
provide greater certainty as to the entitlements under the Nurses Award, reduce regulatory
burden by clarifying entitlements and enable employers to access the flexibility afforded by
104 AI Group Submissions at [203]-[207]
105 AI Group Submissions at [210]
106 [2017] FWCFB 1001
107 AI Group Submissions at [211]-[214]
108 [2017] FWCFB 1001
109 AI Group Submissions at [215]-[216]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
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casual employment without incurring the higher costs associated with the Compounding
Basis. It submits that these effects would be particularly pronounced for small business
employers. It submits that s.134(1)(f) of the Act supports the current application.110
Section 134(1)(g) – the need to ensure a simple, easy to understand, stable and sustainable
modern award system for Australia that avoids unnecessary overlap of modern awards
[66] AI Group submits that the Proposed Variations are clearly supported by s.134(1)(g) of
the Act. It submits that the Relevant Clauses are ambiguous and uncertain and that the
“controversy” concerning the proper interpretation of those clauses renders them neither
simple nor easy to understand. It submits that the Proposed Variations would make the
operation of the Relevant Provisions plain. Further, the Proposed Variations are consistent
with a need to ensure a stable and sustainable modern award system as they are consistent
with the AIRC’s stated intention and longstanding industry practice. It submits that
s.134(1)(g) supports the current application.111
Section 134(1)(h) – the likely impact of any exercise of modern award powers on employment
growth, inflation and the sustainability, performance and competitiveness of the national
economy
[67] AI Group submits that although the likely impact is difficult to assess, the application
is unlikely to have a negative impact on employment growth, inflation and the sustainability,
performance and competitiveness of the national economy and in light of it submissions in
relation to s.134(1)(b), (c), (d), (f) and (g), may in fact have a positive impact.112
ANMF Submissions – fair and relevant minimum safety net
[68] In relation to the Fairness Submissions and the Relevant Submissions the ANMF
submits that:
there are no uncertainties and ambiguities and if there are, they ought be addressed
by s.160 of the Act;
employers who comply with the law are not exposed to claims or litigation;
there is no evidence of a “longstanding industry practice”;
there was no “clear intent” of the AIRC;
as there was no “clear intent” there can be no windfall gain;
no evidence has been led to demonstrate that employers are deterred from engaging
casual employees to perform overtime or work on weekends and public holidays.113
110 AI Group Submissions at [217]-[219]
111 AI Group Submissions at [220]-[222]
112 AI Group Submissions at [223]
113 ANMF Submissions in Reply at [99(a) – (g)]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
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ANMF section 134(1) submissions
[69] In relation to the considerations set out in s.134(1) of the Act, the ANMF submits as
follows.
Section 134(1)(a) – relative living standards and the needs of the low paid
[70] The ANMF submits that the Full Bench in Health Sector Awards – Pandemic Leave114
proceeded on the basis that the aged care sector, which employs employees covered by a
number of awards including the Nurses Award, employs a significant number of low-paid
employees. It submits that lower paid employees are more likely to be engaged as casual
employees and disputes the submission that the Proposed Variations would not have material
impact on the relative living standards or needs of the low paid. It submits that s.134(1)(a)
weighs against the grant of the application.115
Section 134(1)(b) – the need to encourage collective bargaining
[71] The ANMF submits that AI Group has shown little evidence that the interpretation of
the Relevant Clauses in Domain Aged Care may deter employers from engaging in collective
bargaining and that the agreement referred to in AI Group’s submissions demonstrate that
employers are willing to participate in collective bargaining. Further, it submits that a range of
agreements provided for casual employees to be paid using the Compounding Basis after the
Nurses Award came into operation but before the decision in Domain Aged Care. It submits
that s.134(1)(b) of the Act does not support the current application.116
Section 134(1)(c) – the need to promote social inclusion through increased workforce
participation
[72] The ANMF submits that AI Group has led no evidence to suggest that the Proposed
Variations will increase workforce participation. Further, it submits that even if the Proposed
Variations result in the employment of more casuals, this would be in substitution for existing
part-time employees as the Nurses Award already allows part-time employees to work
additional hours without overtime necessarily being paid. It submits that s.134(1)(c) of the
Act is a neutral consideration.117
Section 134(1)(d) – the need to promote flexible work practices and the efficient and
productive performance of work
[73] The ANMF submits that there is no uncertainty in relation to the Relevant Clauses. It
submits that the decision in Domain Aged Care provides absolute certainty as to how the
Relevant Clauses are to be interpreted. It submits that AI Group has not demonstrated that the
criteria in s.134(1)(d) of the Act has been met.118
114 ANMF Submissions in Reply at [102]
115 ANMF Submissions in Reply at [101]-[109]
116 ANMF Submissions in Reply at [110]-[113]
117 ANMF Submissions in Reply at [114]-[116]
118 ANMF Submissions in Reply at [117]-[118]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
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Section 134(1)(da) – the need to provide additional remuneration for employees working
overtime, unsocial, irregular or unpredictable hours, weekends, public holidays and shifts
[74] The ANMF accepts that section 134(1)(da) is not a statutory directive for including
additional rates of pay in an award for work performed in the described circumstances.
However, it submits that casual employees, who it submits are engaged in insecure work
encompassed by the criteria in s.134(1)(da) of the Act, would be negatively impacted by the
Proposed Variations and this reduction in remuneration must be considered. Further, it
submits that AI Group have not demonstrated that payment on the Cumulative Basis is
mandated by the Act and that a number of awards use the Compounding Basis. It submits that
s.134(1)(da) weighs against the current application.119
Section 134(1)(e) – the principle of equal remuneration for work of equal or comparable
value
[75] The ANMF submits that any reduction in remuneration will have a significant
disproportionate effect on women. It relies upon 2018 workforce data, which it submits shows
that 89% of employed registered nurses, enrolled nurses and midwives are female. It submits
that s.134(1)(e) of the Act weighs against the current application.120
Section 134(1)(f) – the likely impact of any exercise of modern award powers on business
including on productivity, employment costs and the regulatory burden
[76] The ANMF submits that there is no uncertainty in the Relevant Clauses. As such the
Proposed Variation would not reduce regulatory burden. It submits that employers are
required to comply with the Nurses Award irrespective of whether the current application is
successful. It submits that s.134(1)(f) of the Act is a neutral consideration.121
Section 134(1)(g) – the need to ensure a simple, easy to understand, stable and sustainable
modern award system for Australia that avoids unnecessary overlap of modern awards
[77] The ANMF submits that AI Group have not demonstrated how the Proposed
Variations make the operation of the Relevant Provisions plain. It submits that s.134(1)(g) of
the Act weighs against the current application.122
Section 134(1)(h) – the likely impact of any exercise of modern award powers on employment
growth, inflation and the sustainability, performance and competitiveness of the national
economy
[78] The ANMF submits this is a neutral consideration.123
Consideration
119 ANMF Submissions in Reply at [119]-[122]
120 ANMF Submissions in Reply at [123]-[124]
121 ANMF Submissions in Reply at [125]-[128]
122 ANMF Submissions in Reply at [129]-[130]
123 ANMF Submissions in Reply at [131]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-reply-anmf-310720.pdf
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[79] We have carefully considered each of the submissions made by the parties in this
matter in relation to each of the matters we are required to take into account under s.134(1) of
the Act. However, we do not consider it necessary to address each submission in detail in this
decision, as we consider that they may be adequately addressed by the following three
comments. Firstly, AI Group’s submissions are largely unsupported by evidence. AI Group
submits that evidence was not required as its primary contention is one of industrial merit124
and to a large extent does not rest upon factual propositions.125 We reject that submission and
consider the absence of evidence to be fatal to AI Group’s case. In support of its contention
that pursuant to s.157 a determination varying the Nurses Award is necessary to achieve the
modern awards objectives, AI Group advance a number of submissions which, contrary to its
submission, contain factual propositions. This is the case in relation to the AI Group’s
submissions as to s.134(1)(a), (b), (c), (d) and (f), the Relevant Submissions and, in part, the
Fairness Submissions. In the absence of evidence by AI Group to support its submissions as
to these matters we do not consider there is any proper basis upon which those submissions
(which are contested) may be accepted. Accordingly, those submissions must fail. Secondly,
AI Group’s submissions as to s.134(1)(b), (c), (d), (f) and (g) and, in part, the Fairness
Submissions, are founded, either in whole or in part, on an assertion that the Relevant Clauses
are ambiguous or uncertain and subject to controversy. For the reasons set out earlier in this
decision, we reject that there is any such ambiguity, uncertainty or controversy. Accordingly,
those submissions are rejected. Thirdly, AI Group’s submissions in relation to s.134(1)(g)
and, in part, the Fairness Submissions are premised on the asserted intent of the AIRC award
modernisation Full Bench.126 We have earlier rejected that there was any such intent
demonstrated by the AIRC award modernisation Full Bench and, therefore these submissions
are also rejected.
[80] Accordingly, for the reasons set out above and on the material currently before the
Commission, we are not satisfied that the Proposed Variations are necessary to achieve the
modern awards objective.
Disposition
[81] We have found that the Relevant Clauses are not ambiguous or uncertain nor do they
contain an error for the purposes of s.160 of the Act. We therefore decline to make a
determination varying the Nurses Award as sought in the Proposed Variations. We have also
found that the Proposed Variations are not necessary to achieve the modern awards objectives
pursuant to s.157. Accordingly, we also decline to make a determination varying the Nurses
Award as sought in the Proposed Variations pursuant to s.157.
[82] The application is therefore dismissed.
124 Transcript PN215, AI Group Reply Submissions [96] and [99]
125 AI Group Reply Submissions at [99]
126 See AI Group Submissions at [164], [168], [170]
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-090620.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am20201-sub-aig-290920.pdf
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DEPUTY PRESIDENT
Appearances:
B Ferguson for AI Group
K Wischer for the ANMF
Hearing details:
2020.
Melbourne (via Microsoft Teams):
20 October.
Printed by authority of the Commonwealth Government Printer
PR726094
AIR WORK THE CON ISSION SEAL OF TI
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Annexure A
DRAFT DETERMINATION
Fair Work Act 2009
s.158 – Application to vary a modern award
Australian Industry Group, The
(AM2020/1)
NURSES AWARD 2010
[MA000034]
DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, [DATE]
Nurses Award 2010 – casual loading – weekend penalty rates – overtime rates.
A. Further to the decision issued on [date], it is ordered that the Nurses Award 2010 be
varied by:
1. Deleting clause 10.4(b) and inserting in lieu:
(b) A casual employee will be paid an hourly rate equal to 1/38th of the minimum
weekly rate prescribed by this Award, appropriate to the employee’s classification,
plus a casual loading of 25% of that hourly rate.
2. Deleting clause 10.4(d) and inserting in lieu:
(d) Where a loading or a specified rate is payable to a casual employee for work
performed during a shift, a weekend, a public holiday or overtime; it must be
calculated on 1/38th of the minimum weekly rate prescribed by this Award. The 25%
casual loading prescribed by clause 10.4(b) must be added to the rates payable during
a shift, on a weekend, on a public holiday and during overtime.
3. By inserting a new clause 26.3:
26.3 The amount payable to a casual employee under clause 26 must be calculated in
accordance with clause 10.4(d).
4. By inserting a new clause 28.1(e):
(e) Casual employees
The amount payable to a casual employee under clause 28 must be calculated
in accordance with clause 10.4(d).
5. By inserting a new clause 32.1(c):
AUSTRALIA FairWork Commission
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(c) The amount payable to a casual employee under clause 32.1 must be calculated
in accordance with clause 10.4(d).
B. This determination comes into operation on 1 January 2010.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
Price code A
