1
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Australian Workers' Union
(AM2020/104)
HORTICULTURE AWARD 2020
[MA000028]
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT CATANZARITI
COMMISSIONER RIORDAN MELBOURNE, 1 FEBRUARY 2022
Horticulture Award 2020 – application to vary an award – piece rates –minimum hourly rate.
1. Background
[1] On 15 December 2020, the Australian Workers’ Union (AWU) made an Application to
vary cl.15.2 of the Horticulture Award 2020 (the Horticulture Award or the Award),1 which
deals with piece rates (the Application).
[2] In a decision2 published on 3 November 2021 (the November 2021 Decision) we dealt
with the Application and decided to vary the Horticulture Award to insert a minimum wage
floor with consequential time recording provisions in cl.15.2. We were satisfied that such a
variation was justified by work value reasons and was necessary to achieve the modern awards
objective. We also expressed the provisional view that it is necessary to vary the Horticulture
Award in the terms set out in the draft determination attached to that decision.
[3] We made the following directions to provide interested parties with an opportunity to
comment on the proposed draft variation determination and the provisional view:
‘1. Submissions in response to the proposed draft variation determination and our
provisional view should be filed by no later than 4.00pm on Friday 26
November 2021.
2. Submissions in reply are to be filed by no later than 4.00pm on Friday 10
December 2021.
3. Any request for an oral hearing is to be made by no later than 4.00pm on
Monday 13 December 2021. Absent a specific request for an oral hearing, the
1 Horticulture Award 2020, MA000028.
2 [2021] FWCFB 5554.
[2022] FWCFB 4
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-application-awu-151220.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-application-awu-151220.pdf
[2022] FWCFB 4
2
matter will be determined on the papers. If a hearing is required, it will be held
at 9:30am on Thursday 16 December 2021.
4. If no submissions are filed opposing our provisional view, we will issue a
variation determination in the same terms as the draft determination.’
[4] In response to the directions, the following submissions were received:
Agribit Software
Australian Catholic Migrant and Refugee Office
Australian Catholic Religious Against Trafficking in Humans (ACRATH)
Australian Fresh Produce Alliance (AFPA)
Australian Industry Group (Ai Group)
Australian Workers’ Union (AWU)
Blueberry Fields
Citrus Australia
Citrus SA
Dermark Pty Ltd
F Battistel
Fruit Growers Tasmania (FGT)
Fruit Growers Victoria (FGV)
Grandview Orchards
Greater Shepparton City Council
Growcom
Gunnible Pastoral Company
H.W.Pogue & Co.
Industrial Committee of FGV (Fruit Growers Victoria) and CDFGA (Cobram and
District Fruit Growers Association)
Luscious Citrus Pty Ltd
National Farmers Federation (NFF)
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-np-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-acmro-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-acrath-181121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-afpa-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-aig-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-awu-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-blueberryfields-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-ca-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-citrussa-251121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-dermark-251121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-fb-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-fgt-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-fgv-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-gvo-251121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-gscc-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-growcom-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-gunnible-221121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-hwpc-241121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-icfgv-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-icfgv-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-lc-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-nff-261121.pdf
[2022] FWCFB 4
3
Northern Victorian Fresh Tomato Growers Association
NSW Cherry Growers Association
NSW Farmers (Industrial) Association (NSWFA)
PFT Agriculture
Roths Citrus
Sunny Ridge
Sutton Farms
United Workers' Union (UWU)
[5] The following submissions in reply were also received:
88 Days and Counting
Ai Group
AWU
UWU
Fruit Growers Tasmania
NFF
NSW Farmers (Industrial) Association
[6] There were no requests for an oral hearing. Accordingly, we will proceed to determine
the matter on the papers.
[7] A summary of submissions was prepared by Commission staff and attached to our
Statement of 16 December 2021.3 Interested parties were invited to comment on the accuracy
of the summary of submissions, by 4 pm on Thursday 20 January 2022.4 Comments were
received from:
AWU, and
FGT.
[8] The AWU noted there is a typographical error at [58] of the summary of submissions.
The FGT submission seeks to clarify their submissions as summarised at [25] and [29] of the
summary of submissions document. We have taken these submissions into consideration.
3 [2021] FWCFB 6070.
4 Ibid [4].
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-nvftga-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-nswcga-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-nswfa-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-ptfa-271121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-rc-251121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-sr-261121.pdf
https://www.fwc.gov.au/documents/awardmod/variations/2020/am2020104-sub-sf-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-uwu-261121.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-88dc-091221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-aig-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-awu-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-uwu-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-fgt-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-nff-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-nswfa-101221.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-awu-190122.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-sub-fgt-200122.pdf
[2022] FWCFB 4
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[9] In section 2 of this decision, we deal with a number of the issues raised in the
submissions and in section 3 we deal with proposed changes to the draft determination. In
section 4 we deal with the operative date of the variation determination.
2. Issues raised in Submissions
2.1 Reconsideration
[10] A number of the submissions from individual enterprises and some of the employer
parties contend that a minimum wage floor for piecework should not be inserted in the
Horticulture Award. In substance, these submissions ask that we reconsider our conclusion in
the November 2021 Decision.
[11] Those parties who contend we should not implement the November 2021 Decision did
not identify the source of the power to take the action proposed.
[12] Section 603 of the Fair Work Act 2009 (Cth) (the Act) sets out the Commission’s power
to vary or revoke decisions:
‘603 Varying and revoking the FWC’s decisions
(1) The FWC may vary or revoke a decision of the FWC that is made under this Act
(other than a decision referred to in subsection (3)).
Note: If the FWC makes a decision to make an instrument, the FWC may vary or revoke
the instrument under this subsection (see subsection 598(2)).
(2) The FWC may vary or revoke a decision under this section:
(a) on its own initiative; or
(b) on application by:
(i) a person who is affected by the decision; or
(ii) if the kind of decision is prescribed by the regulations—a person
prescribed by the regulations in relation to that kind of decision.
(3) The FWC must not vary or revoke any of the following decisions of the FWC under
this section:
(a) a decision under Part 2-3 (which deals with modern awards)
(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 2-4 (which deal
with enterprise agreements);
(c) a decision under Part 2-5 (which deals with workplace determinations);
(d) a decision under Part 2-6 (which deals with minimum wages);
[2022] FWCFB 4
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(e) a decision under Division 3 of Part 2-8 (which deals with transfer of
business);
(f) a decision under Division 8 of Part 3-3 (which deals with protected action
ballots);
(g) a decision under section 472 (which deals with partial work bans);
(h) a decision that is prescribed by the regulations.
Note: The FWC can vary or revoke decisions, and instruments made by decisions, under
other provisions of this Act (see, for example, sections 447 and 448).’
[13] Subsection 603(1) confers a discretion to vary or revoke ‘a decision of the FWC that is
made under this Act (other than a decision referred to in subsection (3))’. Paragraph 603(3)(a)
expressly excludes decisions under Part 2-3 of the Act. The November 2021 Decision is a
decision under Part 2-3 of the Act, it follows that s.603 does not provide a source of power to
vary or revoke that decision.
[14] By the enactment of s.603 the legislature may be said to have turned its mind to the
circumstances in which a Commission decision may be varied or revoked, accordingly, any
implied power to review or revoke a decision may be excluded. However, for the reasons which
follow, it is not necessary for us to determine whether there is an implied power to revoke a
decision and, if there is, the circumstances in which the power may be exercised.
[15] Those who contend that we should not implement the November 2021 Decision advance
a number of arguments in support of that proposition; in particular, that such a variation will
result in:
increased administrative and managerial burden and costs
labour shortages, loss of productive workers due to lack of incentive and a need to
lay off underperforming workers
disadvantage or discrimination towards underperforming workers, and/or
loss of global competitiveness in export markets.
[16] Many of the arguments now advanced were also put by the principal employer parties
in the earlier proceedings and were fully canvased in the November 2021 Decision. The
submissions now put challenge a number of the evidentiary findings in the November 2021
Decision; albeit not on the basis of any analysis of the evidence and without adducing any
further evidence.
[17] Two particular aspects of the November 2021 Decision are challenged. The first
concerns the extent to which a minimum wage floor will impact productivity. A number of
submissions assert that the introduction of a minimum wage floor will disincentivise
horticulture workers and productive workers will leave the industry. In particular, it is asserted
that:
[2022] FWCFB 4
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‘[a minimum wage floor] takes away incentive for working hard’5
‘we will lose our best workers who currently achieve well above the hourly rate’6
‘[a minimum wage floor] impacts the incentivisation of inexperienced pieceworkers
to improve quickly and to become productive’7
‘if anyone works hard then they can make seriously good money. There is incentive
to work. A floor price takes away that incentive.’8
‘the draft determination … will result in many employers no longer being able to
afford to offer pieceworker rates because they can’t pay hourly rates for unproductive
workers, or carry the extra administrative and supervisory burden required … our real
concern is that that we’ll see another exodus from horticulture of the most willing and
motivated workers’9
‘[a minimum wage floor] encourages laziness in employees who work at the average
piece rate, to reduce work efficiency and fall below the average knowing that they can
rely on getting the minimum casual rate’10
‘hourly rate could create workforce conflict, with more efficient workers becoming
frustrated by less efficient workers who aren’t pulling their weight in comparison, with
a reduced incentive for performing more efficiently … [and] penalises the capable
experienced picker to a lower rate of pay’11, and
‘by setting a minimum floor rate it will mean that less productive workers will not be
given employment opportunities. Quite simply, horticultural employers will not be
able to afford to employ them.’12
[18] These assertions are speculative and unsupported by any evidence. Similar arguments
were advanced in the earlier proceedings in which a number of the employer lay witnesses
expressed the opinion that introducing a minimum wage floor would both ‘demotivate
underperforming employees from lifting their performance and ‘disincentivise’ pieceworkers
currently earning more than the minimum award rate’.13
[19] In the November 2021 Decision we accepted the first assertion — at least in respect of
some underperforming employees; but noted that underperformance can be managed, for
example by setting proficiency targets. We did not accept the second assertion — noting a
consistent theme in the employer evidence that piecework is an attractive option for workers
because it provides an opportunity to earn substantially more than the minimum hourly rate:
5 Citrus SA submission dated 25 November 2021 p.1.
6 Blueberry Fields submission dated 26 November 2021.
7 Citrus Australia submission dated 26 November 2021 p.9.
8 Grandview Orchards submission dated 25 November 2021 p.1.
9 Growcom submission dated November 2021 p.6.
10 Luscious Citrus Pty Ltd submission p.1 .
11 NSW Cherry Growers Association submission dated 25 November 2021 p.1-3.
12 PFT Agriculture submission dated 27 November 2021 p.1.
13 November 2021 Decision [358].
[2022] FWCFB 4
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Mr King: piecework ‘is an effective way of attracting, motivating and retaining
workers as the piece rate rewards performance and has no ceiling on earnings’.14
Ms Reardon: piecework is used to ‘promote productivity’ as employees are
‘incentivised to work their fastest’.15
Mr McClintock: ‘Piece rates are used and favoured because they attract motivated
workers with a high rate of retention due to the high potential for earning when
compared to the ordinary hourly rate’.16
Ms Silverstein: ‘We also use piece rates because the worker benefits and it creates an
incentive for them to earn more money than on hourly rates.’17
Mr Gaeta: ‘Payment by piece rate is suitable to motivate workers to work efficiently
as their earning is dependent on their productivity’.18
Mr Han: ‘When harvest season ends we occasionally offer the best Pickers further
employment in the packing shed, where they will be paid hourly rates, but they
usually reject the offer because they know they can earn much better money going
to do harvest work on other farms earning piece rates.’19
[20] At [361] of the November 2021 Decision we concluded:
‘We accept that appropriately set pieceworker rates can provide an incentive for workers
to increase their output, as their earnings will increase. We are not persuaded that
introducing a minimum wage floor will ‘disincentivise’ pieceworkers currently earning
more than the minimum award rate. It seems to us that such an outcome is inherently
unlikely.’
[21] Nothing in the recent submissions persuades us to depart from that conclusion.
[22] A number of the recent submissions also challenge the finding in the November 2021
Decision in respect of non-compliance with cl.15.2.
[23] For example, Mr Battistel states:
‘I find it very disturbing that the report stated that there was widespread non-compliance
of the award which is not true. 99.99% of the farmers under the Horticulture Award pay
by the award and with piece rates, which is agreed by both parties prior to starting
depending on picking conditions with an average picker always well exceeding the
hourly rate, most the time it is the picker that decides the rate as the picker has the upper
14 Exhibit AFPA 2 [49].
15 Exhibit NFF 1 [34].
16 Exhibit NFF 4 [23].
17 Exhibit NFF 5 [33]
18 Exhibit NFF 7 [8]
19 Exhibit NFF 8 [34]
[2022] FWCFB 4
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hand due to severe picker shortages which has been the case over last 20 years and more
so since covid.’20
[24] Similarly, Growcom submits:
‘it is difficult to understand how the Full Bench consistent with this observation has
arrived at a finding that there is “widespread non-compliance with clause 15.2 of the
Horticulture Award” with sufficient confidence to warrant making the significant
changes to the Award requested by the AWU.
The language used in relation to employment conditions in the Australian horticulture
industry is important and unfortunately is becoming increasingly loose. Claims
unsupported by evidence of “widespread” underpayment or abuse of workers must be
questioned. Similar words like “rampant” and “endemic” are creeping into discourse
and used interchangeably. They are inaccurate and also harmful. At the very least, in its
final determination we ask the Full Bench to review its use of language and use words
that better reflect the evidence presented.’21
[25] The NSW Cherry Growers Association submits:
‘The cherry industry totally rejects the notion “that employers who obtain formal
‘piecework agreements’ with employees are few, and that the majority of employees
who are remunerated under piece rates do not have a piecework agreement in place”.’22
[26] Sunny Ridge submits:
‘The Summary of Decision complains that there is widespread non-compliance with
clause 15.2 of the Horticulture Award. There is no evidence to suggest that the larger
firms are guilty of exploitation. They are regularly subject to inspection and audit and
they cannot afford to cut corners. Sunny Ridge is one of the largest independent berry
growers in Australia with 330 hectares of farmland on the Mornington Peninsula and the
Yarra Valley in Victoria and the Sunshine Coast in Queensland, producing 4.2m kilos
of fruit with a revenue of just over $47m.
To the extent that there has been under payment it is not necessarily a conscious or
deliberate decision by growers, especially smaller ones, many of whom cannot afford
the luxury of seeking legal advice, which in any event could not be definitive. Workers
who earn well above the base rate by virtue of their productivity performance are by
definition not being exploited.’23
[27] It is convenient to note here that Sunny Ridge later submits:
20 Frank Battistel submission dated 26 November 2021 p.1.
21 Growcom submission dated November 2021 p.6.
22 NSW Cherry Growers Association submission dated 26 November 2021 p.2.
23 Sunny Ridge submission dated 25 November 2021 p.2.
[2022] FWCFB 4
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‘The decision to double the minimum rate on a public holiday is simply a gratuitous and
unnecessary impost, which will inevitably result in many growers being unable to afford to pick
their crops on these days.’24 [Emphasis added]
[28] This submission is directed at the note at cl.15.2(d) of the draft determination:
‘Note: A pieceworker is paid 200% of the piece rate for work on a public holiday (see
clause 27.3).’
[29] Sunny Ridge’s submission plainly proceeds on the erroneous assumption that the
November 2021 Decision increased the public holiday pieceworker rate. It did not. The note
simply reflects the terms of cl.27.3 of the Award, which states:
‘27.3 Public holiday rates—other than casual employees
All work performed on public holidays will be paid for at the rate of 200% of the
ordinary hourly rate or 200% of the piecework rate for a pieceworker.’
[30] Sunny Ridge’s submission demonstrates a lack of awareness of the existing award
obligations and flies in the face of its contention that large employers comply with their award
obligations and do not ‘cut corners’.
[31] In the November 2021 Decision we concluded that there was widespread non-
compliance with cl.15.2 of the Horticulture Award, in particular:
‘• many growers do not determine pieceworker rates in accordance with the method
prescribed by clause 15.2, as interpreted by the Federal Court in Hu (No.2)25 and the
Hu Appeal26;
pieceworker rates are set unilaterally by the grower and presented to the employee on
a ‘take or leave it’ basis, rather than being the product of any genuine negotiation
between the employer and employee;
pieceworker rates are adjusted unilaterally by the grower and adjustments are not the
subject of negotiation; and
pieceworkers are usually not provided with a written piecework agreement.’27
[32] The evidence supporting these findings is set out in section 4 of the November 2021
Decision.
[33] Nothing in the subsequent submissions persuades us to depart from our earlier finding.
24 Sunny Ridge submission dated 25 November 2021 p.3.
25 [2018] FCA 1034.
26 [2019] FCAFC 133.
27 [2021] FWCFB 5554 [362].
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2.2 Provision of trainee rates
[34] A number of the employer submissions advocate the introduction of a ‘trainee wage’.
For example, Citrus Australia advances an ‘alternate variation’:
‘The Commission found that it takes a pieceworker two weeks to become competent in a
role. Therefore, if an employee has no relevant experience, they should be started on a
trainee basis with a trainee wage (a proportion of the minimum wage) so that there is an
incentive to rapidly improve productivity.
If after a two-week period the trainee has not achieved the piece rate, they should have
options; to continue as a trainee on a trainee wage, or to sign a waiver acknowledging
that they are aware they do not meet the piece rate. At all times the trainee has free will
to leave the employer.’28
[35] The NSW Cherry Growers Association submits:
‘If a new worker cannot pick at a productive rate, i.e they cannot pick to the equivalent
hourly rate, then this should be reflected in terms of an apprentice type introductory rate
for the time period determined for each industry, until such time the employee is to be
deemed a competent worker.’29
[36] The AWU submits the proposal from Citrus Australia that a trainee wage rate be inserted
into the Horticulture Award is beyond the scope of the submissions sought by the Full Bench
in relation to the draft determination. Further it could not reasonably be dealt with as part of
the current proceedings as it would need to be justified by evidence and work value reasons.30
[37] No application has been lodged to vary the Horticulture Award to insert a trainee rate.
In the event such an application is lodged the observations in section 2: ‘The Legislative
Framework’, of the November 2021 Decision are apposite. In particular:31
‘Variations to modern awards must be justified on their merits. The extent of the merit
argument required will depend on the circumstances. Significant changes where merit
is reasonably contestable should be supported by an analysis of the relevant legislative
provisions and, where feasible, probative evidence.’
‘Additional considerations arise when the Commission is setting, varying or revoking
modern award minimum wages. Section 157(2) of the Act provides that the
Commission may make a determination varying modern award minimum wages if
satisfied that the variation is justified by work value reasons and making the
determination outside of the system of annual wage reviews is necessary to achieve
the modern awards objective. If the Commission is setting, varying or revoking
modern award minimum wages, the minimum wages objective set out in s.284 of the
Act also applies.
28 Citrus Australia submission dated 26 November 2021 p.9.
29 NSW Cherry Growers Association submission dated 25 November 2021 p.3.
30 AWU submission in reply, 10 December 2021 [6].
31 [2021] FWCFB 5554 [14] and [23]–[24].
[2022] FWCFB 4
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‘The term ‘modern award minimum wages’ is defined in s.284(3):
“Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern
awards, including:
(a) wage rates for junior employees, employees to whom training
arrangements apply and employees with a disability; and
(b) casual loadings; and
(c) piece rates.” ’ [Emphasis added]
[38] Further, it would have to be shown that the introduction of a trainee rate is necessary to
ensure that the Horticulture Award achieves the modern awards objective. In this respect it is
relevant to note that Level 1 in the Horticulture Award may be considered to be an introductory
or training rate and, if this is so, it is unlikely that insertion of a new ‘trainee rate’ would be
‘necessary’ within the meaning of s.138.
[39] A ‘Level 1 employee’ is one who:32
‘undertakes induction training which may include information on the enterprise,
conditions of employment, introduction to supervisors and fellow workers, training
and career opportunities, plant layout, work and documentation procedures, work
health and safety, equal employment opportunity and quality control/assurance;
performs routine duties essentially of a manual nature and to the level of their training;
exercises minimal judgment;
works under direct supervision;
is responsible for the quality of their own work; and
is a new employee; or is an existing employee performing work within this grade who
is undertaking training so as to enable advancement to Level 2. [Emphasis added]’
[40] Indicative duties of a Level 1 employee are:33
‘performing general labouring duties;
fruit or vegetable picking, thinning or pruning;
operating small towing tractor engaged in transfer of produce bins and other containers
during harvest;
32 Horticulture Award, sch.A cl.A.1.2.
33 Ibid, sch.A cl.A.1.3.
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performing a range of housekeeping tasks in premises and grounds;
sorting, packing or grading of produce where this requires the exercise of only minimal
judgment;
performing basic recording functions related to work performed at this level;
providing assistance within the scope of this level to other employees as required; and
undertaking structured training so as to enable advancement to Level 2.’ [Emphasis
added]
[41] We note that a number of awards which also include piece rates and a minimum wage
floor have a similar introductory or training Level 1 classification. These include:
Meat Industry Award 2020 at A.3.1
Silviculture Award 2020 at cl.12
Sugar Industry Award 2020 at A.2.1
Timber Industry Award 2020 at A.1.1
2.3 Matters outside jurisdiction
[42] A number of the recent submissions raise matters beyond the Commission’s jurisdiction.
For example, ACRATH submits that there is a need ‘for an outside body to ensure that workers’
rights are protected and exploitative practices addressed’.34 We note that the functions of the
Fair Work Ombudsman include to promote compliance with the Act and fair work instruments
(which include modern awards), including ‘by providing education, assistance and advice to
employees, employers … and organisations and producing best practice guides to workplace
relations or workplace practices.’35
[43] Citrus Australia expressed a preference for a national mandatory licensing scheme for
labour hire operators and increased resourcing of the Fair Work Ombudsman.
[44] Sutton Farms makes a similar submission in relation to monitoring and compliance:
‘The real solution is to remove the employers that do not comply with the current
regulations and make food safety, ethical sourcing and related management practices
and benchmarks mandatory, before a business can produce. Then these should be
monitored and policed properly and fully which is currently not happening while
businesses can continue to operate without a base level of compliance, auditing and
regulatory requirement to be adhered.’36
34 ACRATH submission dated 18 December 2021.
35 Act s.682.
36 Sutton Farms submission dated 26 November 2021 p.2.
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[45] It is not our role to comment on the appropriateness or otherwise of a national mandatory
licensing scheme for labour hire operators, or on the resourcing of the Fair Work Ombudsman.
These are matters for the Government.
[46] We do not propose to delay the operation of the determination varying the Horticulture
Award until a national mandatory licensing scheme for labour hire operators is in place as
suggested by Citrus Australia. We are also not persuaded by Citrus Australia’s submission that
we should delay implementation having regard to the resourcing of the Fair Work
Ombudsman.37 We deal with the date of operation in section 4 of this decision.
2.4 Procedural fairness
[47] Sunny Ridge appear to raise an issue of procedural fairness, it submits that:
‘This momentous decision was taken without any notice to, or consultation with, major
independent growers, including Sunny Ridge, who knew nothing about the issue of
proceedings, let alone the extensive hearings involved and the nature of the evidence
adduced. Thus a significant number of growers who are heavily impacted by the
additional cost burden have had no opportunity to put the salient facts before the
Commission.’38
[48] There is no doubt that the Commission is bound to ‘act judicially’, which includes an
obligation to afford parties procedural fairness. But the application and content of the doctrine
of procedural fairness is determined by the context. As Mason J observed in Kioa v West:
‘What is appropriate in terms of natural justice depends on the circumstances of the case
and they will include, inter alia, the nature of the inquiry, the subject matter, and the
rules under which the decision - maker is acting.’39
[49] Relevantly, s.577(a) and (b) provide that the Commission must perform its functions
and exercise its powers in a manner that:
‘(a) is fair and just; and
(b) is quick, informal, and avoids unnecessary technicalities’.
[50] The key contextual considerations in the matter before us are:
the statutory framework
the active involvement of a number of employer associations and individual
employers, and
the Application was made in December 2020 and since that time all material has been
publicly available.
37 Citrus Australia submission dated 26 November 2021 p.3
38 Sunny Ridge submission dated 26 November 2021 p.4.
39 (1985) 159 CLR 550 [32]
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[51] The Application was made on 16 December 2020 and published on the Commission’s
website on the same day. A dedicated webpage was established for the publication of all
relevant material relating to the Application. Following this:
Directions were issued on 18 December 2020 inviting any party opposing the
Application to file submissions and evidence by 14 May 2021. The directions also set
out a date for the hearing of the Application.
Amended directions were issued on 5 March 2021.
Submissions and evidence opposing the Application were filed by a number of
employer associations as well as by individual businesses40
Hearings took place on 13, 15, 16, 20 and 30 July 2021.
[52] In accordance with the Commission’s usual practice, the modern awards subscription
service was used to notify all subscribers to the Horticulture Award each time a new document
was added to the dedicated website.
[53] In these circumstances we are satisfied that we have met our obligation to afford
procedural fairness to those affected by the Application.
2.5 Breaks
[54] A number of the individual employers and employer organisations raised a concern
about a loss of flexibility in employee breaks.41. Lucious Citrus Pty Ltd submits that the
variation to the piece rate provisions:
‘removes the flexibility of persons on the piece rate who wish to take extra breaks
throughout the day and earn less than the award.’42
[55] Breaks are provided for in cl.14 of the Horticulture Award:
‘14. Breaks
14.1 Meal break
(a) A meal break of not less than 30 minutes and not more than one hour will be
allowed each day, to be taken not later than 5 hours after commencing ordinary
hours of work. Provided that where there is agreement between the employer
and an individual employee, the meal break may be taken at a time agreed.
(b) All work performed on the instruction of the employer during a recognised meal
break will be paid for at 200% of the appropriate ordinary hourly rate. Such
40 See November 2021 Decision [6] for a list of submissions and evidence.
41 Frank Battistel submission dated 26 November 2021 p. 2, Sutton Farms submission dated 26 November 2021 p.3,
Industrial Committee (Representatives of Fruit Growers Victoria and Cobram and District Fruit Growers Association)
p.3, Lucious Citrus Pty Ltd submission dated 26 November 2021 p.2.
42 Lucious Citrus Pty Ltd submission dated 26 November 2021 p.1.
https://www.fwc.gov.au/awards-and-agreements/awards/award-modernisation/variation-applications/AM2020/104?type=variation
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am2020104-dir-181220.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2021fwc1213.htm
[2022] FWCFB 4
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payment will continue until the employee is released for a meal break of not less
than 30 minutes.
14.2 Rest break
(a) Employees will be allowed a paid rest break of 10 minutes each day or shift.
(b) Where agreement is reached between the employer and employee for an
additional rest break, such rest break will be unpaid and in addition to the
employee’s ordinary hours of work.
14.3 10 hour break after ceasing work for the day
(a) An employee is entitled to a break of 10 hours between finishing work on one
day and commencing work on the next day or shift.
(b) Overtime rates will be paid in accordance with clause 21—Overtime for work
required to be performed where an employee has not had the 10 hour break until
such time as the employee is released and able to take the 10 hour break.’
[56] Cl.14 provides flexibility for an employer and an employee to agree on the timing of
both the meal break and the rest break. Cl.14.2(b) also provides the flexibility for an employer
and employee to agree to an additional rest break. The variation to cl.15.2 does not change the
operation of the existing breaks provisions in the Horticulture Award.
3. Amendments to the Draft Variation Determination
[57] We propose to make a number of amendments to the draft determination. These are
discussed below.
3.1 Amendment to draft cl.15.2(a)(i) (definition of hourly rate for pieceworker)
3.1.1 Application of the casual loading
[58] Clause 15.2(a)(i) of the draft determination provides that the expression ‘the hourly rate
for the pieceworker’ in cl.15.2 means:
the minimum hourly rate for the pieceworker’s classification level plus the 25% casual
loading under clause 11.3 for a casual pieceworker
[59] The AFPA submits that draft cl.15.2(a)(i) could be read as requiring the 25% casual
loading to be paid to all pieceworkers and submits the clause should be amended as follows:
hourly rate for the pieceworker means the minimum hourly rate for the
pieceworker’s classification level plus, in the case of a casual pieceworker, the 25%
casual loading under clause 11.3 for a casual pieceworker;43
43 AFPA submission dated 26 November 2021 [21]–[22].
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[60] The Ai Group submits that draft cl.15.2(a)(i) should be amended by inserting ‘under this
Award’ after ‘the minimum hourly rate for the pieceworker’s classification level’, so as to
confirm that this rate does not incorporate over-award rates paid pursuant to contract.44
[61] The AWU submits the proposed amendments are unnecessary.45
[62] We consider the confirmation suggested by the Ai Group unnecessary, as awards do not
regulate over-award payments generally and it is clear that the ‘minimum hourly rate’ for an
employee’s classification is specified in cl.15.1 of the Award. However, the drafting of
cl.15.2(a)(i) can be made clearer. We will amend the draft determination to the effect proposed
by AFPA, as marked-up below. We will also amend the heading of draft cl.15.2 to reflect cl.2
of the draft determination:
‘15.2 Pieceworker rates
(a) In clause 15.2:
(i) hourly rate for the pieceworker means the minimum hourly rate for
the pieceworker’s classification level plus for a casual pieceworker the
25% casual loading under clause 11.3 for a casual pieceworker;’
3.1.2 Junior rates
[63] Clause 15.3 of the Horticulture Award prescribes rates for junior employees. The
NSWFA submits that while it may be self-evident cl.15.3 should be taken into account when
determining the hourly rate for the pieceworker who is a junior, for the purposes of clarity, an
explanatory note should be inserted after cl.15.2(a)(i).46
[64] The AWU does not dispute that the wage floor for a junior employee is determined by
reference to the percentages in cl.15.3 and does not oppose adding a note in the following terms
after draft cl.15.2(a)(i):
‘NOTE: Clause 15.3 contains percentages used to calculate the minimum hourly rate for
junior employees.’47
[65] There is some merit in drawing attention to the junior rates clause, although we think a
note to that effect can be worded more simply than proposed by the AWU. A new note is
marked-up under cl.15.2(a)(i) in Attachment 1.
3.2 Amendment to draft cl.15.2(a)(iii) (definition of competent pieceworker)
[66] Draft cl.15.2(a)(iii) defines a ‘pieceworker competent at the pieceworker task’ to mean:
‘a pieceworker who has at least 2 weeks’ experience performing the task (for example,
picking apples, picking strawberries or pruning grape vines);’
44 Ai Group submission dated 26 November 2021 [4]–[6].
45 AWU submission in reply dated 10 December 2021 [41] and [43].
46 NSWFA submission dated 26 November 2021 [5]-[7].
47 AWU submission in reply dated 10 December 2021 [9]-[10].
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[67] The AFPA submits that to accommodate part-time and irregular rosters the experience
required for competency should be expressed in hours, and cl.15.2(a)(iii) amended as follows:
‘pieceworker competent at the piecework task means a pieceworker who has at least
76 hours2 weeks’ experience performing the task (for example, picking apples, picking
strawberries or pruning grape vines);’48
[68] The AWU does not oppose the proposed amendment49 and it is supported by FGT.50
[69] The proposed amendment provides greater certainty and we will amend the draft
determination as proposed by the AFPA. The amendment is marked-up in Attachment 1.
[70] The NFF proposes an additional amendment to cl.15.2(a)(iii) to require the experience
performing a task that counts toward competency to be confined to experience ‘with the
employer’s enterprise’.51 A similar proposal is made by both FGT and NSWFA.52 FGT
proposes the following amendment:
‘pieceworker competent at the piecework task means a pieceworker who has at least 76
hours’ experience with their current employer performing the task (for example, picking
apples, picking strawberries or pruning grape vines);’53
[71] NSWFA submits that such a variation would ‘simplify the verification process and
acknowledge that nature of operations differ from farm to farm’.54 Some of the submissions
from individual employers also raise the question of how an employee will prove their
competence.55
[72] The AWU does not consider the amendments to cl.15.2(a)(iii) proposed by the NFF and
NSWFA to be necessary. The AWU submits that an employer will ‘logically draw upon
experience from their own farm to set a rate that would enable a pieceworker with 2 weeks (or
76 hours’) of experience performing the task to earn the 15% uplift.’ The AWU further submits
that if ‘there is no relevant experience, they will need to estimate the productivity of an
employee with that level of experience.’56
[73] The additional amendment is opposed by 88 Days and Counting, which submits that it
does not adequately set a time limit for developing the competency of a pieceworker and further
that is fails to take into account past experience picking and pruning similar fruit and
vegetables.57 88 Days and Counting further submits that:
48 AFPA submission dated 26 November 2021 [9]–[10].
49 AWU submission in reply dated 10 December 2021 [11]–[12].
50 FGT submission in reply dated 10 December 2021 [7]-[8].
51 NFF submission dated 26 November 2021 [19]–[20]. A similar amendment is proposed by the New South Wales Farmers
(Industrial) Association submission dated 26 November 2021 [14]–[16].
52 NSWFA submission dated 26 November 2021 [14]-[16].
53 FGT submission dated 26 November 2021 [6]–[8].
54 NSWFA submission dated 26 November 2021 [16].
55 Frank Battistel submission dated 26 November 2021 p.2
56 AWU submission in reply, 10 December 2021, 36.
57 88 Days and Counting submission in reply dated 9 December 2021 p.1.
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‘We also know from documents tendered to the FWC that individual fruit harvest seasons
can be as short as 2 weeks (Greater Shepparton City Council, 2021). This is why we
believe this proposed change by the NFF will create a loophole for farmers to continue
exploiting piece workers meaning the chronic underpayment of these workers will
continue.’58
[74] We accept that cl.15.2(a)(iii) leaves open the question of how the competence of a
pieceworker is to be established, but we are not attracted to an amendment along the lines
proposed by the NFF, FGT and NSWFA. We agree with 88 Days and Counting that such an
amendment could result in employers failing to recognise the competence of pieceworkers.
[75] We note that draft cl.15.2(j) requires the employer to keep as employee records:
a copy of each piecework record given to the pieceworker (cl.15.2(j)(i)), and
a record of all hours worked by the pieceworker and the applicable piece rate at the
time those hours were worked (cl.15.2(j)(ii)).
[76] The combination of the written piecework records already given to a pieceworker by the
employer and the record the employer is required to keep of hours worked and the applicable
piece rate for those hours, should suffice to establish the relevant experience of a pieceworker
to a subsequent employer. We also consider that it will not impose a significant additional
burden on employers to require them to provide a copy of record kept pursuant to cl.15.2(j)(ii)
upon the request of a pieceworker or former pieceworker of the employer. We will add to draft
cl.15.2 a new cl.15.2(k) to that effect. We will also add a note under cl.15.2(a)(iii) indicating
that these records can be produced by pieceworkers as evidence of their competence.
3.3 Amendments to draft cl.15.2(d) (piece rate)—specification of uplift and mechanism
for setting and reviewing rates
[77] Draft cl.15.2(d) provides:
‘The employer must fix the piece rate at a level which enables a pieceworker competent
at the piecework task to earn at least 15% more per hour than the hourly rate for the
pieceworker.’
[78] The AFPA submits that while draft cl.15.2 has eliminated the subjective elements
involved in the notions of ‘competent employee’ and ‘average competent employee’ in existing
cl.15.2(b), there are 2 problems with the current draft:
it requires the employer to set the piece rate so as to enable every competent employee
to earn the 15% uplift, and
it does not fix what the AFPA characterises as the ‘compliance and enforcement trap’
with the existing clause, because it prescribes no objective mechanism for calculating
and fixing the piece rate.59
58 88 Days and Counting submission in reply dated 9 December 2021 p.1–2.
59 AFPA submission dated 26 November 2021 [4]–[13].
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[79] The NFF raises a concern similar to the first point above and also submits that the draft
clause could be read to mean that the piece rate has to be set so that:
‘Each individual employee (with more than 2 weeks experience) is able to earn 15%
more than the applicable hourly rate, so that each employee should have their own
piece rate;
Any employee (with more than 2 weeks experience) is able to earn 15% more than the
applicable hourly rate, so that the entire workforce has a piece rate set to the pick rate
of just one (e.g. the fastest and most productive) worker; or
Every employee (with more than 2 weeks’ experience) is able to earn 15% more than
the applicable hourly rate, so that the entire workforce has a piece rate set to the
picking rate of the slowest and least productive worker.’
[80] The NFF submits this should be addressed by retaining the approach in the existing
cl.15.2(b) of pegging the piece rate to the performance of the average pieceworker competent
at the piecework task, or alternatively to set the piece rate on the basis of the mean picking rate
of all competent pieceworkers.60 The NFF’s proposed amendment to cl.15.2(d) is set out below:
‘The employer must fix the piece rate at a level which enables an average pieceworker
who is performing the piece rate task and who is a pieceworker competent at the
piecework task to earn at least 15% more per hour than the hourly rate for the
pieceworker.’
[81] The AFPA’s proposal is along the same lines as the alternative suggested by the NFF,
however, it sets out a methodology for calculating the piece rate. The AFPA notes that the new
requirements under the draft cl.15.2(j) to keep time records would enable the employer to
calculate average productivity. Accordingly, the AFPA submits that draft cl.15.2(d) should be
amended as follows:
‘The employer must fix the piece rate at a level which enables a pieceworker competent
at the piecework task to earn at least 15% more per hour than the hourly rate for the
pieceworker. To do so:
(i) The employer must determine whether the piece rate enables a pieceworker
competent at the piecework task to earn the minimum amount required by this
clause by reference to the average productivity of its pieceworkers competent at
the piecework task during the previous pay period.
(ii) If the piecework task was not performed during the previous pay period or if no
pieceworkers competent at the piecework task performed the task during the
previous pay period, the employer must determine whether the piece rate enables
a pieceworker competent at the piecework task to earn the minimum amount
required by this clause by reference to a reasonable pre-estimate of the average
productivity of pieceworkers competent at the piecework task.
60 NFF submission dated 26 November 2021 [21]–[24].
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(iii) The employer must review its piece rates at the end of every pay period and
adjust them if necessary to achieve the minimum piece rate required by this
clause.’61
[82] FGT raises similar concerns to the AFPA and NFF and submits that c.15.2(d) is open to
multiple interpretations based on:
‘whether the intent is that piecework rates are to be set individually or collectively
across all pieceworkers competent at the piecework task
the process by which a piecework rate is to be determined to ‘enable’ a pieceworker
to attain the ‘Uplift’
the nature of worker selection to test whether a particular piecework rate is compliant
with this clause for the basis of adjustment or enforcement.’62
[83] FGT proposes adding the following definitions to cl.15.2(a):
‘(v) The average hourly rate of an individual pieceworker competent at the
piecework task for the payment period means the calculated value of adding all
payments made to the pieceworker over the payment period using piece rates, and
dividing this by the total hours worked by the pieceworker for the payment period in
pieceworker tasks.
(vi) The average hourly rate of all pieceworkers competent at the piecework task for the
payment period means the calculated value of:
• adding the average hourly rates of all individual pieceworkers competent at the
piecework task for the payment period; and
• dividing this by the number of pieceworkers competent at the piecework task
for the payment period.
NOTE: For the purposes of the above calculation, the average hourly earnings of any
pieceworker competent at the piecework task can be no less than the hourly rate for the
pieceworker as defined in clause 15.2(a)(i), as the employer is required to pay a
pieceworker no less than this rate under clause 15.2(f).’
[84] FGT further submits that cl.15.2(d) should be amended as follows:
‘The employer must fix the piece rate at a level which ensures that the average hourly rate
of all pieceworkers competent at the piecework task for the payment period is at least
15% more than the hourly rate for the pieceworker.’
[85] FGT submits that these proposed amendments would better meet the Commission’s
stated aims at [561] of the November 2021 Decision.
61 AFPA submission dated 26 November 2021 [14]–[16].
62 FGT submission dated 26 November 2021 [29].
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[86] Comments were also received from horticulture employers in relation to the benchmarks
set by the draft determination. Sunny Ridge submits that the draft determination fails to define
the ‘average competent worker’ or provide a formula for easily and clearly identifying the
same.63 Growcom submits that there needs to be greater guidance in the final determination as
to how piecework rates are calculated and set and states that the employee or cohort of
employees to be used as a reasonable benchmark of productivity requires clarification.64
[87] The AWU opposes the proposals of both the NFF and the AFPA for reasons that include:
the changes would potentially result in around half of pieceworkers competent at the
piecework task not receiving the 15% uplift65
draft cl.15.2(d) requires the employer to set the piece rate at a level that would enable
a worker with 2 weeks’ experience to earn at least 15% more than their hourly rate, so
that their earnings will fluctuate according to their productivity (subject to the hourly
wages floor)
the employer parties are overstating the difficulties by not recognising that cl.15.2(d)
is prescribing how the piece rate must be set, not a minimum rate for each employee
a mechanism of the complexity proposed by AFPA is unlikely to be followed in an
industry with a history of non-compliance and an individual employee will have little
practical ability to assess whether the rate is properly set, and
it is unnecessary for express provision to be made for ‘a reasonable pre-estimate’ if
the task has not previously been performed by competent pieceworkers (as this would
be the only workable interpretation).66
[88] The UWU submits that contrary to the submissions of the employer parties, proposed
clause 15.2(d) does not require that the piece rate be set so that every employee who is a
‘pieceworker competent at the piecework task’ earns the 15% uplift.67 It states that, rather, the
clause requires that the rate be set so that a competent pieceworker is enabled to earn the 15%
uplift. The UWU submits that accordingly it does not consider necessary the proposed changes
by FGT, AFPA and NFF that would require the piece rate to be fixed in accordance with the
average pick rates of pieceworkers.
[89] The NFF and AFPA are correct in suggesting that setting the piece rate by reference to
the performance of a competent pieceworker (as under draft cl.15.2(d)) rather than the
performance of an average competent pieceworker, will tend to raise the piece rate. The
approach proposed by the AFPA of setting the piece rate by reference to the average
productivity of competent pieceworkers over the previous pay period will tend to produce a
lower piece rate than draft cl.15.2(d) and, aside from the point that it will be calculated on the
basis of previous performance rather than anticipated future performance, it may produce a rate
that is closer to the rate required under the existing cl.15.2(b) of the Horticulture Award.
63 Sunny Ridge submission dated 26 November 2021.
64 Growcom submission dated 26 November 2021 p.7.
65 Presumably, the AWU means those pieceworkers who fall below the average productivity level.
66 AWU submission in reply dated 10 December 2021 [29]–[33].
67 UWU submission in reply dated 10 December 2021 [5].
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[90] An amendment along the lines proposed by the NFF — amending cl.15.2(b) to refer to
‘an average pieceworker competent at the piecework task’ — would reintroduce some of the
conceptual complexity in the existing clause.
[91] The existing cl.15.2(b) provides:
‘The piecework rate fixed by agreement between the employer and the employee must
enable the average competent employee to earn at least 15% more per hour than the
minimum hourly rate prescribed in this award for the type of employment and the
classification level of the employee. The piecework rate agreed is to be paid for all work
performed in accordance with the piecework agreement.’
[92] Clause 15.2 of the Horticulture Award was considered by the Federal Court in Fair
Work Ombudsman v Hu (No 2)68 (Hu (No 2)) and Fair Work Ombudsman v Hu69 (the Hu
Appeal). The UWU submits70 that the following key principles can be drawn from these
judgments:
1. Clause 15.2 is a protective provision designed to provide a safeguard for
pieceworkers.71
2. While clause 15.2 requires the piecework rate to be fixed by agreement, in
practical terms, this will almost invariably mean that the employer fixes the rate,
and the employee decides whether to accept it.72
3. The clause requires the minimum piecework rate to be determined by the
following method:
(i) Ascertain the hourly rate prescribed under the Award for the type of
employment and the classification level of the employee (including, for
example, casual loading if applicable) and then add 15% to that amount.
(ii) The hypothetical ‘average competent employee’ must be identified.
(iii) Identify the hypothetical hourly pick rate of the ‘average competent
employee’ performing the work at the particular place of work at that
particular time.
(iv) Divide the hourly rate plus 15% by the hourly pick rate of the
hypothetical ‘average competent employee’ or, where an employer has
already set a piecework rate, the employer can compare the hourly pick
rate of the ‘average competent employee’ against the calculation
performed at paragraph i above.73
68 [2018] FCA 1034.
69 [2019] FCAFC 133.
70 UWU, ‘Submissions – United Workers Union’, Submission in Horticulture Award 2020, AM2020/104, 19 March 2021 at
[22] (‘UWU submission, 19 March 2021’).
71 Hu (No 2) [24], [140]; Hu Appeal [74], [75] (Bromberg J).
72 Hu (No 2) [25]; see also Exhibit UWU 2 [12]; Exhibit UWU 6 [10].
73 Hu (No 2) [26]–[27].
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4. The determination of the pick rate of the ‘average competent employee’ is not
an arithmetical exercise, but rather a predictive, theoretical exercise made by
reference to the workforce that is available or potentially available to the
employer.74 For example, for fruit or vegetable pickers, the hourly pick rate of
the ‘average competent employee’ would be dependant upon the average
quantity of fruit or vegetables such an employee would pick per hour.
5. The ‘average competent employee’ is not necessarily ‘proficient’ but at least
‘suitable, sufficient for the purpose, adequate’ and must be selected from the
pool of hypothetical competent employees.75 An employee who is not
competent, for example, an employee who is still in training, must be excluded
when determining the ‘average competent employee’.76
6. To determine what such a hypothetical employee will be able to earn, factors
both personal and external to the hypothetical employee must be considered.
These factors include:
(i) personal characteristics, such as diligence, aptitude, and experience; and
an assumption that training and induction has been provided;
(ii) personal characteristics such as age, strength, and stamina (which while
not relevant, on the evidence, in the case of picking mushrooms, may be
relevant in relation to ‘some other types of horticulture’);
(iii) the general level of experience of the available workforce considered as
a whole; and
(iv) external factors which may include density, quality, size of the product,
the prevalence of unhealthy product which may be affected by growing
conditions, as well as the nature and quality of the equipment provided.77
[93] Earlier in these proceedings, the AFPA proposed an alternative variation if the
Commission were to form the view that the current piecework provisions need to be varied.78
That alternative variation was said to be designed to preserve the concept of a piecework-based
safety net with an uplift of earnings for competent pieceworkers compared to timeworkers, but
provide additional implementation machinery to support the transparent and consistent
application of piecework rates.79
[94] The AFPA’s alternate variation, as set out in its opening submission, had 5 major
elements:
74 Ibid at [28]–[29], [34].
75 Ibid [31].
76 Ibid [30], [85].
77 Ibid [33]–[38].
78 AFPA submission, 11 June 2021, section E.
79 Ibid [42].
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1. It prescribes a specific process to determine the piecework rate, as follows:80
(a) The employer must identify the cohort of competent employees, with
‘competent employee’ to be defined as someone who is suitable,
sufficient or adequate to perform the work. The definition would also
make it clear that the employee need not be ‘proficient’ to be competent.
This part of the variation will provide specific guidance to employers as
to how to set the competence threshold having regard to the complexity
of the work and other factors. Importantly, an employee would be
deemed to be competent after they have been performing the task for a
prescribed period (indicatively, 4 weeks as a catch-all outer limit);
(b) The employer must calculate (or, in the case of the initial setting of the
piecework rate, estimate):
(i) the total output81 of the cohort of competent employees in a
relevant period (Total Output) and
(ii) the total combined hours of work of this cohort during the same
relevant period (Total Hours)
(c) The employer must divide the Total Output by Total Hours to obtain the
Average Hourly Output of a Competent Worker, and
(d) For each applicable classification and type of employment, the employer
must take the applicable minimum hourly rate, add 15% and then divide
by the Average Hourly Output of a Competent Worker. The result is the
minimum piecework rate.
2. The employer is required to review and adjust the piecework rate at prescribed
intervals (say, every pay period) to make sure that it is set appropriately.82
3. To provide further protection to novice employees who have not yet become
competent, the employer is required to pay these employees at the level of the
slowest competent employee.
4. The employer is required to keep a record of all hours worked by a pieceworker,
as well as the calculations set out above.
5. The employer is required to pay a pieceworker at the applicable minimum hourly
rate (instead of the piecework rate) for any work that does not yield any
piecework output and is not an inherent part of the piecework.
[95] In the November 2021 Decision we noted that, in terms of transparency and fairness, the
AFPA’s proposed clause is an improvement on the existing cl.15.2, but:
80 AFPA submission, 11 June 2021 [44].
81 Measured in an appropriate unit, such as punnet, bucket, kilogram, etc.
82 AFPA submission, 11 June 2021 [44].
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‘it is far too complex and such complexity would be a barrier to compliance. There is
some substance to the AWU’s critique; the proposal does not ameliorate the complexity
inherent in the current term and nor does it adequately address the subjectivity inherent
in the selection of a ‘competent pieceworker’. This complexity is illustrated by clause
15.2(k) of the AFPA’s possible draft implementation of their proposal, which sets out
the process for calculating the minimum piecework rate for a particular task, as follows:
k) Each pay period, the employer must, for each group of pieceworkers performing
a particular piecework task specified in the piecework agreement, calculate the
minimum piecework rate for that task in that pay period in accordance with the
following steps:
i) calculate:
the total output of the competent pieceworkers in the group in the pay
period (Total Competent Output); and
the total combined hours of work of the competent pieceworkers in
the group during the pay period (Total Competent Hours);
ii) divide the Total Competent Output by Total Competent Hours to obtain
the Average Hourly Output of a Competent Worker;
iii) take the applicable minimum hourly rate, add 15% and then divide by the
Average Hourly Output of a Competent Worker.’
Proposed clause 15.2(l) then defines a ‘competent pieceworker’ as follows:
l) A competent pieceworker for the purposes of this clause is an employee who, in
the reasonable opinion of the employer, is suitable, sufficient or adequate to
perform the task or tasks assigned to the relevant group. An employee is deemed
to be competent at a particular task or set of tasks after he or she has been
performing these task(s) for 20 working days.’83
[96] We note that the AFPA’s new proposed variation to clause 15.2(d), as set out at [81]
above, does address some of the concerns we raised with their earlier proposal in the November
2021 Decision. However, the proposed redrafting creates the following issues:
as the piece rate is calculated on productivity in the previous pay period, changing
crop or environmental conditions could make that previous productivity more difficult
or impossible to achieve over the next pay period
where a picking period on a farm is short, the piece rate might always be based on a
‘reasonable pre-estimate’ of average productivity rather than actual performance data,
and
83 November 2021 Decision [438]–[439] (paragraph numbers omitted).
[2022] FWCFB 4
26
it would not seem practicable to fix piece rates according to productivity during the
previous pay period in an industry where some employers change piece rates
frequently (including changing piece rates during the course of a working day).
[97] The intended operation of the AFPA’s proposed cl.15.2(d)(iii) is also unclear. We
presume the AFPA is not proposing that employers would undertake a reconciliation at the end
of each pay period and if necessary top up the piece rate payments to pieceworkers having
regard to their average productivity during that pay period.
[98] In circumstances where there is considerable variation in the type of picking work across
the industry, we do not propose to fix a method for calculating piece rates in the Award. The
variation proposed by the AFPA might provide an appropriate method for setting a piece rate
where crop density and picking conditions are stable from pay period to pay period. We
encourage industry bodies such as the AFPA to develop guidance on setting compliant piece
rates for particular picking work, to assist employers in the horticulture industry.
[99] However, in light of the recent submissions there would be benefit in rewording the
minimum piece rate requirement under draft cl.15.2(d) by reference to the average productivity
of pieceworkers competent at the piecework task. We think this will set the minimum piece rate
more precisely and at a level more closely aligned to the rate required under cl.15.2(b) of the
Award as it is at present. We will also include a definition of average productivity. Amendments
to draft cl.15.2(d) and a new paragraph 15.2(a)(i) to this effect are marked-up in Attachment
1.
[100] We envisage the process of fixing a piece rate under the reworded cl.15.2(d) will be
similar in some respects to that required under the existing cl.15.2(b) as explained by the Court
in Hu (No 2) and the Hu Appeal, but will be simpler. It will be simpler because competence is
clearly defined and it will generally not be necessary for an employer to contemplate any of the
attributes of a hypothetical competent employee other than their productivity. The minimum
level of the piece rate will have been met during a pay period if the rate is fixed so that any
pieceworker working at the average productivity during the pay period of the pieceworkers
competent at the piecework task, will earn at least 15% more than their hourly rate under the
Award. If the employer has no competent employees performing the piecework task, the
average productivity will need to be estimated on the basis of the productivity of the competent
employees available or potentially available to the employer.
3.4 Amendments to draft cl.15.2(e) (rate for work in addition to piecework)
[101] Ai Group submits that draft cl.15.2(e) should be amended as follows, to make clear that
amounts are only payable under the clause as a result of work performed at the request of the
employer:
‘If a pieceworker does an employer requests a pieceworker to perform any work in
addition to the task for which they are being paid a piece rate, the pieceworker must be
paid for that additional work at the hourly rate for the pieceworker.’84
84 Ai Group submission dated 26 November 2021 [7]–[8].
[2022] FWCFB 4
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[102] We are not persuaded that the proposed amendment is necessary. No such express
distinction is made, for example, in the definition of ‘overtime’ in cl.21.1 of the Award.
3.5 Amendments to draft cll.15.2(f) and 15.2(h)(iv) (underpinning rate and prescribed
statement)
3.5.1 Reconciliation period
[103] Draft cl.15.2(f) provides:
‘Despite any other provision of clause 15.2 a pieceworker must be paid no less than the
amount they would have received if paid for each hour worked at the hourly rate for the
pieceworker.’
[104] The NFF raises a concern as to the compliance burden if cl.15.2(f) requires the employer
to conduct an hour-by-hour comparison between the amount to be paid for piece work and the
pieceworker’s hourly rate (and then make up the difference for any hour where the former is
less than the latter).
[105] The NFF suggests that the comparison should be conducted over a pay period, provided
that is no more than 2 weeks. The NFF proposes that the clause be amended as follows:
‘Despite any other provision of clause 15.2, over the course of a full pay period a
pieceworker must be paid no less than the amount they would have received if paid for
each hour worked at the hourly rate for the pieceworker.’85
[106] The AFPA raises a similar concern that cl.15.2(f) does not specify the period over which
the comparison is to be done and submits the clause should be amended by inserting ‘, in each
pay period’ after ‘clause 15.2’, with a similar amendment being made to the statement
prescribed under cl.15.2(h)(iv).86
[107] A number of submissions by employer associations and individual enterprises also raise
concerns about the regulatory burden associated with the need to conduct an ‘hour by hour’
comparison.87
[108] The present wording ‘for each hour worked’ was based on the AWU claim in this matter.
The present wording ‘must be paid no less than the amount they would have received …’ was
based on the wording of various other modern awards in which piece rates are underpinned by
minimum payments.88
[109] The AWU submits that if we see merit in the employers’ concerns, then having regard
to the high level of itinerant and transient work the appropriate reconciliation period would be
85 NFF submission dated 26 November 2021 [3]–[13].
86 AFPA submission dated 26 November 2021 [23]–[24] and [31] and Appendix. See also Fruit Growers Victoria submission
dated 26 November 2021 p.1 and Growcom submission dated 26 November 2021 p.7.
87 For example, see submissions by Citrus Australia dated 26 November 2021, FGT dated 26 November 2021 and FGV dated
26 November 2021.
88 See, for example, Silviculture Award 2020 cl.15.2(a), Building and Construction General On-site Award 2020 cl.19.6(e)(i),
Meat Industry Award 2020 cl.18.10 and Wool Storage, Sampling and Testing Award 2020 cl.16.3(d)(i).
[2022] FWCFB 4
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‘per day or shift’.89 Accordingly, the AWU submits the clause could be amended by inserting
‘, for each day or shift worked’ after ‘clause 15.2’.90
[110] It is not clear that draft cl.15.2(f) requires an hour-by-hour comparison (ie a
‘reconciliation period’ of an hour), but that reading is suggested by the commentary on the
clause in the November 2021 Decision.91 The Horticulture Award requires wages to be paid
weekly or fortnightly.92
[111] We accept that clarification of the reconciliation period would make the Award clause
simpler and easier to understand. The options include: a day, a week and a pay period (ie either
a week or a fortnight).
[112] A reconciliation period of a day provides an appropriate balance between the interests
of employers (by reducing regulatory burden) and protecting employees. The material before
us suggests that a significant proportion of pieceworkers are engaged for one day or less. As
Mr King notes in his First Statement, the ‘high attrition rate for picking work’ is a key challenge
for the horticulture industry and ‘[m]any workers leave within the first day or two of the job’.93
[113] Clauses 15.2(f) and 15.2(h)(iv) and Schedule I of the draft determination will be
amended to insert a per day reconciliation period as marked-up in Attachment 1.
3.5.2 Calculation of underpinning rate
[114] The AFPA seeks clarification of how the minimum payment is calculated under the draft
cl.15.2(f) and submits that the clause could be read as requiring a pieceworker to be paid as if
they were a ‘timeworker’ including payment of penalties and loadings. The AFPA proposes
that the clause be amended to make clear that the hourly rate for a pieceworker is ‘a flat hourly
floor rate’. AFPA’s proposed amendments to the clause (including the amendment discussed
above) are as follows:
‘Despite any other provision of clause 15.2, in each pay period a pieceworker must be
paid no less than the number of hours worked during the pay period multiplied by the
amount they would have received if paid for each hour worked at the hourly rate for the
pieceworker.’94
[115] The AWU does not consider any change necessary, as the minimum payment is linked
to definition of ‘hourly rate for the pieceworker’ in cl.15.2(a)(i), which is confined to the
minimum hourly rate plus casual loading if applicable.95
89 AWU submission in reply dated 10 December 2021 [13]–[22]. The AWU also submits this would resolve the concern
raised by Fruit Growers Tasmania—that hour-by-hour reconciliation would overcompensate employees where piecework
payments are ‘lumpy’ (for example where filling a bin takes 2 hours, so that the pieceworker receives no payment in
respect of the first hour and payment for a full bin in the second hour) (Fruit Growers Tasmania submission dated 26
November 2021 [9]–[19]).
90 The UWU makes a similar submission see UWU submission in reply dated 10 December 2021 [8].
91 [2021] FWCFB 5554 [574].
92 Award cl.16.1.
93 Exhibit AFPA 2 [41] and [43].
94 AFPA submission dated 26 November 2021 [25]–[27].
95 AWU submission in reply dated 10 December 2021 [49].
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[116] In our view, the amended drafting proposed by the AFPA is clearer than the present
draft clause and is to the same effect. We will adopt the substance of the AFPA’s proposal. An
amendment along the lines of the AFPA’s proposal is marked-up in in cll.15.2(f) and 15.2(h)(iv)
and Schedule I in Attachment 1.
3.6 Amendment to draft cl.15.2(h) (content of piecework record)
[117] Draft cl.15.2(h) provides:
‘Before a pieceworker begins a piecework task for an employer, the employer must give
the pieceworker a written record signed by the employer (a piecework record) that
must:
(i) state the date and time the piecework is to commence;
(ii) describe the task for which the piece rate will be paid;
(iii) state the amount of the piece rate;
(iv) include the following statement:
‘Under the Horticulture Award 2020 a pieceworker must be paid no less
than the amount they would have received if paid for each hour worked
at their hourly rate under the Award (including the 25% casual loading
for a casual pieceworker).’
and
(v) state the hourly rate for the pieceworker.
NOTE: An example of the type of record required by clause 15.2(h) is at
Schedule I—Piecework Record. There is no requirement to use the form of
record set out in Schedule I—Piecework Record.’
[118] Two issues have been raised in respect of this draft clause.
3.6.1 Multiple Tasks
[119] The AFPA is concerned that draft cl.15.2(h) seems to contemplate that a piecework
record can only cover one task; so that unnecessary paperwork will be required if a pieceworker
is engaged to perform multiple tasks. The AFPA proposes the following amendments to the
clause:
‘Before a pieceworker begins a piecework task for an employer, the employer must give
the pieceworker a written record signed by the employer (a piecework record) that
must:
(i) state the date and time the piecework is to commence;
[2022] FWCFB 4
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(ii) describe the task(s) for which the piece rate will be paid;
(iii) state the amount of the piece rate for each piecework task;
(iv) include the following statement …’
[120] The AWU accepts that a piecework record can cover multiple tasks and does not
consider any amendment necessary.
[121] As the AWU suggests, the present drafting does not preclude a piecework record
covering multiple tasks. Where multiple tasks are covered, the requirement to ‘state the date
and time the piecework is to commence’ should be understood as referring to the date and time
the first piecework task is to commence.
[122] There is some merit in making it clearer that a piecework record can cover multiple
tasks, but we are not attracted to the amendment proposed by the AFPA. That amendment may
obscure an essential point of the clause, which is to ensure that before a pieceworker begins any
particular piecework task for an employer, the employer must give the pieceworker a record
describing that task and specifying the piece rate for that task. The proposed changes to
paragraphs (ii) and (iii) when read together may also cause confusion as to what constitutes a
separate task for the purposes of the piecework record.
[123] It seems to us that the desired clarification can be made by adding a note under draft
cl.15.2(h) and amending the example pieceworker record attached to the draft determination so
that it covers multiple tasks. We will also sightly simplify the wording of the existing note
under cl.15.2(h). The amendments are marked-up in Attachment 1. We note that where a
pieceworker performs multiple tasks and the piece rate for those tasks differs (as seems likely),
draft cl.15.2(j)(ii) will require the employer to keep a record of the hours worked by the
pieceworker at each of the different piece rates.
3.6.2 Requirement to give further piecework record
[124] Draft cl.15.2(i) provides:
‘If an employer proposes to change the piece rate or piecework task of a pieceworker the
employer must first give the pieceworker a further piecework record including the new
rate or task.
[125] The AFPA submits that as the Horticulture Award applies across a large variety of crops
and growing set ups, piecework is generally performed in the field, and some growers change
piece rates frequently, the requirement to provide a new piecework record before a new piece
rate takes effect ‘may not be reasonably practicable in all cases [and] … may create a
compliance trap … or delay a rate increase taking effect to the disadvantage of pieceworkers.’96
The AFPA proposes that draft cl.15.2(i) be replaced by the following 2 subclauses:
‘(i) If an employer proposes to engage the pieceworker to perform a new piecework
task not covered by an existing piecework record, the employer must give the
96 AFPA submission dated 26 November 2021 [29].
[2022] FWCFB 4
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pieceworker a further piecework record including the new task before
commencement of the new task.
(ii) If an employer proposes to change the piece rate of a pieceworker, the employer
must inform the pieceworker of the new rate before commencement of work
under the new rate and must give the pieceworker a further piecework record
including the new rate as soon as reasonably practicable.’97
[126] The effect of the proposed amendment is that:
in the case of a proposed change to the piecework task, a further piecework record
need not be given to the pieceworker if the new task is already covered by an existing
piecework record, and
in the case of a proposed change to the piece rate, the employer must inform the
pieceworker of the new rate before commencement of work under the new rate, and
must give the pieceworker a further piecework record as soon as reasonably
practicable.
[127] The AWU opposes the proposed amendment, noting that the requirement to provide a
new piecework record before task or rate changes ensures the employer and employee are both
clearly informed in writing. The AWU submits that in light of the compliance issues in the
industry and the significant component of overseas workers, it is not appropriate for the
requirement to provide a record setting the piece rate to depend upon a vague standard such as
‘as soon as reasonably practicable’ (which will be interpreted and applied in different ways
across the industry).98
[128] Considering the first point above, we assume the AFPA’s proposal that no new
piecework record be required in case of a task change, would only apply where both the task
was already covered by an existing piecework record with the same employer and there was no
change to the piece rate for that task as prescribed in the existing record.
[129] We note that where there is such a task change and this entails a change of piece rate
from that applying to the previous task, the employer will be required by draft cl.15.2(j)(ii) to
keep a written record of the date and time of the rate change.
[130] It seems to us that this aspect of the AFPA’s proposal may slightly reduce regulatory
burden without significantly reducing employee protections under the draft clause. We will
adopt the substance of this aspect of the AFPA’s proposal.
[131] Considering the second aspect of the AFPA’s proposal, the only details in a piecework
record that will need to be updated where there is a change in piece rate for a task covered by
that record, will be the rate and the date and time piecework under that rate is to commence.
Given that, as AFPA apparently accepts, a pieceworker must be informed of a new rate before
it commences, it seems unlikely there would be a significant reduction in regulatory burden in
permitting the new piecework record to be provided after the event. On the other hand, retaining
the requirement that a new piecework record be given before a rate change will better ensure
97 Ibid.
98 AWU submission in reply dated 10 December 2021 [37]–[39].
[2022] FWCFB 4
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that employees understand that a rate change is being made and when it begins, and may reduce
the risk of employers inadvertently failing to issue and keep accurate piecework records.
Accordingly, we reject this aspect of the AFPA’s proposal.
[132] Draft cl.15.2(h) already requires the employer to issue a new piecework record to a
pieceworker before changing the piecework task to one not covered by an existing piecework
record with the pieceworker. It follows that the first aspect of the AFPA’s proposal can be
given effect simply by removing the further requirement under draft cl.15.2(i) to issue a new
piecework record when there is a change of piecework task. An amendment to this effect is
marked-up in cl.15.2(i) in Attachment 1.
3.7 Amendment to draft cl.15.2(k) (base and full rate of pay for purposes of the NES)
[133] The AWU’s submissions regarding the operative date of the determination calls
attention to an issue with the drafting of cl.15.2(k).
[134] As discussed further in section 4 of this decision, the AWU is concerned there may be
an influx prior to the operative date of the determination of applications for approval of
enterprise agreements that ‘seek to “lock-in” piecework rates through enterprise agreements on
the basis of a point-in-time BOOT assessment.’99 This raises an issue as to the interaction
between draft cl.15.2(k) and s.206 of the Act. Section 206(1) is to the effect that where an
enterprise agreement applies to an employee and a modern award covers the employee, the
‘base rate of pay payable to an employee under the agreement (the agreement rate) must not
be less than the base rate of pay that would be payable … under the modern award (the award
rate) if the modern award applied to the employee.’ Pursuant to s.206(2), if the agreement rate
is less than the award rate then ‘the agreement has effect in relation to the employee as if the
agreement rate were equal to the award rate.’
[135] Section 16(1) of the Act provides a general definition of ‘base rate of pay’:
‘General meaning
(1) The base rate of pay of a national system employee is the rate of pay payable to
the employee for his or her ordinary hours of work, but not including any of the
following:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.’ [Underlining added]
[136] Pursuant to s.16(2) this general definition does not apply to a pieceworker in relation
to the pieceworker’s entitlements under the National Employment Standards (the NES) if a
99 AWU submission dated 26 November 2021 [24].
[2022] FWCFB 4
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modern award applies to the pieceworker and specifies the pieceworker’s base rate of pay for
the purposes of the NES.
[137] As required by s.148 of the Act, draft cl.15.2(k) provides for determination of the base
and full rates of pay for the purposes of the NES for pieceworkers covered by the Horticulture
Award. Regulation 1.10 of the Fair Work Regulations 2009 is to the effect that the rate of pay
identified in the Award as the base rate of pay for the purposes of the NES is also the base rate
of pay for the purposes of s.206 for a pieceworker covered by the Award. It follows that the
base rate of pay for the purposes of s.206 for a pieceworker covered by the Horticulture Award
is the rate determined under draft cl.15.2(k). As presently drafted, cl.15.2(k) provides:
‘(k) For the purposes of the NES the base rate of pay and full rate of pay of a
pieceworker are the same and are worked out as follows:
(i) By dividing the total amount earned by the pieceworker during the
relevant period by the total hours worked by the pieceworker during the
relevant period.
(iii) If the pieceworker was continuously employed by the employer for a
period of 12 months or more immediately before the rate of pay is to be
worked out—the relevant period is the 12 months before the rate is to
be worked out. If the pieceworker was continuously employed by the
employer for a period of less than 12 months immediately before the rate
of pay is to be worked out—the relevant period is that period.’
[Underlining added]
[138] Comparing the underlined wording of the definition of base rate of pay in s.16 with that
in draft cl.15.2(k), it appears that the underlined wording in the draft clause might be
misinterpreted as referring to the total payment actually made to the pieceworker rather than
the total payment the pieceworker was entitled to receive under the Horticulture Award. Of
course the 2 amounts would be the same if the pieceworker is actually paid in accordance with
the Award.
[139] To avoid such a misinterpretation we will amend the wording of draft paragraph
15.2(k)(i) to better reflect the wording in s.16(1) of the Act
4. Date of operation of the determination
[140] The draft determination attached to the November 2021 Decision did not specify a date
of operation.
[141] The NFF submits that s.166 will apply to the determination and that s.166(1)(a)
establishes a ‘presumption that a determination which sets or varies a minimum wage should
come into operation on 1 July in the next financial year after it is made.’100 Ai Group is also of
the view that s.166 will apply to the determination.101
100 NFF submission dated 26 November 2021 [33].
101 Ai Group reply submission dated 10 December 2021 [9]–[11].
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[142] The NFF contends that the implementation date should be 1 July 2022 ‘to allow for
growers to adjust HR practices and to manage (as best they can) the current labour restraints
caused by COVID 19.’102 In particular the NFF says:
farms will be paying significantly more in wages than anticipated and budgeted until
the end of the 2021/22 financial year, because the present significantly constrained
labour pool will mean growers will have to hire or retrain unproductive staff and pay
them the ‘piece rate floor’
with wages comprising about 30%–50% of overheads, growers will not be able to
manage such an increase in the short term
to implement the new provisions growers will have to make significant changes to
administrative processes—potentially including: changes in personnel management
systems/practices to monitor employee productivity and dismiss insufficiently
productive employees; engaging with labour markets and programs such as Pacific
Australia Labour Mobility rather than relying on working holiday makers, and
changing payroll systems, and
these changes will have to take place under the cloud of COVID 19 and in a context
of rapidly changing law and policy, particularly as to labour movement.103
[143] The AFPA submits that the variation should have effect on 1 July 2022 because
employers will need some lead time to comply. Similarly to the NFF, the AFPA submits
employers will need time to:
make financial arrangements to cope with increased labour costs
adjust payroll systems
cull unproductive employees, make hiring more selective and put in place additional
management and supervision for pieceworkers, and
understand and implement the changes so as to ensure compliance.104
[144] The Ai Group submits that employers will also be required to: determine which
pieceworkers are ‘competent at the piecework task’; establish systems to track which employees
meet the threshold for application of the piece rate under cl.15.2(d), and establish systems to
generate piecework records. The Ai Group further submits that the high proportion of micro
and small businesses covered by the Award weighs in favour of an operative date of 1 July 2022
at the earliest.105
102 NFF submission dated 26 November 2021 [34].
103 NFF submission dated 26 November 2021 [25]–[32].
104 AFPA submission dated 26 November 2021 [32]–[37].
105 Ai Group reply submission dated 10 December 2021 [7]–[8].
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[145] A number of the submissions made by individual horticulture enterprises and other
employer bodies advance similar arguments.106 In particular, a number of the individuals and
employer bodies submit that implementation should be delayed to enable appropriate systems
to be put in place.
[146] The AWU agrees that s.166 will apply to the determination, but submits that the Full
Bench’s decision as to timing is discretionary and will turn on the facts of the particular case.107
[147] Ai Group submits that that the Commission should take into account past decisions
regarding appropriate operational dates, particularly those that pertain to award amendments
that will increase employment costs. Ai Group refers in particular to the 2019 amendments to
the Social, Community, Home Care and Disability Services Industry Award 2010.108
[148] The AWU submits109 an operative date of 1 January 2022 is appropriate (rather than the
1 July 2022 ‘default date’) for reasons including:
The Full Bench’s findings of widespread non-compliance with Award cl.15.2 and
significant underpayment of pieceworkers in comparison to the Award minimum
hourly rate and the National Minimum Wage, which make it inappropriate to allow
the existing provision to continue to operate until 1 July 2022 to the detriment of
employees and law-abiding employers. This would also be contrary to the modern
awards objective.
The Full Bench described the intent of the draft determination as being to make the
piecework term simpler and easier to understand, reduce regulatory burden and
promote compliance, and employers and employees should not have to wait until
1 July 2022 for those outcomes.
The Full Bench found that inserting a minimum wage floor would lead to an increase
in productivity that to some extent would offset the likely increase in employment
costs and regulatory burden, so the impact on employers of an earlier operative date
is likely to be manageable and not to outweigh the positive factors.
If the determination does not take effect until 1 July 2022 there may be an influx prior
to this date of applications for approval of enterprise agreements that ‘seek to “lock-
in” piecework rates through enterprise agreements on the basis of a point-in-time
BOOT assessment.’110 The AWU asserts there was such an influx of agreements prior
to the amendments that introduced overtime entitlements for casuals coming into
operation.
106 Blueberry Fields submission dated 26 November 2021, NSW Cherry Growers Association submission dated 25 November
2021, Citrus Australia submission dated 26 November 2021, FGT submission dated 26 November 2021, FGV submission
dated 26 November 2021, HW Pogue & Co submission dated 24 November 2021 at p.1-2 Northern Victorian Fresh
Tomato Growers Association submission dated 26 November 2021
107 AWU submission dated 26 November 2021 [9]–[12] citing the Full Bench’s discussion of appropriate transitional
arrangements in Penalty Rates — Transitional Arrangements [2017] FWCFB 3001 [75].
108 Ai Group reply submission dated 10 December 2021 [14]–[20].
109 AWU submission dated 26 November 2021 [14]–[26] and AWU submission in reply dated 10 December 2021 [52].
110 AWU submission dated 26 November 2021 [24].
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The AWU application was made on 15 December 2020 and has attracted media
attention, so that employers have been on notice about the application since late 2020
and have been on notice about the ‘minimum wages floor’ and record keeping
requirements since the Full Bench Decision on 3 November 2021.
[149] In reply the NFF submits:111
if growers are not given adequate time to implement the new provisions, non-
compliance may increase
the AWU’s and UWU’s proposed 1 January 2022 start date would be exceedingly
difficult if not impossible for growers to achieve, because: it is only around 2 weeks
after the Commission’s final decision; the changes would take effect during or just
before the peak season for many commodities/regions, and many professional services
growers will call upon to assist them to implement the changes may not be available
over the Christmas/New Year period
with present workforce shortages growers will not be able replace unproductive
workers with more productive ones in the short term and increase productivity
the AWU’s claims that there will be an influx of applications for approval enterprise
agreements which seek to nullify the changes are speculative, and in any case there is
no reason to believe the system would not filter out objectionable applications as it did
previously, and
it is not open to the Commission to conclude that growers should have started
preparing for the change when the AWU made its application, indeed it would be
unreasonable to expect growers to start preparations until a final decision is reached.
[150] Ai Group submits in reply that a 1 July 2022 operative date is supported by fairness to
employers covered by the Award (Act s.134(1)) and the impact on business, including in
relation to employment costs, productivity and regulatory burden (Act s.132(f)).112 Ai Group
also submits the AWU has presented no evidence for its concern about an influx of applications
for approval of enterprise agreements and that this is misconceived.113 Similarly to the NFF,
the Ai Group further submits that employers have not had an extended period of notice as to
the outcome of the AWU’s application.114
[151] It is convenient to deal with the s.166 point first. Section 166 provides:
‘166 When variation determinations setting, varying or revoking modern award
minimum wages come into operation
Determinations generally come into operation on 1 July
111 NFF submission dated 10 December 2021 [7]–[15].
112 Ai Group reply submission dated 10 December 2021 [15]–[16].
113 Ai Group reply submission dated 10 December 2021 [21]–[28].
114 Ai Group reply submission dated 10 December 2021 [29]–[30].
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(1) A determination under this Part that sets, varies or revokes modern award
minimum wages comes into operation:
(a) on 1 July in the next financial year after it is made; or
(b) if it is made on 1 July in a financial year—on that day.
Note: Modern award minimum wages can also be set, varied or revoked by determinations
made in annual wage reviews. For when those determinations come into operation, see
section 286.
FWC may specify another day of operation if appropriate
(2) However, if the FWC specifies another day in the determination as the day on
which it comes into operation, the determination comes into operation on that
other day. The FWC must not specify another day unless it is satisfied that it is
appropriate to do so.
(3) 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 may take effect in stages
(4) The FWC may specify in the determination that changes to modern award
minimum wages made by the determination take effect in stages if the FWC is
satisfied that it is appropriate to do so.
Determinations take effect from first full pay period
(5) A change to modern award minimum wages made by 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:
(a) unless paragraph (b) applies—the day the determination comes into
operation; or
(b) if the determination takes effect in stages under subsection (4)—the day
the change to modern award minimum wages is specified to take effect.’
[152] The NFF and the Ai Group are correct in their views that s.166 will apply to the
determination, on the basis of our earlier conclusion that the Application seeks to set modern
award minimum wages for pieceworkers.115
115 [2021] FWCFB 5554 [29] and [538].
[2022] FWCFB 4
38
[153] Pursuant to s.166(1)(a) (and assuming the determination is made before 1 July 2022),
the determination will come into operation on 1 July 2022 unless we specify another day of
operation. Subsection 166(2) provides that we must not specify another day unless ‘satisfied it
is appropriate to do so’.
[154] To the extent that s.166(1)(a) can be said to create ‘a presumption’ that the variation
determination arising from these proceedings takes effect from 1 July 2022 it is not a difficult
presumption to displace. We need only be satisfied it is ‘appropriate’ to specify a different day
of operation.
[155] A number of Full Bench decisions have considered the implementation arrangements in
respect of variations to modern awards.
[156] The Penalty Rates (Transitional Arrangements) Decision dealt with the implementation
of the Commission’s decision to reduce Sunday and public holiday penalty rates in certain
Hospitality and Retail sector awards. In particular, the Full Bench concluded that ‘any
transitional arrangements must meet the modern awards objective and must only be included in
a modern award to the extent necessary to meet that objective.’116 These observations have been
adopted by subsequent Full Benches, including in relation to variations which advantaged the
employees covered by the relevant modern award.117
[157] In relation to the s.134 considerations, the Penalty Rates Full Bench stated that the
setting of transitional arrangements required a particular focus on:118
‘relative living standards and the needs of the low paid (s.134(1)(a));
the likely impact of any exercise of modern award powers on business, including on
productivity, employment costs and the regulatory burden (s.134(1)(f)); and
the need to ensure a simple, easy to understand, stable and sustainable modern award
system for Australia that avoids unnecessary overlap of modern awards (s.134(1)(g)).’
[158] Further, as the proposed variation sets modern award minimum wages for pieceworkers,
it enlivens ss.157(2) and 284 of the Act.
[159] Section 284(2) provides that the minimum wages objective applies to the Commission’s
functions or powers under Part 2-3 of the Act so far as they relate to, relevantly, setting or
varying modern award minimum wages. The minimum wages objective is set out in s.284(1):
‘(1) The FWC must establish and maintain a safety net of fair minimum wages, taking
into account:
(a) the performance and competitiveness of the national economy, including
productivity, business competitiveness and viability, inflation and employment
growth; and
116 [2017] FWCFB 3001 [143].
117 [2021] FWCFB 5244 [303]–[306].
118 [2017] FWCFB 3001 [143].
[2022] FWCFB 4
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(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees,
employees to whom training arrangements apply and employees with a
disability.
This is the minimum wages objective.’
[160] The matters in s.284(1)(d) and (e) are not relevant in the present context.119 As to
s.284(1)(a), in the November 2021 Decision we concluded that ‘no probative evidence has been
advanced to suggest, much less demonstrate, that the introduction of a minimum wage floor in
clause 15.2 would have any appreciable impact on the performance and competitiveness of the
national economy’.120 It follows that this consideration has no bearing on the determination of
the operative date of the variation. The matters in s.284(1)(b) and (c) are in the same terms as
s.134(1)(c) and (a) respectively.
[161] The Penalty Rates Full Bench also said:
‘We must also perform our functions and exercise our powers in a manner which is ‘fair
and just’ (as required by s.577(a)) and must take into account the objects of the Act and
‘equity, good conscience and the merits of the matter’ (s.578).
…
Finally, fairness is a relevant consideration, given that the modern awards objective
speaks of a ‘fair and relevant minimum safety net’. Fairness in this context is to be
assessed from the perspective of both the employee and employers covered by the
modern award in question.’121
[162] We apply the above observations to our consideration of the operative date of the
variation we propose to make.
[163] As to the s.134 considerations, the following conclusions from the November 2021
Decision are particularly relevant:
‘Relative living standards and the needs of the low paid’ weighs in favour of inserting
a minimum wage floor from an early operative date. There is widespread
underpayment of pieceworkers in the horticulture industry and, further, a significant
proportion of pieceworkers earn less than the National Minimum Wage. The proposed
variation will assist in rectifying this situation.122
119 [2021] FWCFB 5554 [507]–[509].
120 Ibid a[556].
121 [2017] FWCFB 3001 [144] and [148].
122 [2021] FWCFB 5554 [478].
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The ‘need to encourage collective bargaining’ and ‘the promotion of social inclusion
through increased workforce participation’ weigh against varying the Horticulture
Award to insert a minimum wage floor123. It follows that these considerations favour
a later operative date.
The insertion of a minimum wage floor and consequential time recording provisions
in the piecework clause in the Horticulture Award are likely to have a negative impact
on business, by increasing employment costs and regulatory burden for those
businesses that engage pieceworkers. These considerations favour a later operate
date.124
The introduction of a minimum wage floor will increase compliance by providing an
easily calculated minimum payment. The proposed variation is simple and easy to
understand. These considerations weigh in favour of the insertion of a minimum wage
floor, although not strongly so, and similarly lend some support to an earlier operative
date.125
[164] We now turn to the AWU’s submission that delaying the operative date until 1 July
2022 may lead to an influx prior to this date of applications for approval of enterprise
agreements that ‘seek to ’lock-in’ piecework rates through enterprise agreements on the basis
of a point-in-time BOOT assessment.’126
[165] We agree with the NFF’s characterisation of the submission advanced by the AWU; it
is speculative. Further, it is not clear what capacity employers would actually have to ‘lock-in’
piece rates through enterprise agreements before the determination comes into operation. For
example, this may not be feasible in operations where employers find a need to change piece
rates frequently. Also, it may be difficult to establish that any fixed piece rates satisfy the
BOOT against the Award as it is, when under the approach in Hu (No 2) the minimum amount
of the piece rate could vary depending upon factors such as crop and environmental conditions
and the characteristics of the workforce available to the employer at a particular time.
[166] The capacity for an enterprise agreement to exclude the effect of the amendments to the
Horticulture Award, may also be limited by s.206 of the Act. As discussed in section 3.7 of
this decision, s.206 is to the effect that the base rate of pay under such an enterprise agreement
could not be less than the base rate of pay under the Award as it is from time to time. In
particular, the base rate of pay under the agreement could not be less than the ‘minimum wage
floor’ for piecework under draft cl.15.2(f).
[167] Other contextual issues also bear on the operative date issue. One such matter is our
previous finding that the ‘totality of evidence presents a picture of significant underpayment of
pieceworkers in the horticulture industry when compared to the minimum award hourly rate’:
‘A significant proportion of pieceworkers, and WHM’s in particular, earn less per hour
than the NMW ($20.33 per hour; which is also the minimum hourly rate for a level 1
123 Ibid [484].
124 Ibid [524].
125 Ibid [530].
126 AWU submission dated 26 November 2021 [20]–[24].
[2022] FWCFB 4
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employee in the Horticulture Award) and a substantial proportion earn less than the
‘target rate’ for the ‘average competent pieceworker’127 prescribed in clause 15.2.’128
[168] Such a consideration weighs in favour of an early operative date. We have taken into
account the matters set out above and the specific issues identified in the submissions.
Ultimately a balance needs to be struck between the interests of employers and the interests of
employees.
[169] Finally, we accept that employers will require a reasonable time to adjust to the
imposition of a minimum wage floor for pieceworkers. Payroll systems, recruitment practices
and supervision arrangements may need to be changed to adapt to the new award requirements.
These considerations weigh in favour of a later operative date.
[170] In our view an operative date of 28 April 2022 is ‘appropriate’, within the meaning of
s.166(2). Such an operative date is about 3 months from the date of this decision and almost 6
months from the November 2021 Decision. We have taken into account the ss.134 and 284
considerations to the extent they are relevant, and are satisfied that a 28 April 2022 operative
date is fair, when assessed from the perspective of both the employers and employees covered
by the Horticulture Award.
[171] A variation determination will be published shortly.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
MA000028 PR737832
127 See Dr Howe’s qualitative data [160] and [164]; the NFF survey, Chart 3 at [218]; OmniPoll survey [262]–[264];
Employee lay evidence [280]–[284]; McClintock data [314] and [319].
128 [2021] FWCFB 5554 [362].
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ATTACHMENT 1
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Australian Workers’ Union
(AM2020/104)
HORTICULTURE AWARD 2020
[MA000028]
Agricultural industry
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT CATANZARITI
COMMISSIONER RIORDAN XX MONTH 2022
Horticulture Award 2020 – Ppieceworker rates – minimum hourly rate.
A. Further to the decision [[2022] FWCFB 4] issued by the Fair Work Commission on 1
February 2022, the above award is varied as follows:
1. By deleting the sixth row of the table in clause 7.2, the reference to “clause 15.2(a) –
Minimum wages—pieceworkers – An individual”.
2. By deleting clause 15.2 and inserting the following:
15.2 Pieceworker rates
(a) In clause 15.2:
(i) the average productivity of a pieceworker competent at the piecework
task over a period is calculated by dividing the total output of the
pieceworkers competent at the piecework task over that period by the total
of the hours worked on the piecework task by the pieceworkers competent
at the piecework task over that period (where output is measured in the
same unit used to specify the piece rate, for example, a punnet, bucket or
kilogram);
REVISED DETERMINATION
AUSTRALIA FairWork Commission
[2022] FWCFB 4
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(ii) hourly rate for the pieceworker means the minimum hourly rate for the
pieceworker’s classification level plus for a casual pieceworker the 25%
casual loading under clause 11.2 for a casual pieceworker;
NOTE: The minimum hourly rate for a junior pieceworker is worked out
under clause 15.3.
(iii) pieceworker means an employee being paid a piece rate; and
(iiiv) pieceworker competent at the piecework task means a pieceworker
who has at least 76 hours2 weeks’ experience performing the task (for
example, picking apples, picking strawberries or pruning grape vines);.
NOTE: A pieceworker can use the employee records kept under clause 15.2(j)
as evidence of their experience performing a piecework task.
(b) The following clauses of this award do not apply to a pieceworker:
(i) Clause 13—Ordinary hours of work and rostering arrangements;
(ii) Clause 18.3(c)—Meal allowance; and
(iii) Clause 21—Overtime.
(c) An employer may pay a full-time, part-time or casual employee a piece rate for
performing a task.
(d) The employer must fix the piece rate at a level such that which enables a
pieceworker working at the average productivity of a pieceworker competent at
the piecework task will to earn at least 15% more per hour than the hourly rate
for the pieceworker.
NOTE: A pieceworker is paid 200% of the piece rate for work on a public
holiday (see clause 27.3).
(e) If a pieceworker does any work in addition to the task for which they are being
paid a piece rate, the pieceworker must be paid for that additional work at the
hourly rate for the pieceworker.
(f) Despite any other provision of clause 15.2 a pieceworker must be paid for each
day on which they work no less than the amount they would have received if
paid for each hour worked at the hourly rate for the pieceworker multiplied by
the number of hours worked on that day.
(g) Pieceworkers are paid allowances under clause 18—Allowances (other than
meal allowance) in addition to the rates payable under clauses 15.2(d), (e)
and (f).
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(h) Before a pieceworker begins a piecework task for an employer, the employer
must give the pieceworker a written record signed by the employer (a piecework
record) that must:
(i) state the date and time the piecework is to commence;
(ii) describe the task for which the piece rate will be paid;
(iii) state the amount of the piece rate;
(iv) include the following statement:
‘Under the Horticulture Award 2020 a pieceworker must be paid for each
day on which they work no less than the amount they would have
received if paid for each hour worked at their hourly rate under the award
(including the 25% casual loading for a casual pieceworker) multiplied
by the number of hours worked on that day.’
and
(v) state the hourly rate for the pieceworker.
NOTE 1: A piecework record can cover more than one piecework task.
NOTE 2: An example of a piecework record the type of record required by clause
15.2(h) is at Schedule I—Piecework Record. There is no requirement to use the
form of record set out in Schedule I—Piecework Record.
(i) If an employer proposes to change the piece rate for a or piecework task of a
pieceworker the employer must first give the pieceworker a further piecework
record including the new rate or task.
(j) The employer must keep the following as employee records:
(i) a copy of each piecework record given to the pieceworker; and
(ii) a record of all hours worked by the pieceworker and the
applicable piece rate at the time those hours were worked.
(k) An employer must give a pieceworker or former pieceworker a copy of the
employee record in clause 15.2(j)(ii) upon request.
(k)(l) For the purposes of the NES the base rate of pay and full rate of pay of a
pieceworker are the same and are worked out as follows:
(i) By dividing the total amount payable to earned by the pieceworker under
this award during the relevant period by the total hours worked by the
pieceworker during the relevant period.
[2022] FWCFB 4
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(iii) If the pieceworker was continuously employed by the employer for a
period of 12 months or more immediately before the rate of pay is to be
worked out—the relevant period is the 12 months before the rate is to
be worked out. If the pieceworker was continuously employed by the
employer for a period of less than 12 months immediately before the rate
of pay is to be worked out—the relevant period is that period.
3. By replacing the words “piecework rate” in clause 27.3 with the words “piece rate”.
4. By inserting a new Schedule I—Piecework record as follows:set out in the attachment
to this determination.
SCHEDULE I—Piecework record
Link to PDF copy of Piecework record
Name of pieceworker: _____________________________________________
Name of employer: _____________________________________________
The piecework will commence on: ___/___/20___ at: _____ am/pm
Piecework Task 1
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The pieceworker will be paid for this task the piecework the amount of $_______ per
____________
Piecework Task 2
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The pieceworker will be paid for this task the piecework the amount of $_______ per
____________
Piecework Task 3
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
[2022] FWCFB 4
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The pieceworker will be paid for this task the piecework the amount of $_______ per
____________
Under the Horticulture Award 2020 a pieceworker must be paid for each day on
which they work no less than the amount they would have received if paid for each
hour worked at their hourly rate under the award (including the 25% casual loading
for a casual pieceworker) multiplied by the number of hours worked on that day.
The pieceworker’s hourly rate under the award is $_______ per hour.
Name of employer representative: ___________________________________________
Signature of employer representative: ________________________________________
Date signed: ___/___/20___
5. By updating the table of contents and cross-references accordingly.
B. This determination comes into operation on 28 April 2022. In accordance with s.166(5)
of the Fair Work Act 2009, this 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 28 April
2022.
PRESIDENT