[2008] AIRCFB 1000

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

DECISION

Workplace Relations Act 1996
s.576E—Procedure for carrying out award modernisation process
Request from the Minister for Employment and Workplace Relations—28 March 2008

JUSTICE GIUDICE, PRESIDENT VICE PRESIDENT LAWLER VICE PRESIDENT WATSON SENIOR DEPUTY PRESIDENT WATSON SENIOR DEPUTY PRESIDENT HARRISON SENIOR DEPUTY PRESIDENT ACTON COMMISSIONER SMITH

MELBOURNE, 19 DECEMBER 2008

CONTENTS

	Paragraph
List of Main Abbreviations
Introduction	[1]
The Context	[5]
General Issues and Standard Clauses	[11]
Coverage	[12]
Access to the award	[34]
Award flexibility	[35]
Consultation	[40]
Dispute resolution	[42]
Types of employment	[47]
Termination of employment	[53]
Redundancy	[56]
Minimum wages	[63]
Junior and apprentice rates	[71]
National Training Wage	[72]
Supported Wage System	[73]
Allowances	[74]
District allowances	[79]
Accident pay	[83]
Superannuation	[89]
Parental leave	[94]
Annual leave	[95]
Personal/carer’s leave	[101]
Community service leave	[103]
Public holidays	[105]
Transitional provisions	[106]
Indigenous employing entities	[108]
Stand down	[109]
Variation prior to 1 January 2010	[110]
The Priority Industries and Occupations
Catering industry, liquor and accommodation industry, restaurants	[113]
Clothing industry (including footwear manufacturing), textile industry	[145]
Coal mining industry	[154]
Higher education industry	[167]
Metal and associated industries, glue & gelatine, rubber, plastic & cablemaking, vehicle manufacturing	[177]
Mining industry	[193]
Private sector clerical occupation	[220]
Racing industry	[232]
Rail industry	[240]
Retail industry	[279]
Security industry	[288]
Conclusion	[299]
Attachment A—List of priority modern awards

LIST OF MAIN ABBREVIATIONS

In this decision the following abbreviations are used:

INTRODUCTION

[1] This decision deals with award modernisation and in particular the making of priority modern awards. The award modernisation process is governed by Part 10A of the Workplace Relations Act 1996 (Cth) (the WR Act). Section 576C of Part 10A requires award modernisation to be conducted in accordance with an award modernisation request made by the Minister for Employment and Workplace Relations (the Minister). The Minister made such a request, pursuant to s.576C(1) of the WR Act, on 28 March 2008. The request was subsequently amended by the Minister, pursuant to s.576C(4) of the WR Act, on 16 June 2008. We shall refer to the request as amended as the consolidated request.

[2] The Commission published a decision on 20 June 2008 in which, among other things, it indicated that, as contemplated by the consolidated request, it intended to make priority modern awards in a number of industries and occupations by the end of 2008. 1 In that decision the Commission also established a timetable for making the priority modern awards and an outline of the timetable for completing the modernisation process as a whole in a total of four stages. The completion of Stages 2, 3 and 4 was also dealt with in a subsequent statement on 3 September 2008. That statement included a detailed timetable for those stages.2

[3] The Commission published exposure drafts of the priority modern awards on 12 September 2008. Many interested parties made written comments and suggestions on the exposure drafts. In addition the Commission sat to hear oral submissions. As we indicate later in this decision, we have decided to make 17 modern awards in the priority stage. These awards are published at the same time as this decision and can be accessed from the AIRC home page.

[4] This decision is divided into the following sections:

The context
General issues and standard clauses
Priority industries and occupations
Conclusion

THE CONTEXT

[5] It is important to make some preliminary observations about the context in which the award modernisation process is taking place. We have already mentioned the provisions of Part 10A of the WR Act and the Minister’s request. Section 576C of the WR Act is important and should be set out in full:

“576C Award modernisation request

(1) An award modernisation process must be carried out in accordance with a written request (an award modernisation request) made to the President by the Minister.

(2) An award modernisation request must specify:

(a) the award modernisation process that is to be carried out; and

(b) the time by which the award modernisation process must be completed, which must not be later than 2 years after the making of the request; and

(c) any other matter relating to the award modernisation process that the Minister considers appropriate.

(3) Without limiting subsection (2), an award modernisation request may also do any of the following:

(a) require the Commission to prepare progress reports on specified matters relating to the award modernisation process and make them available as required by the request;

(b) specify matters (in addition to those referred to in subsection 576J(1) and sections 576K and 576M) about which terms may be included in modern awards;

(c) require the Commission to include in a modern award terms about particular matters, being matters about which terms may be included in a modern award;

(d) give directions about how, or whether, the Commission is to deal with particular matters about which terms may be included in a modern award.

(4) The Minister may, by written instrument, vary or revoke an award modernisation request.

(5) If the Minister makes an instrument varying an award modernisation request, the instrument may also specify a later time for the completion of the award modernisation process requested. The later time:

(a) may be more than 2 years after the making of the award modernisation request; but

(b) must not be more than 2 years after the making of the instrument varying the award modernisation request.

(6) Neither of the following is a legislative instrument:

(a) an award modernisation request;

(b) an instrument made under subsection (4).”

[6] It can be seen that by this section the Parliament has authorised the Minister to make an award modernisation request to the President of the Commission and that the request constitutes the basis for the award modernisation process. The request accordingly has statutory force and the Commission is required to observe its terms in making modern awards. It is unnecessary to deal with the terms of the consolidated request in detail at this stage although we refer to a number of them later in connection with particular award provisions. It is relevant to note that s.19 of the consolidated request states that the award modernisation process is to be completed by the making of all of the modern awards by 31 December 2009. It is well known that the Australian Government intends that when the modern awards commence to operate on 1 January 2010 there will be a new workplace relations system. The Government has introduced a bill, known as the Fair Work Bill, to replace the relevant terms of the WR Act and, particularly, to provide for the content and variation of modern awards. The Commission is making the priority modern awards at a time when the Parliament has not yet determined the legislative parameters of the new workplace relations system and the place of modern awards in that system.

[7] Because of this situation, it has been necessary to exercise judgment in relation to a number of matters. In most cases we have operated on the basis that the Government’s policy as contained in the Fair Work Bill will be reflected in legislation. In some cases we have been more cautious. While there is uncertainty whichever course we take the possibility remains that the Parliament will make changes in the Fair Work Bill and that those changes will require some aspects of modern awards to be reviewed. We do not expect this situation to result in any insurmountable difficulty provided there is an opportunity to make any necessary variations after the new legislative regime has been established by the Parliament but before modern awards commence to operate.

[8] We should point out that in relation to the National Employment Standards (NES), the path we should follow is clearer because the terms of the consolidated request govern the situation. Paragraphs 28 to 46 of the consolidated request refer to the interaction between modern awards and the NES. On 16 June 2008 the Minister wrote to the President of the Commission enclosing the final version of the NES. We understand that document has been widely published. We consider that at this stage it is appropriate that we make modern awards by reference to that document. Should the Parliament make alterations in the NES which impact on the terms of modern awards it could be necessary to make some variations.

[9] Although we have not set them out the terms of Part 10A of the WR Act remain of particular importance. Section 576A(2) specifies important characteristics of modern awards and s.576B(2) provides a list of matters to which the Commission must have regard in carrying out the award modernisation process. To these must be added statements of intention found in cl.2 of the consolidated request. We have paid close attention to all of these requirements.

[10] The process leading to the making of the priority modern awards has involved pre-drafting consultation, the preparation and publication of exposure drafts, further consultation on the drafts and finally the preparation and publication of the awards. Every written submission and suggestion of any significance has been published on the AIRC website. That site also contains the transcript of the public consultations as well as exhibits and other relevant material. Because of the vast amount of material it has not been possible to refer to all of it. We have attempted, however, to refer to the significant areas of difference in the course of deciding various matters and to indicate the basis upon which we have formulated the terms of the awards. It is apparent that interested parties have adapted well to this process and that there has been adequate opportunity for comment on the exposure drafts and on the various proposals which have been made in relation to them.

GENERAL ISSUES AND STANDARD CLAUSES

[11] We deal in this section with a large number of issues of general importance for the content of modern awards and, in particular, the content of standard clauses. We shall not deal with the same issues in later sections of the decision unless it is necessary to do so. Many matters not dealt with in this section are discussed in the context of the industry or occupation concerned in the next section of this decision.

Coverage

[12] We received a range of suggestions and proposals concerning the manner in which the area of operation of modern awards should be defined. The terms of the statutory scheme which will govern the way in which modern awards will operate are of paramount importance and we deal with that consideration first. The Minister’s submission on behalf of the Australian Government contained the following passage:

“60. Rather than using a concept of parties being ‘bound’ to awards and other terminology associated with the conciliation and arbitration system, the substantive workplace relations bill will adopt two new key concepts which better reflect the new modern workplace relations system.

61. These are:

• that an instrument covers an employer and employee or organisation (that is they fall within the scope of the instrument); and



• the instrument applies to the employer and employee (that is the instrument actually regulates rights and obligations).

62. An example of how the distinction operates is that an award will continue to cover employees/employers where an enterprise agreement is in operation, but during this time it is the agreement rather than the award that will regulate their conditions.

63. The provisions of the WR Act which relate to modern awards ‘binding’ parties (for example, section 576V(1)) will reflect the new concepts.

64. Under the new workplace relations system, an organisation will have standing to enforce an employee’s entitlements under a modern award where the organisation is entitled to represent the industrial interests of an employee covered by a modern award.

65. Right of entry for discussion purposes will be linked to coverage of an employer and employee by a relevant modern award. Entry to investigate a breach of an award will be allowed where the award applies to the union.

66. For this reason, the Government requests that modern awards use the terminology of ‘covering’ rather than ‘bound’ in relation to employers, employees, organisations and eligible entities.”

[13] The Minister has indicated that it is the Government’s intention that the binding effect of modern awards should be based on the notion of coverage. It is appropriate that we act on that statement of intention. Should that intention not be reflected in the legislation in due course it may be necessary to revisit the matter. We have adopted the terminology of “covering” in the title and substantive provisions in the relevant clause in each of the priority awards.

[14] A number of parties suggested that the area of operation of modern awards could be clarified if the coverage provisions had an exclusionary as well as an inclusionary element. In general we agree with that approach and where practical we have adopted it. We also agree, however, with various parties who suggested that modern awards should not specify particular employers that are excluded from coverage. It would be undesirable to replicate an approach based on the requirement for parties to a dispute extending beyond the limits of any one state with the additional problem of identification, amendment and uncertainty. There may be circumstances that make it desirable to specify that particular employers are included or excluded but they would be rare. We have provided for exclusions in relation to enterprise awards and employees excluded from coverage by legislation. It may be necessary to review the terms of these exclusions later to ensure they properly reflect the legislative concepts involved.

[15] In our statement of 12 September 2008 3 we indicated that we had not included any organisations in the exposure drafts as parties bound by them. We raised the question of whether organisations and other similar bodies should be named as bound in the modern awards and we set out a number of considerations relevant to that question.4 Leaving aside the change in terminology from “bound” to “covered”, it is necessary to resolve this issue for the purpose of making priority awards. A number of submissions urged us to name organisations in awards and advanced various reasons for doing so. In almost all cases the reasons given related to the delineation of industrial coverage and representation rights. It is therefore necessary to ask what legal rights will accrue to an organisation if it is named in a modern award as covered by it.

[16] The Minister’s submission to us indicated that it was the Government’s intention that under the new workplace relations system right of entry to premises for discussion purposes would be linked to coverage of an employer and employee by a relevant modern award. Entry to investigate a breach of an award would be allowed where the award applies to the union. The relevant parts of the submission are included in the passage we have already set out. The terms of the Fair Work Bill, which was introduced some weeks after the Minister’s submission was made, diverge from the submission in some very important respects. Clause 484 of the Fair Work Bill, which deals with right of entry for discussion purposes, provides as follows:

“484 Entry to hold discussions

A permit holder may enter premises to hold discussions with one or more persons:

(a) who perform work on the premises; and

(b) whose industrial interests the permit holder’s organisation is entitled to represent; and

(c) who wish to participate in those discussions.”

[17] Clause 481 of the Fair Work Bill, which deals with right of entry to investigate a breach of award, provides as follows:

“481 Entry to investigate suspected contravention

(1) A permit holder may enter premises and exercise a right under section 482 or 483 for the purpose of investigating a suspected contravention of this Act, or a term of a fair work instrument, that relates to, or affects, a member of the permit holder’s organisation:

(a) whose industrial interests the organisation is entitled to represent; and

(b) who performs work on the premises.

Note 1: Particulars of the suspected contravention must be specified in an entry notice or exemption certificate (see subsections 518(2) and 519(2)).

Note 2: FWA may issue an affected member certificate if it is satisfied that a member referred to in this subsection is on the premises (see subsection 520(1)).

(2) The fair work instrument must apply or have applied to the member.

(3) The permit holder must reasonably suspect that the contravention has occurred, or is occurring. The burden of proving that the suspicion is reasonable lies on the person asserting that fact.”

[18] Neither cl.484, dealing with right of entry for discussion purposes, nor cl.481, dealing with right of entry to investigate a breach of award, make it a requirement for entry that the permit holder’s organisation is covered by an award. We think that it is appropriate to regard the terms of the Fair Work Bill as indicative of the Government’s current policy in relation to right of entry. Under that policy award coverage would not affect the rights of the representative of a registered organisation to enter premises for discussion purposes or to investigate a breach of award.

[19] The Minister’s submission also indicated that it was the Government’s intention that an organisation should have standing to enforce an employee’s entitlements under a modern award where the organisation is entitled to represent the industrial interests of an employee covered by a modern award. The Fair Work Bill is consistent with the Minister’s submission on that point. It is apparent that, should the Government’s policy be implemented, the ability of a registered organisation to enforce an employee’s entitlements under a modern award will not be dependent on the organisation being covered by the modern award in question.

[20] As we indicated earlier, the submissions in favour of naming registered organisations in awards as covered by them were based on various assumptions about representation rights and coverage. The relevant terms of the Fair Work Bill do not indicate that awards will affect legal rights in that respect. Furthermore the terms of the Fair Work Bill do not indicate that the ability of a registered organisation to make an application to vary a modern award is in any way dependent on the organisation being covered by the award. We have concluded that under the proposed legislative scheme awards will not be instruments for delineating rights of industrial coverage, entry onto premises or enforcement of awards. Indeed we have been unable to discover any substantive legal right which would accrue to a registered organisation by virtue of being covered by a modern award.

[21] As we indicated in our statement of 12 September 2008 if organisations are to be named in modern awards, issues would arise as to the basis for deciding which organisations should be named. The relevant passage is:

“[9] … A number of matters are capable of being relevant including bare constitutional coverage of employers or employees to whom the modern award will apply, membership among employers or employees to whom the modern award will apply and the history of the organisation’s involvement with a relevant predecessor award. …”

[22] In our view there is no point embarking on an exercise to identify the organisations which should be covered by each modern award, and to what extent, when, for the reasons we have given, nothing appears to turn on the outcome. It is also relevant to observe that under the award system which operated prior to the Work Choices amendments the identification of parties bound was necessary because of the requirement for an antecedent dispute between named employers and organisations. That requirement is not a feature of the modern award system. We have decided, therefore, that as a general principle we shall not name registered organisations as covered by modern awards. Should it be necessary to do so we shall of course reconsider the matter when the legislation has been passed. Although organisations will not be named in awards, we would expect that as a matter of course lists will be compiled of registered organisations, and of other entities, with an interest in a particular award so that they can be informed of developments in relation to that award.

[23] While the coverage clauses will contain a common approach and concepts they must be adapted to the needs of the industries or occupations under consideration and the “model” will necessarily be subject to modification in some areas. It is also necessary that coverage clauses in some awards deal with the interaction between industry awards and occupational awards. As a general rule awards with occupational coverage will be expressed not to cover employees covered by an industry award with relevant classifications. There will also be a note at the end of the coverage clause in most industry awards and in awards with both industry and occupational coverage indicating that, where there is no classification for a particular employee in the award, another award with occupational coverage might cover that employee.

[24] In our statement of 12 September 2008 we indicated that we had included maintenance classifications in some draft industry awards and invited further comment about the desirability of that and about related allowances. We have decided in light of the views and submissions of the parties affected that we shall not include maintenance classifications in industry awards unless there are existing arrangements which make it desirable or there is a consensus and it is appropriate to do so.

[25] A number of issues have arisen concerning the operation of modern industry awards in relation to employees of contractors and labour hire firms. While the coverage clause in a number of the priority awards deals specifically with these employees, it is not possible to foresee all of the issues that might arise or to have a full appreciation of them. It is likely that it will be necessary to give special consideration to labour hire firms and their employees, at least, at a convenient time during 2009. Questions which require discussion include whether there should be a separate award for the labour hire industry to cover employment not covered by other modern awards with either industry or occupational coverage and the basis upon which such employment might be covered by one award rather than another. We should also indicate that when these issues are more fully considered it may be necessary to make some modifications to the coverage provisions of some modern awards.

[26] We shall deal now with some issues concerning award rationalisation. In our statement of 12 September 2008 we made comments concerning award rationalisation as follows:

“[4] As the Commission noted in the June 2008 decision, the Minister’s request and the relevant provisions of the Act require us to have regard to, among other things, the desirability of reducing the number of awards in the workplace relations system and minimising the number of awards applying to a particular employee or employer. While we accept that there are difficulties in implementing these objectives in some industries we have continued to focus on simplification and rationalisation of the award system in drafting the application clauses of the priority awards. While in some cases we have accepted, at least at this stage, that particular industries should not be grouped as originally suggested, in others the grouping is broader than some parties would prefer both as to industry coverage and the classifications of employees. We think it is desirable that parties see the exposure drafts and the conditions they contain and have the opportunity to make further suggestions and submissions. To take the retail industry as an example, we have included fast food and pharmacies in the draft scope of the industry at this stage. The parties concerned will have the opportunity to consider their positions in light of the terms of the whole draft and make further comments and proposals. We mention this matter again in commenting on some of the specific exposure drafts but we wish to make it clear that all views will be considered before the scope of each modern award is finalised.”

[27] We again draw attention to the requirements in the WR Act and the consolidated request that in modernising awards the Commission have regard to the desirability of reducing the number of awards in the workplace relations system and to minimising the number of awards applying to a particular employee or employer. A number of the draft awards were so framed as to consolidate significant areas of award coverage and to bring sectors or branches of industries together into the one modern award. As a result of the consultations with the relevant parties we have decided that in some industries it would be impractical to implement award rationalisation on the scale provided for in the exposure drafts. The industry principally affected is the retail industry. In that industry there will be a number of modern awards covering separate sectors. In the manufacturing industry, on the other hand, the scope of the industry coverage in the draft has been retained in the final version. We think that the Commission should continue to test the scope for rationalisation of the award system by including in draft awards further suggestions for consolidation of areas currently covered by separate awards.

[28] Turning now to the question of overlapping coverage, the exposure drafts contained a provision which was intended to provide a basis for deciding which award applies in the case of overlap. The provision is:

“Where an employer is engaged in more than one industry to which an industry award applies an employee of that employer will be deemed to be in the classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work, regardless of the industry award in which the classification appears.”

[29] While that provision seemed to be generally acceptable, there were a number of strong submissions urging us to adopt a clause in different terms. One alternative proposed is as follows:

“Rule to deal with overlapping award coverage

1. In the event that more than one award applies to work carried out by an employee, prima facie an employer is entitled to apply the award:

(a) which it has legitimately and appropriately been applying to the work; or

(b) which has superseded the award which it has legitimately and appropriately been applying.

2. In the event of a dispute about which award will apply, the parties may jointly or individually refer the matter to the Australian Industrial Relations Commission for assistance in resolving the matter.” 5

[30] There are at least two difficulties with this alternative proposal. The first is that it does not purport to deal definitively with overlap issues, but only sets up a prima facie position. A prima facie position can of course be rebutted. Secondly, the test could not be of any assistance to new employers, but deals only with employers in existence immediately prior to the commencement of the modern awards. As time passes, the provision would have decreasing utility. For these reasons we think that the exposure draft provision is preferable. While it is true that the provision involves the application of judgment in relation to the adjective “appropriate” and the phrase “the environment in which the work is performed”, the alternative proposal has the same characteristic. We have made some minor alterations but for the most part we have retained the draft provision. It will read:

“Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.”

[31] Before leaving the question of potentially overlapping coverage, it should be understood from what we have already said that the coverage clause of each of the modern awards may be subject to variation as the process continues and the scope of the various awards is defined. Before the end of the process it will be necessary to conduct a review to ensure that any significant gaps or areas of overlap are identified and dealt with.

[32] The Australian Council of Trade Unions (ACTU) and some other interested parties proposed that the award should contain a list of superseded awards. As we indicated in our statement of 12 September 2008, we intend to make arrangements for a list of awards and Notional Agreements Preserving State Awards (NAPSAs) superseded by each modern award to be made available administratively. 6 We have taken this course because in moving from a system in which award respondency is based on named parties to one in which award coverage is defined primarily by industry or occupation there is significant room for interpretation and argument in borderline cases. It is not possible to anticipate all of the circumstances which might arise because all of the modern awards will commence to operate on the same date.

[33] The question of supersession and the effect of the making of modern awards upon accrued rights will be dealt with later in dealing with transitional provisions.

Access to the award

[34] We received a number of helpful suggestions concerning the access to the award provision contained in the exposure drafts. We have decided to extend the requirement so that the employer is also required to provide access to the NES. Because employees’ minimum conditions will be contained partly in the award and partly in the NES, reference to the terms of the NES may be necessary in order to fully understand an award provision. For that reason we think it is necessary to ensure that a copy of the NES, as well as a copy of the award, is made available to employees. The clause will provide that the employer is under an obligation to make a copy of the NES available to employees as well as a copy of the award. We have resisted suggestions that the terms of the NES should be included in the awards. As we understand it we are obliged by the terms of the consolidated request not to simply repeat the terms of the NES in modern awards. Nevertheless the provision will ensure that employees are in a position to find out, at the workplace, what their minimum conditions of employment are. We also have made a small addition, being the last sentence of the standard clause, in an attempt to make access easier:

“Access to the award and the National Employment Standards

The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a noticeboard which is conveniently located at or near the workplace or through electronic means, whichever makes them more accessible.”

Award flexibility

[35] A number of interested parties asked us to modify the operation of the model award flexibility clause. The ACTU and a number of unions drew our attention to the potential conflict between the model award flexibility provision which we published in our decision of 20 June 2008 7 and provisions for majority facilitation which are contained in a number of existing awards. In particular it was suggested that the model clause could undermine the operation of provisions which permit certain award provisions to be altered by agreement with the majority of employees. It was submitted that if an employer was unsuccessful in obtaining the agreement of the majority of the employees, agreement could be pursued and obtained on an individual basis under the award flexibility clause.

[36] We do not think it is appropriate that we review our decision at this early stage. Similar arguments were advanced in the proceedings leading to the publication of the model clause on 20 June 2008. In our decision of that date we said, in dealing with some similar questions:

“[164] We deal first with some issues concerning the nature of agreements to be permitted by the model clause and some questions concerning collective arrangements. It is evident from the terms of cll. 10 and 11 of the request, which we have set out above, that the clause should provide for agreements between an employer and an individual employee. It is not intended that the clause should deal with collective agreements such as those with a majority of employees. The use of terms such as “individual employee” and “individual needs” and “the individual employee” leave no room for doubt on the issue. For this reason the model clause should not provide for agreements between an employer and a majority of employees. Nor should the ability of an employer and an individual employee to make an agreement under the clause be in any way conditional on an agreement with a majority of employees in the area concerned.”

[37] While the notion of an individual flexibility agreement might conflict with a provision for majority agreement in some circumstances, it would be contrary to our understanding of the requirement for individual flexibility that majority approval should be given precedence over individual agreement. To remove any doubt on the issue, it is our view that the operation of the individual flexibility provision should not be subject in any way to a requirement for majority agreement.

[38] We have, however, made one addition to the model clause. The new subclause deals with situations in which an employer wishes to enter an individual flexibility agreement. In such situations the employer will be required to provide a written proposal to the employee. The employer will also be required to take measures to ensure the employee understands the proposal. The provision reads:

“An employer seeking to enter into an agreement must provide a written proposal to the employee. Where the employee’s understanding of written English is limited the employer must take measures, including translation into an appropriate language, to ensure the employee understands the proposal.”

[39] We have noted the proposal in the Fair Work Bill that individual flexibility terms in awards must require the employer to ensure that any individual flexibility arrangement must result in the employee being better off overall than the employee would otherwise have been. 8 Should the Fair Work Bill be enacted in that form the model clause may require alteration to reflect that requirement.

Consultation

[40] We received a number of submissions from employers and employer bodies critical of the consultation clause in the exposure drafts. Employers generally opposed the provision on the basis that it was onerous and would impede genuine change. A number proposed an alternative clause. Union interests urged us to retain the consultation provision and to extend it by creating a general right for all employees to be represented by someone of their choosing in matters under the award.

[41] We have decided to retain the consultation provision as a standard clause. A clause in almost identical terms appeared in most of the Commission’s awards for many years and no issue of substance was raised with us concerning its operation during that period. We accept that compliance with the provision might require some employers to make efforts to consult with their employees that they might not otherwise make. Nevertheless there is potential for real benefit to those employers and their employees if both parties approach the consultations constructively. The following passage from the judgment of Deane J in Federated Clerks’ Union of Australia v Victorian Employers’ Federation is apposite:

“The introduction by an employer of technological changes which may have material effects in or upon the employment of existing employees is plainly a matter of legitimate interest and concern to those employees. It is inevitable that employees should be concerned to assert an entitlement to be kept informed of the existence and implication of any proposal to introduce such changes. Indeed, it is a matter of common knowledge that the threatened or actual implementation of such changes, with or without consultation with the employees affected, constitutes one of the main causes of contemporary disputation between employers and employees both in this country and overseas. Provisions aimed at providing an existing employee with some protection against the effect of the introduction of such changes upon his or her employment or ensuring, at the least, some notification and consultation in the event that such changes are contemplated are not inappropriate to be included in the terms and conditions of employment of any employee who is concerned with the security, significance and content of his or her employment and whose existing employment is or may be thought to be vulnerable to the effects of such changes.” 9

Dispute resolution

[42] With one exception we do not see the need to make any alterations of substance to the dispute resolution provision contained in the exposure drafts. The matter which needs comment concerns the requirement in the provision that while the dispute resolution procedure is being conducted work should continue “normally”. The use of the word “normally” led a number of parties to make alternative suggestions. There are two issues. The first is whether the provision should contain a requirement that the status quo be maintained while the procedure is being conducted. The second issue is whether the word “normally” is in any event too imprecise.

[43] We have concluded that it is not appropriate that the dispute resolution provision should contain a requirement that the status quo be maintained. While experience indicates that in many cases it is difficult to ascertain the status quo and that difficulty may itself be a cause of dispute, that is not a sufficient reason for not including such a requirement. A more compelling reason, in our view, is that the nature of the powers which the Commission can exercise in the dispute resolution process is inconsistent with a status quo requirement. Where compulsory arbitration is not in contemplation it would not be appropriate to require one side or the other in the dispute to revert to the pre-dispute situation pending the outcome of the process.

[44] We agree, however, with those who suggested that the term “normally” is too general. We have replaced “normally” with the expression “in accordance with the award and the Act.” We have retained the provision which makes it clear that the employer can direct what work an employee can perform.

[45] Before leaving the dispute resolution procedure we should make it clear that the operation of the clause is not intended to be confined to issues concerning one employee only. It follows that if a dispute affects a group of employees, for the purposes of the procedure each member of the group may be represented by the same representative.

[46] The Minister and a number of parties made submissions concerning dispute resolution training leave. This type of leave was found to be incidental to an allowable award matter and necessary for its effective operation pursuant to s.89A of the WR Act, as it stood at that time, by a Full Bench of the Commission in 1998. 10 Dispute resolution training leave, although quite common in pre-reform awards prior to the Work Choices amendments, has never been a test case provision.11 We have decided to maintain dispute resolution training leave where it is a prevailing industry standard.

Types of employment

[47] In our statement of 12 September 2008 we indicated that we intended to adopt a standard loading of 25 per cent for casual employees. We received many representations in relation to that indication. For example, a number of employer representatives submitted that we should not adopt a standard casual loading or that if we did so 25 per cent was too high.

[48] There is great variation in the casual loadings in NAPSAs and federal awards. In some cases the situation is complicated by the fact that casuals receive an annual leave payment, usually through an additional loading of one twelfth, although in most cases casuals do not receive annual leave payments. To take some examples, a casual loading of 25 per cent is common throughout the manufacturing industry, casual loadings in the retail industry vary from 15 per cent to 25 per cent. A loading of 25 per cent is very common, although not universal, throughout the hospitality industry. A number of pre-reform awards currently provide for a 33⅓ per cent loading and higher when the annual leave payment is taken into account. It seems to us to be desirable to standardise provisions to apply to casuals where it is practicable to do so to avoid claims in the future based on unjustified differences in loadings. We appreciate that there are casual employees in some industries in some States receiving loadings less than 25 per cent and we understand that employers of those employees will experience an increase in labour costs if the loading is standardised to 25 per cent. Equally, there will be reductions in labour costs where the loading, including the annual leave loading where it applies, exceeds 25 per cent currently.

[49] In 2000 a Full Bench of this Commission considered the level of the casual loading in the Metal, Engineering and Associated Industries Award 1998 (the Metal industry award). 12 The Bench increased the casual loading in the award to 25 per cent.13 The decision contains full reasons for adopting a loading at that level. The same loading was later adopted by Full Benches in the pastoral industry.14 It has also been adopted in a number of other awards. Although the decisions in these cases were based on the circumstances of the industries concerned, we consider that the reasoning in that case is generally sound and that the 25 per cent loading is sufficiently common to qualify as a minimum standard.

[50] In all the circumstances we have decided to confirm our earlier indication that we would adopt a standard casual loading of 25 per cent. We make it clear that the loading will compensate for annual leave and there will be no additional payment in that respect. Also, as a general rule, where penalties apply the penalties and the casual loading are both to be calculated on the ordinary time rate.

[51] An issue has also arisen concerning the provision permitting casuals to have the option to convert to non-casual employment in certain circumstances. This provision has its genesis in the Full Bench decision already mentioned in connection with the fixation of the casual loading of 25 per cent in the Metal industry award. 15 The Bench made it clear that it had formulated the casual conversion provision based on the circumstances of the industry covered by the award and that there had been no evidence concerning other industries. Section 515(1)(b) of the WR Act identifies casual conversion provisions as matters which cannot be included in awards. Section 525 provides that such terms have no effect. These sections were part of the Work Choices amendments. It appears, however, that casual conversion provisions in NAPSAs were not invalidated. Modern awards can contain a casual conversion provision. In light of the arbitral history of such provisions in the federal jurisdiction we shall maintain casual conversion provisions where they currently constitute an industry standard, but we shall only extend them in exceptional circumstances. The modern awards reflect this approach. We note in particular that we have decided to include a casual conversion provision in the Textile, Clothing, Footwear and Allied Industries Award 2010 (the Textile industry award) against the opposition of employers. We have done so taking into account the nature of the industry and the reduction in the casual loading from 33⅓ per cent to 25 per cent in part of the industry covered by the award.

[52] Some employers suggested there should be a standard provision dealing with probationary employment. In our view where probationary employment is not specifically provided in an award it is nevertheless permissible as a matter of contract. While we have maintained probationary employment provisions in some awards we see no need for a standard provision.

Termination of employment

[53] A number of matters arose during the exposure draft consultations concerning the termination of employment provision. The first concerns the draft provision for withholding of monies by the employer should the employee fail to give the required notice of termination. The draft provision is as follows:

“Notice of termination by an employee

The notice of termination required to be given by an employee is the same as that required of an employer except that there is no requirement on the employee to give additional notice based on the age of the employee concerned. If an employee fails to give the required notice the employer has the right to withhold pay to a maximum amount equal to the amount the employee would have received under the terms of the NES.”

[54] It was submitted that the provision is unclear and requires redrafting. We agree. The redrafted clause will permit the employer to withhold monies due on termination equivalent to the amount the employee would have earned for the period of notice less an amount for any notice actually given. It is appropriate that the employer should only have the right to withhold monies due to the employee under the award or the NES. The redrafted clause is:

“If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by the clause less any period of notice actually given by the employee.”

[55] It was also suggested that we should draft a standard clause dealing with abandonment of employment. We are not prepared to do so. Not all awards contain such a provision and what provisions there are differ in a number of respects. We have adopted the approach of generally maintaining existing provisions where practical and not extending their area of operation unless it is necessary to remove interstate differentials.

Redundancy

[56] The exposure drafts uniformly provided for redundancy payments for employees who would not be entitled to such payments under the NES because their employer had fewer than 15 employees. This reflected a preliminary view. We have received a wide range of detailed submissions and consequently we have decided to consider the small business exemption afresh.

[57] There were sharp divisions between the submissions of employers, unions and the Minister on this proposal. The relevant terms of the consolidated request are as follows:

“30. A modern award cannot exclude the NES or any provision of the NES. However, a modern award can provide ancillary or incidental detail in relation to the operation of an entitlement under the NES but only if the effect is not detrimental to an employee in any respect, when compared to the NES.

… …

32. ….. a modern award may supplement the NES where the Commission considers it necessary to do so to ensure the maintenance of a fair minimum safety net for employees covered by the modern award, having regard to the terms of this request and the existing award provisions (including under NAPSAs) for those employees, such as small business redundancy entitlement. The Commission may only supplement the NES where the effect of these provisions is not detrimental to an employee in any respect when compared to the NES.”

[58] Issue was joined on two important questions. The first is whether the draft provision would exclude a provision of the NES, contrary to the terms of para.30 of the consolidated request. The second is whether the draft provision is necessary to ensure the maintenance of a fair minimum safety net for employees covered by all or some modern awards, consistent with para.32 of the consolidated request.

[59] We have decided to deal with this matter by reference to the arbitral and legislative history of redundancy pay for employees of small business. The Commission’s Termination, Change and Redundancy decisions of 1984 are the source of the general standard of redundancy pay in the federal jurisdiction. 16 In the second of those decisions the Commission provided an exemption for small business employers from the obligation to pay redundancy pay. Although the decision was of a test case nature, the small business exemption was not included in all federal awards. It was specifically not included in some awards because of the nature of the industry covered by the award. The award governing the clothing industry was one such award.17 In the Redundancy Case 2004 a Full Bench of the Commission considered applications to review the test case standard established in 1984. The Bench increased the existing severance pay scale and partially removed the small business exemption.18 Pursuant to the decision small business employees were entitled to redundancy pay but the scale of payments was lower than that applying to other employees. The Parliament subsequently enacted legislation to nullify the removal of the small business exemption in the Redundancy Case 2004.19 Thereafter the position which had been introduced in 1984 continued to apply. The terms of the NES maintain the exemption for small business.

[60] Seen in the context of the history we have set out, the terms of the NES indicate an intention to adopt the Commission’s 1984 decision in relation to small business—that employees of employers of fewer than 15 employees should not be entitled to redundancy pay. We are obliged by the terms of the NES to observe the small business exemption. We therefore conclude that the draft provision would exclude a term of the NES contrary to the terms of s.30. We also find that it is not necessary to include the provision in modern awards generally to ensure the maintenance of the safety net. As a general rule, therefore, the small business exemption will be maintained. We shall make an exception for federal awards and industries in which there was no small business exemption prior to the Redundancy Case 2004. Among the priority modern awards the only award in this category is the Textile industry award. The terms of the Textile industry award will include the small business redundancy pay provisions previously in the Clothing Trades Award 1999. 20 The provision will only apply to the clothing industry.

[61] There are a number of different redundancy pay schemes in State awards and legislation which are reflected in NAPSAs. These schemes sometimes include provisions which are more beneficial for employees than those contained in the NES. Provisions in this category include more generous redundancy pay scales, redundancy pay for employees of small businesses, different calculations for base pay and so on. It is appropriate that these interstate differentials be taken into account in transitional provisions. Most awards will contain a transitional provision as follows:

“1.1 Subject to clause 1.2, an employee whose employment is terminated by an employer is entitled to redundancy pay in accordance with the terms of a NAPSA:

(a) that would have applied to the employee immediately prior to 1 January 2010, if the employee had at that time been in their current circumstances of employment and no agreement made under the Workplace Relations Act 1996 (Cth) had applied to the employee; and

(b) that would have entitled the employee to redundancy pay in excess of the employee’s entitlement to redundancy pay, if any, under the NES.

1.2 The employee’s entitlement to redundancy pay under the NAPSA is limited to the amount of redundancy pay which exceeds the employee’s entitlement to redundancy pay, if any, under the NES.

1.3 This clause does not operate to diminish an employee’s entitlement to redundancy pay under any other instrument.

1.4 This clause ceases to operate on 31 December 2014.”

[62] The NES excludes employees from redundancy entitlements where the award covering them contains an industry specific redundancy scheme. Where a modern award specifies an industry specific redundancy scheme that scheme operates in place of the NES. For example, we have decided that the higher education redundancy scheme should be an industry specific redundancy scheme and the Higher Education—Academic Staff—Award 2010 will provide accordingly.

Minimum wages

[63] As indicated in our statement of 12 September 2008, the minimum wages in the modern awards include the increases in pay scales and minimum rates in transitional awards operative generally from October 2008. Minimum wages will require further adjustment should there be a general increase in pay scales before January 2010. It is convenient to deal with a number of other matters related to wages.

[64] In many cases there will be changes in award classification structures applying to employees. We are aware that decisions will have to be made as to the classification and level that employees should be placed in and the potential for issues to arise in that respect. Those issues are capable of being dealt with through the dispute resolution procedure. It should be pointed out, however, that the ability to determine such issues through that procedure, taking into account the terms of the Fair Work Bill, will be very limited.

[65] In the case of a number of modern awards issues arose concerning the manner of expression of minimum wages. We have set out hourly rates in addition to weekly rates in some awards. Some awards also contain annual salaries.

[66] A number of parties sought provision for salary packaging or salary sacrifice and annualised wages and salaries as standard in awards. We shall deal with salary sacrifice first. A number of employer interests suggested that salary sacrifice was a legitimate, well accepted practice and that employees would benefit from its adoption. Arrangements permitting an employee to sacrifice an amount of wages in exchange for the employer making a payment on the employee’s behalf are not a feature of the award system. We think we should take a cautious approach. Consistent with the views expressed in our decision of 20 June 2008 concerning the model award flexibility provision, we do not think that minimum wages should be subject to reduction by agreement other than by bargaining. We have not included salary sacrifice provisions in any of the modern awards.

[67] We deal now with annualised wages and salaries. In our statement of 12 September 2008 we said:

“[26] A number of parties suggested that annualised wage and salary arrangements be included in modern awards. Such arrangements are provided for in the Act. [See s.576J(1)(f)]. No substantial case was put for inclusion of these arrangements on a general basis and we have considered the situation award by award. We do not consider that such provisions should be included in modern awards as a matter of course. Where there are similar arrangements in a relevant pre-reform award or NAPSA, where there is a consensus, or where there is a case on the merits based on the nature of the industry or patterns of work the situation may be different. Most of the exposure drafts do not contain such arrangements.”

[68] A number of parties suggested that annualised wage and salary arrangements are a desirable flexibility for employees and should be introduced as a matter of course. It was also suggested that the reference to such arrangements in the WR Act is a clear indication that such arrangements are desirable. There are arguments of convenience which must be taken into account. Employers and some employees might prefer the predictability of regular uniform payments. It has also been suggested that productivity might improve if a salaried approach is adopted. While there is some force in these submissions we are not prepared to adopt annualised payment arrangements as a general standard. There are a number of reasons.

[69] Although annualised wage and salary provisions are a common feature of workplace agreements they are very rare in the Commission’s awards. By far the predominant method of calculating entitlements is weekly, based on ordinary hours, penalties, overtime etc. This is a system with which employees, particularly employees who are safety net dependent, are familiar. No doubt many employees arrange their affairs on that basis. While employers invoked the need for flexibility there is always the potential for employee disadvantage which through fear of reprisal or ignorance employees are unable to correct. There are also some practical problems associated with the concept in industries in which short hour employment is common and in which working hours may vary unpredictably. While flexibility might be important, when safety net entitlements are at issue employers would be required to keep a record of hours in any event to ensure that the annualised pay was sufficient to meet those entitlements. Finally, in some industries employers may be able to implement annualised pay arrangements without breaching the award. We assume that this occurs in many areas of employment already. Annual salaries are of course also a feature of many workplace agreements.

[70] As indicated we have decided not to adopt a standard provision for annualised wages and salaries in modern awards. Where such provisions already exist in relevant awards we have maintained them. The matter could be revisited in one of the regular award reviews which have been foreshadowed. We also note that the Clerks—Private Sector Award 2010 will include an overtime exemption provision which will go part of the way to addressing claims for annualised salaries in that award. We deal with this later. The parties to the Rail Industry Award 2010 agreed that the award should contain an annualised wage and salary provision but could not agree on all of the terms. We deal with that matter later also.

Junior and apprentice rates

[71] The federal awards and NAPSAs with which we are dealing contain a very wide range of rates for junior employees and apprentices. The relevant instruments fix percentages of the adult wage for juniors and apprentices based on a host of historical and industrial considerations, most of which can only be guessed at. It is not possible to standardise these provisions on an economy-wide basis, at least not at this stage. We have adopted the limited objective of developing new rates which constitute a fair safety net for each of the modern awards based on the terms of the relevant predecessor awards and NAPSAs. We have attempted to strike a balance as between, in some cases, wildly varying provisions. In the case of junior employees the rates will be expressed as a percentage of the rate for the relevant adult classification. In the case of apprentices the rates will generally be expressed as a percentage of the relevant trade rate.

National training wage

[72] We understand that discussions are continuing concerning the redrafting of the National Training Wage Award 2000. 21 It is still our intention that in due course the terms of the redrafted award should be included as a schedule to each modern award. The President will arrange for a conference of the major employer and employee representatives before a member of the Commission with a view to bringing the redrafting to a conclusion.

Supported wage system

[73] The Minister’s submission contained, as an attachment, a proposed standard clause dealing with wages for employees with a disability. We understand that there have been discussions between the ACTU, the Australian Chamber of Commerce and Industry (ACCI) and the Department of Education, Employment and Workplace Relations concerning the proposal and that there is a level of agreement. We shall await the outcome of those discussions. The finalisation of a standard clause will be considered in Stage 2 of the modernisation process.

Allowances

[74] The consolidated request requires the Commission to include an appropriate method or formula for automatically adjusting relevant allowances when minimum wages are adjusted. The exposure drafts included provisions which expressed allowances as a percentage of a standard rate. This would ensure that where the standard rate was altered allowances were adjusted accordingly. The draft provision applied to all allowances, including those that are expense-related. In relation to allowances which are expense-related, it is obvious that adjustment by references to wage increases would not directly reflect increases in relevant price levels. Given the relative magnitude of the increases, however, the differences would not be great. Any significant disadvantage could be addressed in periodic award reviews. Expressing expense-related allowances as a percentage of the standard rate would ensure that allowances would not need updating in the normal course. Almost without exception, the main union and employer representatives are opposed to the adjustment of expense-related allowances in line with wages. For that reason we have decided to provide for the adjustment of expense-related allowances by reference to the Consumer Price Index. The terms of the provision will be standard, allowing for changes in each allowance by reference to the change in a specified index. We set out as an example the provision which appears in the Hospitality Industry (General) Award 2010:

“Adjustment of expense-related allowances

At the time of any adjustment to the standard rate, each expense-related allowance shall be increased by the relevant adjustment factor. The relevant adjustment factor for this purpose is  the percentage movement in the applicable index figure most recently published by the Australian Bureau of Statistics since the allowance was last adjusted.

The applicable index figure is the index figure published by the Australian Bureau of Statistics for the Eight Capitals Consumer Price Index (Cat No. 6401.0), as follows:

Allowance	Applicable Consumer Price Index figure
Meal allowance	Take-away and fast foods sub-group
Clothing, equipment and tools allowance	Clothing and footwear group
Vehicle/travel allowance	Private motoring sub-group”

[75] In order to ensure that those covered by each award have access to the current amount, arrangements will be made for the expense-related allowances to be updated in accordance with the specified index at the time of any general wage adjustment.

[76] The method of adjusting wage-related allowances will be the one in the exposure drafts based on the concept of a fixed percentage of a standard rate. This method renders updating of wage-related allowances unnecessary.

[77] We have also decided to fix a common rate for some allowances. They are as follows:

• motor vehicle allowance—74 cents per kilometre;



• motorcycle allowance—25 cents per kilometre.

[78] The standardisation of common allowances would be desirable and could also be addressed in one of the foreshadowed award reviews.

District allowances

[79] In our statement of 12 September 2008 we drew attention to the existence of various allowances which apply on a limited geographic basis in the following passage:

“[28] There is an unresolved issue concerning allowances variously described as district, locality or remote area. A number of pre-reform awards and NAPSAs contain such allowances. Questions arise about such allowances. They are by nature confined to particular locations. In that connection it is relevant that modern awards will apply throughout Australia. If it is appropriate that these allowances be included in modern awards, which is a matter for discussion, there must be a consistent and fair national basis for their fixation and adjustment. Without a rational system the inclusion of these allowances in modern awards could lead to inconsistency and consequent unfairness. We would welcome views and proposals on these questions. The allowances have not been included in the exposure drafts.”

[80] While it may be that historically the allowances in question are related to the cost of living in the relevant geographic areas, as indicated already, if they are to be a part of the modern award system, there must be a consistent and fair national basis for their fixation and adjustment. We should indicate that we are concerned at this point only with allowances applying in Western Australia and the Northern Territory. We are not aware of any allowances in other States which are of significant magnitude overall to require consideration. The Western Australian Industrial Relations Commission has regularly adjusted the district allowances applying in Western Australian awards for many years. The allowances are of course reflected in the Western Australian NAPSAs. As we understand the position, allowances in NAPSAs remain at the level they were in the relevant State award on 27 March 2006. Approximately 4 per cent of pre-reform awards applying in Western Australia include the location allowances and are therefore not a common feature of federal awards applying in that State. The Northern Territory allowance, contained in all pre-reform awards which apply in the Territory, was frozen at its current level some years ago by decision of a Full Bench. In that decision it was indicated that the allowance was outmoded and should not be adjusted again. 22 There are also other allowances of this kind in the Northern Territory.

[81] In relation to the allowances in NAPSAs and pre-reform awards operating in Western Australia, it is appropriate that those should be maintained in modern awards until there is a proper opportunity to consider whether they should be a permanent feature of the awards and, if so, the basis for their fixation and adjustment. We do not intend to provide for any automatic adjustment at this stage. Because of the nature of the Northern Territory allowance, it cannot be maintained for more than five years and, because of the decision of the Full Bench, it should not be adjusted during that period. We shall provide that the district, locality or remote area allowances, described generally as district allowances, applying in Western Australia and the Northern Territory be preserved for a period of five years in a transitional provision. Most of the modern awards contain the following standard clause:

“1.1 Northern Territory

An employee in the Northern Territory is entitled to payment of a district allowance in accordance with the terms of an award made under the Workplace Relations Act 1996 (Cth):

(a) that would have applied to the employee immediately prior to 1 January 2010, if the employee had at that time been in their current circumstances of employment and no agreement made under that Act had applied to the employee; and

(b) that would have entitled the employee to payment of a district allowance.

1.2 Western Australia

An employee in Western Australia is entitled to payment of a district allowance in accordance with the terms of a NAPSA or an award made under the Workplace Relations Act 1996 (Cth):

(a) that would have applied to the employee immediately prior to 1 January 2010, if the employee had at that time been in their current circumstances of employment and no agreement made under that Act had applied to the employee; and

(b) that would have entitled the employee to payment of a district allowance.

1.3 This clause ceases to operate on 31 December 2014.”

[82] In order to assist those covered by the award, administrative arrangements will be made to prepare and publish a list of the relevant allowances. There can be a full examination of all the matters relevant to the allowances sometime after 1 January 2010 either on application or as part of the review contemplated by the Fair Work Bill.

Accident pay

[83] In our statement of 12 September 2008 we raised for consideration whether the Commission has power to include accident pay provisions in modern awards. A number of submissions were made on the point. We accept that accident pay may be characterised as an allowance for the purposes of s.576J(1)(g) and that it is the Australian Government’s intention that the industrial legislation to operate from 1 January 2010 should have an equivalent provision. The question is in what circumstances should modern awards provide for accident pay.

[84] Accident pay entitlements can be found in a number of awards and other instruments. Section 16 of the WR Act does not exclude State workers’ compensation laws: they continue to operate. Accident pay entitlements are therefore governed by State legislation, NAPSAs and federal awards. While there is a general pattern to the entitlements there is a great diversity in the detail of the provisions.

[85] We also note that while accident pay is an allowable matter for the purpose of modern awards, it was not an allowable award matter from 27 March 2006 by force of s.513(1) of the WR Act. Prior to that time, however, it is well known that accident pay provisions were a feature of many federal awards and had been for more than 25 years. And while the Work Choices amendments invalidated accident pay provisions in pre-reform awards, so far as we can ascertain they did not invalidate the accident pay provisions in NAPSAs. This is a further illustration of the complex legal context in which accident pay must be considered.

[86] The first observation to be made is that the effect of accident pay provisions upon employer costs is related not only to the level of the accident pay entitlement but also to the level of benefits provided through the relevant workers compensation scheme. The cost to employers is a function of the amount of pay that must be made up and the duration in weeks of the liability. Because State workers’ compensation laws are not uniform there will usually be differences in the cost of accident pay from State to State. Looking at the employee side of the equation there are equivalent differences, on a State basis, in the value of accident pay as an entitlement.

[87] In light of these considerations we have decided to deal with accident pay on a transitional basis. Our intention is to preserve accident pay arrangements until 31 December 2014. We anticipate that in the period prior to that date an opportunity will arise to consider the formulation of a national standard to apply to all award covered employees. This task will be made considerably easier if uniformity is developed in relation to workers compensation schemes.

[88] Where the accident pay scheme applying in a particular industry is clear we shall include the terms of the scheme in the relevant modern award. Where there are a variety of schemes operating, whether on a State or sectoral basis, in the industry to be covered by a modern award we shall include a generally worded clause which is designed to preserve the operation of each of those schemes until the end of the transition period. The clause will be in the following form:

“1.1 Subject to clause 1.2, an employee is entitled to accident pay in accordance with the terms of:

(a) a NAPSA that would have applied to the employee immediately prior to 1 January 2010 or an award made under the Workplace Relations Act 1996 (Cth) that would have applied to the employee immediately prior to 27 March 2006, if the employee had at that time been in their current circumstances of employment and no agreement made under the Workplace Relations Act 1996 (Cth) had applied to the employee; and

(b) that would have entitled the employee to accident pay in excess of the employee’s entitlement to accident pay, if any, under any other instrument.

1.2 The employee’s entitlement to accident pay under the NAPSA or award is limited to the amount of accident pay which exceeds the employee’s entitlement to accident pay, if any, under any other instrument.

1.3 This clause does not operate to diminish an employee’s entitlement to accident pay under any other instrument.

1.4 This clause ceases to operate on 31 December 2014.”

Superannuation

[89] The model superannuation provision included in the exposure drafts was the subject of a large number of submissions and comments. While some suggestions were made that there should be no superannuation provision in awards at all, we think that it is appropriate to deal with the subject in the limited terms proposed in the draft but with some modifications.

[90] The terms of the exposure draft concerning the default fund provision were the cause of a number of submissions from employer and employee interests, from superannuation funds and the superannuation industry. We have decided to allow as a default fund any fund to which the employer was making contributions for the benefit of employees on 12 September 2008. This approach is likely to minimise inconvenience for employers. While funds other than those provided for will not qualify as default funds employees may still exercise their right to choose in favour of these funds.

[91] The standard clause will be as follows:

“21. Superannuation

21.1 Superannuation legislation

(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.

(b) The rights and obligations in these clauses supplement those in superannuation legislation.

21.2 Employer contributions

An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.

21.3 Voluntary employee contributions

(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 21.2.

(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.

(c) The employer must pay the amount authorised under clauses 21.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses 21.3(a) or (b) was made.

21.4 Superannuation fund

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 21.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 21.2 and pay the amount authorised under clauses 21.3(a) or (b) to one of the following superannuation funds:

(a) ………………….. or

(b) ………………….. or

(c) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.”

[92] The superannuation provision in some of the exposure drafts included an additional paragraph dealing with superannuation contributions during periods of paid leave or while an employee was absent from work due to injury or work-related illness. It is not our intention that the additional paragraph should be part of the standard clause. It may be appropriate, however, where it is necessary to maintain the pre-existing safety net.

[93] We have included superannuation provisions in most awards. Where we have not the issue is dealt with below in relation to the award concerned.

Parental leave

[94] We received some submissions which urged us to supplement the entitlement to concurrent parental leave which is provided for in the NES. We have decided not to do so. This appears to be an area in which it would be necessary to supplement the NES in all awards and the result would therefore be the creation of a new minimum standard rather than mere supplementation.

Annual leave

[95] As we noted in our statement of 12 September 2008, it has not been possible to develop a single model clause for annual leave. While some parties have sought greater uniformity in the area, there is a wide range of differing provisions in the awards and NAPSAs that we are dealing with. In many cases the provisions are more generous to employees than the provisions of the NES. Areas in which this can be observed are the quantum of holiday pay, leave loading and the definition of shift worker. In considering what should be included in the modern award on each of these matters we have attempted to identify or formulate a standard entitlement in the area covered by the modern award rather than preserving a range of differing entitlements. This involves a degree of rationalisation at the award level only and will not result in standard provisions across all awards.

[96] There are also some issues concerning the time of taking leave. The time of taking leave is referred to in para.33 of the consolidated request and s.36(1)(b) of the NES. Section 36(1)(b) reads:

“36 Modern awards may include certain kinds of provisions

(1) A modern award may include provisions of any of the following kinds:

… …

(b) provisions requiring an employee (or allowing for an employee to be required) to take paid annual leave in particular circumstances;

… …”

[97] The provisions in awards and NAPSAs governing annual close-downs vary significantly. It is preferable that we do not alter provisions which have been specifically developed for particular industries. We have adopted the approach of attempting to identify an industry standard in each case. This means there may be some variation in the close-down provisions.

[98] One issue that has arisen repeatedly, and is provided for in the NES, is the right of an employer to require that an employee take arrears of annual leave. We think that an employer should have the ability to reduce annual leave liability by compelling employees to take annual leave provided appropriate notice is given. While there may be different approaches to this question, in each of the awards there will be some provision which will give the employer the ability to take action to reduce arrears.

[99] A number of employer interests sought provisions for cashing out of annual leave by agreement. Such arrangements are apparently included in many Australian Workplace Agreements (AWAs) and workplace agreements. Should cashing out of annual leave become widespread it would undermine the purpose of annual leave and give rise to questions about the amount of annual leave to be prescribed. We think some caution is appropriate when dealing with this issue at the safety net level. We do not intend to adopt a model provision. Consistent with our approach to annual leave provisions generally we shall be influenced mainly by prevailing industry standards, and the views of the parties, in addressing this issue.

[100] It has also been suggested that if awards do not provide for cashing out of annual leave it will not be legally permissible to make workplace agreements which provide for cashing out. In our opinion cashing out arrangements are an appropriate matter for bargaining. If, when the legislative regime is settled, it is apparent that workplace agreements cannot provide for cashing out of annual leave unless there is a relevant provision in a modern award it may be necessary to revisit the question.

Personal/carer’s leave

[101] Two matters require comment in relation to personal/carer’s leave. The first concerns the terms of the exposure draft and in particular that part of the draft clause in some awards which would permit an employee up to two single day absences for personal leave per year without being required to produce a medical certificate or statutory declaration to the employer as evidence of the reason for absence. It was our intention that this part of the clause would only be included in a modern award where it represented the maintenance of an existing entitlement in the industry. After careful consideration we have decided not to include such a provision at all. Section 48 of the NES provides as follows:

“48 Notice and evidence requirements

… …

Evidence

(3) An employee who has given his or her employer notice of the taking of leave under this Division must, if required by the employer, give the employer evidence that would satisfy a reasonable person that:

(a) if it is paid personal/carer’s leave—the leave is taken for a reason specified in section 39; or

(b) if it is unpaid carer’s leave—the leave is taken for a permissible occasion in circumstances specified in subsection 44(1); or

(c) if it is compassionate leave—the leave is taken for a permissible occasion in circumstances specified in subsection 46(1).

… …”

[102] By this provision the NES gives the employer the right to require an employee to produce evidence that would satisfy a reasonable person of the reason for the absence. The intention is that the question of evidence should be dealt with by applying a test of reasonableness. We do not think we should undermine that test by a provision of the kind we had included in a number of the exposure drafts. We have, however, included such a provision in the black coal mining award because it applies in the context of a supplementation of the NES and is an agreed provision.

Community service leave

[103] We have given further consideration to whether modern awards should supplement the NES in relation to the amount of jury service leave to which an employee is entitled. The NES provides that jury service leave should be limited to 10 days. So far as we know jury service leave provisions in awards and NAPSAs are not subject to any cap at all. If we were to maintain an unlimited entitlement it would be necessary to supplement the NES in every modern award. Such a course would be inconsistent with the NES and tend to undermine it.

[104] A similar consideration arises in relation to the rate of pay while on jury service leave. For similar reasons we shall not make general provision for a rate of pay other than the base rate as defined in the NES. It follows that the standard community service leave clause will simply refer to the NES.

Public holidays

[105] A number of requests were made that we supplement the public holiday entitlements in the NES by including in awards some days that are observed as public holidays but not gazetted as such. We have decided against that course as it is apparent that the NES governs the question of the number of public holidays to which employees should be entitled.

Transitional provisions

[106] We have received many submissions and suggestions concerning the way in which modern awards should deal with the multitude of transitional issues which may arise in the establishment of a safety net based predominately on modern awards and the NES. Transitional provisions must be developed, that, in a practical way, take account of the intention of the consolidated request that modern awards not disadvantage employees or increase costs for employers. In the case of some conditions of employment we have decided to include a specific transitional provision in the priority awards. These conditions are redundancy pay, accident pay and district allowances in Western Australia and the Northern Territory. There are also a small number of transitional provisions of limited application. In general, however, we are convinced that, as many contended, transitional provisions are best dealt with after the terms of the priority awards have been published, if it is practical to do so. There are a number of reasons. The first and obvious reason is that it is difficult to know what the effect of the award will be until those affected have had an opportunity to consider the impact in detail. The second reason is that in many cases the effect of the award upon employees and employers is not uniform and depends upon the terms of the NAPSA or pre-reform award which applied previously. More debate will be needed as to how the differing situations of employers and employees are to be viewed and dealt with. In some cases an aggregate or overall approach may be the appropriate one. Finally, it follows that the representatives of employers and employees will be in a better position to assess the overall effect of the awards, taking potential gains and losses into account and will be in a position to give practical assistance to the Commission.

[107] There is an additional consideration. It is desirable that transitional provisions, including supersession provisions, take account of the legislative scheme in which they will operate. For that reason it is our intention not to deal with transitional provisions until the legislation, including the foreshadowed transitional legislation, has been passed by the Parliament. At that time we shall be in a position to assess the overall economic impact and to give consideration to how transitional provisions are to be finalised for the remaining stages of the modernisation process. On current indications we would expect to address these matters towards the middle of 2009.

Indigenous employing entities

[108] The Chamber of Commerce of the Northern Territory (CCNT) submitted that the award modernisation program should take account of the special needs of indigenous organisations in remote areas. The CCNT submission indicated that such organisations operate a variety of businesses which reflect a range of local factors such as geography, climate, community needs, tourism, industry needs and national security. The view was expressed that the patterns of work in these organisations are unlikely to be catered for in modern awards. We think this submission raises some potentially important issues for the award modernisation process. We shall make provision for the matter to be further considered concurrently with Stage 4 when the terms of modern awards generally applying to indigenous organisations will be clearer and there will be an opportunity to properly consider the impact and decide upon the necessary modifications.

Stand down

[109] We have not included any provision for stand down of employees during periods where useful work cannot be performed for a reason or reasons beyond the employer’s control. Should it be necessary this matter can be further considered.

Variations prior to 1 January 2010

[110] We have already referred to a number of situations in which it might be necessary to review or alter modern award provisions before the awards commence on 1 January 2010. References to legislation, including the terms of the NES, will need to be updated. There may be other issues arising from the legislative scheme. In addition we have been unable to finalise a number of provisions which will be included in most if not all modern awards. Those provisions will deal with the supported wage system for employees with a disability, the national training wage and in some cases conditions for school-based apprentices. There may also be a need to vary minimum wages as a result of an adjustment to the pay and classification scales by the Australian Fair Pay Commission (AFPC).

[111] We have not made any provision for settlement of the terms of the awards. The nature of the drafting process including the extensive opportunities for drafting input have assisted us greatly. It is possible, however, that there are drafting issues which will need attention and application can be made to vary in relation to those.

[112] We deal later with a small number of issues which might require further attention. Those issues apart, and allowing for variations of the kind we have just described, we would not expect any other variation to be made.

PRIORITY INDUSTRIES AND OCCUPATIONS

Catering industry, Liquor & accommodation industry, restaurants

Scope of the award

[113] In our statement of 12 September 2008, 23 which accompanied the exposure drafts, we expressed a provisional view that the nature of work in the hospitality industry and the terms and conditions of employment in federal awards and NAPSAs were such that a single modern award could be made in respect of the hospitality industry, although consideration of the clubs and off-shore resorts sectors were deferred until Stage 3.

[114] In the post-exposure draft consultations, the Restaurant and Catering Industry Association of Australia (Restaurant and Catering Australia) argued again for the making of a separate restaurant and catering industry award and the Hotel, Motel and Accommodation Association of Australia (HMAA) sought separate award coverage for the accommodation sector.

[115] Restaurant and Catering Australia submitted that the restaurant and catering sector constitutes a significant industry in its own right and is deserving of its own award. It asserted that the exposure draft inappropriately applied the terms of a hotel industry award to other sectors and that the Restaurants, &c., Employees (State) Award (NSW) (the Restaurants NSW award) 24 made following an arbitration in the New South Wales Industrial Relations Commission,25 should form the basis of a separate award regulating restaurants only. Restaurant and Catering Australia submitted that there were differences between hotels and restaurants, both in terms of awards and NAPSAs currently applying, with particular reference to the Restaurants NSW award, and the manner in which the sectors traded and staffed their establishments and that the making of an award in the terms of the exposure draft would impose cost increases on employers in the restaurant and catering sector of the industry in New South Wales (NSW) in particular and in Queensland, Western Australia and Tasmania as well.

[116] HMAA submitted that a separate award for the accommodation sector would better recognise the changes that have occurred in the industry, allow for greater flexibility and facilitate a simpler award.

[117] We have considered the further submissions of Restaurant and Catering Australia, HMAA and other organisations involved in the consultations and decided to make a single modern award for the hospitality industry, as proposed in the exposure draft.

[118] We accept that there are some differences in trading and staffing arrangements between various sectors within the hospitality industry. Equally, however, there is some commonality between the sectors. It is also significant that there is a level of diversity in the operations of various businesses within sectors of the industry.

[119] There is also some diversity in terms and conditions in federal awards and NAPSAs operating within the hospitality industry, as defined in the exposure draft. However, such differences apply equally across awards within the smaller sectors proposed as they do across sectors. There is a high level of commonality in federal award provisions covering the hotel, accommodation and restaurant sectors and some but less commonality in the relevant NAPSAs. To illustrate, in the restaurant sector there are significant differences between the terms and conditions in the Restaurants NSW award and those in NAPSAs operating in other States just as there are significant differences between the federal restaurant awards and State NAPSAs. For example, the additional penalties in respect of “late work” in the NSW award are not reflective of arrangements applying generally in either federal awards or NAPSAs in other States.

[120] In our view, the classification structure in the exposure draft is capable of accommodating the types of employees engaged in each sector. Whilst the structure is more extensive than appears in some existing awards, in order to accommodate the broader operation of the award, employers previously subject to a more confined structure should be able to readily identify and apply those classifications utilised in their establishments.

[121] We appreciate that additional costs will arise for some employers from the making of an award in the terms of the exposure draft, more so in some States than others, depending upon the terms and conditions currently applying in the NAPSAs. This situation would arise even if separate awards were made for the restaurant and accommodation sectors. The impact of changed safety net conditions for some employers, and in other cases employees, can be addressed through transitional arrangements.

Definitions

[122] The definition of “appropriate level of training” has been updated at the suggestion of several employer organisations and the Australian Liquor, Hospitality and Miscellaneous Workers Union (LHMU). The definition of standard rate has been expanded to encompass both a weekly and an hourly standard rate.

Types of employment

[123] We have adopted the proposal by the Australian Hotels Association (AHA) to consolidate penalty provisions for full-time, part-time and casual employees into a single table and made some consequential changes to relevant clauses.

Minimum wages and classifications

[124] For ease of reference, we have added a column setting out the minimum hourly wage in the minimum wages clause (as it has been renamed). The wages for managerial staff in hotels have been corrected by replacing the figures in the exposure draft by the rates in cl.14 of the Liquor and Accommodation Industry—Hotels, Resorts and Gaming—(Managerial Staff)—Award 2003, 26 adjusted for 2006, 2007 and 2008 AFPC increases. Penalty rates have been included as a matter which can be incorporated into annualised salaries for these managers.

[125] On 28 October 2008, the LHMU, in the context of suggesting amendments to the definition of “appropriate level of training” proposed translation arrangements linking Australian Qualifications Framework (AQF) qualifications to classification levels for food and beverage attendants. Whilst, on its face, this proposal has some attraction, it was introduced at a very late stage of the consultations. Consequently other organisations and parties were not in a position to assess and comment on it. Further, it is unclear what, if any, cost implications might arise from the proposal. While we have not included the proposal in the award we invite those interested to discuss the proposal further and, if appropriate, revisit the issue though an application to vary the draft award before it comes into operation. Consideration might also be given, in this context or otherwise, to how to better accommodate sommeliers within the classification structure.

[126] As noted in our statement of 12 September 2008, we had decided not to include classifications for trades other than cooking and waiting in the draft award. There was insufficient information provided during the subsequent consultations as to the type and extent of work requiring additional trades classifications or the additional terms and conditions which might be required, to persuade us otherwise. The award will not include any additional trades classifications.

[127] The clerical structure from The Hospitality Industry—Accommodation, Hotels, Resorts and Gaming Award 1998 (the Hospitality industry award) 27 was included in the exposure draft. In the absence of any information as to the practical requirement for higher clerical classification levels in the industry, we have retained the structure which was in the draft.

[128] Some submissions sought the inclusion of gardening and maintenance classifications into the award. We will defer final consideration of this proposition until after the consideration of the gardening services (other than racing) industry in Stage 4.

[129] We have decided against the inclusion of special provisions for casual bar attendants—racecourses and showgrounds. In our view the general classification structure and wage rates, and related additional entitlements in the draft award provide an appropriate safety net standard, subject to further consideration of transitional arrangements. Casual bar attendants employed by race clubs are included in the coverage of the Racing Clubs Events Award 2010.

Apprentice wages

[130] There is a considerable variety in apprentice wage levels, as a percentage of the adult trade rate, in federal awards and NAPSAs in the hospitality sector. The diversity of arrangements is more evident in respect of cooking apprentices, with fewer awards prescribing wage rates for waiting apprentices.

[131] In respect of apprentice cooks, wages at the level in the exposure draft are to be found in federal catering, restaurant and hotel awards, hotel and motel NAPSAs in NSW and most South Australian NAPSAs. Lesser rates, particularly at the first and second years, are prescribed in catering NAPSAs in NSW and Western Australia, hotel, motel and industrial catering awards in Western Australia, the restaurants NAPSA in NSW and Australian Capital Territory awards. Tasmanian NAPSAs prescribe marginally lower rates—at the earlier years. Rates in Northern Territory awards and the South Australian motels NAPSA are higher than those within the exposure draft. The most common apprentice rates are those found in the exposure draft.

[132] We appreciate that the apprentice rates in the exposure draft will impose a cost on employers in many sectors of the industry in some States and on some sectors in other States. Against that, the prescription of lesser rates would disadvantage many current and prospective apprentices, particularly those to whom federal awards and some NAPSAs apply. This raises a difficult issue of balancing a cost to employers affecting their engagement of apprentices and the incentive to undertake an apprenticeship. Given these conflicting considerations and the diversity of apprentice wages across federal awards and NAPSAs an exercise of judgment is required.

[133] We have retained the rates in the exposure draft. They reflect the rates in federal catering, restaurant and hotel awards, hotel and motel NAPSAs in NSW and most South Australian NAPSAs. Some increases will result in some States and in the Northern Territory. Cost increases and reductions will need to be addressed in transitional arrangements.

[134] The diversity in apprentice rates is indicative of broader issues which need to be addressed, in relation to apprentice and other training arrangements across the country. We do not think that the award modernisation process provides a proper opportunity to address those issues. In reaching that conclusion, we have had regard to submissions of training organisations which advocate a fuller review of apprentice wages.

Junior rates

[135] A review of junior rate percentages across federal awards and NAPSAs suggests that the rates in the exposure draft, which reflect the hospitality industry award provisions are set at a relatively high level. They will increase the cost of engaging junior employees under a number of federal awards and most NAPSAs. Following the consultation on the exposure draft we, have decided to alter the junior rate percentages in the exposure draft as follows:

Junior employees (other than office juniors)
Age	Rates in exposure draft		Rates to apply
	%		%
		16 years and under	50
17 years and under	70	17 years	60
18 years	80	18 years	70
19 years	90	19 years	85
20 years	Full adult rate	20 years	100

Junior office employees
Age	Rates in exposure draft	Rates to apply
	%	%
Under 16 years:	50	45
16 years	60	55
17 years	70	65
18 years	80	75
19 years	90	90
20 years	Full adult rate	100

[136] These rates, for juniors other than office employees, are based on those in the Motels, Accommodation and Resorts Award 1998 (the Motels award) 28 and the Liquor and Accommodation Industry - Restaurants - Victoria - Award 1998.29 They better reflect the junior rates in NAPSAs and will avoid cost increases which most employers in the industry would otherwise face. We have added a junior rate for employees 16 years and under at the rate of 50 per cent of the relevant classification rate, reflecting additional junior rates at lower ages in a number of NAPSAs. The rates for junior office employees are more reflective of existing hospitality awards generally.

[137] The effect of these rates on employees and employers respectively can be addressed when finalising transitional arrangements.

Allowances

[138] We have included some allowances which did not appear in the exposure draft, namely:

• a laundry allowance for catering employees, including airport catering, consolidated into a single provision;



• a laundry allowance for motel employees;



• an airport catering supervisory allowance; and



• an airport catering travel allowance.

[139] We have also included an overnight stay allowance in the terms of cl.28.2 of the Motels award as suggested by HMAA. We have not limited its application to motel employees, on the basis that the provision would not be otherwise applied. Interested organisations should advise us if there is a need to expressly restrict the operation of the provision.

[140] The LHMU proposed that a number of other allowances be included in the award. We are not inclined to include such allowances in the award presently, but the proposal may be raised again when transitional arrangements are being considered.

Superannuation

[141] We have included a provision requiring contributions at a lesser earnings level than the legislative provision. The provision appears in federal awards and some NAPSAs and could be regarded as an industry standard.

Hours of work

[142] We have added a clause directed to accommodating, by agreement, working arrangements for caterers servicing remote locations, such as are presently available under the Industrial Catering, Cleaning and Incidental Services (AWU and LHMU) Award 2000. 30

Personal/carer’s leave and compassionate leave

[143] We have deleted the evidence requirements included in the exposure draft in favour of the NES prescription, consistent with our approach in other modern awards.

Transitional arrangements

[144] Transitional arrangements will be the subject of further consideration, consistent with the general observations made earlier in this decision. This will involve further consideration of specific arrangements proposed by the LHMU, other unions and employers during the consultation process, including provisions advanced by the LHMU to maintain current award annual leave provisions applying to casual hotel employees in NSW and casual airport catering employees.

Clothing industry (including footwear manufacturing), textile industry

[145] The Textile, Clothing and Footwear Union of Australia (TCFUA) invited us to rename the modern award by including the word “Fashion” in its title on the basis that it better described the sector. We have been reluctant to make the change in the absence of debate as to the impact such a change may imply. The title will remain unchanged.

[146] When we published the exposure draft we sought to simplify the description of the textile, clothing and footwear industry and to avoid extensive descriptions of work and duties. All parties saw difficulties with this approach and provided a revised description of the various sectors. We have adopted those descriptions.

[147] During the second round of consultations a number of submissions were put on the need to ensure that employees properly understood any proposal advanced for individual or majority flexibility. As discussed earlier we have decided to broaden the obligation originally drafted so as to focus on, not just English as a second language, but on a person’s comprehension or otherwise of written English.

[148] Particularly strong submissions were put in relation to casual employment. In the first place the TCFUA expressed great concern at the reduction in the casual loading from 33⅓ per cent to 25 per cent. The second aspect, which the Australian Industry Group (AiGroup) raised, was the question of casual conversion. As to the percentage loading for casuals, we dealt with that issue in the general part of our decision. After examining the casual conversion we have decided to retain the clause in the exposure draft. Award limitations on the use of casuals have been of two kinds: the level of the loading and a limit on the number of times a casual can be engaged in a calendar year; the latter approach being more common in NAPSAs.

[149] We think that given the history of the use of casual employment in the sectors the better approach for a modern award to apply throughout Australia is to include provision for a casual who elects to do so to convert to weekly employment.

[150] Important submissions were also made in relation to the regulation of outworkers. There has been no disagreement about the need to properly protect this class of employee. In the submissions of the TCFUA and some State governments, it was put that we should ensure that existing State legislation which protects outworkers should not be inadvertently overridden by the modern award. We agree with this and have made provision for the saving of relevant State legislation.

[151] On the question of shiftwork in the textile sector, considerable information was provided by Godfrey Hirst Australia Pty Ltd. AiGroup also made a strong submission about the need to ensure that additional costs are not imposed in the way in which shift work is regulated. Against this background, we have decided to include the major parts of the shift work provisions currently found in the Textile Industry Award 2000 31 in the modern award.

[152] In relation to superannuation, the TCFUA invited us to place an obligation upon employers to pay superannuation contributions for the benefit of employees more regularly than the legislation requires. We have included a provision to this effect. We think, given the nature of employment in the industry, that such a provision is warranted.

[153] Finally, the TCFUA and AiGroup did not agree upon the skills definition for a level 5 or the introduction of two additional levels in the wages scale. We have decided upon a definition for level 5 which we have included in the award. We decline to introduce new wage levels into the award without adequate examination of work value issues. There has been a commitment by the parties to examine this matter and an opportunity may arise if the Fair Work Bill is enacted, for the matter to be considered after 1 January 2010.

Coal mining industry

[154] The award will cover all black coal mining in Australia but not brown coal mining. The only brown coal mined in Australia is mined in Victoria and South Australia where all such mining is undertaken as an adjunct to power generation. We have changed the name of the relevant award to make explicit reference to black coal. The award will be the Black Coal Mining Industry Award 2010.

[155] We note again a particular circumstance relevant to the approach we have adopted to this award. All of the major coal mining companies in Australia were jointly represented and presented submissions as the coal mining industry employer group (CMIEG). The Construction, Forestry, Mining and Energy Union (CFMEU) is the key union that represents production employees in the industry. The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) is the key union representing staff employees in the industry. The CMIEG, CFMEU and APESMA substantially agreed on the terms of a draft award for the black coal mining industry. A number of the changes to the exposure draft were agreed by relevant parties.

Coverage

[156] We have, at this stage, acceded to the main submissions of the CFMEU and the CMIEG in relation to the coverage clause in the exposure draft and have generally reverted to the form of words in the draft clause agreed by the main coal industry parties. We note that the stated goal of the CFMEU and the CMIEG was to achieve a coverage clause that as closely as possible reflects the status quo in terms of the existing application of the key federal pre-reform awards both in relation to the kinds of employers to whom those awards apply and the extent to which the awards apply to such employers. We agree with that goal and intend that the award we have made should neither expand nor contract the reach of the key pre-reform awards both in relation to the kinds of employers to whom those awards apply and the extent to which the awards apply to such employers. It follows that we reject submissions that sought to have mechanical and electrical contractors invariably covered by awards other than the modern award for the black coal mining industry.

[157] However, we are concerned that the clause as drafted is not simple to understand nor easy to apply. In particular, contractors who perform some work at or about coal mines may have difficulty in determining whether the award covers them. We acknowledge that significant attempts were made by the parties to agree on a form of words that described the industry in a clear and direct way. We intend to vary cl.4 before the award commences so that it contains a clearer description of the black coal mining industry albeit a description that reflects as closely as possible the status quo. We recognise that the difficulties in developing such a description are substantial and that this should not be done without further consultation with interested parties.

Mines Rescue

[158] The parties had agreed upon Mines Rescue as a separate classifications category in the proposed award. We have decided to exclude Mines Rescue from the final version of the award. There are only two employers that operate in this area and, although they are private companies, they perform functions provided for by legislation in NSW and Queensland respectively. Each of those employers has its own enterprise award so that there are no employers that the proposed Mines Rescue portion of the award would cover. An application to vary the award can be made in the relatively unlikely event of new employers in the mines rescue area.

Dispute resolution

[159] The exposure draft contained a number of clauses, in terms agreed by the key parties, which would have conferred a compulsory arbitral function on the Commission to determine various matters in the event of a dispute. The Fair Work Bill, consistent with policy announcements by the Minister, would, if enacted in its present form, prevent the national industrial tribunal from exercising any such compulsory arbitral function.

[160] We have adjusted the relevant clauses to provide for disputes to be dealt with in accordance with the standard dispute resolution procedure included in all the priority awards. However, it is clear that the major parties agreed to the clauses in question when it was assumed that compulsory arbitral powers would be available in relation to award disputes. We understand that the CFMEU and APESMA may well have taken a different approach to the clauses in question if arbitration were not to be available. After the final form of the legislation is known it may be necessary or otherwise appropriate to reconsider the matter.

Types of employment

[161] We accept the submission of the CMIEG that casual employment should at least be available for employees in the classifications in Schedule B. We have omitted cl.10.4 of the exposure draft on the basis that it is unnecessary.

Variation of retrenchment pay

[162] While, consistent with the approach outlined above, we have removed agreed language that would have conferred an arbitral function on the Commission, our provisional view is that the NES will provide for a determination in any event.

Ordinary hours of work

[163] We have not included a note sought by the CMIEG to the effect that the award flexibility clause would authorise the employer and an individual employee to agree to averaging of hours over a period other than the relevant roster cycle. Such a note is unnecessary. On any view an agreement of that sort can be made under the award flexibility clause.

Accident pay

[164] Consistent with our general approach to accident pay we have added a sunset clause to the draft of the accident pay clause agreed by the major parties although in due course a non-transitional accident pay clause might be added to the award.

Pressing domestic need leave

[165] When the exposure draft was published we saw merit in the submissions of the CMIEG seeking the removal of pressing domestic need leave from the award but were inclined to think it better that the matter be addressed in a variation application after the modern award had commenced to operate. In light of the limitations in the Fair Work Bill on variation of modern awards we have revisited the issue. The entitlement to pressing domestic need leave was introduced into a federal award applying to production employees in New South Wales by the Coal Industry Tribunal in 1973 as part of a clause headed Compassionate Leave. 32 This was at a time when carer’s and compassionate leave were not a common feature of federal awards. With the widespread introduction of personal/carer’s leave the rationale for the inclusion of pressing domestic need leave is substantially removed. Nevertheless, the entitlement to pressing domestic need leave remains in the two key pre-reform awards applying to the vast majority of employees in the black coal mining industry. The clause providing for pressing domestic need leave puts no limit on the number of occasions in a year that an employee is entitled to pressing domestic need leave (with payment for the first day of each period of leave). In this respect the clause is most unusual. We accept the argument that such an entitlement is not appropriate in an award intended to provide a fair “minimum” safety net of enforceable terms and conditions of employment for employees.

Schedule B

[166] The agreed draft of the classification table in Schedule B included notes on the sources of various groupings in that table. We acknowledge that the origins of the groupings in Schedule B are as indicated in those notes but we have not included the notes in the award.

Higher education industry

[167] There have been a number of changes to the exposure drafts either to make clear the obligations, or to slightly alter particular provisions. In large measure the changes will not be controversial. However, we discuss below a number of areas in which the submissions indicate important differences of view.

[168] In relation to higher education we published only two draft awards—one for academics and the other for general staff. No distinction was made between so-called private and public universities. Having considered the information provided in the second round of consultations, we have decided to make two awards as foreshadowed and not to further segment the sector.

[169] Except for matters that we shall come to, we have decided that, at the safety net level, there should be no relevant difference. Matters going to enterprise specific issues involving practice and procedure can be progressed through enterprise bargaining.

[170] During the second round of consultations on the exposure draft, there was significant comment on five main areas. They were:

• Redundancy;



• paid maternity leave;



• rules surrounding fixed term employment;



• superannuation; and



• exemption rate for high salary earners.

[171] In relation to redundancy, there has been an industry specific scheme which has applied to a number of universities. This was not included in the exposure draft. We have been persuaded to include the industry specific redundancy scheme but only where it previously applied. The provision we have included will not apply to universities who were not party to the Universities and Post Compulsory Academic Conditions Award 1999. 33

[172] In relation to paid maternity leave, the NES provides for unpaid maternity leave, but a significant number of university awards provide for a period of paid maternity, paternity and adoption leave. We consider we should include provision for paid maternity, paternity and adoption leave to ensure the maintenance of a fair minimum safety net. We have included in both awards a provision which seeks to maintain an obligation to afford paid maternity, paternity and adoption leave, where they exist, to both current and future employees.

[173] Of particular concern to employers was the inclusion in the exposure draft of the terms of the Higher Education Contract of Employment Award 1998 34 (the HECE award). This was an award made by a Full Bench following extensive evidence and submissions.35 In resolving the merits of the argument, certain conditions were placed on the extensive use of fixed term contracts. These conditions were peculiar to the universities and related to their employment practices. Nothing has been advanced which persuades us to revisit the decision of the Full Bench or to call its findings into question.

[174] With one exception, we have decided to maintain the approach in the exposure drafts. The exception is that we have limited the operation of the clause to the universities covered by the original HECE award. Other universities covered by the modern awards were not before the Full Bench. We are not prepared to assume that their employment practices and procedures match those of the universities against whom the award was originally made.

[175] In relation to superannuation we have included a provision which relevantly maintains the operation of the Tertiary Education Superannuation Scheme Award 1988. 36

[176] Finally, we have considered the submission that the award (or parts of it) should not apply to persons who earn salary in excess of a particular classification level. Some adjustments have been made in relation to higher level classifications particularly in relation to time off instead of overtime in the general staff area. However, we are not prepared to provide a blanket exemption when the foreshadowed legislation will exempt employees either based upon the class of employee or their earnings.

Metal & associated industries, glue & gelatine, rubber, plastic & cablemaking, vehicle manufacturing

[177] The terms of the modern Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing award) are largely those agreed between AiGroup and the Metal Trades Federation of Unions (MTFU). The Manufacturing award, however, is one which is likely to be subject to considerable variation as award modernisation progresses and consideration is given to it including other relevant industries and occupations.

[178] The coverage of the Manufacturing award, for example, is likely to be refined as award modernisation progresses. As a result, even though it is agreed between AiGroup, the MTFU and others that employees of electrical contractors bound by an electrical contracting award or NAPSA and, in NSW, the installation of power plants in power stations and/or substations should be excluded from the coverage of the Manufacturing award, these exclusions have not been included in the Manufacturing award at this stage pending the consideration of the modern award coverage of industries being dealt with in later stages of award modernisation.

[179] While there is considerable agreement about the terms of the Manufacturing award, there are some differences. Some terms of difference between the relevant unions and the employers, such as those concerning casual conversion to full-time or part-time employment, small business redundancy, accident pay, cashing-out of annual leave and evidence in respect of personal/carer’s leave, have been dealt with earlier in this decision and the reasons for preferring one position over another explained.

[180] With respect to other differences, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) asked us to include a number of classifications not contained in the exposure draft. AiGroup opposed their inclusion because they considered the classifications should be covered by another modern award or because they had not had sufficient opportunity to consider whether they are appropriate for inclusion. The additional classifications sought by the AMWU have not been included in the Manufacturing award at this stage. The matter can be further considered in later stages of award modernisation, thereby giving AiGroup and other unions greater opportunity to consider the appropriateness of their inclusion.

[181] The MTFU asked for an additional safeguard concerning the facilitative provisions in the Manufacturing award dealing with relevant unions being informed by an employer about their intention to use facilitative provisions concerning payment of wages and ordinary hours of work for shift workers. This clause, with some modification, has been included in the facilitative provisions as it is an integral part of the facilitative clause in the Metal industry award and was previously agreed between the MTFU and AiGroup.

[182] In addition to the clause concerning consultation regarding major workplace change, the MTFU also sought a clause concerning consultation and representation. This was not supported by AiGroup. The clause sought has not been included in the Manufacturing award as it imposes no right or obligation about consultative mechanisms and procedures. Further, the clauses concerning consultation regarding major workplace change and dispute resolution provide for employee representation.

[183] The casual employment clause in the exposure draft of the Manufacturing award has been supplemented by requiring an employer engaging a causal employee to advise the employee of such matters as their type of employment and classification level. The supplementation was requested by the MTFU. The supplementation is relevant to the application of the casual conversion clause and a similar clause was previously agreed by AiGroup.

[184] The apprenticeship provisions in the Manufacturing award largely reflect those in the exposure draft, notwithstanding some request for their alteration. They are long standing provisions of the Metal industry award. We recognise, however, that they may require some adaptation as other industries and occupations become part of the Manufacturing award.

[185] While the redundancy provisions in the Engine Drivers’ and Firemen’s (ACT) Award 2000 (the Engine Drivers’ (ACT) award) 37 were sought to be included for small business, they have not been included at this stage. This is because that award seems to provide such provisions for on-site and off-site construction and the construction industry and its interaction with the Manufacturing award will be considered in Stage 2 of award modernisation. The inclusion of the redundancy provisions from the Engine Drivers’ (ACT) award in the Manufacturing award is, therefore, a matter best left for further consideration later in the award modernisation process.

[186] The MTFU sought a number of provisions dealing with the method of classification of employees. AiGroup opposed their inclusion. They have not been included at this stage because the necessity for and effect of their inclusion is not clear. They can be further dealt with when the inclusion of other industries and occupations in the Manufacturing award is considered. The clause sought by the MTFU concerning training has also not been included. Amongst other things, it does not appear to provide any effective right or obligation.

[187] The suggestion that the minimum wages for unapprenticed juniors in the exposure draft be rationalised has been adopted, having regard to the prevailing standards.

[188] AiGroup sought a clause concerning the frequency of payment of wages to certain employees. The clause has not been included given the flexible terms of the period of payment clause in the award. The Chamber of Commerce and Industry of Western Australia also sought changes to the averaging of hours arrangements for day workers. However, such change has not been included given the flexibilities already contained in the award flexibility clause and facilitative and shift worker provisions.

[189] A clause concerning work on a rostered day off by employees performing survey work on a recognised building and construction site, which was requested by the MTFU, has not been included as its necessity and effect is not clear. However, a clause providing a morning tea rest period for certain employees has been included as it is a prevailing industry standard for such employees. Similarly, the application of the technical computing equipment allowance and ship trials clauses have been clarified to reflect their current application. The space tracking industry allowances have not been included as they appear to be derived from enterprise specific allowances and their operational effect in the context of the Manufacturing award is not clear.

[190] AiGroup sought a clause concerning the taking of time off instead of payment for overtime, shift work or Sunday or public holiday work for a Supervisor/Trainer/Coordinator. This has not been included given the flexibility already provided by the overtime and award flexibility clauses of the award.

[191] The LHMU sought a provision requiring overtime to be paid at time and a half for the first two hours instead of for the first three hours for some employees. However, this has not been included in the Manufacturing award in light of the prevailing industry standard. The MTFU also sought that provisions for a minimum of four hours work for certain employees performing Sunday or public holiday work be included in the Manufacturing award. Instead, a minimum of three hours work provision is included having regard to the prevailing industry standard. Similarly, AiGroup requested that the lower shift and penalty rates in the Rubber, Plastic and Cable Making Industry – General - Award 1998 38 be preserved. Such preservation has not been included in the Manufacturing award. Instead, prevailing industry standards have been adopted. The effect of the non-preservation is a matter that can be dealt with in transitional arrangements.

[192] Finally, the MTFU submitted the term “or other relevant Skills Council” should be included in the classification definitions in the Manufacturing award. The inclusion was opposed by AiGroup. The term has not been included in the Manufacturing award because the necessity for and effect of it is not clear. It can be further considered at later stages of award modernisation in dealing with the addition of other industries and occupations to the award.

Mining industry

[193] The principal submissions on behalf of employers in this industry were made by Australian Mines and Metals Association (AMMA). Submissions made by other employers were, in the main, directed to the coverage clause of the award and able to be resolved between the employers by variations to that clause.

[194] Several unions made submissions all of which we have considered. A large amount of the submissions of AMMA and those made by the Australian Workers’ Union (AWU) and the CFMEU in particular, related to whether, and in what terms, they should be identified as parties to the award. For the reasons given earlier in this decision we do not need to consider those submissions at this stage.

[195] We will now refer to the most significant changes that were made to the exposure draft. In this respect we should note that the AWU, when referring to the clauses of the exposure draft, identified one or other clause contained in a NAPSA which it submitted provided a superior benefit in respect of that term or condition and asserted that should be reflected in the exposure draft. We have not adopted that approach and it is not one we think consistent with the provisions of the consolidated request and the WR Act. We have considered each of the pre-reform awards in this industry as well as the relevant NAPSAs. In order to exercise our judgment as to the appropriate provisions to be in this modern mining award we have taken into account provisions in the awards which we consider to be prevailing standards and provisions which may only be reflected in a handful of awards relevant only to the particular sector of the industry covered.

[196] In our decision of 20 June 2008, when we included mining on the list of priority industries, we noted that it had a number of attributes that might not exist in other industries. Many mining operations are conducted in remote locations not easily accessible by daily commuting. We said that there would be a number of considerations peculiar to this industry about what terms may be appropriate in a modern mining industry award. We have followed that approach in deciding the appropriate safety net terms for this award, bearing in mind also that particular terms and conditions for any sector or employer may be regulated by a workplace agreement. In so far as the AWU identified conditions that it submitted were superior in any one or other NAPSA they are matters that can be addressed, if necessary, when we consider transitional provisions that might be appropriate for this award.

Definitions

[197] We have varied the definition of a continuous shift worker. The definition we have included is one that is commonplace in mining industry awards. It is particularly relevant in the context of this award as it is such an employee who will be entitled to an additional week’s annual leave.

Coverage

[198] Clause 4.1(e) which is contained in the clause defining the mining industry, has been varied to reflect agreement reached between parties.

[199] Clause 4.2 contains a list of industries and occupations which are excluded from the award. Clauses 4.2(c)(vi) and 4.2(c)(vii) exclude the quarrying and salt industries. The CFMEU submitted that neither should be excluded. It asserted that they were traditionally considered part of the mining industry however little more was put in support of this submission. We have retained them in the exclusion clause noting that aspects of quarrying are being dealt with in the Stage 2 industries and that further consideration can be given to the appropriate modern award coverage for the salt industry later in the award modernisation process.

[200] Clause 4.2(c)(x) is a new exclusion and provides that the activities of prospecting and resource assessment for the purposes of potential mine development which is not on a mining lease or tenement will not be covered by this award. AMMA submitted that employees involved in these activities may be drilling for water or locating a bore one day, on another prospecting for a mineral covered by this award and on another drilling for a soil test. The work of these employees was not confined to the mining industry and it was undesirable that an employer should be covered by multiple awards. We have decided to exclude these activities at this stage. However, during the later stages of the award modernisation process it will be necessary to again consider what may be the appropriate modern award to cover those activities.

[201] Clause 4.2(c)(xi) excludes brown coal mining from the coverage of this award. There was no opposition to including this clause. Clause 4.2(c)(xii) has been included and reflects agreement reached with AiGroup about the interaction between this award and the Manufacturing award.

Types of employment and termination of employment

[202] In cl.10 we need only refer to the subclause dealing with part-time employment. Although several mining awards contain a clause dealing with this type of employment many do not. The draft lodged by AMMA contained a part-time employment clause however it did not provide for the payment of such employees for hours worked outside of those agreed with the employer. An entitlement to be paid at overtime rates for such hours is commonplace in awards. We have inserted such a provision into this clause.

Abandonment of employment

[203] The exposure draft contained a clause dealing with abandonment of employment. We have considered the submissions of the parties noting that such a clause is not common in mining awards. Additionally CFMEU submitted that it is doubtful whether it is an allowable matter. Without deciding whether the CFMEU submission is correct we are persuaded that the award should not contain such a clause.

Minimum wages

[204] The minimum weekly rates are those contained in the exposure draft however new levels six and seven have been added together with appropriate minimum weekly rates for those levels. As we understand the submission of AMMA the new classification levels have been developed with the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and not opposed by any other union.

[205] The exposure draft contained a provision dealing with piece rates. In support of the provision AMMA submitted that piece rates had been a feature of the underground mining industry however it did not identify any particular awards which contain such a clause. The AWU was not opposed to a piece rates clause however it submitted that it should contain a guarantee that the remuneration of an employee would be 30 per cent in excess of what would otherwise have been paid under the award. The CFMEU submitted that such a clause is only in a NAPSA operating in Queensland and should not, for safety and other reasons, be a method of total remuneration of an employee. We note that there is also a clause in a NAPSA operating in South Australia however all the provision states is that an employer and an employee working underground can agree to work a system of piece work. We have decided it is not appropriate to have a piece work clause in the new award.

[206] The exposure draft contained clauses dealing with salary sacrifice and annualised salaries. Little was said in support of the salary sacrifice clause and we have decided, it not being common in awards, that it should not be contained in the modern mining industry award. Both the AWU and CFMEU opposed any clause dealing with annualised salary arrangements. The AWU submitted that it contained no methodology as to how the salary was to be calculated and that a reference to the NES base rate of pay in the AMMA draft was unclear. The CFMEU opposed such a clause submitting that it was not in current awards and no case had been made out to justify it. We accept these submissions and have decided that the award should not contain such a clause.

Allowances

[207] We have included allowances applicable to drilling, exploration and prospecting activities in cl.14. These are required as a consequence of us deciding that aspects of those activities should be included in definition of the mining industry.

[208] The issue of an appropriate industry allowance was addressed in detail by the parties. At the request of this Full Bench the AWU and AMMA gave further consideration to the allowances each had been proposing at an earlier stage in this process. In order to compensate for a number of aspects of the disabilities in the industry we have decided to insert an industry allowance. The quantum of the allowance is at the upper end of what AMMA submitted may be appropriate. It will be paid for all purposes and compensate for the location and nature of mining operations, clothing, dirt, wet, height, fumes, heat, cold and confined spaces.

[209] We are aware that some pre-reform awards and NAPSAs contain a district or locality allowance particularly those operating in Western Australia. It is unclear which aspects of the industry are compensated for by these allowances however it would appear that at least aspects associated with the location where the activities are carried are incorporated. We accept that industry and locality allowances are not necessarily interchangeable and the components they compensate for do not necessarily align. However, on a transitional basis, we have decided that the best compromise is that employees with an entitlement to both the industry allowance and a locality allowance are to receive whichever is the greater.

[210] We have commented elsewhere in this decision about the need during the transitional period for district allowances to be more generally considered. In that context the quantum of the industry allowance may need to be reconsidered.

Maximum weekly hours

[211] AMMA’s primary position was that hours should be capable of being averaged over a period of up to 52 weeks. As an alternative it submitted that up to six months was appropriate or, subject to an agreement between an employer and the majority of affected employees, up to 52 weeks. We have considered the existing flexibility contained in awards that deal with the periods of time over which hours may be averaged. We have also considered the fact that a significant percentage of employees engaged in this industry and performing work that would otherwise be covered by the award will be excluded as high income earners. This group will be able to have their hours averaged over a period of six months.

[212] We have decided that it is appropriate that hours of work be capable of being averaged over a period of 26 weeks and cl.17.2 of the award is in those terms.

Rostering

[213] We refer first to the issue of the minimum period of time an employer is to give to an employee when changing a roster. There is no prevailing standard within the awards. Many contain no clause dealing with this at all and others provide that seven days notice of such change should be given. A number provide for 48 hours. We have decided that a minimum of 48 hours is appropriate. Consistent with the submission of the CFMEU we have placed an obligation upon employers to consult with affected employees about any roster changes.

[214] We have not inserted the clause sought by AMMA in relation to placing an obligation on employees to perform reasonable handover work. The clause did not provide for the manner in which an employee may be compensated if this was to occur and we accept the submissions of the unions that such a clause is not in existing mining awards.

Annual leave

[215] We have earlier referred to the definition of a shift worker which will provide such an employee with an additional week’s annual leave. We were not persuaded to adopt the definition proposed by AMMA. It is unclear if any awards contain a similar provision. The definition we have adopted is commonplace in both pre-reform awards and NAPSAs in the mining industry.

[216] We have not included a clause in the terms sought by AMMA which provided that a week’s leave was to be based on the average number of ordinary hours worked per week under the employee’s rostering arrangements. Little was said in support of the clause other than that it was to provide clarity in respect of an employee's leave entitlements. The AWU submitted that the clause was unclear and not one contained in any existing mining industry awards.

[217] The next issue is how the amount to be paid for annual leave should be calculated. The mining industry awards contain a range of provisions identifying what components are to be in or out of the calculations. More awards than not, however, have a provision which encompasses in some way the monies the employee would have received had leave not been taken. The clause we have decided upon is, we think, a fair compromise between the positions contended for by the AWU and AMMA and the methodology contained within the existing awards.

Work on public holidays

[218] AMMA sought a clause that provided that an employer could reasonably require an employee to work and an employee may not reasonably refuse to work on a public holiday in certain identified circumstances. In our opinion each of the circumstances identified would be factors that s.55 of the NES provides must be considered when determining whether a request on the one hand or refusal on the other was reasonable. We are not persuaded that it is appropriate that a decision about the reasonableness of a request should, in effect, be made in advance by way of a provision of the award. The assessment is to be made at the time the request is made and the factors then relevant to the circumstances of the employer and the employee in question can be considered.

Superannuation

[219] The exposure draft did not have a superannuation clause. The vast majority of awards in this industry do not have a superannuation clause. A small number contain a clause which does no more than note that superannuation is dealt with in legislation and refers to the name of that legislation. A handful of NAPSAs contain a reference to the employer’s provident or benefit scheme. Submissions made after the exposure draft was published said little about superannuation. SunSuper indicated that if a clause was to be inserted in this award it should be named as a default fund. The AWU indicated that it supported the SunSuper submission and said no more. The AMWU submitted that there should be a superannuation clause if only to provide for a requirement that employers continue to make contributions while an employee is on workers’ compensation. None of these submissions have persuaded us that a clause dealing with superannuation should be in this award.

Private sector clerical occupation

[220] In our earlier statements and decisions we indicated that within a system of modern awards there is an important role for an occupational award covering clerical employees in the private sector. That was part of our consideration in establishing the private sector clerical occupation as a priority area of employment in the award modernisation process. We have also emphasised that the WR Act and the consolidated request give priority to industry awards and one objective of award modernisation is to limit the number of awards applying to a particular employer. For these reasons we indicated that in order to give effect to the objectives of award modernisation, when each industry is considered, it will be necessary to consider all classes of award covered employees in that industry and the extent to which it is appropriate to have those employees covered by an award with industry-wide application.

[221] The Australian Services Union (ASU), supported by some employer groups, sought the establishment of a general presumption in favour of coverage by the Clerks—Private Sector Award 2010 (the Clerks private sector award) for all employees currently covered by a general clerical occupational award or NAPSA. We do not consider that it is appropriate to establish a presumption of this type. It is clear that the Clerks private sector award will have very significant application. However it will not cover all clerical employees in the private sector.

[222] In the priority industries dealt with in the first stage of award modernisation there are five other awards which contain clerical classifications. The Clerks private sector award will not apply to employers covered by those awards with respect to employees covered by those awards. We have identified these awards in the coverage clause of the Clerks private sector award in order to provide clarification as to the scope of the award. As other awards with clerical classifications are made throughout the process we propose to add these to the list in cl.4.3. When each other industry is dealt with the position of clerical employees will be considered. A relevant consideration will obviously be the extent and nature of award-covered employees in the industry. The Clerks private sector award will apply to all private sector clerical employees not covered by an industry award.

[223] The making of the Clerks private sector award will provide assistance in determining the appropriate coverage for clerical employees in other industries, and to the extent it is appropriate to have clerical classifications in an industry award, provide guidance for appropriate clerical terms and conditions.

[224] The ASU contended that the legal services industry required consideration under a separate industry award and that special provisions of one sort or another are appropriate for the cash processing and wagering industries. We agree that the legal services industry should be considered as a separate industry and will do so in Stage 4. At this stage we have not excluded cash processing or wagering from the Clerks private sector award. We have included a definition of clerical work to make it clear that it is a term of broad application and includes cash processing. Clerks involved in wagering also fall within the scope of the award.

[225] As other industries are considered as part of the award modernisation process, it may be appropriate to expressly acknowledge the coverage of clerks in a particular industry by the Clerks private sector award and consider amendments to the award to properly achieve the objectives of award modernisation. Alternatively it may be appropriate to include clerical classifications within the industry award.

[226] Extensive submissions were made about the content of the exposure draft for this award. The ASU identified a number of areas of disadvantage for current and future employees. Employers identified a number of areas which they contended limited existing flexibilities and increased costs for employers. Particular submissions were made in support of the classification structure, hours, and flexibilities contained in the NSW clerical NAPSA especially given the very large proportion of clerical employees covered by that instrument.

[227] The approach we have adopted is to have regard to the range of existing provisions, acknowledging that there will be some positive and negative changes for both employers and employees. Further, it is appropriate to consider the overall package of award minimum obligations in assessing the impact.

[228] A number of changes to the exposure draft have been made as a result of these considerations. We have decided to include an exemption provision in line with the NSW NAPSA clause in recognition of the longstanding and widespread use of the concept in federal clerical awards and in NAPSAs.

[229] We have rationalised the allowances and made other general changes for reasons explained in the main body of this decision but made few other changes to the classifications, wages and conditions contained in the exposure draft. We consider that the classifications properly reflect work value and existing award classification structures.

[230] The hours provisions published in the exposure draft have been modified slightly. We do not intend to remove the facility for ordinary hours on Saturday morning, as sought by the ASU, or extend ordinary hours to Saturday afternoon as sought by some employers. We will however provide for a penalty of time and a quarter for ordinary hours worked on Saturday. The clause also provides that the ordinary hours which apply to the majority of employees at the workplace under another modern award will apply.

[231] We confirm our view that a case has not been made out for an annualised salaries or a salary packaging clause. As we have indicated above we have decided to include an exemption rate in the award. We note the availability of annualised salary and salary packaging either as part of the contract of employment, other agreements, or with respect to overaward benefits.

Racing industry

[232] We have decided to make three modern awards. The awards will apply in each of the areas identified in the exposure drafts which the Commission published in September 2008.

[233] The Racing Clubs Events Award 2010 (the Events award) is an industry award covering events at horse and greyhound racing venues. The coverage of the award may at some future time be extended to include events at other venues. The exposure draft contained an integrated classification structure which included kitchen, cooking and other hospitality classifications and also provided for evening and weekend penalties of the kind which apply in the hospitality industry. These penalties are in excess of those in awards and NAPSAs applying to events day staff in racing and other industries. We have decided not to include the hospitality classifications in the award. As a consequence we shall not include the evening and weekend penalties from the hospitality industry. The penalty rate structure is therefore more in keeping with that applying to attendants and other events staff in federal awards and NASPAs. The award will include only a limited number of liquor employee classifications. In that respect we have adopted the classifications and rates from the Liquor Industries – Racecourses Showgrounds, etc. Casuals – Award 1998 (Transitional). 39 It is envisaged that the Hospitality Industry (General) Award 2010 will apply to other hospitality employees and catering employees although this may require further consideration.

[234] The minimum wages and ordinary hours provisions are intended to recognise the nature of the industry while providing a proper safety net.

[235] There is a range of different arrangements in federal awards and NAPSAs dealing with minimum periods of engagement and postponement or cancellation of events. We have attempted to simplify those arrangements. It may be necessary to revisit this issue after the award has been operating for some time.

[236] There are some important changes in the classification structure. We have included classifications for a number of raceday officials which were not included in the exposure draft. We have decided to adopt the structure for raceday officials in Part C of the Theatrical Employees (Recreation Grounds and Raceday Officials - NSW and ACT) Award 2000. 40 This appears to be the most comprehensive structure in the industry. There are a number of consequential changes to the draft structure. It is of course not possible to develop a uniform national structure without altering existing arrangements. We are confident the structure will in time prove effective although there is always the possibility that some minor adjustment might be appropriate.

[237] In relation to minimum wages we should mention that in some States lower wages apply to some types of meetings or to meetings outside the metropolitan area. This is a consideration in country New South Wales for example. If we were to maintain these differences equity considerations would arise in many areas of the industry covered by the award and in other industries as well. We are not persuaded that there is justification for special treatment of the employers and employees affected and have decided not to provide for such differences in the Events award. It is possible that the impact of this change may need to be taken into account in considering the transitional provisions.

[238] The Racing Industry Ground Maintenance Award 2010 is an industry award covering ground maintenance at horse and greyhound racing venues. It is in similar terms to the exposure draft except for the working hours and penalty arrangements. While ordinary hours are generally confined to 6.30 am to 6.30 pm Monday to Friday there is provision for ordinary hours to commence earlier for employees required for track work and for employees required to be on hand at weekends during events and for some events during the evening. Penalties apply at these times. These provisions to a large extent reflect the terms of the Race Clubs Employees (State) Award (NSW). 41 The 19 day month is included in the Sportsground Maintenance and Venue Presentation (Victoria) Award 200142 but is not a feature of awards and NAPSAs applying specifically to racecourse ground maintenance employees and we do not regard it as an industry standard. We have decided not to include it in the modern award.

[239] The Horse and Greyhound Training Award 2010 covers the horse and greyhound training industry. The award will bring training of trotters and greyhounds into federal award coverage for the first time. For the most part the award reflects the provisions of the Horse Training Industry Award 1998. 43

Rail industry

[240] In this part of our decision we will refer to the submissions of Rail Skills and Career Council (RSCC) as representing those made on behalf of employers. Although a small number of other employers made submissions they were either resolved by agreed changes made to the exposure draft or those employers subsequently aligned themselves with the submissions of the RSCC.

[241] The principal submissions on behalf of unions traditionally party to rail industry awards were made by the Australian Rail Tram and Bus Industry Union (ARTBIU). It indicated that it also made submissions on behalf of APESMA, AMWU, ASU, CEPU and CFMEU. Unless indicated otherwise we refer to these as the submissions of the rail unions.

[242] In our statement of 12 September 2008 we referred to the scope of the pre-reform awards within this industry. 44 That diverse range of classifications, groups and activities within the rail industry are now to be covered by this modern award. It will cover employees and employers engaged in the passenger rail sector, be they suburban, country or interstate and will also cover the movement of freight by rail and all associated activities. As a general observation the rail industry awards bore little similarity with each other and many were highly prescriptive albeit containing numerous provisions now being outdated or inappropriate for a fair minimum safety net award. It was submitted by the rail unions that “the only consistent factor in classifications and allowances in awards and workers terms and conditions is that there is no consistency.”45 That is an accurate observation.

[243] It was conceded by the rail unions that the importance of awards had somewhat diminished over the years and they had been concentrating now for some time on enterprise bargaining agreements. The accuracy of this submission is reflected in the fact that many rail awards have not been varied for a considerable number of years. All parties accepted that it was not likely that any employee was award reliant.

[244] We will now refer to the most significant provisions of the Rail Industry Award 2010. In doing so we note that the coverage of the award remains largely in the same terms as the exposure draft.

Definitions

[245] The definition of a shiftworker is in the terms sought by the rail unions. It is consistent with the definitions of shiftworker contained in many of the relevant pre-reform rail awards. We have also inserted a definition of private siding as sought by the rail unions.

Coverage

[246] The rail unions sought an addition to the coverage clause to provide that it would extend to employees of labour hire employers. In this context they gave, as an example, the increasing incidence of locomotive drivers being engaged by labour hire companies and submitted that it was unclear whether current awards regulates the minimum award terms and conditions of such workers. This is not a matter we have been able to deal with in the context of considering the provisions of an appropriate modern award for the rail industry. It arises more generally across industries and we have referred earlier in this decision to issues concerning the operation of modern industry awards in relation to employees of contractors and labour hire firms. At the time consideration is given to this issue it may be appropriate for the rail unions to again raise their particular concerns.

[247] The ASU sought an additional clause in following terms:

“All employees who immediately prior to this award coming into force are classified as salaried officers in the awards below, will continue to be employed on an annual salary (as defined). Pay periods for annual salaries may be either weekly or fortnightly as is the custom and practice. Any employee may be employed on an annual salary as defined and paid either weekly, fortnightly, four weekly or such other pay period as is the custom and practice of the employer.”

[248] We were not persuaded to insert this clause. It is not the type of provision that should be contained in the coverage clause of the award. It has more to do with the eligibility rules of the ASU than it has with coverage. We refer later in this decision to wage provisions of the award which we have expressed both by reference to the minimum weekly wage and the annual salary equivalent to accommodate the submissions of the ASU.

[249] Variations have been made to the exclusions clause to reflect agreements reached with parties with an interest in the Manufacturing award. The award will not extend to engineering contractors providing services to the rail industry provided they are not themselves Rail Transport Operators.

Types of employment and termination of employment

[250] The part-time provisions require that time worked in excess of agreed hours is to be paid at overtime rates. Such a clause is contained in some rail awards and reflects the prevailing standard in awards in other industries in relation to such employee’s entitlements in this respect.

Probationary periods and abandonment of employment

[251] The exposure draft contained both probationary employment and abandonment of employment clauses. Probationary employment clauses are a feature of existing awards and we have retained the clause. We have decided to remove the abandonment of employment clause on the basis that such clauses are not common in this industry.

Minimum wages

[252] The minimum wages payable to employees in the three classification streams were expressed in the exposure draft as a weekly rate. We indicated in our statement of 12 September 2008 that when an appropriate classification structure was developed consideration would be given to expressing minimum pay rates in a manner other than by reference to a weekly rate. 46 The ASU in particular wanted the wage rates to also be expressed as annual rates for reasons associated with its eligibility rules. We have now done that for the clerical, administrative, professional and operations streams.

Allowances

[253] We commented in our statement of 12 September 2008 that the rail industry pre-reform awards and NAPSAs contained a vast number and range of allowances. We asked the parties to consider rationalising the allowances. The allowances subsequently proposed by the parties reflected significant areas of agreement about allowances appropriate for a modern award and the quantum of those allowances.

[254] In relation to freight allowances however the parties were not in agreement. The rail unions proposed that an allowance should be struck which reflects the additional skill involved in hauling loads of various tonnages. RSCC asserts there is no additional skill required as a consequence of the weight of the load hauled however it does accept that there are productivity considerations and greater responsibility involved. There is no prevailing standard or consistency in the allowances clauses in the rail industry compensating for these activities. We have decided to adopt the RSCC proposal to reflect such additional responsibilities or skills involved on account of various tonnages hauled in the operations classification levels 5 and 6.

[255] We have varied the higher duties allowance contained in the exposure draft. Although a clause in the same terms was contained in the rail unions draft we note that in their submissions they indicated that the clause provided for a lesser entitlement for a number of employees by reference to the corresponding provision in existing awards. In this respect we note that there is a significant disparity within the awards in relation to the manner in which higher duties is dealt with. A number of awards contain no reference to higher duties at all and others require employees to work five consecutive days prior to an allowance being paid. Considering the various entitlements in the awards we have decided upon what we think is a fair compromise. The higher duties clause will now provide that the higher rate should be paid to an employee where the employee works either one shift or a day performing duties of a higher classification.

Annualised wage and salary arrangements

[256] We have accepted the submissions of the parties that annualised salary arrangements are a common feature in the industry and we note that a clause dealing with this matter was contained in drafts proposed by both RSCC and the rail unions. However, they were not in the same terms.

[257] The rail unions submitted that entering into such an arrangement should only be by agreement between the employer and employee concerned. We agree and the clause in the award has been drafted accordingly. Additionally the rail unions sought a provision about assumptions that may have been made about overtime or penalty components to be absorbed into the annualised wage. There is merit in these submissions and our clause reflects them.

[258] We have made a number of other changes to the terms of the clause as contained in the exposure draft. It now provides that a copy of the agreement is to be given to the employee and kept by the employer as a time and wages record. We have also inserted provisions dealing with the manner in which the agreement may be terminated.

Hours of work

[259] As a general observation the pre-reform awards and NAPSAs contain limited regulation of hours when compared with other awards in the federal and state systems. Although the issue of hours is clearly important there were few submissions made by the parties about the terms of specific provisions that should be in the award.

[260] The RSCC submitted that given the background of there not being highly prescriptive hours clauses and, where they did exist they reflected no consistency, this was not the occasion to introduce any additional regulation. Furthermore they relied upon the fact that this industry is highly regulated in respect of safety and fatigue management.

[261] It has been necessary for us to exercise judgment about several aspects of the regulation of hours and related matters and we shall summarise the decisions we have made.

[262] RSCC sought a clause allowing an employee’s hours to be averaged over 52 weeks. The rail unions opposed that, and in their draft filed on 10 October, retained the 12 weeks averaging clause from the exposure draft. We have considered the employers submission about the impact of seasonal demands on the industry and the freight sector in particular. We also note that there are a variety of provisions in awards allowing ordinary hours to be worked over a period of a fortnight, a month and up to one year. We have decided an appropriate compromise for this award is 16 weeks.

[263] When considering the span of hours during which ordinary time maybe worked we noted that there are no clauses that regulate locomotive drivers and related activities. To the extent there is regulation relating to traffic operations and workshops there is no consistency. The clauses regulating trade, professional and salaried grades contain some regulation of the span of hours but no similarity as to the hours or the days of the week over which they may be worked.

[264] We have decided an appropriate compromise is to provide a clause dealing with the span of hours for day workers in clerical, administrative and professional classifications and technical and civil infrastructure classifications. We have not been persuaded to provide a similar clause for operations.

Breaks

[265] The clause in the exposure draft was also in drafts filed by both the rail unions and RSCC. However, the rail unions sought two additional provisions each relating to the minimum hours of rest an employee is to be given between shifts. The RSCC submitted that this industry is regulated by rail specific legislation prescribing in some detail safety and fatigue management obligations and, within the various sectors of the rail industry, there are different minimum requirements.

[266] A number of the pre-reform awards contain no relevant clause. Others do contain provisions dealing with the minimum hours between consecutive shifts. There is, however, no prevailing standard reflected in those provisions. The minimum hours vary from seven and range up to 12 hours. Additionally, within those provisions there are further provisos and conditions depending on whether an employee is working out of a home base, headquarters or a foreign station.

[267] We have decided not to put any clause in the award. This matter should be monitored by the parties for a period after the award comes into operation and submissions can be made at an appropriate time if the matter needs to be revisited.

Overtime and penalty rates

[268] Clause 20.1(a) provides that an employee in the clerical, administrative and professional stream at level 7 or above will not be entitled to overtime. A similar cut-off clause has been contained in some salaried employee awards for years. The clauses are not in the same terms however. We accept there is some justification for the retention of such a clause but have provided that it is only overtime that will not be paid to the employee in question.

[269] Clause 21.2(c) deals with the minimum payment to be made in the event an employee is called back to work. The unions sought such a clause; the RSCC did not agree. The rail awards do reflect call back provisions with four hours being, in our opinion, a reasonable compromise.

[270] The RSCC strongly opposed the shift work penalty clauses as contained in the exposure draft. They submitted that shift work penalties in the industry have never been expressed as a 15 or 30 per cent loading for afternoon or night shift and have always been expressed as a fixed dollar amount. We accept that on a closer consideration of the awards this submission is correct. Clause 20.4 is now in accordance with the RSCC draft provision.

Annual Leave

[271] The parties submitted competing clauses defining a shiftworker so as to provide an entitlement to such a worker of an additional week’s leave. The requirement for such a definition is contained in s.32(1)(b) of the NES. We have adopted the definition sought by the rail unions.

Superannuation

[272] The exposure draft did not have a provision dealing with superannuation. None of the pre-reform awards considered in the Commission’s research documentation or referred to by any party contained a superannuation clause. We note that the NAPSA covering Queensland Rail contains a superannuation clause however that provides only that the scheme established by the Superannuation State Public Sector Act 1990 was to apply to employees. RSCC submitted that against that background, and given that superannuation is now regulated by legislation, it is not appropriate to introduce award regulation of superannuation for the first time. It also notes that in several sectors of the industry the superannuation entitlements of employees have traditionally been regulated by state legislative or state government sponsored schemes reflecting the fact that much of the rail industry was, in the past, part of state government.

[273] We have not been persuaded that it is appropriate to include a superannuation clause in the modern rail industry award.

Classifications

[274] The exposure draft contained three classification streams. These streams largely reflected the major classification groups in existing awards. The wage rates we assigned to each level within the three streams was our assessment of what would have been the current rates had the awards been adjusted to reflect wage increases of general application such as safety net reviews.

[275] The parties were able to reach some agreement about the classification structure and definitions, however there remained some significant disagreement. Firstly, the structure appropriate for the clerical, administrative and professional stream was in issue. In our statement of 12 September 2008 we noted that the ASU had submitted that none of the classification structures contained in awards to which it was a party provided a reliable precedent. It conceded that the structure it had first sought from the Queensland Rail NAPSA was inappropriate. It then proposed that provisions from a number of awards within local government and the social and community services sector should be adopted. The ASU submitted that a number of these pre-reform awards contained almost identical pay structures and very similar classification definitions and would be appropriate to introduce into the rail industry.

[276] We are not persuaded that adopting the classification structures, definitions and rates from awards in these industries is justified. They are very prescriptive, are overly complex and, most importantly, clearly not developed with any consideration to the rail industry and the diverse sectors within it. It is not appropriate that this structure be contained in a minimum safety net rail industry award. It is of course a matter for the ASU to negotiate, in a workplace agreement, a structure it thinks appropriate for any particular employer or any particular sector of the rail industry in which it has an interest.

[277] We have adopted the classification structure sought by the RSCC for the clerical, administrative and professional stream. It contains basic generic descriptors able to accommodate the many and varied roles in the several sectors of the rail industry. RSCC has accepted that the five levels it originally proposed should be extended to the nine levels we proposed in the exposure draft. We have not included a clause that employees paid over a level 9 rate “will not be award covered”. Such a provision should be in the exclusion clause and an opportunity given to all interested parties to address it. We note in this respect that rail awards have traditionally covered senior officers and we assume many of these could be considered to be senior managers. Many will be excluded from this award as they will be considered high income earners in the new system.

[278] The classifications and rates for the technical and civil infrastructure stream are largely agreed and no further comment need be made about them. As for the operations stream we have adopted the latest version of the structure as contained in the RSCC correspondence dated 14 November 2008. It is preferable to the structure proposed by the rail unions on 7 November 2008. No case was made for the introduction of three new levels over those contained in the exposure draft. The RSCC proposal, with its generic descriptors of functions, skills and qualifications, is consistent with the structure of the other two streams and capable of being applied across all the sectors of this industry. Given the vast range of occupations in this industry we have decided, as a general rule, to not identify occupations or positions. Each of the occupations referred to by the rail unions will, however, need to be considered by the parties when translating employees into this new structure.

Retail industry

[279] A major proportion of the submissions on the retail industry exposure draft award concerned its scope and application. In our decision of 20 June 2008 we indicated that we proposed to consider all aspects of the retail industry, apart from real estate agencies and motor vehicle related retailing, as part of the priority stage.

[280] In response to that decision the Shop, Distributive and Allied Employees Association (the SDA) proposed a single award in the industry. The exposure draft adopted that approach while providing for variations for some parts of the industry in relation to classifications and hours. In our statement of 12 September 2008 we invited submissions on the inclusion of additional flexibilities to reflect current award and NAPSA provisions.

[281] In the subsequent consultations, employer groups continued to oppose the inclusion of fast food, beauty and hairdressing, meat retailing, and community pharmacies within the same award as applies to general retailing. In response to these submissions the SDA indicated that its approach, which was revised following our decision of 20 June 2008, was based on the Commission’s decision. Arising from consultations in relation to the Agriculture industry in Stage 2, employers who conduct stand alone nurseries also indicated their opposition to the inclusion of nurseries within a general retail award.

[282] The issue of the scope of the retail award raises important considerations concerning the objectives of award modernisation. The objective of reducing the number of awards applying in an industry carries with it the objective of rationalising disparate terms and conditions so that the resultant safety net is more uniform, consistent and fair. However, it is also evident that there are wide variations in terms and conditions in safety net awards and NAPSAs in the retail industry.

[283] The more awards with disparate provisions are aggregated the greater the extent of changes in the safety net. Changes may be able to be accommodated by a “swings and roundabouts” approach, specific provisions relevant to part of the industry or transitional provisions. However, significant changes may also result in net disadvantage to employees and/or increased costs for employers. The publication of an exposure draft which sought to rationalise the terms and conditions across the various types of retail establishment provided a means whereby the impact of such an approach could be fully evaluated.

[284] We have considered these matters and the submissions of the parties and have decided to make separate awards for general retailing, fast food, hair and beauty, and community pharmacies. Further, we will exclude stand alone meat retailing and, at this stage, stand alone nurseries from the general retail award to enable those types of operations to be considered as part of the meat and agriculture industries respectively. The position regarding real estate agencies and motor vehicle related retailing will also be considered in subsequent stages.

[285] In reaching this decision we have placed significant reliance on the objective of not disadvantaging employees or leading to additional costs. We note that such an approach will not lead to additional awards applying to a particular employer or employee.

[286] The contents of the four awards we publish with this decision are derived from the existing awards and NAPSAs applying to the different sectors. Although the scope of the awards is obviously reduced, this did not eliminate the variations in terms and conditions within each part of the industry. We have generally followed the main federal industry awards where possible and had regard to all other applicable instruments. In this regard we note in particular the significant differences in awards and NAPSAs applying to the fast food and pharmacy parts of the industry.

[287] Many of the submissions made to us from employers expressed concern at additional costs arising from provisions of the Retail industry exposure draft regarding hours of work, overtime, penalty rates, annual leave and allowances. We have revised these provisions having regard to the terms, incidence and application of relevant instruments for each sector. The result is provisions which more closely approximate to existing instruments for the relevant parts of the industry but which adopt different standards from one part to another. We have addressed submissions concerning the application of allowances and hours provisions and made other changes consistent with the approach to such matters in the main part of this decision.

Security services

[288] The Australian Security Industry Association Limited (ASIAL) continued to press for an occupational award that would apply to all employees performing work for which a security licence is required under applicable state or territory legislation. The LHMU expressed support for a hybrid award that had both industry and occupational operation.

[289] We are still not persuaded that the award should have an occupational operation. We recognise that a number of the priority awards we have made contain classifications for security work and that a number of those classifications have wage rates lower than equivalent classifications in the award we have made for the security services industry. This disparity has existed in a number of states and territories for a long period. We note the submissions of the Minister, which other parties have supported, that where the Commission includes the same occupation in more than one industry award, it is desirable that, so far as practicable, the terms and conditions for that occupation are consistent across the relevant industry awards. We agree that this is desirable. On the other hand, we also think it undesirable to disturb established relativities within particular industries. On balance we are satisfied at this stage that the wage rates in the Security Services Industry Award 2010 (the Security industry award) and for the security classifications in other priority awards are appropriate.

[290] We will revisit the issue of whether the Security industry award should be given an occupational operation for employees performing jobs for which a security licence is required during Stage 4 at which time we will be in a better position to assess the nature and extent of classifications for security work across the modern award system.

Types of employment

[291] We accept the submissions of ASIAL that the manner in which part-time employment was provided for in the exposure draft is unnecessarily limiting. Nevertheless, we are concerned to ensure the essential integrity of part-time employment which should be akin to full time employment in all respects except that the average weekly ordinary hours are fewer than 38. We have adjusted the relevant clause to make it clear that part-time employees can work on rosters in a way that is relevantly the same as full-time employees save that part-time employees should be able to agree at the time of engagement on days or parts of days on which they will not be rostered.

[292] We have removed cl.10.5(c) in the exposure draft that specified the entitlements for which the casual loading substitutes. Such a clause is unnecessary in the award we have made for the security services industry. We note that the NES makes clear which NES entitlements do not apply to casuals.

[293] We have omitted cl.10.6(d) of the exposure draft. Upon reflection we were concerned that this subclause might, on rare occasions, lead to unjust results. This omission should not be interpreted as conveying an intention that cancellation of an employee’s security licence will not constitute a valid reason for termination. Where an employee is required to hold a security licence to perform their job and the employee has their licence cancelled by the relevant licensing authority this will almost invariably provide a valid reason for termination. However, we can conceive of circumstances where such an outcome is due to conduct of the employer and not caused by the employee. We are concerned that the subclause may be seen as excluding the possibility of a finding that a termination in those unusual circumstances was harsh, unjust or unreasonable. The amendment suggested by the LHMU would have solved this problem but created other problems. On balance we think it preferable to omit the subclause altogether.

Allowances

[294] We accept the submissions of ASIAL that rates in the relevant NSW pre-reform award, the award from which the rates in the exposure draft were drawn, were rates that had been previously increased to include a first aid allowance that was then removed from the award. To include an allowance for holding a first aid qualification would involve a double-dipping. The clause ASIAL proposes has been adopted and acknowledges the appropriateness of a first aid allowance for higher level first aid qualifications when those qualifications are required to be used by the employer.

[295] The LHMU sought the inclusion of a laundry allowance at the rates in the pre-reform award operating in the ACT. Given the relatively high wage rates we have adopted and the history of the NSW pre-reform award from which they were drawn we are not persuaded that such an allowance should be included.

Ordinary hours of work and rostering

[296] We have been persuaded by the submissions of ASIAL that provision should be made for 12 hour ordinary time shifts. We recognise that the security services industry operates 24 hours a day, seven days a week and that 12 hour shifts are a ubiquitous feature of the industry throughout Australia. The exposure draft provided for 12 hour shifts but only on the basis of 10 hours of ordinary time and two hours of rostered overtime. The absence of provision for 12 hour ordinary time shifts would result in increased costs to many employers and result in many employees working more overtime than they may wish to work. The pre-reform awards in NSW, Victoria and Western Australia contain facilitative clauses that allow for 12 hour ordinary time shifts to be worked by agreement with a majority of employees, as does the relevant NSW NAPSA. We have included such a clause based on the clause in the Victorian pre-reform award.

Shift penalties

[297] We accept the submissions of ASIAL and others that the penalty rate in the exposure draft for the “Night Span” was too high. We agree with ASIAL’s submission that it should be the rate specified in the main NSW pre-reform award, being the award from which the wage rates that we have adopted were drawn.

Overtime rates

[298] Similarly, we accept that the adjustments to the overtime rates submitted by ASIAL represent a fairer balance between disadvantage to employees and increased costs to employers.

CONCLUSION

[299] The making of the priority modern awards has required an enormous amount of work by many people. The large number of awards and NAPSAs and the variety of interests and issues that required consideration indicate that the task has been of truly historic proportions. We have been greatly assisted by the willingness of interested parties to participate constructively in the process. We understand the demands that have been made on them and we express our appreciation to them for the way in which they have responded. We should also acknowledge the cooperative efforts made to reduce areas of difference without which the task would have been much more difficult. It is also appropriate to acknowledge the research and administrative assistance provided to us and to others by the Modern Awards Team in the Registry.

[300] A list of the 17 priority modern awards accompanies this decision in Attachment A. Orders making the awards are published with this decision.

BY THE COMMISSION:

PRESIDENT

 1   [2008] AIRCFB 550.

 2   [2008] AIRCFB 708.

 3   [2008] AIRCFB 717.

 4   Ibid. at paras 8–11.

 5   Submission of the Australian Industry Group, 10 October 2008 at para 45.

 6   [2008] AIRCFB 717 at para 14.

 7   [2008] AIRCFB 550.

 8   Clause 144(4)(c).

 9   (1984) 154 CLR 472 at 502–503. See also Re Clerks (Oil Companies) Award 1966 (1968) CAR 339 at 344-345.

 10   Re Australian Public Service, General Employment Conditions Award 1995 and Other Awards (No 2) (“Leave Allowability Decision”, Print Q9399, (1998) 85 IR 361.

 11   Print Q9399 at para 26; (1998) 85 IR 361 at 368.

 12   Print T4991, (2001) 105 IR 27.

 13   Ibid.

 14   The Pastoral Industry Award 1998, PR930781, 30 April 2003 and the Woolclassers Award 1999, PR952585, 20 October 2004.

 15   Print T4991, (2001) 105 IR 27.

 16   F6230, (1984) 8 IR 34 and F7262, (1984) 9 IR 115.

 17   Print R9211, 22 September 1999.

 18   PR032004, 26 March 2004 at paras [272]-[276]; (2004) 129 IR 155 at 222-223.

 19   See s.513(4) of the Workplace Relations Amendment (Work Choices) Act 2005.

 20   AP772144CAV.

 21   AP790899CAN.

 22   Print F4832, 10 April 1984.

 23   [2008] AIRCFB 717 at para 46.

 24   AN120468.

 25   Restaurants Employees (State) Award unreported, IRC 216 of 1995, 23 August 1996.

 26   AP821899.

 27   AP783479CRV.

 28   AP787952CRV.

 29   AP787213CRV.

 30   AP834748.

 31   AP799036.

 32   The Australian Coal and Shale Employees Federation and ors v New South Wales Combined Colliery Proprietors Association and ors [1973] Coal Mining Industry Determinations 1 at pp 2–3.

 33   AP801516.

 34   AP784204.

 35   Q0702, 11 May 1998.

 36   AP799601.

 37   AP805250CRA.

 38   AP794720CRV.

 39   AT787006.

 40   AP799620CRA.

 41   AN120450.

 42   AP812760CRV.

 43   AP783476CRV.

 44   [2008] AIRCFB 717 at para 83.

 45   Rail Unions submission of 10 October 2008.

 46   [2008] AIRCFB 717 at para 79.

Attachment A to Full Bench decision of 19 December 2008

LIST OF PRIORITY MODERN AWARDS

Black Coal Mining Industry Award 2010

Clerks—Private Sector Award 2010

Fast Food Industry Award 2010

General Retail Industry Award 2010

Hair and Beauty Industry Award 2010

Higher Education Industry—Academic Staff—Award 2010

Higher Education Industry—General Staff—Award 2010

Horse and Greyhound Training Award 2010

Hospitality Industry (General) Award 2010

Manufacturing and Associated Industries and Occupations Award 2010

Mining Industry Award 2010

Pharmacy Industry Award 2010

Racing Clubs Events Award 2010

Racing Industry Ground Maintenance Award 2010

Rail Industry Award 2010

Security Services Industry Award 2010

Textile, Clothing, Footwear and Associated Industries Award 2010

Printed by authority of the Commonwealth Government Printer

<Price code J, PR122008>