1
Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective
Variation of Professional Employees Award 2020 on Commission’s own
motion
(AM2022/7)
Scientific services
ACTING PRESIDENT HATCHER
DEPUTY PRESIDENT SAUNDERS
COMMISSIONER P RYAN SYDNEY, 20 JANUARY 2023
Professional Employees Award 2020 – Commission acting on its own motion – hours of
employment and overtime – coverage.
Introduction and background
[1] This matter has been created on the Commission’s own motion to deal with two issues
in respect of the Professional Employees Award 2020 (Award). The first concerns hours of
employment and overtime, and arises from a Full Bench decision issued on 22 April 2020 as
part of the 4 yearly review of modern awards1 (April 2020 decision). The second concerns the
coverage of the Award and was identified in a separate Full Bench decision in Zheng v Poten
& Partners2 (Zheng). The background to these issues is set out below.
Hours of employment and overtime
[2] As part of the 4 yearly review of modern awards, a Full Bench was constituted to deal
with substantive matters in relation to the Award (matter AM2019/5). In the April 2020
decision, the Full Bench agreed with submissions made by the Association of Professional
Engineers, Scientists and Managers, Australia (APESMA) that clause 13 (previously clause 18)
of the Award, which deals with hours of employment and overtime, does not achieve the
modern awards objective.3 The Full Bench said:
“[59] In its Outline of Submission APESMA identified several deficiencies with the
current provision which it submits, fails to meet the modern awards objective. The key
concerns are summarised as follows:
1 [2020] FWCFB 2057
2 [2021] FWCFB 3478 at [45]-[46] and [58]
3 [2020] FWCFB 2057 at [60]-[61]
[2023] FWCFB 13
DECISION
AUSTRALIA FairWork Commission
[2023] FWCFB 13
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Averaging of 38 Hours Over a Cycle – no definition of a cycle and the
consequential issues of lack of prescribed compensation in Hours of Work clause
for the working of additional hours.
No enforceable minimum standard for working additional/unsociable hours –
including no provision for record keeping/reconciliation.
Employees covered by the award are disadvantaged when compared to other
modern awards with more advantageous provisions, including modern awards
covering professional/managerial employees and non-professional employees
performing similar work alongside professional employees in a similar
environment.
[60] APESMA submits that the current provision is unenforceable and fails to meet the
modern awards objective in that it fails to provide a fair and relevant safety net and,
accordingly, changes are ‘necessary’ to achieve the modern awards objective.
[61] We agree with APESMA’s assessment. In its current form clause 18 does not
achieve the modern awards objective.” [footnotes omitted]
[3] The Full Bench went on to reject a package of amendments advanced as a consent
position by the APESMA and the Australian Industry Group (Ai Group) on the basis the
proposal lacked merit, and the parties were invited to file further submissions.4 While the
majority of the 4 yearly review is now concluded,5 this matter remains outstanding.
Coverage
[4] Separately, the Full Bench in Zheng identified concerns with the way in which the
coverage of the Award is described, noting there has been excessive litigation as to whether
unfair dismissal applicants are covered by the Award.6 The Full Bench made the following
observations:
“[45] It is to be noted that the ‘principal purpose’ test was utilised in Carpenter to
determine whether the employee in question fell within the incidence of the relevant
award, which was described in terms of the specific work function of the employee, and
not to determine whether the employee fell within a particular classification in the
award. It appears to us, however, that the ‘principal purpose’ test is singularly ill-suited
to determine whether a person falls within one of the classifications in the PE Award
(or indeed the IT Award). That is because the classifications, including but not limited
to the Level 3 classification considered in Ms Zheng’s case, are expressed in highly
generic terms and do not describe with any specificity the job functions required to be
performed at each level. It appears to us that the classification descriptors have been
drafted primarily in order to determine, by reference to the degree of skill and
4 [2020] FWCFB 2057 at [70]-[87]
5 [2022] FWCFB 189
6 [2021] FWCFB 3478 at [45]-[46] and [58]
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responsibility being exercised, in which classification a person otherwise covered by
the award will fall, rather than to identify whether a person is covered by the award at
all. In respect of Level 3, for example, the classification descriptor begins by referring
to ‘An employee at this level…’, and the subsequent criteria do not describe any
function particular to the job of an engineer, IT specialist or scientist but merely uses
broad expressions such as ‘mature professional knowledge’, ‘scope for individual
accomplishment’, ‘coordination of more difficult assignments’ and ‘modify established
guides and devise new approaches’. The only language which appears to attach to work
which might be performed by an engineer, IT specialist or scientist are the words
‘professional’ and ‘technical’, but these are used only in the most general way. We
consider that the main function of the Level 3 descriptor is to distinguish that
classification from the other classifications above and below it. Identifying the
‘principal purpose’ of an employee’s employment and then attempting to determine
whether that purpose fits within such a generically defined classification descriptor
seems to us to be an inchoate task likely to produce difficulty in rendering a clear
answer.”
[5] The Full Bench noted that interested parties may wish to consider whether the coverage
provisions of the Award should be reviewed so that the scope of its coverage is expressed with
greater certainty and so questions about whether it covers particular employees can be
determined more readily and with greater consistency.7
[6] The procedural history of this matter is as follows:
A directions hearing was held on 16 March 2022. Following this, the parties were
directed to confer in relation to the hours of employment and overtime and
coverage issues and report back to the Commission on 2 May 2022.
The report-back was held on 27 May 2022 at which the parties agreed to continue
their discussions in relation to two issues. A conference was held on 29 June 2022.
A further report-back was held on 3 August 2022, at which the parties advised
the Commission that they had been unable to reach agreement on a resolution to
the issues. On 4 August 2022 directions were issued setting out a timetable for
interested parties to file evidence, submissions and reply material before a final
hearing on 28 October 2022.
On 15 September 2022 the timeframes for filing material were extended.
On 10 October 2022 the filing timeframes were further extended and the hearing
was rescheduled to 23 and 25 November 2022 at the parties’ request.
The hearing ultimately took place on 23 November 2022 only.
[7] The following initial submissions, evidence and draft determinations were filed:
7 [2021] FWCFB 3478 at [58]
[2023] FWCFB 13
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The Ai Group filed written submissions and a draft determination setting out its
proposed variations to the Award on 19 September 2022;8
Australian Business Industrial and the NSW Business Chamber (ABI and
NSWBC) filed written submissions on 19 September 2022;9 and
The APESMA filed written submissions, witness statements made by Jacki
Baulch, Mateja Simovic and Alex Crowther as well as a draft determination
setting out its proposed variations to the Award on 19 September 2022;10
[8] The following parties filed submissions in reply:
ABI and NSWBC on 9 November 2022;11 and
the Ai Group on 9 November 2022.12
[9] The APESMA filed supplementary submissions on 22 November 2022.13
[10] We deal with the hours of employment/overtime issue and the coverage issue separately
below.
Hours of employment and overtime
APESMA
[11] The APESMA filed a draft determination which set out its proposal for variations to the
Award to resolve the issues concerning hours of employment and overtime. In summary, its
draft determination involves the following variations:
(1) A variation to clause 13.2 to require that ordinary hours be averaged over a regular
cycle of 6 months.
(2) A new clause 13.3 establishing a span of ordinary hours from 6.00 am to 6.00 pm
Monday to Friday.
(3) A new clause 13.4 establishing the spread of ordinary hours by reference to any
different award which covers other employees in the workplace who work in
association with professional employees covered by the Award.
(4) A new clause 13.5 enabling the working of rostered afternoon and night shifts.
8 Ai Group – Submission and draft determination
9 ABI and NSWBC – Submission
10 APESMA – Submission, witness statements and draft determination
11 ABI and NSWBC – Submission in reply
12 Ai Group – Submission in reply
13 APESMA – Supplementary submissions
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-sub-aig-190922.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-sub-abi-anor-190922.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-wss-pa-190922%20-redacted.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-sub-abi-anor-091122.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-sub-aig-091122.pdf
https://www.fwc.gov.au/documents/documents/awardmod/variations/2022/am20227-sub-pa-221122.pdf
[2023] FWCFB 13
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(5) A new clause 13A, Overtime, which provides for:
overtime rates of pay of time and a half for the first three hours and double
time thereafter, calculated daily;
a minimum payment of three hours’ pay on Saturdays and Sundays;
rest breaks during and after overtime;
call-back prescriptions;
minimum overtime payments for remote service/support;
a 20% stand-by allowance;
a requirement for overtime hours to be reasonable; and
the model time off in lieu of payment for overtime (TOIL) clause.
(6) A new clause 13B which provides for penalty rates of 115% for afternoon shifts,
130% for night shifts, 150% for Saturday work, 200% for Sunday work and 250%
for public holiday work.
(7) A new clause 13C, being a model annualised wage arrangements clause.
[12] In support of its proposal for variation of the Award, the APESMA submitted that the
existing provisions in respect of overtime, call-backs, remote support and working shifts in
clause 13 of the Award are vague, uncertain and (consequently) unenforceable. It submitted
that the existing Award rates are minimum rates for 38 ordinary hours which do not compensate
for additional hours or alternative work patterns and, in order to meet the modern awards
objective, it is necessary that the Award include enforceable obligations to make additional
payments for work outside ordinary hours, as well as the other terms identified by the Full
Bench at [81]-[85] of the April 2020 decision.
[13] The APESMA identified that the terms of its draft determination are derived from the
following sources:
The proposed clause permitting the span of ordinary hours to be taken from a
different award in certain circumstances derives from clause 13.5 of the Clerks—
Private Sector Award 2020 which, it submitted, is relevantly a modern award that
is occupation-based instead of the more typical industry-based nature of most
modern awards.
The proposed annualised salary clause is based on the Model 1 proposal for those
who work a consistent pattern of hours in the 4 yearly review of modern awards
– Annualised Wage Arrangements decision.14 The proposed draft clause includes
14 [2019] FWCFB 1289 at [53]
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shift work, because shift work is included in the exposure draft of the
determination proposed for the Health Professionals and Support Services Award
2020.
The proposed TOIL provision is based on the model clause set out in the 4 yearly
review of modern awards—Common issue—Award Flexibility decision.15
The remainder of the clauses in the draft determination, with the exception of the
remote work provision, are based on the wording of relevant provisions from the
Clerks—Private Sector Award 2020.
[14] The APESMA relied upon witness statements made by Ms Jacki Baulch, Mr Mateja
Simovic and Mr Alex Crowther (summarised below) to support their position. Citing the
evidence of Ms Baulch and Mr Simovic, the APESMA submitted that employees whose
contract rate of pay is at or close to the Award minimum rate for 38 hours end up being paid
less than the Award minimum rate per hour when they work more than 38 hours in a week, with
no legal capacity to enforce a right to remuneration for those additional hours. It submitted that
the vast majority of modern awards which apply to professional employees provide for overtime
payments and TOIL arrangements, citing the evidence of Ms Baulch, which reviews 30 modern
awards applying to professional employees and notes that 26 of the awards contain overtime
provisions and 24 include TOIL provisions. It also relied on Ms Baulch’s evidence as
demonstrating that professional employees are required to work additional hours, particularly
younger workers and graduates, and pointed to Mr Crowther’s evidence about the 2022
Professional Engineers Remuneration Survey which identifies that there are professional
engineers and scientists who are being paid less per hour worked than the award rate when all
hours worked are taken into account. Accordingly, the APESMA submitted, the Commission
should vary the Award pursuant to s 157(3) to meet the modern awards objective in the terms
of its draft determination.
Evidence of Mr Crowther
[15] Mr Alex Crowther holds the position of Surveys Manager at the APESMA. In his
witness statement, Mr Crowther described the conduct and outcomes of a series of surveys of
professional engineers and scientists. The outcomes relevantly included:
The mean of the average number of hours worked per week by professional
engineers in the private sector was 43.3 in 2022 and 44 in 2021.
In 2022, 2.3% of Level 1 professional engineers, 6.6% of Level 2 professional
engineers, 1.0% of Level 3 professional engineers and 1.7% of Level 4
professional engineers reported rates below the Award rate of pay if the Award
rate is to be paid for all hours worked. In 2021, the percentages were 23.1% of
Level 1 professional engineers, 14.8% of Level 2 professional engineers, 5.3% of
Level 3 professional engineers and 2.2% of Level 4 professional engineers, and in
2018 they were 28% of Level 1 professional engineers and 19.4% of Level 2
professional engineers. There would be a significantly higher incidence of below-
15 [2015] FWCFB 4466 at [267]
[2023] FWCFB 13
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award hourly rates if payment at the rate of time and a half were required for hours
worked in excess of 38 a week under the Award.
The median base hourly rates of pay for professional engineers likely to be
covered by the Award in 2022 were $35.82 for Level 1, $46.91 for Level 2, $58.52
for Level 3 and $71.49 for Level 4 (based on either a 38-hour working week, or a
shorter working week where indicated on an individual basis).
The mean of the average number of hours worked per week by professional
scientists in the private sector was 44.8 in 2021.
In 2021, 24.2% of Level 1 professional scientists, 11.8% of Level 2 professional
scientists, 3.5% of Level 3 professional scientists and 3.5% of Level 4 professional
scientists reported below-Award rates where all self-reported hours are accounted
for. If a 50% loading were applied to hours in excess of 38 hours per week (that
is, payment at the rate of time and a half), the incidence of payment below Award
rates becomes 24.2% of Level 1 respondents, 18.3% of Level 2 respondents,
11.0% of Level 3 respondents and 6.5% of Level 4 respondents.
The median base hourly rates of pay for professional scientists likely to be covered
by the Award had a median base hourly rate of pay of $34.81 for Level 1, $42.88
for Level 2, $52.97 for Level 3 and $69.06 for Level 4 (based on either a 38-hour
working week, or a shorter working week where indicated on an individual basis).
[16] In relation to the methodology used in undertaking the surveys, Mr Crowther
acknowledged the following limitations:
Members of the APESMA represented a larger proportion of the overall
respondents than the proportion of the overall number of professional engineers,
scientists and information communication technology professionals working in
Australia that are APESMA members.
Survey respondents self-reported their pay, regular hours of work and their
classification.
To maximise responses, all available contacts believed to be employed in the
surveyed profession were invited to participate and all responses were included if
sufficient information had been provided, and no additional attempts were taken
to make the survey sample more closely resemble the broader profession.
[17] In cross-examination, Mr Crowther further conceded that, as the 2018 survey included
introductory paragraphs stating that the APESMA was seeking variations to the Award, it is
possible that an employee concerned about this issue would be more likely to respond to the
survey than an employee who was not.16 He also accepted that some forms of employee benefits
such as the value of an employer-provided vehicle had not been included in calculations of
16 Transcript, 23 November 2022 PNs 388-396
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employee earnings,17 and he clarified that the base hourly rates recorded do not include any
separate amounts such as overtime payments and allowances, that survey respondents were
instructed to exclude superannuation allowances from their base rate and that it represented an
amount before any salary sacrifice.18
Witness Statement of Ms Jacki Baulch
[18] Ms Baulch is the Principal Industrial Officer in the Federal Office of the APESMA. In
her witness statement, Ms Baulch addressed the typical patterns of work for engineers and
scientists and their terms of employment. Ms Baulch stated that the most common issues raised
with her by members covered by the Award related to their proposed employment contracts,
unfair dismissals, underpayment issues associated with them being paid an annual salary, and
working excessive hours for which there was not considered to be adequate compensation.
[19] Ms Baulch’s statement annexed a table setting out extracts of the hours, overtime and
penalty provisions applying in the predecessor awards to the Professional Employees Award
2010 (2010 Award). Ms Baulch said that it appeared that overtime penalties, TOIL
arrangements, specified spans of hours, weekend and public holiday penalties, detailed recall
to work/callout/standby provisions and detailed shiftwork provisions applied to some pre-
reform awards and NAPSAs covering roles performed by workers under the current Award.
She also identified other awards resembling the current Award which, while not specifying
penalty payments for overtime, working unsociable hours, weekends or detailed arrangements
for TOIL, did refer to the need for providing additional recognition when additional hours are
worked and for taking account of what would apply to others working in the same industry.
[20] Ms Baulch’s statement was also accompanied by a review she conducted of overtime
and TOIL provisions of the modern awards that cover graduates and professionals. Her review
indicated that the majority of modern awards covering graduates and professionals provide for
overtime to be paid at time and a half for the first few hours of overtime worked and double
time thereafter, and that most graduates and professionals covered by these awards have access
to TOIL at either overtime penalties or at time-for-time.
[21] As to the hours worked by employees under the Award, Ms Baulch stated that:
Engineers within the construction industry had told her that they regularly work
in excess of 45 hours per week, are paid an annual salary and do not get paid
overtime or access to TOIL.
The APESMA’s research and anecdotal information received from graduate
engineers working in the construction industry suggested that it is likely that some
of them are not paid the minimum Award rates if the hours they worked were
included in their total remuneration.
Many consulting industry engineers have told her that it is common for them to
work 60 to 70 hours a week, seven days a week, when they have a project in
17 Ibid PN 432.
18 Ibid PNs 442-443.
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operation or are preparing a bid. Depending on the industry in which the engineer
consults, they may or may not be able to take a break after the project is completed.
In her experience it is usual for consulting engineers’ employment contracts to
provide an annual salary in exchange for the employee working all the hours
required to do the job. Such contracts do not stipulate or acknowledge a set number
of hours to be worked in a week.
Consulting industry engineers have informed her that there are very rarely any
assessments made to determine if the pay they receive adequately compensates
them for the hours they work.
Some engineers working in the manufacturing industry are covered by enterprise
agreements that tend to provide overtime payments and TOIL. Based on her
interactions with them, engineers employed in manufacturing have generally
indicated that they are paid annual salaries, their contracts require them to work
all the hours required to do the job, they do not receive additional overtime
payments (but sometimes get to take some TOIL) and they generally work
between 45 and 50 hours per week.
In her experience engineers in the defence contracting industry are more likely to
work 12-hour shift arrangements than others covered by the Award. Such
engineers have advised her that they are not being treated as shift workers and are
not receiving the employment benefits generally available to shift workers such
as access to five weeks’ annual leave.
Mining engineers generally work in a manner similar to other construction
industry workers, and their employment contracts are generally more financially
rewarding than for other engineers. However, she had been informed that their
hours of work are generally in excess of 50 a week and in some instances between
60 and 70 hours a week for long periods of time. They are also often subject to
FIFO arrangements, 12-hour shifts without the benefit of the shift penalties, and
do not receive overtime payments or TOIL. In her experience, their employment
contracts provide an annual salary and require employees to work the hours
required to do the job without specifying any standard hours.
Scientists working in the food production industry tend to be poorly paid in
comparison to engineers, but tend to not have the same work/life balance
problems. However, medical research scientists report a lack of job security and
tend to work excessive hours because the funding and project timelines set to
complete research projects is often insufficient.
Ms Baulch stated that in her experience information technology professionals
frequently work long hours because they are often required to work outside of
ordinary business hours so that their activity does not disrupt their clients’
businesses, in addition working during normal business hours. She said that the
employment contracts she has seen generally indicate that no overtime payments
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or TOIL arrangements are available and pay an annual salary in compensation for
all the hours required to be worked.
[22] Ms Baulch said that she believed that the awards system that applied prior to the making
of the 2010 Award generally worked for employees covered by it, but that changes in the nature
of work such as the current ubiquity of emails and mobile phones, and the lack of overtime and
TOIL provisions, together with the removal of the “market rates” component of the predecessor
awards, has left people covered by the Award with industrial regulation that now does not meet
their needs.
[23] Ms Baulch was not cross-examined by any party.
Witness Statement of Mr Simovic
[24] Mr Simovic is an Organiser for the APESMA. In his witness statement, Mr Simovic
described the structure of the games sector of the IT industry, the types of work performed and
worker demographics. He said that:
to his knowledge no enterprise agreements have been made within the sector;
in his experience around 60% of the sector consists of contractors, freelancers and
casual employees, and the remaining 40% are permanent full-time or part-time
employees;
IT-qualified employees and professional engineers covered by the Award
typically work as software engineers, programmers or systems managers; and
on the basis of the results of a survey conducted by Game Workers Unite Australia
(annexed to Mr Simovic’s statement), and consistent with his experience, the
games sector is not characterised by high incomes.
[25] In relation to hours of work and remuneration, Mr Simovic said that in periods before
the release of a game or immediately after a game’s release, technical teams are often required
to work significant additional hours and that it was not unusual for teams to work 60 hours per
week for two months straight. He said that game workers who are employees are most
commonly engaged on annual salary arrangements. He was not aware of any contracts
providing for overtime payments, and has reviewed contracts providing for below-Award rates
of remuneration. He also said that the funding model applied to the development and production
of games leads to employers in the sector expecting periods of intense work hours, which in
some cases could be detrimental to employees’ health, and that some employees are encouraged
to work longer hours through the provision of paid meals. Mr Simovic stated that in his view
protections are required to discourage employers from imposing excessive work hours on
young and Award-reliant employees for no additional remuneration and would lead to
companies improving their planning and budgeting.
Ai Group
[26] The Ai Group’s draft determination proposes:
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(1) A new clause 13.2 allowing for the averaging of ordinary hours over a period of
up to 12 months.
(2) The deletion of existing clauses 13.3-13.6.
(3) A new clause 14.3, applicable to Level 1 employees only, which would require
compensation in the form of payment at the applicable minimum hourly rate, or
TOIL, for overtime, call-backs, remote service/support, or time worked on
afternoon, night or weekend shifts. Any additional payments could be absorbed
into over-award remuneration.
(4) A new clause 14.4, applicable to Level 2-5 employees, which essentially repeats
existing clauses 13.3-13.6, with the addition of requirements that the form and
level of compensation provided to an employee pursuant to clause 14.4 must be
agreed between an employer and employee at or prior to the commencement of
the employee’s employment, and that the employer must inform the employee in
writing of the categories of work being compensated for and the form of the
compensation.
(5) The addition of the model TOIL clause as clause 14.5.
[27] The Ai Group submitted that it would not be appropriate for the Award to contain
prescriptive provisions concerning hours of work and the basis upon which those hours are
remunerated because employees covered by the Award are highly-skilled and qualified, are
often required to deliver specific outcomes rather than perform discrete tasks, are prescribed
minimum rates that are among the highest across the modern awards system, and often have
discretion as to how, when and where they perform their work. It further submitted that the
Commission should be cautious in varying the Award’s longstanding hours of work and
remuneration scheme, noting any variation that would impose greater costs or inflexibilities
needs to be supported by probative and cogent evidence. The Ai Group nonetheless
acknowledged that the Commission had found that clause 13 of the Award does not achieve the
modern awards objective, and stated that it has proposed the changes set out above to address
key criticisms of the current provisions.
[28] In relation to the existing Award provisions, the Ai Group submitted that:
Clause 13.3 requires an employer to compensate an employee for time worked in
specific circumstances, an important protection compelling an employer to
provide some form of additional compensation for the work specified and drawing
parties’ attention to the need for additional compensation to be provided in those
circumstances.
Clause 13 is not as prescriptive as the hours of work and penalty rate regimes
contained in many other awards, which is reflective of the nature of work covered
by the Award. The Award appears to have been deliberately designed to enable
employers and employees to come to arrangements that suit their interests, as was
[2023] FWCFB 13
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the case in the relevant pre-modern awards that previously covered such
employees and employers, and should not lightly be disturbed.
Clause 13.3(a), which requires employers to compensate employees for time
worked “regularly” in excess of ordinary hours, is a textual indicator for the
proposition that the minimum rates prescribed by the Award are intended to
compensate employees for the performance of at least some overtime without
additional remuneration.
If the Commission proposes to introduce an obligation to pay overtime rates for
all additional hours it would not be appropriate for employees to, in effect, be
compensated twice for such work and further consideration would need to be
given to how annual salaries were set.
Part-time and casual employees are entitled to the minimum hourly rate prescribed
by clause 14.1 for all hours of work consistent with its proposed variations.
The current terms of the Award reflect an assumption that employees are to be
paid an annual salary that is not directly referable to the performance of a specific
quantum of work in any given pay period.
[29] In relation to the variations proposed in its draft determination, the Ai Group firstly
submitted that its proposed clause 13.2 ensures an outer limit of 12 months is placed on the
period over which ordinary hours may be averaged, makes clear that the provision operates by
agreement, enables the continuation of above-award salary arrangements that compensate
employees for all hours of work, and strikes a balance between ensuring the Award clearly
provides for a maximum period over which ordinary hours can be averaged and ensuring such
prescription is sufficiently flexible. As to its proposed clause 14.3, the Ai Group submitted that
it would introduce significant new entitlements for Level 1 employees, and was advanced on
the basis that Level 1 employees may have less scope or capacity to negotiate fair and
reasonable arrangements with their employer or may be more susceptible to being required to
perform additional overtime without sufficient compensation. Proposed clause 14.3(d) would
permit the proposed new monetary obligations to be absorbed into over-award payments, which
would allow Award-derived obligations to be offset against salaries paid to employees through
contractual arrangements, which has not previously been necessary due to the absence of an
obligation to pay specific amounts for working in the circumstances contemplated by existing
clause 13.3.
[30] In relation to Level 2-5 employees, the Ai Group submitted that these are highly-
qualified professionals, with considerable discretion over how and when they work, and
therefore it is not necessary or appropriate to vary the Award to require payment of specific
amounts. Proposed clause 14.4 nonetheless provides additional protections to these employees
by:
making clear that an employer must take into account the terms and conditions
that apply to the majority of employees employed in the relevant establishment;
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requiring agreement between an employer and employee as to the form and level
of compensation provided at or prior to the commencement of employment;
requiring an employer to inform employees of the form of compensation they will
receive and the categories of work it covers, to ensure employees are better placed
to understand the basis upon which they are being compensated and to enable
productive discussions;
requiring an employer to advise an employee of any change to the form or level
of compensation they are receiving; and
compelling the employer to adjust the compensation if they determine it was not
set at an appropriate level, in addition to annually reviewing the compensation
payable.
[31] The Ai Group opposes the variations sought by the APESMA, contending that they:
reflect a fundamental and historic shift in the way in which the Award regulates
the hours of work and remuneration of professional employees, in circumstances
where a case has not been made out for these changes;
would have significant adverse impact on employers and likely also some
employees, reducing the flexibility available to them;
lack adequate consideration of how and when professional employees covered by
the Award in fact perform work, the nature of the work they perform and the
characteristics that distinguish them from employees covered by other awards;
and
are not necessary to ensure the Award achieves the modern awards objective.
[32] The Ai Group submitted that it is critical that the Commission consider the specific
conditions and circumstances of employees covered by the Award, including the following:
employees covered by the Award are highly-skilled, tertiary-qualified
professional employees capable of negotiating fair and appropriate terms and
conditions with their employers;
such employees are sought after and highly-paid, and the desire to employ
competent and capable employees delivering high quality work necessarily drives
many employers to offer terms and conditions that considerably outstrip the
minimum Award conditions;
this is demonstrated by the average weekly earnings of full-time employees in
“professional, scientific and technical services” which according to the Australian
Bureau of Statistics (ABS) were $2108.70, and the median base salaries of the
employees that participated in the APESMA’s own remuneration surveys; and
[2023] FWCFB 13
14
employees covered by the Award are not accustomed to “clocking on” and
“clocking off”, enjoy the autonomy and flexibility that setting their own start and
finish times affords, and are assessed by reference to the quality of the work they
undertake rather than the hours worked.
[33] The Ai Group submitted that the above features of professional employees and the
manner in which they perform work requires a different approach to that found in most other
modern awards. The Ai Group further submitted that various elements of the APESMA’s
proposed variations lack specific justification and should therefore be dismissed, including:
limiting the span of ordinary hours to 6.00 am - 6.00 pm;
limiting the performance of ordinary hours to weekdays, to the exclusion of
weekends;
the definitions of “afternoon shift” and “night shift”;
the shiftwork parameters in proposed clauses 13.5(c)-13.5(g);
the imposition of a minimum payment period in respect of overtime performed on
weekends;
the proposed entitlement to a rest break during overtime;
the terms of the provisions proposed in respect of rest breaks, rest periods, call-
backs, remote service or support, stand-by and TOIL; and
the rate at which employees are to be paid for overtime, shiftwork, ordinary hours
worked on weekends and on public holidays.
[34] The Ai Group submitted that the APESMA’s material does not deal with critical issues,
including when employees covered by the Award typically perform ordinary hours, the extent
to which they perform ordinary hours outside the proposed span of hours, and the extent to
which they are required to perform ordinary hours or overtime on the weekends. The Ai Group
submitted that as the proponent of these variations, the onus of establishing that they are
necessary to achieve the modern awards objective rests with the APESMA.
ABI and NSWBC
[35] ABI and the NSWBC submitted that, given the Full Bench’s view in the April 2020
decision that clause 13 of the Award does not meet the modern awards objective, it cannot be
retained in its current form. They broadly supported the Ai Group’s proposed variations. They
opposed the draft determination filed by the APESMA on the basis that it “extends well beyond
a reasonable attempt to remedy the issues identified by the Full Bench” and submitted that:
the majority of employees covered by the Award work without direct supervision;
other comparable professional roles and occupations are award-free; and
[2023] FWCFB 13
15
remuneration on an “hours worked” basis is simply not a feature of the industries
in which employees covered by this Award work.
[36] Although ABI and the NSWBC acknowledged that defining a period over which hours
may be averaged is necessary, they submitted that the APESMA’s proposed six-month
averaging period (proposed clause 13.2) is unnecessarily limiting and would not allow for the
peaks and troughs which may characterise work in the industries in which employers and
employees covered by this Award operate, and would require reconsideration of existing
remuneration structures.
[37] ABI and the NSWBC expressed concern about the APESMA’s proposed clause 13.5(c),
which provides that ordinary hours of work which constitute shiftwork in accordance with the
proposed definitions can only be averaged over a roster cycle of up to 12 weeks, except where
extended by agreement with a majority of affected employees. They submitted that requiring
employees covered by the Award to work in accordance with a roster is inconsistent with its
fundamental design and purpose, and that this anomaly is amplified by the requirement that an
averaging period can only be extended by agreement with a majority of those concerned. ABI
and the NSWBC also submitted that the APESMA’s proposed span of hours provisions
(proposed clauses 13.3 and 13.5) would restrict employers and employees’ ability to determine
when work is performed in accordance with their respective needs and desires and lead to a
situation where employees must either work within a narrow span of time or receive overtime
payments. This, they submitted, went far beyond remediation of the Full Bench’s concerns
identified in the April 2020 decision and does not provide an outer limit on things such as
overtime, weekend or unsociable hours which have been factored into above-Award
remuneration.
[38] ABI and the NSWBC opposed the APESMA’s proposed regime of overtime payments
(proposed clause 13A) being introduced as a blanket entitlement for all employees, especially
in conjunction with the proposed narrow span of ordinary hours. They also characterised the
proposed additional provisions for rest breaks, 10 hour break after overtime and the resumption
of work the next day, call-back arrangements, remote service/support work and a stand-by
allowance as “burdensome additional arrangements”. ABI and the NSWBC submitted that
these arrangements would impose additional costs on employers and inappropriately limit both
employers’ and employees’ ability to set flexible patterns of work. They submitted that the
APESMA had not advanced a merit case supported by probative evidence to support these
proposed changes.
[39] In relation to the APESMA’s proposed shift work provisions (proposed clause 13B),
ABI and the NSWBC submitted that current clause 13.3 already provides for employees to be
compensated for work on afternoon, night or weekend shifts. This could include non-monetary
benefits such as additional leave or flexi-time to which the employer and employee have agreed,
and this already constituted an appropriate safety net to ensure employees are not regularly
required to work unsociable hours without recognition, while maintaining employees’ and
employers’ capacity to arrive at a remuneration package which meets their needs. In respect of
public holidays, they submitted that this is dealt with by the National Employment Standards
(NES). Finally, the ABI and the NSWBC opposed the annualised wage arrangements provision
proposed by the APESMA (proposed clause 13C).
[2023] FWCFB 13
16
Consideration
[40] The evidence before us is confined to that adduced by the APESMA. We have no direct
evidence from any employer or employee to whom the Award applies. The APESMA’s
evidence was limited, in the cases of Ms Baulch and Mr Simovic, to information gleaned from
their experience in dealing with professionals in various industry sectors covered by the Award.
The survey evidence provided by Mr Crowther, as he readily accepted, had a number of
limitations, including that the survey respondents substantially consisted of APESMA
members, respondents were self-selecting and this likely created a bias towards those who were
concerned about the issues being surveyed, and the data provided by respondents was not
verified. Thus, the survey results cannot be said to be based on a randomly-selected
representative sample of professional employees to whom the Award applies.
[41] However, this does not mean that the APESMA’s evidence is to be disregarded or
assigned no weight. Evidence such as that given by Ms Baulch and Mr Simovic, albeit it is
hearsay, is commonly taken into account and given weight in award cases. Although evidence
of this nature may not meet the requirements for expert evidence, properly speaking,
nonetheless the Commission may rely upon the evidence of persons who have long experience
and established expertise in dealing with employment issues in a particular industry or
occupation. That is particularly so when the evidence, as here, is entirely unchallenged. In
respect of Mr Crowther’s survey evidence, the assessment of such evidence is not a binary task
whereby it is simply accepted or rejected. As was stated in the Penalty Rates Decision, most
survey evidence has methodological limitations, whether in relation to the sample, the nature
of the questions put or the response rate, and the central issue is the extent to which the various
limitations impact on the reliability of the results and the weight to be attributed to the survey
data.19 Even flawed surveys may provide data that can at least be treated as “suggestive or
anecdotal”.20
[42] Having regard to these matters, we make the following findings on the basis of the
APESMA’s evidence:
(1) Full-time professional employees covered by the Award, including engineers in
the construction industry, consulting engineers, engineers in manufacturing,
mining engineers, scientists, IT professionals, and professional employees in the
gaming sector, frequently work hours well in excess of 38 per week, either on a
regular basis or during peak work periods. Mean working hours for professional
engineers and scientists are significantly in excess of 38 per week.
(2) Such employees are usually paid an annual salary which is intended to cover all
hours worked and often do not have any fixed hours of work. They are usually not
paid any overtime payments for hours worked in excess of 38 hours per week and
are only rarely granted TOIL for additional or excessive hours.
19 [2017] FWCFB 1001, 265 IR 1 at [1097]
20 Ibid at [1098]
[2023] FWCFB 13
17
(3) A large majority of professional engineers and scientists are paid significantly in
excess of the minimum annual wages prescribed by the Award, and the median
base hourly rates of pay for such employees are above the minimum Award rates
with the extent of the difference becoming more significant at higher classification
levels.
(4) Notwithstanding finding (3), there is a minority of professional engineers and
scientists who earn less than the amount they would earn if they were entitled to
be paid the hourly rates prescribed in clause 14 of the Award for all hours worked.
[43] It may be added that there is no evidence before us of employees being provided with
additional monetary compensation in accordance with the mechanisms provided for in current
clauses 13.3, 13.4 or 13.5 of the Award, or having their annual remuneration reviewed in
accordance with clause 13.6.
[44] It may be accepted, at a high level of generality, that it is not industrially appropriate for
an award applying to highly-paid professional salaried employees to provide for a prescriptive
regime of overtime and weekend penalty rates and shift allowances. To a certain extent, the
combination of the concept of a profession consisting of persons with specialised knowledge
and skills in a recognised body of learning derived from research, education and training at a
high level and held accountable to ethical and performance standards, and the payment of an
annual salary intended to remunerate all aspects of the employment relationship, requires
professional employees to work flexibly as required to meet the demands of their employment.
[45] However, that principle cannot fully be applied to professional employees who are, in
respect of this Award, “award-reliant” - that is, afforded only the minimum rates and conditions
for which the Award provides - or paid only slightly above the Award minimum rates. The
evidence suggests that, although this is only the case for a minority of employees, it is of most
significance in relation to persons classified at the lower classification levels of the Award. The
minimum annual wages for which the Award provides cannot be regarded as high enough to
compensate any employee, even a professional employee, for all the incidents of their
employment, and were never intended to do so. This may be demonstrated in three ways.
[46] First, the rates of pay in the Award appear not to be properly-fixed minimum rates of
pay for professional employees, for the same reasons as stated by the Full Bench in 4 yearly
review of modern awards – Pharmacy Industry Award 201021 at paragraphs [194]-[198]. For
this purpose, it is useful to compare the rates in the Award to those in the Educational Services
(Teachers) Award 2020 (EST Award), which have recently been the subject of a full work value
consideration, with a new classification structure and properly-fixed minimum rates of pay.22
The key classification in the EST Award is a Level 2 Teacher with proficient accreditation
which, for long day care centres which operate throughout the year, has a minimum annual
salary of $72,572. The equivalent classifications in the Award here would appear to be Level
1, Pay Points 1.2, 1.3 and 1.4 — that is, a four-year qualified professional in their second to
fourth years of employment. The minimum annual wage rates in the Award for these
21 [2018] FWCFB 7621
22 [2021] FWCFB 2051 at [653]-[664]; [2021] FWCFB 6021 at [84]
[2023] FWCFB 13
18
classifications are $58,586, $61,026 and $64,117 respectively — and thus range from 11.7% to
19.3% beneath the equivalent EST Award classification.
[47] Second, far from providing for high salaries, the lower-level salary rates in the Award
may actually render an employee in the category of “low paid” if they work significant
additional hours. The benchmark utilised for the identification of a low-paid employee is either
earnings below $22.20 per hour using ABS data for 2021 or $22.56 per hour using HILDA
data.23 For example, a four-year qualified graduate professional at Level 1, pay point 1.1 will,
on the Award annual wage of $57,619, only earn $22.16 per hour if they work 50 hours in any
week.
[48] Third, although the provisions of clauses 13.2-13.6 of the Award are, as found in the
April 2020 decision,24 unenforceable and fail to provide a fair and relevant safety net, they
nonetheless indicate that the minimum salaries prescribed by the Award were never intended
to constitute the full measure of remuneration for hours worked in excess of 38 per week, or for
unsociable hours.
[49] It may also be noted that there is a major disparity in treatment in the Award as between
full-time employees on the one hand and part-time and casual employees on the other. Clause
10.2 of the Award provides that part-time employees must be paid the appropriate minimum
hourly rate for their classification as prescribed in clause 14 - that is, the hourly rate is payable
for every hour worked. Similarly, clause 11.1 provides that casual employees are to be paid the
minimum hourly rate prescribed by clause 14, plus the casual loading of 25%, “per hour
worked”. In both cases, if the employee works in excess of 38 hours in a week, they will
continue to be paid their hourly rate. However, full-time employees have no prescribed rate of
pay for additional hours worked beyond the inchoate entitlement to “compensation” in clauses
13.3-13.6.
[50] We consider that it is necessary, therefore, that clause 13 should prescribe additional
rates of compensation for additional and unsociable hours for full-time employees in order for
the Award to meet the modern awards objective of establishing a fair and relevant safety net. It
is in this context that we consider the alternative proposals advanced by the Ai Group and the
APESMA.
[51] The Ai Group proposal involves, in substance:
(1) The capacity to average ordinary hours over a 12-month period.
(2) A requirement to pay Level 1 employees the applicable minimum hourly rate for
all hours worked in excess of or outside ordinary hours, or on call-backs, or on
afternoon, night or weekend shifts or, alternatively, provide TOIL.
(3) A continuation of the existing arrangements for Level 2-5 employees, subject to
new requirements for the formalisation of compensation arrangements prior to the
commencement of employment.
23 Annual Wage Review 2021-22 [2022] FWCFB 3500 at [106]
24 [2020] FWCFB 2057 at [60]-[61]
[2023] FWCFB 13
19
[52] We do not consider that this proposal would establish a fair and relevant safety net. It
makes no provision for any additional remuneration for employees working ordinary hours
during unsociable periods. Further, in respect of employees in Levels 2-5, it proposes in
substance the continuation of the existing arrangements which have already been found not to
meet the modern awards objective. For employees at these levels, it remains the case under the
Ai Group proposal that there is no entitlement as such to additional remuneration or TOIL for
hours worked in excess of 38 per week, notwithstanding the proposed new requirement for the
formalisation of compensation arrangements. The form of any additional “compensation” is not
the subject of any minimum prescription, and the mechanism for the review of annual
compensation remains unenforceable. The Ai Group proposal is therefore rejected.
[53] The APESMA proposal contains the following elements:
(1) The capacity to average ordinary hours over a six-month period.
(2) The establishment of a span of ordinary hours of 6.00 am to 6.00 pm, Monday to
Friday (or as prescribed by the award applicable to the majority of employees at
the workplace).
(3) The establishment of a shift work regime, with shift rates of 115% for afternoon
shifts and 130% for night shifts.
(4) The establishment of penalty rates for Saturday work (150%), Sunday work
(200%) and public holidays (250%).
(5) The addition of a new overtime clause which would provide for penalty rates of
time and a half for the first three hours of overtime and double time thereafter,
computed on the basis that each day’s work will stand alone, and which would
also provide for rest breaks during overtime and rest periods after overtime. The
clause would also make specific provision for the circumstances of call backs and
remote service/support.
(6) The addition of the standard provision for TOIL.
(7) The addition of a standard annualised wage arrangements provision.
[54] The APESMA seeks to justify this proposal by reference to the analysis in Ms Baulch’s
witness statement concerning provisions in some pre-modernisation State and federal awards
applicable to professional engineers and scientists for a specified span of hours, penalty
payments for working on weekends and public holidays and overtime, TOIL, call-back, remote
work and stand-by arrangements, as well as detailed shift work provisions. However, we do not
think much purpose is served by revisiting pre-modernisation award provisions which have not
been in effect for well over a decade. The Full Bench of the Australian Industrial Relations
Commission which conducted the award modernisation exercise drafted the 2010 Award as an
amalgamation of three awards proposed by the parties25 and in doing so determined to include
25 [2009] AIRCFB 450 at [196]
[2023] FWCFB 13
20
an hours provision which “is not prescriptive but nonetheless alerts employees to the need to
take into consideration the demands placed upon professional employees when fixing
remuneration”.26 This occurred without apparent opposition from the APESMA. Our task in
the current proceeding is not to re-undertake the award modernisation exercise by selectively
picking provisions from pre-modernisation for inclusion in the Award, but rather to assess what
is necessary to achieve the modern awards objective by reference to the currently prevailing
circumstances. These circumstances include that prescriptive provisions concerning a span of
ordinary hours of work, overtime, shift work, weekend work and the like have not applied to
employers and employees covered by the Award since it commenced operation in 2010.
[55] We consider that the APESMA’s proposal is overly prescriptive having regard to the
very limited nature of the evidence before us. The evidence adduced by the APESMA simply
does not address most of the major elements of its proposals: there is no evidence before us, for
example, of the circumstances pertaining to the performance of shift work by professional
employees (beyond the mere assertion that they sometimes perform it), only very limited
evidence concerning the times at which professional employees typically start work, and no
evidence at all concerning call-backs, remote work, and work on Sundays and public holidays.
Accordingly, we cannot be satisfied that the provisions proposed by the APESMA would be
appropriate for the employment relationships covered by the Award. To the contrary, it is likely
that they would have a significantly disruptive effect given the current lack of prescription in
these areas and introduce unnecessary complexity and prescription into the sphere of
professional salaried employment. For these reasons, we also reject the APESMA proposal.
[56] The approach we prefer is a minimalist one which establishes, for employees paid at or
close to the minimum salary rates in the Award, an enforceable entitlement to remuneration, or
TOIL, for hours worked in excess of 38 per week and a baseline entitlement to additional
remuneration for unsociable hours, but which otherwise maintains the degree of flexibility
appropriate for professional salaried employment. Such an approach would involve amending
the Award to include provisions to the following effect:
(1) Ordinary hours of work, for which the minimum annual wages prescribed in
clause 14 are payable, are 38 per week. There is no need for a provision allowing
averaging of ordinary hours because of the minimalist approach we intend to
adopt.
(2) An employer may, in accordance with s 62 of the Fair Work Act 2009 (Cth) (FW
Act), request or require that a full-time employee work overtime (that is, in excess
of 38 hours per week) provided that the additional hours are reasonable.
(3) The employee shall, subject to (4), (5), and (6) below (and unless (8) below
applies), be paid the appropriate hourly rate in clause 14 for all hours worked in
excess of 38 in a week in addition to the minimum annual wages in clause 14.
This shall include work on or in connection with call-backs and work performed
on electronic devices or otherwise remotely.
26 [2009] AIRCFB 826 at [236]
[2023] FWCFB 13
21
(4) A provision in the terms of the model clause in respect of TOIL.27
(5) A penalty rate of 125% shall be payable for all hours worked (whether ordinary
or overtime hours) before 6.00 am or after 10.00 pm on any day Monday to
Saturday. For casual employees, this is in addition to their casual loading.
(6) A penalty rate of 150% shall be payable for rostered hours (whether ordinary or
overtime hours) worked on a Sunday or public holiday. Again, for casual
employees, this is in addition to their casual loading.
(7) The employer shall keep records of all hours worked by an employee in excess of
38 per week, or worked before 6.00 am or after 10.00 pm on any day Monday to
Saturday, or worked at any time on a Sunday or public holiday, for the purpose of
compliance with the requirements of (3), (4), (5) and (6) above. We note that this
is necessary because the requirement in reg 3.34 of the Fair Work Regulations
2009 (Cth) to keep records of overtime records only applies “if a penalty rate or
loading (however described) must be paid for overtime hours actually worked by
an employee”, and we do not intend to require that a penalty or loaded rate be paid
in respect of overtime except where the requirement in either (5) or (6) applies.28
(8) The requirements in (3), (4), (5), (6) and (7) above will not apply in respect of
employees covered by the Award who have a contractual entitlement to an annual
salary that is 25% or more in excess of the minimum annual wage for the
appropriate classification in clause 14.
[57] We consider that such an approach is appropriate in the context of the current annual
wages for which the Award provides. It may require reconsideration in the event that an
application is made to vary the Award to provide for properly-fixed minimum annual wage
rates.29
[58] The variations we intend to make are, we consider, necessary to ensure that the Award
achieves the modern awards objective in accordance with the requirement in s 138 of the FW
Act. In respect of the mandatory considerations in s 134(1), we have taken these matters into
account in the following way (using the paragraph designations in the subsection):
(a) In the way earlier explained, the lack of any additional entitlement to remuneration
for hours worked in excess of 38 per week for full-time employees may lead to
award-reliant employees at the lower classification levels to be notionally “low
paid” where they work significant additional hours. This will be remedied under
the approach we intend to take, and this weighs in favour of the variations.
(aa) The variations do not have any implications for access to secure work across the
economy, and there we consider this to be a neutral consideration.
27 See [2016] FWCFB 4258
28 See Real Estate Industry Award [2019] FWCFB 2634 at [36], Annualised Wage Arrangements [2018] FWCFB 154 at
[124]
29 See President’s Statement – Occupational segregation and gender undervaluation, 4 November 2022 at [33]
[2023] FWCFB 13
22
(ab) The variations, by allowing for proper remuneration of overtime and work
performed during unsocial hours, on Sundays and public holidays, and on night
shifts (except where the employee is paid 25% or more in excess of the minimum
annual wage rates), may conceivably constitute workplace conditions that
facilitate women’s full economic participation. This weighs in favour of the
variations to a minor degree.
(b) We do not consider that the variations will encourage or discourage collective
bargaining. We therefore consider this to be a neutral consideration.
(c) It is possible, although we cannot put it any higher than this, that the enhanced
entitlements we intend to provide will increase workforce participation. This
weighs to a minor degree in favour of the variations.
(d) We do not consider that the variations will impede flexible modern work practices
and the efficient and productive performance of work, and may indeed promote it
by appropriately remunerating the flexible performance of work outside of
ordinary hours. We consider this to be a neutral consideration.
(da) The variations will provide an entitlement to additional remuneration for
employees working overtime, unsocial hours, on Sundays and public holidays,
and on night shifts (except where the employee is paid 25% or more in excess of
the minimum annual wage rates) in circumstances where no such entitlement has
previously existed. This weighs to a significant degree in favour of the variations.
(f) In respect of employees who are paid less than the 25% exemption rate which will
be established, it is likely that the variations will increase employment costs, and
also the regulatory burden (by requiring that records of hours worked be kept).
The cost effect, however, arises to a large degree because the evidence suggests
that the existing provisions of clause 13 requiring compensation for working
additional or unsocial hours are not complied with. For employees who are paid
at or above the exemption rate, the variations will have no relevant effect. Overall,
this consideration weighs against the variations.
(g) This consideration is of limited relevance to the variations and has neutral weight.
(h) We do not consider that the variations will have any implications for or discernible
effect upon the national economy, and this is accordingly a neutral consideration.
[59] The above considerations, overall, weigh in favour of the variations being made. These
variations will ensure that the safety net provided by the Award is fair, by ensuring that work
performed in excess of ordinary hours or at unsocial times is appropriately remunerated, and is
also relevant in that it establishes a scheme of entitlements that is certain and enforceable.
[2023] FWCFB 13
23
Coverage
APESMA
[60] The APESMA made two submissions in relation to the issue of award coverage. In its
initial submission of 19 September 2022 (September submission), it proposed that the following
note be included in Schedule A—Classification Structure and Definitions to the Award,
immediately below the heading, to ensure that an employee who performs professional
engineering or scientist duties would be covered even if their duties do not fall squarely into
one of the existing classification descriptors:
“Note: Other than where, pursuant to clause 4.7, there is an award classification in
another award that is more appropriate, an employee performing professional
engineering or professional scientific duties has to be placed into one of [the] following
classifications, being the classification which is the most appropriate.
For clarity, this applies equally to employees who have managerial responsibilities
unless those managerial duties are the principal purpose of the position and those
managerial duties do not involve the employee performing any professional engineering
or professional scientific duties.”
[61] The APESMA submitted that professional engineers and professional scientists are
engaged in a wide range of disparate jobs with multiple duties, which can include supervision
or management of other workers. The definitions of engineering and scientific duties in clause
2 of the Award to mean duties carried out by a person in any particular employment, “the
adequate discharge of any portion” of which duties requires qualifications of the employee as
a professional engineer/scientist, have deliberately and historically been used to reflect the
difficulties that would otherwise arise from attempting to define in a more precise manner the
nature of the roles. An important aspect of these definitions, it submitted, is that coverage is not
to be determined based on the “principal purpose” test, since it applies where any portion of the
employee’s duties have the requisite character.30
[62] The APESMA referred to s 163 of the FW Act, under which the Commission is not
permitted to reduce the coverage of a modern award unless it is satisfied there is another award
other than the Miscellaneous Award that would appropriately cover those who are excluded. It
submitted that the Commission should only be concerned with making changes to the
classification definitions in Schedule A to remove ambiguity in a manner that does not reduce
existing coverage, and should therefore reject the proposals made by the Ai Group. Citing
Zheng, the APESMA submitted that the proper effect of the existing coverage clause is that a
person who is performing professional engineering or professional scientific duties will fall
within one of the classifications in Schedule A of the Award. The APESMA acknowledged that
the application of the “principal purpose” test to determine if the duties of the employee fall
within the classification descriptors has not always been straightforward, given the
classification descriptors in Schedule A are cast in generic terms, consistent with the broad
coverage of the Award. However, it submitted, the solution should not be to attempt the
30 Halasagi v George Weston Foods Ltd [2010] FWA 6503 at [23]; Zheng v Poten & Partners (Zheng) [2021] FWCFB 3478
at [36]-[37] and [45]; Bateman v Communications Design & Management [2014] FWCFB 8768 at [22]-[23]; Zheng v
Poten & Partners [2021] FWCFB 6041 at [15].
[2023] FWCFB 13
24
“mammoth task” of rewriting the classification descriptors, as this runs a risk of reducing
coverage and is not necessary in light of Zheng.
[63] The APESMA submitted that Zheng has reconfirmed that the “principal purpose” test is
not to be applied to the question of whether the employee has professional engineering or
professional scientific duties. The true intent of the classification clause is to place those who
fall within the coverage of the Award into one of the classifications. Accordingly, the APESMA
submitted, there is no need to do more than include a note that confirms that is the case. This
would not reduce existing coverage, since the Award would continue to apply to employees
who have managerial responsibilities if the employee performs professional engineering or
professional scientific duties as defined. It also submitted that a further note could be included
stating that the Award does not apply to those who are principally employed to be a manager
or senior manager if their managerial duties do not involve the employee performing any
professional engineering or scientific duties.
[64] In its supplementary submission dated 22 November 2022 (November submission), the
APESMA detailed the history of the coverage clauses for engineers and scientists in the various
predecessors to the Award. The APESMA relied on this history to support the contention that
no changes to the Award are necessary if the correct approach is followed to determine
coverage.
[65] The APESMA submitted that when the Professional Engineers Award 1961 was made,
it contained a definition of “professional engineering duties” which was functionally identical
to the definition in the Award. Before this, the definitions of “professional scientific duties” and
“professional engineering duties” in the Metal Trades (Consolidated) Award 195231 (1952
Consolidated Award) were also functionally identical to the definitions found in the Award,
with neither of the 1952 Consolidated Award definitions containing indicative duties. In 1971,
the 1952 Consolidated Award was separated into the Professional Scientists Metal Industry
(Interim) Award 1971—Part IV32 and the Professional Engineers Metal Industry (Interim)
Award 1971—Part III.33 The first award retained the same definition-based classification
structure as the 1952 Consolidated Award, including the lack of task descriptions. The second
introduced a new salary structure. The APESMA submitted that this new salary structure was
the genesis of what is now found at Schedule A to the Award.
[66] The APESMA’s submission noted that both the above awards were later subsumed into
the Metal, Engineering and Associated Industries (Professional Engineers and Scientists)
Award 1998 (1998 Award), the immediate pre-modernisation predecessor to the current Award.
The 1998 Award contained a 4-stage classification structure for engineers and scientists, which
was linked to the C10 structure of the Metal Industry Award 1998. The APESMA submitted
that, during the award modernisation process, only three substantial changes occurred:
1. The classification structure for engineers and scientists was consolidated, and
information technology employees added;
31 Metal Trades (Consolidated) Award 1952 (1968) 125 CAR 281
32 The Part number remaining referable to the overarching metal industry award: Professional Scientists Metal Industry
(Interim) Award 1971 – Part IV (1971) 140 CAR 429
33 Professional Engineers Metal Industry (Interim) Award 1971 – Part III (1971) 140 CAR 859.
[2023] FWCFB 13
25
2. Time/competency-based progressions for graduate engineers were introduced;
and
3. The concept of a qualified engineer, by that point lacking utility, was removed.
[67] The APESMA submitted that what did not change was the underlying purpose of the
classification structure, namely to provide an (effectively) competency-based career path for
persons engaged in a particular occupation — that of professional engineer or scientist, as they
pursue that unitary occupation over the course of their career. The APESMA distinguished this
from classification structures in awards that define a wide range of disparate occupations (e.g.
the Animal Care and Veterinary Services Award 2020) or setting various pay levels in a variety
of roles for a particular industry rather than occupation (e.g. the C10 scale in the Manufacturing
and Associated Industries and Occupations Award 2010), and submitted that the classification
structure at Schedule A of the Award does not in any way describe classifications or
occupations. It rather describes levels at which the relevant occupation — professional
engineer, scientist or information technology employee — can be performed by reference to
seniority, skill and autonomy. Once a person is a professional engineer or scientist and is
performing professional engineering or scientist duties, they are covered by the Award, and
their classification level becomes a secondary consideration.
[68] The APESMA concluded that this analysis explains and resolves the difficulty identified
in Zheng, and that coverage under the Award is determined by a three-step test:
(1) Is the employee, as part of their role, required to perform professional engineering,
scientific or information technology duties?
(2) Does a classification in another award more appropriately apply as per clause 4.7,
with reference to the principal purpose test?
(3) Which classification properly applies to the employee, with reference to the
seniority, complexity and autonomy of the duties provided?
[69] It submitted that the above approach obviates the need for any change to the Award. In
the alternative, it relied on its September submission in respect of the proposed note.
Ai Group
[70] The Ai Group opposed the insertion of the note proposed by the APESMA, submitting
that it does not deal with the key concerns raised by the Commission about the Award’s
coverage, and would expand the coverage of the Award by mandating that any employee
performing “professional engineering” or “professional scientific” duties, as defined, must be
classified in accordance with Schedule A. It submitted that the APESMA’s September
submission, which stated that the true intent of the classification clauses is to place those who
would otherwise fall outside the coverage of the Award into one of the classifications, suggests
that the second step articulated by the Full Bench in Zheng is an artificial step that does not in
fact present a barrier to the coverage of an employee under the Award. The Ai Group contends
that this mischaracterises Zheng, noting that whilst the Commission commented on the
[2023] FWCFB 13
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difficulties associated with applying the “principal purpose” test to the classification structure,
it did not conclude that the second step is redundant or that any employee who satisfies the first
limb must, or will, always satisfy the second limb.
[71] The Ai Group further submitted that the proposed note would contradict clause 4.1(a)
of the Award, which provides that the Award covers employers throughout Australia with
respect to employees performing professional engineering and scientific duties “who are
covered by the classifications in Schedule A” and those employees. Whilst the clause describes
the coverage of the classification structure as a contingency, the proposed note purports to
overcome this by mandating that all employees who pass the first hurdle must be classified at
the most appropriate level. The Ai Group submitted it would also purport to override the
“principal purpose test”, which requires a consideration of whether an employee’s principal
purpose falls within the scope of any of the descriptors and if so, which one. It also submitted
that the note proposed also failed to address the concerns of the Commission stated in Zheng,
and was also confusing because it stipulates that an employee whose managerial duties are the
principal purpose of their role are not required to be classified in accordance with Schedule A
when the Award would nonetheless leave open the prospect that such employees may be
classified under Schedule A because it would not expressly state that such employees are not
covered by the Award or the classification structure.
[72] The Ai Group agreed with the APESMA that the solution to the matters raised is not to
attempt a wholesale re-write of classification descriptions, submitting that given the breadth of
the Award’s coverage and the number of industries and sectors in which it applies, such a task
would require a wide-ranging assessment of the entire range of employees covered by the
Award, the duties that they are required to undertake and the level of responsibility that they
are required to discharge, which is not practicable in these proceedings. The Ai Group submitted
that varying the Award to address the Commission’s concern about the manner in which the
classification structure is drafted, without inadvertently altering the coverage of the Award, is
not clearly available. Consequently, the Commission should not make any changes to the
coverage of the Award in the context of these proceedings.
[73] In further submissions addressing the APESMA’s November submission, the Ai Group
opposed the APESMA’s position as to the approach that ought to be followed to determine
coverage under the Award, contending that:
the approach is inconsistent with the language used in clause 4.1(a), which states
that the Award covers employers with respect to employees performing
professional engineering and scientific duties “who are covered by the
classifications in Schedule A” and those employees. It is clear from the terms of
the Award that not all employees performing professional engineering or scientific
duties are covered by it; rather, clause 4.1(a) expressly limits the scope of the
Award to those performing these duties who are also covered by the
classifications;
in Zheng, the Commission expressly decided not to depart from a long line of
authorities that support the application of the “principal purpose” test to the second
step, stating it would “destabilise the operation of the [Award] if we enunciated a
different approach now”, and any variation to the Award requiring a departure
[2023] FWCFB 13
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from the two-step approach enunciated in Zheng and other authorities would be
inconsistent with the need to ensure a stable modern awards system; and
a variation to the Award purporting to remove the application of the “principal
purpose” test would, in effect, broaden the coverage of the Award to encompass
managerial employees whose principal purpose is not encapsulated by the
classification descriptions in the Award.
ABI and NSWBC
[74] ABI and the NSWBC submitted that, whilst they appreciated the position advanced by
the Full Bench in Zheng with respect to the importance of ensuring that users have clarity in
terms of the coverage of the Award, they considered it equally important that these proceedings
not result in any substantive change to the coverage of the Award. Accordingly, they submitted,
only a minor alteration to the classifications at Schedule A, such as by the insertion of a note
stating that classification definitions do not apply to employees who are wholly or mainly
engaged in managerial positions, would be sufficient to remedy any confusion that might exist
without altering the existing coverage of the Award. ABI and the NSWBC expressed concern
that the APESMA’s proposed note could potentially result in an extension of coverage by
default in that the proposed note would operate so that, unless an employee is covered by
another modern award, then an employee performing professional engineering or scientific
duties would be covered by this Award, whether or not that is currently the case. This would
not be remedied by the inclusion of a further note as proposed by the APESMA, which by
endeavouring to limit the generality of the foregoing note by way of exception, would only
serve to further complicate the issue of coverage under the Award.
Consideration
[75] Clause 4.1 of the Award provides that an employee may fall within the coverage of the
Award in one of three ways:
(1) Employees who perform professional engineering or professional scientific duties
(as defined in clause 2) who are covered by the classifications in Schedule A.
(2) Employees who are employed by employers principally engaged in the
information technology industry, the quality auditing industry or the
telecommunications services industry (as defined in clause 2) and who are covered
by the classifications in Schedule A.
(3) Employees who are employed by employers principally engaged as medical
research institutes, who perform professional medical research duties, and who
are covered by the classifications in Schedule B.
[76] The difficulty identified in Zheng does not apply to the third category. The definitions
of “medical research institute” and “professional medical research duties” in clause 2, and the
classifications in Schedule B which are directly referable to medical research employees, allow
for the application of the “principal purpose” test in the conventional way. However, the
classifications in Schedule A are drafted in a mostly generic way to apply to all employees in
[2023] FWCFB 13
28
the first two categories. Levels 1 and 2 use job description terms in their heading titles which
are defined in clause 2 and thus might at first blush be understood as identifying what the
principal purpose of these classifications is. For example, clause A.1.1 of Schedule 1 has the
heading “Level 1—Graduate professional includes: Graduate engineer, Graduate information
technology employee and Qualified scientist”, and the terms used are all defined in clause 2 by
reference to minimum academic and professional qualifications.
[77] However, on closer analysis, that proves not to be the case. The first sentence in
Schedule A, immediately underneath the heading, states that the classifications apply “[f]or
employment involving the performance of professional duties except medical research duties”.
The definitions of the relevant classes of professional duties in clause 2, namely “professional
engineering duties”, “Professional information technology duties” and “Professional scientific
duties” make clear that they refer to employment duties the adequate discharge of any part of
which requires the employee to hold the academic and professional qualifications contained (in
respect of Level 1) in the definitions of “Graduate engineer”, “Graduate information
technology employee” and “Qualified scientist”. These definitions have a long history in the
industrial regulation of professional employees.34 Thus, when read with the relevant definitions,
being a “Graduate engineer”, “Graduate information technology employee” and “Qualified
scientist” does not need to be the principal purpose of an employee’s employment in order for
the employee to fall within Level 1. Rather, it appears to be sufficient that this is a purpose, or
part of the purpose of the employment. Beyond this point, it is difficult to identify from the text
of the classification definitions for Levels 1 and 2 what the principal purpose for employment
in these classifications must be.
[78] As for Levels 3 and 4, Schedule A defines them, except in relation to a senior (lead)
auditor at Level 3, in entirely generic terms in a way which makes it virtually impossible to
identify the principal purpose which can be assigned to these classifications.
[79] As explained in paragraph [46] of Zheng, it is well-established that the “principal
purpose” test is used to determine the application of the classifications in Schedule A of the
Award. However, for the reasons stated above, we agree with the conclusion in paragraph [45]
that this test is “singularly ill-suited” to determine the application of those classifications, and
the uncertainty this has caused has led to excessive litigation about the coverage of the Award
in individual cases. We therefore consider that some modification to Schedule A is required in
order to more clearly elucidate the circumstances in which an employee will be covered by any
of the classifications without either expanding or contracting the coverage of the Award. This
conclusion necessarily involves a rejection of the Ai Group’s submission that we should, in
effect, do nothing.
[80] Subject to one important limitation, it appears to us that the classifications in Schedule
A are drafted on the basis of an assumption that, once a person is engaged to perform duties of
the requisite nature, they will fall within one of the classifications. That is, the classifications
have the function of determining in what grade an employee covered by the Award will fall
rather than whether an employee is covered by the Award in the first place. The limitation is
that the classifications do not extend to positions which are principally managerial in nature.
Level 4, the highest classification, covers a person performing professional work at a senior or
34 See e.g. Re Professional Engineers' Association [1959] HCA 47, 107 CLR 208
[2023] FWCFB 13
29
leading level. However, there is no indication that this is intended to cover a managerial
position. Clause A.1.11(d), which refers to a Level 4 employee being assigned duties “only in
terms of broad objective” which are “reviewed for policy, soundness of approach,
accomplishment and general effectiveness”, makes it apparent that a Level 4 employee remains
subject to higher managerial control. Further, clause A.1.11(e) provides:
(e) The employee supervises a group or groups including professionals and other
staff, or exercises authority and technical control over a group of professional
staff. In both instances, the employee is engaged in complex professional
engineering or professional scientific/information technology applications.
[81] This provision identifies that the Level 4 employee exercises only supervisory authority
and control in respect of professional/technical matters. In short, a Level 4 employee is not a
manager, even if the role of manager might in some respects require engineering, scientific, or
information technology qualifications.
[82] No party suggested that, in order to resolve the difficulty we have identified, we should
review and recast the classification definitions in Schedule A. We agree that this would be a
major undertaking extending beyond the scope of the current proceedings. We think that a better
approach would be to add a provision to Schedule A which makes it clear that the classifications
will apply in the way identified above — that is, that they apply to all employees who perform
professional engineering duties, professional scientific duties, professional information
technology duties or quality auditing unless the person holds a position which is principally
managerial in nature. Such an approach involves a combination of the approaches advanced by
the APESMA and ABI and the NSWBC.
[83] We conclude therefore that Schedule A of the Award should be varied by deleting the
sentence appearing immediately under the heading and inserting in lieu thereof the following
provision:
An employee performing professional engineering duties, professional scientific duties,
professional information technology duties or quality auditing must be classified in one
of the following classifications provided that the employee is not employed in a wholly
or principally managerial position.
[84] The effect of the above variation will be to remove the need to apply the “principal
purpose” test and thus resolve the difficulty identified in Zheng. For the reasons earlier outlined,
and contrary to the submissions of the APESMA, we do not consider that the express exclusion
of managerial employees will narrow the coverage of the Award and thus engage s 163(1)
because no classification in Schedule A currently applies to a manager. Nor do we consider that
the variation will expand the coverage of the Award, since its purpose is clarificatory and
consistent with the current classification definitions. The variation is necessary, we consider, to
achieve the modern awards objective in s 134(1) of the FW Act. In reaching this conclusion,
we regard the consideration in s 134(1)(g) as having determinative weight, with the other
identified considerations being neutral.
Next step
[2023] FWCFB 13
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[85] A draft determination to give effect to this decision is published concurrently with this
decision. Parties may file submissions in response to the draft determination by 4:00 pm
(AEDT) on Friday, 10 February 2023.
ACTING PRESIDENT
Appearances:
L Saunders of counsel for the Association of Professional Engineers, Scientists and Managers,
Australia.
R Bhatt for the Australian Industry Group.
K Thomson for Australian Business Industrial and the NSW Business Chamber.
Hearing details:
2022.
Sydney:
23 November.
Printed by authority of the Commonwealth Government Printer
PR749865
OF THE FAIR WORK COMMISSION THE
