[2013] FWCFB 2170

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FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 6, Sch. 5—Modern awards review

Modern Awards Review 2012—Award Flexibility
(AM2012/8, AM2012/51, AM2012/172, AM2012/177, AM2012/178, AM2012/179, AM2012/180, AM2012/199, AM2012/204, AM2012/210, AM2012/228, AM2012/240, AM2012/245, AM2012/250, AM2012/287)

JUSTICE ROSS, PRESIDENT
SENIOR DEPUTY PRESIDENT WATSON
COMMISSIONER GREGORY

 

MELBOURNE, 15 APRIL 2013

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Transitional Review - award flexibility - model flexibility term varied - better off overall assessment is at the time the IFA is made - IFAs can only be entered into after employee has commenced employment - notice of termination extended from 4 weeks to 13 weeks - penalty rates and public holiday decisions distinguished on the basis that s.145 was not part of the legislative framework during the award modernisation process.

CONTENTS

Paragraph

1. Introduction and Background

1

    1.1 The legislative context

3

    1.2 The award modernisation process

14

2. Workplace Flexibility

33

    2.1 General

33

    2.2 The Review Report

45

    2.3 The 2012 IFA Report

54

3. Consideration of the Applications

81

3.1 Scope of award terms which may be subject to an IFA

86

 

3.2 Machinery Matters

 

150

      (i) The better off overall test

151

      (ii) Termination provisions

160

      (iii) External approval of IFAs

189

      (iv) Annual review of IFAs

203

4. Conclusion

207

ABBREVIATIONS

2012 AWALI Report

Work-Life balance in South Australia

2012 IFA Report

General Manager’s report into the extent to which individual flexibility arrangements are agreed to and the content of those arrangements: 2009-2012

AAA

Accommodation Association of Australia

ABI

Australian Business Industrial

ABS

Australian Bureau of Statistics

ACCI

Australian Chamber of Commerce and Industry

ACTU

Australian Council of Trade Unions

AFEI

Australian Federation of Employers & Industries

Ai Group

Australian Industry Group

AIRC

Australian Industrial Relations Commission

AMWU

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

BOOT

Better off overall test

Bupa decision

Re Bupa Care Services Pty Ltd [2010] FWAFB 2762

Business SA

South Australian Employers’ Chamber of Commerce and Industry t/as Business SA

CFMEU

Construction, Forestry, Mining and Energy Union

Commission

Fair Work Commission

DEEWR

Department of Education, Employment and Workplace Relations

FW Act

Fair Work Act 2009 (Cth)

FWA

Fair Work Australia

FWO

Fair Work Ombudsman

GFC

global financial crisis

HBIA

Hair and Beauty Industry Association

HIA

Housing Industry Association

IFA

individual flexibility arrangements

June 2008 Full Bench decision

Award modernisation decision [2008] AIRCFB 550

June 2012 Full Bench decision

Modern Awards Review 2012 - Preliminary Issues decision
[2012] FWAFB 5600

Master Builders

Master Builders Australia

Master Plumbers

Master Plumbers and Mechanical Contractors Association of New South Wales

NAPSA

Notional agreement preserving State awards

NDT

no disadvantage test

NES

National Employment Standards

NRA

National Retailers Association

OECD

Organisation for Economic Co-operation and Development

On-site award

Building and Construction General On-site Award 2010

Panel

Fair Work Act Review Panel

Plumbing Award

Plumbing and Fire Sprinklers Award 2010

Qld Audit Report

Qld - Pharmacy Industry Audit Program Report

Restaurant Award

Restaurant Industry Award 2010

Review Report

Towards more productive and equitable workplaces

SDA

Shop, Distributive and Allied Employees Association

Transitional Provisions Act

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Transitional Review

Modern Awards Review 2012

VECCI

The Victorian Employers’ Chamber of Commerce and Industry

WR Act

Workplace Relations Act 1996 (Cth)

1. INTRODUCTION AND BACKGROUND

[1] This decision deals with 15 applications to vary the standard award flexibility provision in 10 modern awards. A list of the applications and relevant awards is set out at Attachment 1. The applications are made in the context of the review of all modern awards required by the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Provisions Act). We refer to that review as the Transitional Review.

[2] We propose to deal first with two contextual matters - the legislative context and the award modernisation process. We will then turn to deal with the broader issue of workplace flexibility and other matters which are relevant to the determination of the applications before us.

1.1 The legislative context

[3] The legislative context for the Transitional Review was comprehensively dealt with in a Full Bench decision of 29 June 2012 (the June 2012 Full Bench decision). 1 We adopt that decision and have applied it to the matters before us. For present purposes we only propose to deal with the legislative context in summary terms.

[4] The principal legislative provision in respect of the Transitional Review is Item 6 of Schedule 5 to the Transitional Provisions Act:

[5] Subitem 6(1) provides that the Fair Work Commission (the Commission) must conduct a review of all modern awards 2 as soon as practicable after 1 January 20123. It is important to note that the Transitional Review contemplated in Item 6 is quite separate from, and narrower in scope than, the 4 yearly reviews of modern awards provided for in s.156 of the Fair Work Act 2009 (Cth) (the FW Act). The scope of the Transitional Review was a matter of contention in the June 2012 Full Bench proceeding.

[6] The June 2012 Full Bench decision construed Item 6 according to its terms, having regard to the legislative purpose and context. Part of that context was the award modernisation process conducted by the former Australian Industrial Relations Commission (AIRC) under Part 10A of the Workplace Relations Act 1996 (Cth) (the WR Act). We deal with the award modernisation process in Part 1.2 of this decision. As to the scope of the Transitional Review the June 2012 Full Bench concluded as follows:

[7] Under subitem 6(3) of Schedule 5 the Commission has a broad discretion to vary any of the modern awards in any way it considers necessary to remedy any issues identified in the Transitional Review. However, subitem 6(4) provides that in making such a variation the Commission must take into account the modern awards objective in s.134 of the FW Act, and, if varying modern award minimum wages, the minimum wages objective in s.284.

[8] The modern awards objective is set out in s.134 of the FW Act:

[9] Any variation of a modern award arising from the Transitional Review must also comply with the provisions of the FW Act which deal with the content of modern awards (see ss.136–155 of the FW Act). To the extent that any application seeks to alter the coverage of a modern award, then the requirements set out in ss.162–164 within Division 6 of Part 2-3 of the FW Act are relevant. Similarly Division 3 of Part 2-1 will be relevant if an application seeks to alter the relationship between a modern award and the National Employment Standards (NES). Section 138 of the FW Act, dealing with the content of modern awards, is also relevant and a factor to be considered in any variation to a modern award arising from the Transitional Review.

[10] In considering the legislative context we note that one of the authorities referred to in the proceedings purports to summarise the views expressed in the June 2012 Transitional Review decision. In AMWU v Australian Business Industrial 4 a Full Bench expressed the approach to the Transitional Review in these terms:

[11] In our view, this statement does not accurately reflect the approach adopted by the June 2012 Full Bench decision. The relevant passage from the June 2012 Full Bench decision states that in the context of the Transitional Review:

[12] The approach posited by the June 2012 Full Bench decision is not qualified by reference to those instances ‘where an evidentiary case has been presented’. The reason for such an omission is that evidentiary cases were rarely presented in the Part 10A award modernisation process. To adopt such a precondition to the requirement to establish cogent reasons for a particular variation materially changes the intent of the June 2012 Full Bench decision.

[13] We now turn to the award modernisation process that resulted in the inclusion of the standard award flexibility provision in all modern awards.

[14] The award modernisation process took place in the period from April 2008 to December 2009 and was conducted in accordance with a written request (the award modernisation request) made by the Minister for Employment and Workplace Relations to the President of the AIRC. 7 The process was completed in four stages, each stage focussing on different industries and occupations.

[15] The award modernisation process was governed by Part 10A of the WR Act. Section 576C of Part 10A required award modernisation to be conducted in accordance with an award modernisation request. The process involved the AIRC inviting submissions, conducting consultations with interested parties, publishing exposure drafts, accepting further written or oral submissions and then publishing a modern award. By the end of 2009 the AIRC had reviewed more than 1500 federal awards and notional agreements preserving State awards (NAPSAs) and created 122 industry and occupation based modern awards.

[16] The AIRC was required to prepare a model flexibility clause as part of the award modernisation process. The objectives of the clause were set out in the Ministerial request of 28 March 2008 and subsequently varied on 18 December 2008 and 2 May 2009. An extract from the consolidated version of the Ministerial Request is set out at Attachment 2.

[17] In a statement issued by the President of the AIRC on 29 April 2008 8 the award flexibility model clause was identified as a priority task. The statement included two draft model award flexibility clauses, one proposed by the Australian Council of Trade Unions (ACTU) and the other a joint proposal by the Australian Chamber of Commerce and Industry (ACCI) and Ai Group. At paragraph [25] of the 29 April 2008 Statement the President said:

[18] On 20 June 2008 9 a Full Bench decision of the AIRC dealt with the matters identified as priority tasks, including the determination of the model flexibility clause. The detailed reasons in support of the draft model clause are set out at paragraphs [155] - [192] of that decision. In the course of its reasons the Full Bench identified the differing views on a number of the features of the proposed clause. The aspects of the Full Bench decision which go to the scope of the clause and a number of ancillary matters are particularly relevant in the context of the applications before us. As to the scope of the proposed model clause the Full Bench said:

[19] Three things may be said about the Full Bench’s decision with respect to the scope of the model flexibility clause.

[20] First, the Full Bench concluded that it was unnecessary and inappropriate to include a term about minimum wages in the model clause as s.576J(f) of the WR Act made separate provision for flexibility in relation to the way in which wages, salaries and monetary entitlements may be paid. We note that s.139 of the FW Act is in the same terms as s.576J of the WR Act (compare s.576J(1)(f) and s.139(1)(f)).

[21] Second, in relation to s.576J(1)(h) - leave, leave loading and arrangements for taking leave, the Full Bench noted that generally speaking leave matters, other than leave loading, are dealt with in the NES. At that stage the Full Bench was not prepared to include any of the matters dealt with in the NES in the model flexibility clause for the reasons stated at paragraph [172] of its decision.

[22] Flexibility in respect of leave and arrangements for taking leave are not before us and are being dealt with by another Full Bench constituted to specifically deal with Transitional Review applications relating to annual leave.

[23] The final observation in relation to the Full Bench’s decision with respect to the scope of the model clause is that the Full Bench decided that it was not appropriate to include award terms dealing with superannuation, consultation, representation and dispute settlement within the scope of the model clause. The Full Bench was of the view that the inclusion of such terms in the model clause ‘would be likely to add complexity and unnecessary regulation rather than increase flexibility’.

[24] The AIRC Full Bench also dealt with a number of ancillary issues which went to the practical operation of the model clause, including the question of dispute settlement, and the term or duration of flexibility agreements and the provision of guidance to parties to proposed agreements. 11 We refer to some of these aspects of the Full Bench’s decision later, in our consideration of the applications before us. For present purposes it is sufficient to note that the Full Bench decided that a flexibility agreement could be terminated at any time by agreement or by one party giving four weeks’ notice in writing to the other.

[25] A draft model clause was attached to the Full Bench’s decision of 20 June 2008. In a subsequent statement issued on 12 September 2008 12 the AIRC slightly modified the model clause:

[26] The model clause was subsequently modified in December 2008 13 and 3 April 200914 to take account of submissions from interested parties, amendments to the Ministers Request and legislative change.

[27] The current model clause is in the following terms:

[28] A clause in these terms is in every modern award, as is required by s.144 of the FW Act.

[29] Before leaving the 2008 AIRC Full Bench decision it is important to note that the Full Bench itself stated that it was desirable to review the model flexibility clause after a reasonable period. At paragraph [192] the Full Bench said:

[30] The fact that a review of the model flexibility clause was specifically contemplated by the AIRC at the time it was determined is an important factor in our consideration of the applications before us. It is also relevant to observe that aspects of the current legislative framework were not in operation at the time the 2008 AIRC Full Bench made its decision. Section 145 of the FW Act is particularly relevant in this regard and we return to this point later in our decision.

[31] The sentiments expressed by the AIRC in the extract set out at paragraph [29] above are reflected in the Explanatory Memorandum to the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009:

[32] Before turning to deal with the applications before us we propose to briefly address the broader issue of workplace flexibility and some developments since the AIRC Full Bench decision regarding the model clause. The report titled ‘Towards more productive and equitable workplaces - an evaluation of the Fair Work legislation’ (the Review Report) and the ‘General Manager’s report into the extent to which individual flexibility arrangements are agreed to and the content of those arrangements: 2009-2012’ (the 2012 IFA Report) are particularly relevant in this regard.

2. WORKPLACE FLEXIBILITY

[33] The general object of the FW Act is to provide ‘a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians’. 16 Balance in this context has a number of dimensions: balance between the interests of business and unions; between work and family responsibilities; and between fairness and flexibility. This balanced framework incorporates, among other things:

[34] The safety net is provided through the National Employment Standards (the NES), modern awards and national minimum wage orders. Flexible working arrangements are facilitated through provisions within the NES, the model flexibility term in modern awards and enterprise agreements. The type of flexibility afforded can be characterised as ‘procedural flexibility’, which Stewart defines as the ‘adoption of regulatory mechanisms which facilitate change’. 17

[35] The NES are the minimum standards that apply to national system employees and underpin what can be included in modern awards and enterprise agreements. The NES sets minimum employment standards in relation to the following matters: 18

[36] The NES provides scope for the flexible application of the prescribed minimum standards in a number of ways, such as:

[37] Section 65 is also part of the NES and provides that an employee who is a parent, or has the responsibility for the care of a child may request the employer for a change in working arrangements to assist the employee to care for the child if the child:

[38] There are restrictions on the entitlement to make such requests, relating to the employees’ length of service and employment type (s.65(2)).

[39] A report on the Australian work and life index 2012 by Skinner, titled ‘Work-Life balance in South Australia’, (the 2012 AWALI Report) assesses the impact of the right to request provisions in s.65 of the FW Act. 19 An overview of the key findings from the 2012 AWALI Report is set out below.20

    Overview of key findings

    From SA AWALI 2012, South Australian workers request flexible work arrangements, and have their requests accepted, at comparable rates to the national average:

      • 1 in 5 SA workers made a request for a flexible work arrangement in the last 12 months;

      • The majority – nearly 70 per cent – had this request fully accepted.

          Those most likely to make a request are:

      • Women with children, especially pre-school aged children;

      • Workers in part-time jobs, especially women part-timers;

      • Workers in sales occupations.

    The most common reasons to make a flexibility request are:

      • To meet child-care or family responsibilities and commitments;

      • To meet study commitments;

      • Because of health reasons.

    Of those workers who did not make a request, the majority (around 60 per cent) are content with their current work arrangements. Other reasons cited by a minority of respondents were that flexibility is not possible in their job, they had just started their job or that they could not afford a reduction in income.

    Access to flexibility is an important support for work-life balance – there is a clear association between having a flexibility request accepted and lower work-life interference.

[40] Modern awards are dealt with in Part 2-3 of Chapter 2 of the FW Act. Section 144(1) provides that each modern award must include a ‘flexibility term’ enabling an employee and his or her employer to agree on an individual flexibility arrangement (an IFA) varying the effect of the award in relation to the employee and the employer. The stated objective of such arrangements is ‘to meet the genuine needs of the employee and employer’.

[41] An IFA has effect in relation to the employee and the employer as if the relevant modern award was varied by the flexibility arrangement. For the purposes of the FW Act the IFA is taken to be a term of the modern award (s.144(2)).

[42] Subsections 144 (4) and (5) deal with the requirements pertaining to flexibility terms:

[43] Section 145 of the FW Act is also relevant and we deal with it later in our decision.

[44] Modern awards and the NES provide a framework of minimum terms and conditions of employment. There is no statutory impediment to employers and employees agreeing to increase these minimum entitlements. In other words the workplace relations system does not limit ‘upwards flexibility’. As the [2008] AIRC Full Bench observed:

2.2 The Review Report

[45] On 20 December 2011 the Minister for Workplace Relations, the Hon. Bill Shorten MP, announced the appointment of a three member panel to review the FW Act and the Transitional Provisions Act. The terms of reference asked the Panel to examine and report on the extent to which the legislation is operating as intended, and on areas where the evidence indicated that the operation of the legislation could be improved consistent with the legislative objects.

[46] In June 2012 the Panel provided its report titled the Review Report to the Minister. The Review Report was publicly released on 2 August 2012 and can be accessed through the Department of Education, Employment and workplace Relations website at http://www.deewr.gov.au/fair-work-act-review.

[47] The Panel established to review the operation of the FW Act considered, among other things, whether the FW Act impedes flexibility in work patterns and the organisation of work. The Panel saw ‘considerable scope for increased use of individual flexibility arrangements’ and made a number of recommendations to encourage their wider adoption. We deal with that aspect of the Panel’s report at section 2.2 of our decision. More broadly, the Panel observed that ‘the Australian industrial relations system exhibits a reasonably high degree of flexibility and mobility’. 22 That observation was based on a number of important indicators23:

[48] The Review Report specifically considered the operation of IFAs (see section 5.3.2 of the Review Report) and noted that it had ‘given the issue of IFAs extensive consideration and made a series of recommendations on their operation’. 29 The Panel’s recommendations in relation to IFAs were intended ‘to create a greater opportunity for employers and employees to make individual flexibility arrangements while ensuring adequate and appropriate protection for the employer and the employee’.30 The specific recommendations are as follows:

    Recommendation 9: The Panel recommends that the better off overall test in s. 144(4)(c) and s. 203(4) be amended to expressly permit an individual flexibility arrangement to confer a non-monetary benefit on an employee in exchange for a monetary benefit, provided that the value of the monetary benefit foregone is specified in writing and is relatively insignificant, and the value of the non-monetary benefit is proportionate.

    Recommendation 10: The Panel recommends that the FW Act be amended to require an employer, upon making an individual flexibility arrangement, to notify the FWO in writing (including by electronic means) of the commencement date of the arrangement, the name of the employee party and the modern award or enterprise agreement under which the arrangement is made.

    Recommendation 11: The Panel recommends that the FW Act be amended to provide a defence to an alleged contravention of a flexibility term under s. 145(3) or s. 204(3) where an employer has complied with the notification requirements proposed in Recommendation 10 and believed, on reasonable grounds, that all other statutory requirements (including the better off overall test) had been met.

    Recommendation 12: The Panel recommends that s. 144(4)(d) and s. 203(6) be amended to require a flexibility term to require an employer to ensure that an individual flexibility arrangement provides for termination by either the employee or the employer giving written notice of 90 days, or a lesser period agreed between the employer and employee, thereby increasing the maximum notice period from 28 days to 90 days.

[49] Each of these recommendations proposes that the FW Act be amended, in specified ways. The amendment of the FW Act is, of course, a matter for the Parliament. We note however that recommendation 12 is capable of implementation without legislative amendment.

[50] Recommendation 12 proposes that s.144(4)(d) be amended to ensure that an IFA may be terminated by either the employee or the employer giving 90 days written notice. It will be recalled that s.144(4)(d) provides that the flexibility term in modern awards must ‘set out how any flexibility arrangement may be terminated by the employee and the employer’. On a plain reading of s.144(4)(d) it provides that a flexibility term in a modern award must include a provision which sets out how any IFA ‘may be terminated by the employee and the employer’. Importantly, s.144(4)(d) does not specify by what method an IFA may be terminated, that issue being a matter for the discretion of the Commission. In this regard the requirements for flexibility terms in modern awards are quite different to those which apply to flexibility terms in enterprise agreements.

[51] The FW Act provides that a flexibility term must be included in enterprise agreements approved by the Commission (see s.202(1)). Section 203 sets out the requirements to be met by such terms. Relevantly, s.203(6) provides that the flexibility term must require the employer to ensure that any IFA agreed to under the term must be able to be terminated:

[52] If an enterprise agreement does not include a flexibility term the ‘model flexibility term’ in Schedule 2.2 to the Fair Work Regulations 2009 is taken to be a term of the agreement. 31 Clause 5 of the model flexibility term deals with the termination of an IFA and is in essentially the same terms as s.203(6).

[53] It seems to us that the differences between ss.144(4)(d) and 203 are telling. If the legislature had intended to mandate the duration of a termination period in relation to IFAs made pursuant to a flexibility term in a modern award then it would have chosen language of the type used in s.203(6). It chose not to do so. The clear inference is that the notice required to effect the termination of an IFA made under a flexibility term in a modern award is to be determined by the Commission. 32 The merits of such a provision is a separate matter and we return to that issue later.

2.3 The 2012 IFA Report

[54] Section 653(1)(b) of the FW Act requires the General Manager to conduct research into the extent to which IFAs under modern awards and enterprise agreements are being agreed to and the content of those arrangements. This research is to be conducted in relation to the first three years after the commencement of the FW Act and in each subsequent three year period (see s.653(1A)). The first report under these provisions, in relation to the period 1 January 2010 to 30 June 2012, was tabled in Parliament on 13 February 2013, the 2012 IFA Report, and a copy can be accessed through the FWC website at http://www.fwc.gov.au/documents/IFA.

[55] In order to provide information on the extent to which IFAs were made and the content of those arrangements, a survey of employers and a survey of employees was undertaken between March and June 2012.

[56] The sample survey of 2650 national system employers was stratified according to the Australian Bureau of Statistics’ definition of employer size (based on the number of employees) and industry. A survey of some 4500 employees from a range of industries and locations was also conducted. Information about the stratification and sampling methods used, and the limitations of the research is set out in section 3 of the 2012 IFA Report.

[57] Employer awareness of IFAs varied across different employer sizes. 33 About 54 per cent of all employers were ‘aware that employers can have an IFA with an employee that varies the effect of the modern award or an enterprise agreement that applies to an employee’. Awareness of IFAs was lowest among smaller employers, i.e. those employing fewer than 15 employees (50 per cent) and highest amongst large employers (84 per cent). ‘Large employers’ were defined as those which employ 200 or more employees.

[58] About 35 per cent of employees were aware that employees who have their employment conditions set by a modern award or an enterprise agreement can agree to an IFA with their employer. Awareness was higher among full-time employees (38 per cent) than amongst part-time employees (30 per cent). There were also differences in awareness by gender, age and whether or not the employee was from an English speaking background. 34

[59] Around eight per cent of employers reported making at least one IFA and the likelihood of having made an IFA increased with employer size. Almost 27 per cent of large employers reported at least one IFA compared with around 12 per cent of medium sized employers and about 7 per cent of small employers. Employers indicated that IFAs had more commonly been made to vary modern awards as opposed to enterprise agreements.

[60] Section 4.2.3 of the 2012 IFA Report provides information about employers who did not make IFAs. Some 45 per cent of employers were aware of IFAs but had chosen not to make them. These employers were asked the reasons why they had chosen not to make IFAs. The results are set in Table 4.2 of the 2012 IFA Report, which is reproduced below. 35

[61] The most common reason, reported by just over half of employers (51 per cent), was that there had been no identifiable need for an IFA. Around one-third of employers indicated that they had not made an IFA because they had not received a request. Employers also indicated that they did not make IFAs because they varied conditions of employment with employees through other less formal arrangements (15 per cent) or by using formal individual agreements (13 per cent). Less than one per cent of employers indicated that they did not make IFAs because they could not agree with their employees about them; or that they were concerned about penalties or risks associated with IFAs; or that IFAs could be unilaterally terminated upon four weeks’ notice.

[62] Employers party to only one IFA reported varying lengths of IFA operation. 36 About 31 per cent of IFAs had been in operation for six to less than 12 months and a further 27 per cent for one to less than six months. Around seven per cent of IFAs had been in operation for more than two years. When compared with single IFA employers, multiple IFA employers reported that IFAs had typically been in operation for a longer period. While around 19 per cent reported IFAs in operation for six to 12 months, about 40 per cent reported IFAs in operation for more than two years.37

[63] For single IFA employers, most reviews, modifications and terminations of enterprise agreement IFAs were employer-initiated (94 per cent), with only six per cent being employee-initiated. For modern award IFAs the results were more evenly split: 50 per cent of reviews, modifications and terminations were employer-initiated and 47 per cent were employee-initiated, with an additional two per cent initiated by both parties. 38

[64] Multiple IFA employers reported that most reviews, modifications and terminations of IFAs were employer-initiated (around 70 per cent). Around 21 per cent were reportedly initiated by an employee or employee representative and around eight per cent by both employer and employee. 39 These results are not disaggregated so the proportion of modern award IFAs that were terminated at the initiative of multiple IFA employers is unknown.

[65] The survey data also provides some insight into the content of matters dealt with by IFAs. The employee survey data reveal that the modern award terms most frequently varied related to arrangements for when work is performed (identified by 59 per cent of employees with an IFA), as shown by Table 5.11 of the 2012 IFA Report.

[66] A relatively large proportion of IFAs related to ‘other’ terms (45 per cent). Table 5.12 in the 2012 IFA Report provides an overview of some of the other terms and conditions of employment that IFAs were reported to vary. An increase in the base rate of pay was the most common variation identified (representing 11 per cent of all other variations) followed by an increase in flexibility in the hours worked (nine per cent). Around 20 per cent of these variations could not be categorised into these groups.

[67] The employer survey data showed a similar pattern. The table below is derived from Tables 5.2 and 5.3 from the 2012 IFA Report.

[68] The employers surveyed also identified a range of benefits to employees resulting from agreeing to an IFA 40. The most common benefits identified by single IFA employers were more flexible working hours (37 per cent) and increased take-home pay (33 per cent). Around a quarter of single IFA employers identified more consistent take-home pay, increased job security and improved work-life balance as benefits.

[69] Multiple IFA employers most commonly suggested that the benefits to the employee were more flexible working hours (40 per cent) and increased take-home pay (41 per cent). More flexible working hours was a benefit identified by 30 per cent of employers with enterprise agreement IFAs and 50 per cent of employers with modern award IFAs. Increased take-home pay was reported by 29 per cent and 43 per cent of employers with enterprise agreement IFAs and modern award IFAs respectively. A greater proportion of employers with enterprise agreement IFAs indicated that ‘other parenting or family reasons’ had been a benefit to the employee than employers with modern award IFAs (41 per cent compared with 13 per cent). 41

[70] Employers also identified benefits to the business/organisation arising from their IFA(s). 42 For single IFA employers, the benefits most commonly indicated were the creation of benefits and incentives to attract or retain staff (34 per cent) and clarity about conditions for both the employer and employee (30 per cent). Around nine per cent suggested there was no benefit to the employer.

[71] For multiple IFA employers, the benefits most commonly identified were formalising existing arrangements (43 per cent); clarity about conditions (36 per cent); staff being able to work more or less hours as needed by the employer (34 per cent); and increased flexibility with rostering (34 per cent).

[72] Multiple IFA employers with modern award IFAs were more likely to have cited that formalising existing arrangements was a benefit to the employer (43 per cent) compared with employers with enterprise agreement IFAs (16 per cent). Some 60 per cent of multiple IFA employers with enterprise agreement IFAs identified that the creation of benefits and incentives to attract or retain staff was a benefit to the employer, while this was reported by 28 per cent of employers with modern award IFAs. 43

[73] We also note that there is some evidence that IFAs are being used in a manner which is inconsistent with the model flexibility term and the requirements of the FW Act.

[74] In the employer survey conducted as part of the 2012 IFA Report employers were asked whether the employee was required to sign IFA documentation in order to continue or commence employment. A majority of single IFA employers (69 per cent) with modern award IFAs required the employee to sign the IFA documentation to either commence or continue their employment. 44 Just over half of multiple IFA employees (54 per cent) required all employees to sign IFA documentation to either commence or continue their employment.45 On its face such conduct is inconsistent with the requirement in clause 7.2 of the model flexibility term that the employer and individual employee must have ‘genuinely agreed’ to make the IFA, without coercion or duress. The making of an IFA prior to the commencement of employment is inconsistent with the June 2008 AIRC Full Bench decision in which it was decided that an IFA was to be made available only after the commencement of employment:

[75] The intention of the AIRC Full Bench is reflected in the reference to ‘employee’ in the model flexibility clause, rather than ‘prospective employee’.

[76] Section 341(3) of the FW Act is also relevant in this context, it states:

[77] The Review Report also gave consideration to this issue and concluded as follows:

[78] There is also at least one reported instance of a penalty being imposed on an employer for using coercion and duress to compel an employee to agree to an IFA. Fair Work Ombudsman v Australian Shooting Academy Pty Ltd 48was such a case. In that matter, Logan J observed at [36]:

[79] The final observation in relation to the practical implementation of the model flexibility term relates to the ‘Qld - Pharmacy Industry Audit Program Report’ (the Qld Audit Report). In that report the Fair Work Ombudsman (FWO) raises some concerns about the use of IFAs in the retail pharmacy sector in Queensland. The Qld Audit Report was the result of a program conducted by the FWO to assess the level of compliance in the sector with rates of pay, minimum hours of engagement, meal break entitlements, time and wages record keeping and pay slip obligations. FWO Inspectors assessed the records of 575 employers operating pharmacies throughout Queensland. Of the 575 audits completed, 320 employers (56 per cent) were found to be compliant and 255 employers (44 per cent) to be in contravention. One of the findings made in the Qld Audit Report related to the use of IFAs in the sector:

[80] A copy of the Qld Audit Report can accessed through the FWO website: http://www.fairwork.gov.au/campaignresults/QLD/Qld-Pharmacy-Industry-Campaign-Final-Report.pdf

3. CONSIDERATION OF THE APPLICATIONS

[81] As we have mentioned, this decision deals with 15 applications to vary the standard award flexibility provision in 10 modern awards.

[82] A set of draft directions in relation to these matters was published on the Commission’s website on 21 January 2013. A Directions Hearing was held on 31 January 2013 to provide interested parties the opportunity to comment on the draft directions. Final directions were issued by the Full Bench on 4 February 2013 and posted to the Commission’s website. Applicants and interested parties were directed to file comprehensive written submissions, relevant documentary material and comprehensive witness statements for any witness evidence in support of their position on any application within the timeframe set out in the directions.

[83] Two background documents prepared by the Commission’s staff were placed on the website for the information and assistance of interested parties, the first was a summary of the applications and supporting submissions received, and the second was a history of the model award flexibility clause. We do not propose to repeat that material but note that we have had regard to all of the submissions. An annotated model flexibility clause setting out the variations proposed is set out at Attachment 3 to this decision.

[84] Oral submissions were heard by the Full Bench on 27 March 2013.

[85] The applications can be broadly categorised as going to the scope and operation of the model flexibility term. We propose to deal first with the applications going to the scope of the model flexibility term.

3.1 Scope

[86] As we have noted, s.144(4) of the FW Act provides that the flexibility term must identify the terms of the modern award the effect of which can be varied by an individual flexibility arrangement. Subclause 7.1 of the model flexibility term provides that the employer and employee may agree to vary the application of award terms concerning:

[87] A number of applications seek to vary the scope of the model flexibility term.

[88] Some applications seek the deletion of clause 7.1 in its entirety and the insertion of a provision which would allow IFAs in respect of each and every term of a modern award. 50 For example the VANA and Hair and Beauty Australia both propose the deletion of clause 7.1 in its entirety and its replacement by a new clause 7.1 in the following terms:

[89] The Housing Industry Association (HIA) seeks to add a new paragraph (h) to subclause 7.1 as follows:

[90] Other applications seek more limited variations to the scope of the model flexibility term. For instance in relation to clause 7.1(a), ‘arrangements for when work is performed’, the Baking Industry Association of Queensland - Union of Employers, the National Retailers Association (NRA) and the Hair and Beauty Industry Australia (HBIA) seek to include the words “including the minimum duration of shifts.” 51 In its application, the Australian Retailers Association52 seeks to reword 7.1(a) as follows: “arrangements for when work is performed, including minimum shift engagements”. In its subsequent submission dated 25 February 2013, the NRA appears to have changed its proposed rewording of 7.1(a) to: “arrangements for when work is performed (including minimum shift engagement)”.

[91] The Victorian Employers’ Chamber of Commerce and Industry (VECCI) seeks the insertion of two new award terms which may be varied by an IFA, namely minimum shift lengths and ‘preferred hours’ arrangements. 53

[92] The HIA seeks to vary clause 7.1 to provide that award terms dealing with frequency of payment may be varied by an IFA.

[93] It is convenient to deal first with those applications which seek to vary the scope clause of the model flexibility term such that an IFA may vary the application of any term of a modern award.

[94] We note that no evidence was advanced in support of such a variation and little was put by way of merit argument. Those organisations that supported such a variation were unable to identify any particular issues which have arisen from the current scope of the model term save in respect of frequency of payment and minimum engagement periods. 54 We deal later with those particular issues. The most common complaint about the scope clause of the model term was the ambiguity and uncertainty said to arise from the use of the expression ‘arrangements for when work is performed’ in subclause 7.1(a).

[95] The written submission by Australian Business Industrial (ABI) makes this point at paragraph 4.5:

[96] In its submission Australian Federation of Employers and Industries (AFEI) says:

[97] To similar effect Business SA submitted:

[98] Mr Barkatsas, on behalf of VECCI, submitted:

[99] We are not persuaded to vary the scope of the model flexibility term such that an IFA may vary the application of any term of a modern award.

[100] Division 3 of Part 2-3 of Chapter 2 of the FW Act deals with the terms of modern awards. Sections 143-149 deals with certain terms that must be included in each modern award:

[101] No case has been advanced as to why these particular award terms should be able to be varied by an IFA.

[102] Section 139 of the FW Act sets out the terms that may be included in a modern award:

[103] The June 2008 AIRC Full Bench gave careful consideration to the terms of s.576J and decided to limit the scope of the model flexibility term to those matters specified in clause 7.1. In doing so, the 2008 AIRC Full Bench specifically addressed award terms dealing with minimum wages by reference to s.576J(1)(a) and concluded that there was no sound basis for including such terms within the operation of the model clause. The AIRC Full Bench expressed the view that it was unnecessary to include such terms having regard to the separate provision that was made for flexibility in relation to the way in which wages, salaries and other monetary entitlements may be paid (referring to s.576J(1)(f) of the WR Act) and, further, it was ‘inappropriate’ to include minimum wages terms within the model clause because:

[104] In our view, these observations remain apposite and we note that s.139(1)(f) of the FW Act is in the same terms as s.576(1)(f) of the WR Act.

[105] The 2008 AIRC Full Bench also concluded that the inclusion of award terms dealing with superannuation, consultation, representation and dispute settlement within the scope of the model clause would be likely to add complexity and unnecessary regulation rather than increase flexibility. No cogent reasons have been advanced for departing from this aspect of the 2008 AIRC Full Bench decision and we do not propose to do so.

[106] We also note that the Fair Work Amendment Act 2012 (Cth) inserted a number of provisions in the FW Act dealing with the inclusion of a default superannuation fund term in modern awards and requiring the Commission to conduct 4 yearly reviews of such terms. The variations to modern awards flowing from these new legislative provisions should be dealt with before consideration is given to including award terms dealing with superannuation within the scope of the model flexibility term.

[107] The instances of inappropriate use of IFAs referred to earlier provide a further reason for declining to expand the scope of the flexibility term to cover any term of a modern award.

[108] While we are not persuaded to vary the scope of the model flexibility term in the manner sought we acknowledge that subclause 7.1 has given rise to some ambiguity and uncertainty, particularly in relation to the scope of the expression ‘arrangements for when work is performed’. It is appropriate that this ambiguity and uncertainty be addressed.

[109] As to how this matter may be addressed a number of parties agreed with the proposition that one way of providing clarification would be to identify the specific provisions within each modern award that fall within the expression ‘arrangements for when work is performed’ in clause 7.1. 60 As we noted earlier (see paragraphs [65]-[67] above) the award terms most frequently varied by an IFA related to arrangements for when work is performed.

[110] The starting point in resolving the existing uncertainty is to ascertain the intention of the 2008 AIRC Full Bench when it determined the scope of the model clause. In deciding that award terms dealing with arrangements for when work is performed would be within the scope of the model clause the AIRC Full Bench made reference to paragraph 576J(1)(c) of the WR Act. 61 A provision in the same terms is now in s.139(1)(c) of the FW Act and it provides:

[111] It is tolerably clear that the AIRC Full Bench intended that the reference to ‘arrangements for when work is performed’ would include the matters specifically identified in s.576J(1)(c), of the WR Act (now s.139(1)(c) of the FW Act), that is ‘hours of work, rostering, notice periods, rest breaks and variations to working hours’.

[112] VECCI, and others, contended that minimum engagement provisions in modern awards fall under the head of power in s.139(1)(c) and accordingly fall within the expression ‘arrangements for when work is performed’ and hence within the scope of the model flexibility term. Indeed, VECCI submitted that s.139(1)(c) was the only head of power which supported the inclusion of a minimum engagement term in a modern award and hence it must follow that such a term is within the scope of the model flexibility term.

[113] We do not accept VECCI’s analysis, for two reasons.

[114] First, contrary to VECCI’s submission, s.139(1)(c) is not the only source of power for minimum engagement periods in modern awards. Properly understood such provisions deal with minimum wages (s.139(1)(a)) or are incidental (within the meaning of s.142) to casual employment (s.139(1)(b)). This characterisation is apparent from a consideration of the minimum engagement term in the Clerks—Private Sector Award 2010, which is the award VECCI is seeking to vary. The relevant clause is clause 12.4 and appears under the heading, Casual Employment:

[115] This provision is clearly dealing with minimum wages for casual employees, it is not dealing with arrangements for when work is performed.

[116] The second reason for rejecting VECCI’s contention flows from a plain reading of the expression ‘arrangements for when work is performed’ [emphasis added]. A minimum engagement term says nothing about ‘when work is performed’, it simply prescribes the minimum payment to be made to casual employees for each engagement.

[117] Having rejected the contention that minimum engagement terms fall within the meaning of the expression ‘arrangements for when work is performed’, the task remains to provide greater clarity as to the award terms that do fall within that expression. In our view, this is best done on an award by award basis, on application by an interested party. In the event such an application is made we will publish draft variations which will identify the specific clauses in the relevant modern award which fall within the purview of the expression ‘arrangements for when work is performed’.

[118] We also note that the application by the Master Plumbers and Mechanical Contractors Association of NSW (the Master Plumbers) sought to identify specific award clauses in the Plumbing and Fire Sprinklers Award 2010 in relation to overtime rates, penalty rates and allowances. On the material before us we are not persuaded that such a variation is necessary. We have had regard to the survey advanced in support of the Master Plumbers’ application but we are not persuaded that it establishes that there is any ambiguity in relation to these matters. The relevant survey question asked: ‘Are you in favour of inserting a new clause to clarify and potentially expand the scope of making Individual Flexibility Agreements (IFAs)?’. No information was provided to survey respondents as to how the new clause would clarify the making of IFAs and nor does the survey assist in identifying any ambiguity in the current clause.

[119] We now turn to deal with those applications which seek more limited variations to the scope of the award matters which may be dealt with by IFAs.

[120] As mentioned previously, these applications seek to include ‘minimum shift arrangements’ (or words to that effect), frequency of payment and ‘preferred hours options’. It is convenient to deal with the last matter first.

[121] VECCI is seeking to vary clause 7.1 of the Clerks - Private Sector Award 2010 to insert an additional paragraph in the model flexibility term:

[122] There does not appear to be any generally accepted definition of ‘preferred hours arrangements’ and none is proferred by VECCI. In a recent academic article Cameron dealt with this definitional issue, as follows:

[123] In our view, VECCI’s application is misconceived. Clause 7.1 provides that the employer and the individual employee may agree to vary the application of ‘certain terms of this award’. The award terms which may be the subject of such an arrangement are then identified as those concerning:

[124] There is no award term which concerns ‘preferred hours option’. Hence even if we were minded to grant VECCI’s application, which we are not, it would be ineffective in any event.

[125] Preferred hours arrangements of the type described by Cameron in the extract at paragraph [122] above concern the variation of the application of award terms dealing with arrangements for when work is performed, overtime rates and penalty rates. It follows that such arrangements can be agreed within the scope of the existing model flexibility clause. But there is a real issue as to whether such arrangements would result in the individual employee being better off overall in relation to their terms and conditions of employment (as required by clause 7.4(d)).

[126] Preferred hours arrangements were considered by a Full Bench of the Commission in Re Bupa Care Services Pty Ltd (the Bupa decision). 63 The Bupa decision dealt with a number of appeals in respect of decisions refusing to approve the Bupa Care Services, ANF and HSU Enterprise Agreement 2009 and a number of retail industry agreements. Each of the enterprise agreements was made prior to 1 January 2010 and as a consequence the ‘no disadvantage test’ (the NDT) in Item 10 of Schedule 7 of the Transitional Provisions Act applied. The ‘preferred hours arrangements’ in the agreements in question were of the type described by Cameron in the extract above.

[127] The Full Bench in the Bupa decision cited with approval the decision of the majority in Re MSA Security Officers Certified Agreement 2003 (MSA Security). 64 In MSA Security the majority rejected a clause enabling an employee to work overtime at ordinary rates by agreement with the employer on the basis that the comparison under the NDT was between the terms and conditions of employment in the relevant agreement and the relevant award. The possibility that the employer would provide an employee with additional work hours was irrelevant because the applicable award made no distinction between voluntary working hours and hours directed by the employer.

[128] In the Bupa decision, the Full Bench characterised the NDT in these terms:

[129] The agreements in question failed the NDT because the preferred hours clause represented at least one term or condition of employment that was less beneficial than the awards that applied to the employees.

[130] However, as observed in Black Crow Organics, 66 the effect of the Bupa decision is not that an agreement which provides for hours which would otherwise be payable at overtime rates, to be paid at ordinary rates, because an employee voluntarily works those hours at a particular time, will automatically fail the NDT:

[131] The NDT applied to all agreements made between 1 July 2009 and 31 December 2009. 68 This was the period between the repeal of Work Choices and the commencement of the remaining elements of the FW Act (i.e. minimum wages, NES and modern awards).

[132] Under the NDT the Commission had to be satisfied that the ‘agreement does not, or would not result, on balance, in a reduction in the overall terms and conditions of employment of the employees who are covered by the agreement under any reference instrument relating to one or more employees’. 69

[133] Agreements made on or after 1 January 2010 must pass the ‘better off overall test’ (the BOOT). Under the BOOT the Commission must be satisfied that each employee ‘would be better off overall if the agreement applied to the employee than if the relevant award applied to the employee’.

[134] While the BOOT is expressed in different terms to the NDT, each involves a global assessment. In Armacell Australia Pty Ltd a Full Bench of the Commission described the BOOT in these terms:

[135] While the Bupa decision involved the application of the NDT the same approach has been taken to the BOOT in a number of first instance decisions. For example, in Jellifish!! Pty Ltd where the Commission said:

[136] It follows from the foregoing that on the basis of the current authorities a purported IFA which contains a preferred hours arrangement would not, of itself, result in the individual employee being better off overall. The IFA would need to contain a corresponding benefit that outweighs the detriment of the preferred hours arrangement in order to meet the requirements of the BOOT.

[137] To the extent that the VECCI application is seeking some general endorsement of preferred hours arrangements, we decline to give such an endorsement. As we mention later, such matters are best considered in an appropriate context, rather than in the abstract (see paragraph [158]).

[138] We now turn to those applications which seek to include minimum engagement periods and frequency of pay within the scope of the model flexibility term.

[139] A number of the employer organisations who supported the inclusion of minimum engagement periods within the scope of the model flexibility term relied on Commission decisions which provided reduced minimum engagement periods for secondary school students in the General Retail Industry Award 2010 (the General Retail Award) 72and in the Animal Care and Veterinary Services Award 201073. These decisions are clearly distinguishable from the matters before us, in particular:

[140] In relation to the variation to the General Retail Award referred to above it is also important to note that the Commission had earlier rejected an application to generally reduce the minimum engagement period. 74

[141] We are not persuaded that it is appropriate to include ‘minimum engagement periods’ within the scope of the model flexibility term. As we have noted these provisions relate to minimum wages and for many employees are an important aspect of the modern award safety net. As Vice President Watson observed in Secondary School Students case:

[142] Any variation to minimum engagement periods in modern awards should only be by application to vary the relevant modern award or by enterprise agreement. This will ensure that the variation is subject to appropriate scrutiny. It is not appropriate to permit such variations by IFAs, which are effectively self-executing. In our view, the inclusion of such terms within the scope of the model flexibility term would not be consistent with the modern awards objective.

[143] We now turn to the proposal to include ‘frequency of payment’ within the scope of the model clause.

[144] In support of its proposed variation the HIA says:

[145] Clause 31 of the Building and Construction General On-site Award 2010 (the On-site Award) deals with the payment of wages:

[146] Issues in respect of frequency of payment have generally been dealt with on an award by award basis. For example in Re Simpson Personnel Pty Ltd 77 Senior Deputy President Watson rejected an application to vary clause 31 of the On-site Award to generally make provision for the payment of wages on a weekly or fortnightly basis by mutual agreement. His Honour said:

[147] It should be noted that this application was made outside the Transitional Review and hence s.157 of the FW Act applied. Such a variation can only be made if the Commission is ‘satisfied that making the determination . . . outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective’.

[148] In the context of the Transitional Review, Senior Deputy President Hamberger varied the frequency of payment provision in the Graphic Arts, Printing and Publishing Award 2010. 79 At paragraphs [25] and [26] of his decision the Senior Deputy President said:

[149] In our view the issue of frequency of payment is best dealt with on an award by award basis in the context of either the Transitional Review or the 4 yearly review of modern awards. The relevant award history and the circumstances pertaining to each award are likely to vary and should be dealt with on a case by case basis. The inclusion of such a term within the scope of the model flexibility term would not be consistent with the modern awards objective.

3.2 Machinery matters

[150] In addition to the scope of the flexibility term in modern awards the applications before us raise four issues which may be described as machinery matters:

(i) The ‘better off overall test’

[151] The model flexibility term provides that an IFA must ‘result in the employee being better off overall than the employee would have been if no individual flexibility agreement had been agreed to’ (clause 7.3(b)). Two observations may be made about this requirement.

[152] The first relates to the meaning of the expression ‘being better off overall’. No party in the proceedings before us contended that this expression in the model flexibility term meant anything other than a reference to the BOOT. Section 193 sets out the circumstances in which an enterprise agreement passes the BOOT, relevantly:

[153] The second observation is that the employee must be “better off overall” at the time the IFA is made. In other words the requirement to meet the BOOT is not a continuing obligation over the life of the IFA. The 2008 AIRC Full Bench dealt with this issue at paragraph [180]:

[154] A number of employer submissions supported varying the current model flexibility term to ‘provide greater clarity on the treatment of non-monetary benefits’ in the assessment of the BOOT. 81 In his oral submission Mr Mammone, on behalf of ACCI, pointed to some uncertainty in relation to the proper interpretation of the BOOT.82

[155] The uncertainty referred to relates to the treatment of what are described as ‘non-monetary benefits’ in the application of the BOOT. In this context reference was made to the apparent inconsistencies between the illustrative example on p.137 of the Explanatory Memorandum to the Fair Work Bill 2009; the FWO Best Practice Guide 3: ‘Use of individual flexibility arrangements’; and the Bupa decision. 83

[156] We have already referred to the Bupa decision in the context of dealing with VECCI’s application to expand the scope of the model flexibility term to include the expression ‘preferred hours option’ (see paragraphs [126]-[136] of this decision).

[157] We acknowledge that there is a degree of tension between the illustrative example in the Explanatory Memorandum, the FWO Best Practice Guide and the Bupa decision (albeit that the Bupa decision dealt with the NDT, not the BOOT). But we are not persuaded that it is appropriate for us, in these proceedings, to address that issue.

[158] Observations about the application of the BOOT and the matters which can be taken into account in making such an assessment are best made in the context of a particular case, rather than in the abstract. Any reconsideration of the Bupa decision should be in an appropriate context, such as an application to approve an enterprise agreement, and any party seeking such a reconsideration should make application to have the matter referred to a Full Bench, pursuant to s.615A of the FW Act.

[159] We do, however, think that the model flexibility term should be amended to make it clear that the reference to ‘the employee being better off overall’ in clause 7.3(b), refers to when the IFA is made.

(ii) Termination provisions

[160] Clause 7.8 of the model flexibility term in modern awards provides that an IFA may be terminated by consent (clause 7.8(b)) 84 or by the employer or the individual employee giving four weeks’ written notice of termination (clause 7.8(a)). The IFA ceases to operate at the end of the notice period.

[161] In these proceedings Greater Union and Birch, Carroll & Coyle have sought to vary clause 7.8(a) of the model flexibility term by deleting the reference to “four weeks’ notice” and inserting “sixteen weeks notice.” The application received general support from employer organisations and was opposed by the ACTU and the unions who made submissions in the proceedings.

[162] AFEI and Business SA supported the variation sought. Ai Group supported the proposition that the notice period should be extended and, in particular, supported the Review Report’s recommendation that the notice period be extended to 90 days. 85 ABI took a similar position.86 ACCI provided general support for the proposition that a period of more than 28 days should be provided before a party can unilaterally terminate an IFA, but did not proffer a view in support of any particular notice period.87

[163] The ACTU and a number of unions opposed any extension to the period of notice of termination. 88 The ACTU submitted:

[164] The ACTU contends that the applications seeking to extend the notice of termination are reagitating an issue that was comprehensively dealt with during award modernisation and that the variations sought are inconsistent with the modern awards objective. 90 It is also submitted that the capacity for either party to terminate an IFA on four weeks’ notice is consistent with the legislative intent with respect to how IFAs should operate, in the following respects:

[165] In relation to the last point, the ACTU advanced the following submission:

[166] The ACTU rejected the employer contentions that the safeguards in ss.144 and 145 sufficiently protect an employee from being disadvantaged by an IFA and did not accept the submissions to the effect that the current capacity to terminate an IFA with four weeks’ notice provides a high level of uncertainty for employers such as to justify a variation of the model flexibility term.

[167] The termination provisions in the model flexibility term were determined by a Full Bench of the AIRC in June 2008 as part of the award modernisation process. We have earlier referred to aspects of that Full Bench decision. In relation to the termination provisions, the Full Bench said:

[168] The emphasised parts of the above extract highlight the rationale for the decision to permit IFAs to be unilaterally terminated by giving four weeks’ notice in writing.

[169] Those supporting a notice period of more than four weeks contend that the current notice period acts as a disincentive for employers to enter into IFAs. As ABI put it:

[170] Similarly, Business SA submitted:

[171] The 2012 IFA Report provides little support for the contention that the four weeks’ notice period acts as a disincentive for employers to enter into IFAs. As shown in Table 4.2 (see paragraph [60] above) less than one per cent of employers who were aware of, but did not report making IFAs, cited the four weeks’ notice period as the reason why they had not entered into an IFA. The most common reason, reported by just over half of employers, was that there had been no identified need to enter into an IFA. The survey data does, however, have some limitations. It does not distinguish between employers covered by enterprise agreements and those whose principal industrial instrument was a modern award. Hence, we do not know the proportion of surveyed employers who were operating under a modern award and who had an identified need, but chose not to make an IFA because it could be terminated upon four weeks’ notice. However, based on the published survey data this is unlikely to be a large proportion of this group of employers.

[172] It is also relevant that employer organisations have consistently identified the four weeks’ notice period as a disincentive to employers entering into IFAs. In addition to their submissions in these proceedings, employer organisations advanced similar contentions to the FW Act Review Panel. At page 107 of the Review Report the Panel states:

[173] Further, after giving the issue extensive consideration, the Panel recommended that the four weeks’ notice period be extended to 90 days.

[174] For our part, we accept that the provision of a longer unilateral termination notice period would provide greater certainty to the employer and individual employee parties to IFAs. A longer notice period would also reduce an existing disincentive for employers entering into IFAs.

[175] But these considerations need to be balanced against the factors cited by the 2008 AIRC Full Bench in support of their adoption of a four week notice period, that is:

[176] Hence, while a longer notice period provides greater certainty it also reduces the ability of parties to adapt to changing circumstances, such as those identified by the 2008 AIRC Full Bench. In other words a longer notice period increases certainty but reduces flexibility.

[177] Nor is it any answer to say that an IFA can be terminated by consent at any time. A change in circumstances may not impact on each party in the same way. It may disadvantage one party but have a neutral effect on, or actually advantage, the other party. A change in circumstances will not always result in creating a mutual incentive to vary or terminate the IFA. In this context, it needs to be remembered that the survey data in the 2012 IFA Report suggests that reviews, modifications and terminations of modern award IFAs were initiated by employers as often as employees.

[178] The central issue for us is the balance between the considerations identified by the 2008 AIRC Full Bench (see paragraph [175] above), that is:

[179] Section 145 of the FW Act is also relevant in this context:

[180] In effect s.145(4) imports a termination provision into an award flexibility term which is in addition to any other means of termination of an IFA that the flexibility term provides. Subsection 145(4) states that flexibility term is taken to provide that the purported IFA can be terminated by agreement or by either the employee, or the employer, giving written notice of not more than 28 days.

[181] As previously mentioned, s.145 was not part of the legislative framework at the time of the 2008 AIRC Full Bench decision. This legislative change constitutes a ‘significant change in circumstances’ within the meaning of the June 2012 Transitional Review decision. The change is significant because it provides a legislative safeguard which addresses the central rationale for the 2008 AIRC Full Bench decision. The fact that a review of the model flexibility clause was specifically contemplated by the AIRC at the time it was determined is also an important factor. These matters clearly distinguish the circumstances in these proceedings from those which applied in the Transitional Review Penalty Rates case 96 and the Transitional Review Public Holidays case97.

[182] It will be recalled that one of the factors which led the AIRC Full Bench to adopt a four week notice period was that such a provision provided some protection for employees who made an IFA which materially disadvantaged them. This consideration no longer has the same force as it has now been addressed by the legislative safeguard in s.145.

[183] Contrary to the ACTU’s submissions we are persuaded that s.145 (in conjunction with s.144) sufficiently protects an employee from being disadvantaged by an IFA.

[184] Section 145 only applies in the circumstances set out in s.145(1), that is, an employee and employer have agreed to an arrangement that purports to be an IFA, under a flexibility term in a modern award and the arrangement does not meet a requirement set out in s.144.

[185] One of the requirements in s.144 is that the IFA must result in the employee being better off overall than the employee would have been if no IFA were agreed to (s.144(4)(c)). If an employee party to a purported IFA is not better off overall then s.145(4) applies and the IFA may be unilaterally terminated in accordance with s.145(4). The same situation pertains in the event that the employee and employer have not ‘genuinely agreed’ to the IFA (see s.144(4)(b) or where the IFA has not been signed by the employee and employer parties (see s.144(4)(e)) or where the employer has failed to ensure that a copy of the IFA is given to the employee (s.144(4)(f)).

[186] We accept that s.145 does not apply in all circumstances. For example, it would not give rise to a right of termination if circumstances changed after the IFA was made such that it no longer operated to the mutual benefit of both parties. But, as we have noted earlier, this consideration needs to be balanced against the greater certainty afforded to both parties by a longer notice period.

[187] We are persuaded that it is appropriate to increase the period of notice specified in clause 7.8(a) of the model flexibility term. No particular rationale was advanced in support of the 16 week notice period proposed by Greater Union and Birch, Carroll & Coyle. A period of 16 weeks equates to 112 days, which is greater than the 90 day period recommended by the Panel in the Review Report. In our view it is appropriate to give effect to the Panel’s recommendation. However, we think it is simpler and easier to understand and administer a notice period which is expressed in weeks rather than days. Accordingly, we propose to vary clause 7.8(a) of the model flexibility term by deleting the reference to ‘four weeks’ and inserting a reference to ‘13 weeks’. We are satisfied that such a variation has merit, will enhance the operational effectiveness of the model term and is consistent with the modern awards objective.

[188] In order to ensure that parties to IFAs are aware of the termination provisions in s.145(4) we will insert an appropriate note at the end of clause 7.8 of the model flexibility term.

(iii) External approval of IFAs

[189] The model flexibility term provides that IFAs are not subject to any external approval process. Indeed clause 7.6 provides that where the individual employee concerned is 18 years of age or over:

[190] Where the individual employee is under 18 years of age clause 7.4(a) provides that a parent or guardian may sign the IFA on their behalf.

[191] These aspects of the model terms (i.e. clauses 7.4(a) and 7.6) are now reflected in the statutory requirements for flexibility terms in modern awards. In particular, s.144(4)(e) and s.144(5) provide:

[192] The reference to ‘another person’ in s.144(5) includes ‘a body politic or corporate as well as an individual’. 98 The legislative intent appears to be to prevent unions, other employees or employer associations being able to veto IFAs. Paragraph 575 of the Explanatory Memorandum to the Fair Work Bill evidences this statutory intention:

[193] In determining the model term the 2008 AIRC Full Bench gave consideration to the insertion of additional process or approval requirements:

[194] The approval process relating to IFAs was also addressed in the Review Report in which the Panel said:

[195] The Panel’s observations find expression in recommendations 10 and 11 of the Review Report, set out at paragraph [48] above. The Panel did not recommend that IFAs be approved by the FWA (now the Fair Work Commission).

[196] Application AM2012/204 by the Accommodation Association of Australia (the AAA) seeks to amend the model term by deleting clause 7.6 in its entirety and replacing it with a provision in the following terms:

[197] The AAA did not advance any written submissions in support of its proposal, nor did it attend the oral hearing on 27 March 2013. In its application, the AAA simply asserts that the variation is sought as its members have been reluctant to use IFAs on the basis that they may inadvertently breach the award by entering into IFAs which do not pass the better off overall test.

[198] No participant in these proceedings advanced any submissions in support of the AAA proposed variation. A number of organisations opposed the AAA’s application. In its written submission Business SA submits that the variation should be rejected, for the following reasons:

[199] Ai Group and ACCI also opposed the AAA’s application. In her oral submission Ms Vaccaro, on behalf of Ai Group, submitted that the primary reason the application was opposed was because it would ‘impose an onerous regulatory burden that was never intended to be there’. 102 Ms Vaccaro also submitted:

[200] ACCI also opposed AAA’s application and in the course of oral submissions Mr Mammone, on behalf of ACCI, submitted that the application was contrary to the modern awards objective. 104

[201] We have decided to reject the AAA’s application. No substantive argument has been advanced in support of the variation proposed and, in our view, the application lacks merit and would increase the regulatory burden on business, contrary to the modern awards objective (see s.134(1)(f)).

[202] We also note that there is a real question as to whether such a variation would be compatible with the legislative intent of s.144(5).

(iv) Annual review of IFAs

[203] In application AM2012/287 Hair and Beauty Australia seeks to amend the model term by adding an additional paragraph, as follows:

[204] Hair and Beauty Australia did not advance any written submissions in support of its proposal, nor did it attend the oral hearing on 27 March 2013.

[205] No participant in these proceedings advanced any submissions in support of this proposal and a number of organisations submitted that the variation proposed should be rejected. 105 ACCI and Ai Group opposed the variation on essentially the same grounds as they opposed the external approval process proposed in AM2012/204 (see paragraphs [199]-[200] above). In its submission opposing the application the ACTU noted106 that the 2008 AIRC Full Bench decision rejected submissions to the effect that IFAs should be subject to a no disadvantage test on an ongoing basis because such a provision would ‘add an extra process requirement to agreement making and introduce an element of ongoing uncertainty’.107

[206] We have decided to reject the application by Hair and Beauty Australia. No argument has been advanced in support of the variation proposed and in our view the application lacks merit and would increase the regulatory burden on business, contrary to the modern awards objective (see s.134(1)(f)).

4. CONCLUSION

[207] As previously mentioned, s.145 was not part of the legislative framework at the time of the 2008 AIRC Full Bench decision. This legislative change constitutes a ‘significant change in circumstances’ within the meaning of the June 2012 Transitional Review decision. The fact that a review of the model flexibility clause was specifically contemplated by the AIRC at the time it was determined is also an important factor. These matters clearly distinguish the circumstances in these proceedings from those which applied in the Transitional Review Penalty Rates case 108 and the Transitional Review Public Holidays case109.

[208] The model flexibility term will be varied in the following respects:

[209] In addition to these variations one further variation is proposed in order to improve the level of compliance with the requirements of the model flexibility term. As we have mentioned the evidence suggests that a significant proportion of IFAs are entered into before the individual employee has commenced employment, contrary to the intent of the model flexibility term and the FW Act (see paragraph [73]-[77] above). To address this issue we propose to insert the following words at the end of clause 7.2:

[210] The proposed new model flexibility term is set out below, with the variations highlighted:

    7. Award flexibility

    7.1 Notwithstanding any other provision of this award, an employer and an individual employee may agree to vary the application of certain terms of this award to meet the genuine individual needs of the employer and the individual employee. The terms the employer and the individual employee may agree to vary the application of are those concerning:

        (a) arrangements for when work is performed as set out in:

        [particular award clauses to be specified on an award-by-award basis on application by an interested party];

        (b) overtime rates;

        (c) penalty rates;

        (d) allowances; and

        (e) leave loading.

    7.2 The employer and the individual employee must have genuinely made the agreement without coercion or duress. An agreement under this clause can only be entered into after the individual employee has commenced employment with the employer.

    7.3 The agreement between the employer and the individual employee must:

      (a) be confined to a variation in the application of one or more of the terms listed in clause 7.1; and

          (b) result in the employee being better off overall at the time the agreement is made than the employee would have been if no individual flexibility agreement had been agreed to.

    7.4 The agreement between the employer and the individual employee must also:

          (a) be in writing, name the parties to the agreement and be signed by the employer and the individual employee and, if the employee is under 18 years of age, the employee’s parent or guardian;

          (b) state each term of this award that the employer and the individual employee have agreed to vary;

          (c) detail how the application of each term has been varied by agreement between the employer and the individual employee;

          (d) detail how the agreement results in the individual employee being better off overall in relation to the individual employee’s terms and conditions of employment; and

          (e) state the date the agreement commences to operate.

    7.5 The employer must give the individual employee a copy of the agreement and keep the agreement as a time and wages record.

    7.6 Except as provided in clause 7.4(a) the agreement must not require the approval or consent of a person other than the employer and the individual employee.

    7.7 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.

    7.8 The agreement may be terminated:

          (a) by the employer or the individual employee giving four weeks’ 13 weeks’ notice of termination, in writing, to the other party and the agreement ceasing to operate at the end of the notice period; or

          (b) at any time, by written agreement between the employer and the individual employee.

      Note: If any of the requirements of s.144(4), which are reflected in the requirements of this clause, are not met then the agreement may be terminated by either the employee or the employer, giving written notice of not more than 28 days (see s.145 of the Fair Work Act 2009 (Cth)).

7.9 The right to make an agreement pursuant to this clause is in addition to, and is not intended to otherwise affect, any provision for an agreement between an employer and an individual employee contained in any other term of this award.

[211] The variations proposed are necessary to remedy the issues identified in the Transitional Review and to ensure that the model award flexibility term and modern awards are operating effectively, without anomalies or technical problems arising from the award modernisation process. We are also satisfied that the variations proposed are ‘necessary’ (within the meaning of s.138) to achieve the modern awards objective and will ensure that modern awards provide a fair and relevant minimum safety net of terms and conditions having regard to the matters set out at paragraphs 134(1)(a)-(h). In particular, the variations proposed will provide flexible modern work practices and reduce regulatory burden while taking into account the needs of the low paid and making the model flexibility term simpler and easier to understand.

[212] The determinations giving effect to our decision will be settled by Senior Deputy President Watson, with recourse to the Full Bench if necessary. After the Full Bench dealing with the annual leave aspects of the model award flexibility term has decided the applications before it, a statement will be issued setting out the process of implementing our decision (and the decision of the Annual Leave Full Bench insofar as it deals with the model award flexibility term) in all modern awards.

PRESIDENT

Appearances:

S. McIvor for Australian Business Industrial.

B. Tkalcevic for the Australian Council of Trade Unions.

D. Mammone for the Australian Chamber of Commerce and Industry and for the Australian Federation of Employers and Industries.

G. Vaccaro for the Australian Industry Group.

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

Z. Angus for The Australian Workers’ Union.

G. Starr and J. Moriarty for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

H. Wallgren and E. West for the SA Employers’ Chamber of Commerce and Industry Inc t/as Business SA.

A. Borg for the Construction, Forestry, Mining and Energy Union.

M. Adler for the Housing Industry Association.

S. Kraemer for The Master Plumbers’ and Mechanical Services Association of Australia.

K. Yu for The Master Plumbers and Mechanical Contractors Association of New South Wales.

S. Elliffe for the National Retailers Association.

D. De Martino for the Shop, Distributive and Allied Employees Association.

N. Barkatsas for the Victorian Employers’ Chamber of Commerce and Industry.

Hearing details:

Before Justice Ross:

2013.

Melbourne, Sydney, Brisbane, Canberra, Adelaide (video hearing):

31 January.

Before the Full Bench:

2013.

Melbourne, Sydney and Adelaide (video hearing):

27 March.

Final written submissions:

Australian Council of Trade Unions and Shop, Distributive and Allied Employees’ Association, 5 April 2013.

ATTACHMENT 1 - LIST OF APPLICATIONS

Matter no.

Applicant

Modern award title

Award ID

AM2012/51

Greater Union and Birch Carroll & Coyle

Broadcasting and Recorded Entertainment Award 2010

MA000091

AM2012/228

HIA

Building and Construction General On-site Award 2010

MA000020

AM2012/210

VECCI

Clerks - Private Sector Award 2010

MA000002

AM2012/179

Baking Industry Association of Queensland - Union of Employers

Fast Food Industry Award 2010

MA000003

AM2012/240

NRA

Fast Food Industry Award 2010

MA000003

AM2012/178

Baking Industry Association of Queensland - Union of Employers

Food, Beverage and Tobacco Manufacturing Award 2010

MA000073

AM2012/177

Baking Industry Association of Queensland - Union of Employers

General Retail Industry Award 2010

MA000004

AM2012/245

ARA

General Retail Industry Award 2010

MA000004

AM2012/250

VANA Limited

General Retail Industry Award 2010

MA000004

AM2012/8

NRA

General Retail Industry Award 2010

MA000004

AM2012/172

Hair and Beauty Industry Association

Hair and Beauty Industry Award 2010

MA000005

AM2012/287

Hair and Beauty Australia

Hair and Beauty Industry Award 2010

MA000005

AM2012/204

Accommodation Association of Australia

Hospitality Industry (General) Award 2010

MA000009

AM2012/199

Master Plumbers and Mechanical Contractors Association of NSW

Plumbing and Fire Sprinklers Award 2010

MA000036

AM2012/180

Baking Industry Association of Queensland - Union of Employers

Restaurant Industry Award 2010

MA000119

ATTACHMENT 2

EXTRACT FROM CONSOLIDATED VERSION OF THE MINISTERIAL REQUEST

ATTACHMENT 3 - AMENDMENTS SOUGHT IN APPLICATIONS

The applicants seek the following amendments:

Hair and Beauty Australia - AM2012/287 proposes to delete clause 7.1 in its entirety and replace it with the following:
Master Plumbers and Mechanical Contractors Association of NSW - AM2012/199, in relation to the Plumbing and Fire Sprinklers Award 2010 [MA000036], proposes to delete clause 7.1 in its entirety and replace it with the following:

 1   [2012] FWAFB 5600.

 2   Other than modern enterprise awards and State reference public sector modern awards.

 3   Being the second anniversary of the Fair Work (Safety Net Provisions) Act commencement day.

 4   [2013] FWCFB 580.

 5   Ibid at paragraph [12], adopting the formulation from the review of the Oil Refining and Manufacturing Award 2010 [2012] FWA 7212 at [20].

 6   [2012] FWAFB 5600 at paragraph [99].

 7   The original award modernisation request under s.576C(1) of the Workplace Relations Act 1996 was made on 28 March 2008 and was varied on a number of occasions. A consolidated version of the Request is available from the FWC website.

 8   [2008] AIRC 387.

 9   [2008] AIRCFB 550.

 10   [2008] AIRCFB 550.

 11   [2008] AIRCFB 550 at paragraphs 183-186.

 12   [2008] AIRCFB 717.

 13   [2008] AIRCFB 1000 at paragraph 35.

 14   [2009] AIRCFB 345 at paragraph 8.

 15   [2008] AIRCFB 550 at 192.

 16   Section 3 of the Fair Work Act 2009.

 17   Stewart A. (1992), ‘Procedural Flexibility, Enterprise Bargaining and the Future of Arbitral Regulation’ 5 AJLL 101 at 102.

 18   s.61(2).

 19   The 2012 AWALI Report does not comment on award flexibility or IFAs and hence is of limited relevance to the applications in these proceedings.

 20   2012 AWALI Report at p39.

 21   [2008] AIRCFB 550 at 163.

 22   Review Report at p 78.

 23   Ibid.

24 ABS Cat. No. 6310.0 (various issues) and unpublished data purchased from the ABS. The incidence of casual employment (defined as the percentage of casual employees in all employees, excluding owner-managers of incorporated enterprises) rose sharply from the early to mid-1990s and rose slowly after that to peak at 25.7 per cent in 2004. While falling slightly since then, it has remained at around or just below 25 per cent. The incidence of casual employees in particular years was:

25 ABS, Labour force, Australia, April 2012, ABS Cat. No. 6202.0, downloaded from www.abs.gov.au.

26 M Plumb, M Baker & G Spence, ‘The labour market during the 2008–09 downturn’, RBA Bulletin, March quarter 2010, Reserve Bank of Australia, Sydney; and Borland, The Australian labour market in the 2000s: the quiet decade, Reserve Bank of Australia.

27 CA Sánchez & D Andrews, To move or not move: what drives residential mobility rates in OECD countries? Economics Department Working Papers No. 846, OECD, 2011. The calculations of residential labour mobility are based on data collected from various surveys from member countries. The dataset does not allow for distinguishing between local residential moves and long distance residential moves.

28 ABS, Labour mobility, Australia (Cat. No. 6209.0), various issues.

 29   Review Report at p 106.

 30   Ibid at p 108.

 31   See s.202(4) of the FW Act and Reg. 2.08 of the Fair Work Regulations 2009.

 32   As Irvine CJ observed in Scott v Commercial Hotel Merbein Pty Ltd [1930] VLR 75 at [30]: ‘[T]hough it is not to be conclusive, the employment of different language in the same Act may show that the Legislature had in view different objects’. Also see CFMEU v Hadgkiss (2007) 248 ALR 169.

 33   See Figure 4.1 on p 31, 2012 IFA report.

 34   See section 4.1.2 2012 IFA Report.

 35   General Manager, Fair Work Australia, Employer Survey 2012.

 36   Figure 4.10 on p 44 2012 IFA Report.

 37   Ibid, Figure 4.11 on p 50.

 38   Ibid, at p 43.

 39   Ibid, Table 4.7 on p 49.

 40   Ibid, Table 5.9.

 41   Ibid, Table D.8, Appendix D.

 42   Ibid, Table 5.10.

 43   Ibid, Table D.8, Appendix D.

 44   2012 IFA Report p 42.

 45   Ibid at p 46.

 46   [2008] AIRCFB 550 at paragraph 165.

 47   Review Report at p 109.

 48   [2011] FCA 1064.

 49   Qld Audit Report at pp 11-12.

 50   AM2012/250; AM2012/287.

 51   AM2012/177, AM2012/178, AM2012/179, AM2012/180, AM2012/8, AM2012/240 and AM2012/172.

 52   AM2012/245.

 53   AM2012/210.

 54   HIA at Transcript paragraphs [152]-[153] and [158]; Ai Group at Transcript PN 387-388.

 55   Also see Mr McIvor’s oral submission at Transcript paragraphs 228-234.

 56   February 2013 AFEI submission at paragraph 7.

 57   Business SA written submission at paragraph 5.4.

 58   Transcript at paragraphs 174-175.

 59   [2008] AIRCFB 550 at paragraph 168.

 60   VECCI at Transcript paragraphs 184-185; NRA at Transcript paragraphs 209-212.

 61   [2008] AIRCFB 550 at paragraph 70.

 62   Cameron C (2012) ‘Oxymoronic or Employer Logic? Preferred Hours under the Fair Work Act’, 25 AJLL 43 at 43-45.

 63   [2010] FWAFB 2762.

 64   AIRCFB, PR93765 per Watson SDP, Blain DP and Lewin C, 15 September 2003.

 65   [2010] FWAFB 2762 at 25.

 66   [2010] FWAA 5060.

 67   [2010] FWAA 5060 at 21-22.

 68   Transitional Provisions Act, Schedule 7, Part 2, Item 2(1).

 69   Ibid at Item 4(1).

 70   [2010] FWAFB 9985 at paragraph 41. Also see Topend Consulting Pty Ltd [2010] FWA 6442 and Solar Systems Pty Ltd [2012] FWAFB 6397.

 71   [2012] FWA 9640 at paragraph 54-55.

 72   [2011] FWA 3777; [2011] FWAFB 6251.

 73   [2011] FWA 3974.

 74   [2010] FWA 5068; [2010] FWAFB 7838.

 75   [2011] FWA 3777 at paragraph 40.

 76   HIA submission 26 February 2013 at paragraph 3.1.3; also see paragraphs 3.1.12 - 3.1.19.

 77   [2010] FWA 2894.

 78   Ibid at paragraphs 50-51.

 79   [2012] FWA 8726; [2013] FWAFB 580.

 80   [2012] FWA 8726 at 25-26.

 81   ABI written submissions 25 February 2013 paragraphs 4.8 - 4.15.

 82   Transcript PN 253-271 and 275-280; also see the oral submissions of Ms Yu, on behalf of the Master Plumbers and Mechanical Contractors Association of NSW, Transcript PN 479.

 83   [2010] FWAFB 2762.

 84   Clause 7.8(b) provides that an IFA may be terminated at any time, by written agreement between the employer and the individual employee.

 85   Transcript at PN 390-391.

 86   Transcript paragraphs 216 - 223.

 87   Transcript at PN 272-273.

 88   ACTU written submission 20 March 2013 at paragraph 61-70.

 89   Ibid at paragraph 63.

 90   Ibid at paragraphs 37-60.

 91   [2008] AIRCFB 550 at paragraph 180.

 92   ACTU written submission 20 March 2013 at paragraphs 66-67.

 93   [2008] AIRCFB 550 at paragraph 184.

 94   ABI written submissions of 25 February 2012 at paragraph 4.3.

 95   Business SA written submission at paragraph 4.3.

 96   [2013] FWCFB 1635.

 97   [2013] FWCFB 2168.

 98   Acts Interpretation Act 1901 (Cth), s.2C(1).

 99   [2008] AIRCFB 550 at paragraphs 185-186.

 100   Review Panel pp 106 and 108-109.

 101   Business SA submission in reply (AM2012/204).

 102   Transcript at paragraph 381.

 103   Transcript at paragraph 385.

 104   Transcript at paragraph 489.

 105   ACTU’s written submission of 20 March 2013 at paragraphs 113-114; Ai Group Transcript at PN 381 and 386; ACCI Transcript PN 489.

 106   Ibid, at paragraph 114.

 107   [2008] AIRCFB 550 at paragraph 180.

 108   [2013] FWCFB 1635.

 109   [2013] FWCFB 2168.

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