[2012] FWA 9137

[2012] FWA 9137

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FAIR WORK AUSTRALIA

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

Australian Municipal, Administrative, Clerical and Services Union
(AM2012/182)

Airline operations

VICE PRESIDENT WATSON

SYDNEY, 2 NOVEMBER 2012

Review of modern awards - application to vary the Airline Operations— Ground Staff Award 2010 - correct classification level for check-in staff - part time employees rostered days off falling on a public holiday - is clause 37.5(a) ambiguous - does clause 37.59(a) result in a loss of benefit for part time employees - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Sch 5 Item 6 - Fair Work Act 2009 ss.116,134, 138.

Introduction

[1] This decision concerns an application by the Australian Municipal, Administrative, Clerical and Services Union (ASU) to vary the Airline Operations—Ground Staff Award 2010. 1 The application is made under Sch. 5, Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) as part of the review of all modern awards of which Fair Work Australia is required to conduct after the first two years of all modern awards coming into effect (the 2012 Review).

[2] The matter was listed for mention and programming on 20 June 2012. Directions were issued requiring the Applicant to file submissions in support of the application by 3 August 2012, with other interested parties to file submissions in reply by 7 September 2012. The matter was set down for hearing of the application on 24 September 2012. At the hearing Mr J Cooney represented the ASU, Mr M Mead represented the Australian Industry Group (AiGroup) and Ms R Bernasconi, with Ms K Srdanovic represented the Qantas Group (Qantas).

The relevant legislation

[3] Sch. 5, Item 6 of the Transitional Act provides:

“(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.

(2) In the review, FWA must consider whether the modern awards:

(a) achieve the modern awards objective; and

(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.

(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.

(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.

(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.

(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.

(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).”

[4] Further provisions of the Fair Work Act 2009 (the Act) are also applicable and relevant to the 2012 Review. Section 134 provides as follows:

“134 The modern awards objective

What is the modern awards objective?

(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

...

138 Achieving the modern awards objective

A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.”

The Proposed Variations

[5] The ASU submits two proposed changes in the Award, being the appropriate classification level for check-in staff and clarification of part time employees’ entitlements for a rostered day off falling on a public holiday. Other matters in its original application concerning the variations to the transport social disability allowance and the tropical allowance were not pressed.

Classification of Check-in Staff

[6] Currently check-in staff are classified at level 2 in the Award. The ASU submits that prior to the award modernisation process, check-in staff were indentified at level 3 in the operations stream of the superseded Airline operations [Clerical and Administrative Employees] Award 2 and the Airline Officers (Qantas Airways Limited) Award 2000.3 The ASU submits that aligning check-in staff to the Level 2 classification in the Overseas Airlines Award 19944 was inappropriate. The ASU submits that by virtue of this determination of the classification level, the Award does not meet the modern award objective as it does not provide a fair and relevant minimum safety net of terms and conditions in respect to minimum rates for an employee performing check-in work.

[7] AiGroup and Qantas submit that this application is an attempt to revisit an issue that was dealt with before the Tribunal during the award modernisation process. Further, Qantas disputes the proposition put forward by the ASU that level 3 was the correct classification level of check-in staff prior to the award modernisation process. AiGroup also submits that the ASU has not made a case for the variation based on the minimum wages objective.

[8] AiGroup provided details of the consideration of the matter during the award modernisation process. This included the various submissions and proposals in early - mid 2009 and after the Award was determined a further application by the ASU to address the appropriate classifications for all employees including check-in employees following a variation to the award modernisation request. In determining the exposure draft for this award the Full Bench said: 5

“[16] We have sought to adopt classifications currently applicable in the airline industry for transport workers, clerical, maintenance and stores employees and applied rates that we believe reflect properly fixed minimum rates for the classifications involved. We have included an eight level structure for each of the transport, clerical and maintenance streams and a five level structure for the stores and logistics streams. Obviously in an exercise such as this there is a balance to be struck in formulating classifications and rates because of the significant differences that exist between the current instruments.”

[9] In its subsequent decision 6 the Full Bench was primarily considering whether different classification structures should be adopted for different parts of the industry. It said:

“[11] We have considered all of the material relied on by the parties and considered whether the single classification structure should be replaced by four separate structures as proposed by the ASU. In our view there is not a sound basis for splitting the classification structure into four separate structures. On the material before us it appears that the work of clerical employees in the airline industry is essentially the same regardless of the part of the industry in which the work is performed. We have adopted a single classification structure for the entirety of clerical work in the private sector not covered by an industry award. The classification structure in the award is specific to the airline industry. It is an enhancement on the five level structure applying to private sector clerical employment generally.

[12] It is necessary to deal with the ASU’s submission that the overseas airlines award contains wage rates which are properly fixed minimum rates as a result of the award simplification process. In its main decision simplifying the award the Commission noted that the rates of pay were paid rates (not minimum rates). The decision noted that a conference would be convened to review the rates. Conferences subsequently occurred before Commissioner Raffaelli who issued an order, presumably by consent, on 24 August 2005.The ASU submits that the rates in that order were properly fixed minimum rates. AiGroup disputes this claim. It pointed to the principles adopted by the Commission for the conversion of paid rates to minimum rates and drew a comparison between the rates in the award before and after Commissioner Raffaelli’s Order.This material indicates that the key classification rate in the new structure which was nominally aligned with the C10 rate in the metal industry was in fact more than $85.00 above that rate. On the basis of this material it is clear that the rates in the overseas airlines award are not properly fixed minimum rates.

[13] It has long been established that rates of pay in minimum rates awards should be properly fixed minimum rates with any differences between them to be based on differences in work value. This is a requirement for classifications within awards as well as comparisons of classifications and rates of pay between awards. We are not persuaded that a proper case has been made out on work value grounds to provide four different classification structures containing different rates for essentially the same work. In essence the different rates would be inequitable. The result would require an increase in the minimum obligation for some employers. On the other hand it has not been established that the retention of a properly fixed minimum single classification structure will lead to any reduction in current actual entitlements for any employee. The four structures proposed by the ASU are not based on existing obligations for all employers sought to be covered. Further, the level of complexity involved in granting the application is not consistent with the modern awards objectives or the outcome achieved in modern awards generally.

[14] In accordance with the Minister’s amended request we have considered whether separate classification structures and rates of pay should be provided for ground staff involved in different airline sectors. For the above reasons the proposed differentiation between regional, domestic and Australian based international carriers and overseas based operators is not easy to discern when the nature of the work of current employers and their employees is considered. Therefore, on the material before us, we are unable to conclude that separate classification structures and rates of pay should be provided for ground staff employed in regional, domestic and overseas airline operations.”

[10] The determination of a single classification structure in this Award was a hotly contested matter in two sets of proceedings before the award modernisation Full Bench. The rates determined were based on the various pre-existing award structures including the check-in clerk at level 2 of the Overseas Airline Award 1994 structure. A case for the alteration of that determination has not been made out. I dismiss this part of the application.

Part-time employees and Rostered Days Off falling on a Public Holiday.

[11] Clause 11.4(a)(ii) of the Award currently reads:

“Part-time employees are entitled on a pro rate basis to equivalent pay and conditions to those full-time employees who do the same work in the classification concerned”.

[12] Clause 37.5(a) provides that:

“...Rostered day off falling on public holiday

(a) Except as provided for in clauses 37.5(b) and (c), and where the rostered day off falls on a Saturday or a Sunday, where a full-time employee’s ordinary hours of work are structured to include a day off and such day off falls on a public holiday, the employee is entitled, at the discretion of the employer, to either:

(i) 7.6 hours of pay at the ordinary time rate; or

(ii) 7.6 hours of extra annual leave; or

(iii) a substitute day off on an alternative week day.”

[13] The ASU submits that there is confusion over this provision amongst employers covered by the Award as to whether part-time employees are entitled to a substitute day off on an alternative week day when the employee’s rostered day off (RDO) falls on a public holiday. The ASU submits that the employees concerned work a non-standard working week and their ordinary hours include a Saturday and Sunday subject to agreement between the employer and the majority of employees concerned.

[14] The ASU submits that the ambiguity is that part-time employees, particular part-time shift workers, may or may not be entitled to public holiday in the situation where they are not rostered to work a Saturday or Sunday but their hours are restructured to include a day off and that day off falls on a public holiday.

[15] The ASU further submits that currently clause 37.5(a) results in a loss of a benefit for part-time employees as comparable provisions in two predecessor awards 7 to the Award made provisions for part-time employees to receive the same entitlements as full-time employees on a pro-rata basis.

[16] The ASU submits that deleting the word “full time” on the second line of clause 37.5(a) will clarify that this entitlement is consistent with clause 11.4(a)(i), will remove ambiguity over the application of the clause and will prevent employers claiming that a part-time employee is not entitled to a substitution day where their RDO falls on a public holiday. Further words are proposed by the ASU in placita (i), (ii) and (iii) of clause 37.5 to clarify that the entitlement to payment for part-time employees is on a pro-rata basis.

[17] AiGroup and Qantas do not support the variations and submit that the application should be dismissed. They submit that the variations sought do not have regard to the statutory provisions which guide the Tribunals’ functions as part of the 2012 Review which includes item 6 of schedule 5 of the Transitional Act and ss.134 and 284 of the Act.

[18] Qantas submits that the ASU has not provided sufficient evidence to justify the variations. Therefore with a lack of positive evidence before it, the Tribunal cannot satisfy itself that the variation is necessary as it is required to under the 2012 Review process. AiGroup submits that no ambiguity exists in regard to clause 37.5(a) in its current terms, the clause is in line with other awards and has a long history, the variations sought are inconsistent with s.116 of the Act and the proposition put forward by the ASU that clause 37.5(a) is equivalent to that which was contained in pre modernised awards is incorrect.

[19] Section 116 of the Act and the note that follows it are important. They provide:

“116 Payment for absence on public holiday

If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.

Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.”

[20] This section and the note reflect what I consider to be the general position. An obligation to make payment for public holidays arises where an employee is absent from employment on a public holiday in accordance with the entitlement to the public holiday in s.114 of the Fair Work Act.

[21] Many awards extend this entitlement to payment when a full time employee is rostered off on a public holiday. It appears that the genesis of this provision arose during the award simplification process with respect to the Metal Engineering and Associated Industries Award 1998 8(Metals Award). The concept is directed to ensuring that full time employees who obtained an entitlement to a rostered day off as part of the reduction of ordinary hours to 38 per week do not have their rostered days off coinciding with a public holiday, and if it transpires that a public holiday occurs on a rostered day off, an alternative day is provided or an additional days pay is made. In the Metals Award at least the concept has never applied to part-time employees because they do not have rostered days off as such.

[22] By definition part-time employees work less than full time hours - mostly by way of having more days where they are not required to attend for work. The extension of the entitlement to part-time employees would take the concept of payment for rostered days off coinciding with a public holiday beyond its intended purpose and create more confusion than it is intended to resolve. I consider that the clarification provided by rejecting the application is the best way of resolving any existing confusion.

VICE PRESIDENT WATSON

Appearances

J. Cooney for the Australian Municipal, Administrative, Clerical and Services Union.

R. Bernasconi for Qantas Group.

M. Mead for the Australian Industry Group.

Hearing Details

2012.

Melbourne.

September 24.

1 MA000048.

2 AP768636.

3 AT765780.