[2013] FWCFB 8938 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Transitional Provisions and Consequential Amendments) Act 2009
Item 6, Sch. 5 - Modern awards review
| JUSTICE ROSS, PRESIDENT DEPUTY PRESIDENT SMITH COMMISSIONER HAMPTON |
MELBOURNE, 13 NOVEMBER 2013 |
Review of modern awards - Part day public holidays - ambiguity and uncertainty - s.160 Fair Work Act
[1] This matter arises in the context of the 2012 Modern Awards Transitional Review that the Commission is conducting pursuant to item 6 of Part 2 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
[2] This decision deals with one aspect of the public holiday matters, which have been referred to this Full Bench, namely matters arising from part-day public holidays which had been proclaimed for Christmas Eve and New Year’s Eve.
[3] On 21 December 2012, we dealt 1 with the resolution of ambiguities and uncertainties which arose from the proclamation of part-day public holidays in South Australia for Christmas Eve and New Year’s Eve in December 2012. The Commission issued a range of determinations affecting 113 modern awards to resolve these ambiguities and uncertainties. Five separate draft determinations were published on the Commission’s website on 20 December 2012 and parties were given an opportunity to comment. Five final determinations were issued by the Commission on 21 December 2012.2 The final determinations added an interim schedule to 113 modern awards titled ‘2012 Part-day public holidays’.
[4] Correspondence was received by the Commission on 21 August 2013 from United Voice, 3 outlining that certain parties had held discussions regarding the need for a further interim schedule in the affected modern awards to take into account the part-day public holidays in South Australia in December 2013. In general terms, the proposal made by these parties involved extending the operation of the 2012 Part-day public holidays schedules to include those part-day public holidays this year. Further, the issue would be substantively considered as part of the 2014 Modern Awards Review to be conducted by the Commission.
[5] On 12 September 2013, we issued a Statement 4 establishing a process to deal with the proposal. This involved the convening of a conference, which took place before Commissioner Hampton on 26 September 2013.
[6] All of the parties appearing at the conference supported the continuation of the interim arrangements to cover the Christmas and New Year part-day public holidays that will take place in South Australia later this year. However, Australian Business Industrial (ABI) with the support of the Master Builders Association (MBA) and Restaurant and Catering Australia 5 (RCA) raised some concerns about the operation of one element of the “model” provision that is found in many of the modern awards that were varied late last year.
[7] The relevant provision is in a particular subclause 6 that appears in all but two of the schedules now appearing in the 113 modern awards that were varied. Those concerns had earlier been outlined in correspondence from ABI dated 6 September 2013.
[8] Although there are, in effect, three versions of the schedules with the subclause in question, the following schedule illustrates the context for the provision:
“Schedule X—2012 Part-day public holidays
This schedule operates where this award otherwise contains provisions dealing with public holidays that supplement the NES.
X.1 Where a part-day public holiday is declared or prescribed between 7.00pm and midnight on Christmas Eve (24 December 2012) or New Year’s Eve (31 December 2012) the following will apply on Christmas Eve and New Year’s Eve and will override any provision in this award relating to public holidays to the extent of the inconsistency:
(a) All employees will have the right to refuse to work on the part-day public holiday if the request to work is not reasonable or the refusal is reasonable as provided for in the NES.
(b) Where a part-time or full-time employee is usually rostered to work ordinary hours between 7.00pm and midnight but as a result of exercising their right under the NES does not work, they will be paid their ordinary rate of pay for such hours not worked.
(c) Where a part-time or full-time employee is usually rostered to work ordinary hours between 7.00pm and midnight but as a result of being on annual leave does not work, they will be taken not to be on annual leave between those hours of 7.00pm and midnight that they would have usually been rostered to work and will be paid their ordinary rate of pay for such hours.
(d) Where a part-time or full-time employee is usually rostered to work ordinary hours between 7.00pm and midnight, but as a result of having a rostered day off (RDO) provided under this award, does not work, the employee will be taken to be on a public holiday for such hours and paid their ordinary rate of pay for those hours.
(e) Excluding annualised salaried employees to whom clause X.1(f) applies, where an employee works any hours between 7.00pm and midnight they will be entitled to the appropriate public holiday penalty rate (if any) in this award for those hours worked.
(f) Where an employee is paid an annualised salary under the provisions of this award and is entitled under this award to time off in lieu or additional annual leave for work on a public holiday, they will be entitled to time off in lieu or pro-rata annual leave equivalent to the time worked between 7.00pm and midnight.
(g) An employee not rostered to work between 7.00pm and midnight, other than an employee who has exercised their right in accordance with clause X.1(a), will not be entitled to another day off, another day’s pay or another day of annual leave as a result of the part-day public holiday.
This schedule is an interim provision and subject to further review.” 7
[9] The concerns are said to arise from the underlined text in subclause (g).
[10] Clause X.1(a) is a reference to the provision that recognises the right of an employee, in certain circumstances, to be absent on a public holiday as provided by s.114 of Fair Work Act 2009 (the Act).
[11] ABI suggests on one reading of the present provision, the underlined text means that employees who exercised their right under subclause (a) receive an additional benefit that was not intended. That is, the clause could be read as meaning that the employee reasonably refusing to work would receive pay for the public holiday hours not worked in circumstances where the employee would not have otherwise worked. Not only would that be double dipping, but would arbitrarily distinguish between those who chose not to work and those who were sent home before completing their rostered hours because the employer closed at the start of the public holiday. ABI contends that this is not what is intended by this exclusion, and that such an approach would not be reasonable. 8
[12] ABI has indicated that it is for the Commission to determine whether the subclause is ambiguous in the manner identified and, if so, whether the ambiguity is sufficient to warrant variation. Alternatively, ABI has suggested that the Full Bench might consider clarifying the operation of the relevant subclause in its decision when dealing with this matter.
[13] The RCA contends that the relevant subclause can be interpreted to give employees, including a casual exercising their right of refusal to work on a public holiday under the Act, additional full day entitlements creating an incentive to exercise the right and not to work. It was further contended that the original intent of the schedules was to ensure that the introduction of part-day public holidays in South Australia did not provide full day benefits under the various public holiday clauses contained in modern awards.
[14] The RCA argues that this “loophole” must be corrected and proposes the following alternative provision:
“(g) An employee not rostered to work between 7.00pm and midnight will not be entitled to another day off, another day’s pay or another day of annual leave as a result of the part-day public holiday. Except where a part-time or full-time employee is not rostered because they have exercised their right not to work under X.1 (a) then such part-time or full-time employee will be paid their ordinary rate of pay for such hours not worked for the part-day public holiday.”
[15] The Australian Industry Group (AiG) has proposed a further alternative 9 as follows:
“(g) An employee not rostered to work whose ordinary hours of work do not fall between 7.00 pm and midnight, other than an employee who has exercised their right in accordance with clause X.1(a), will not be entitled to another day off, another day’s pay or another day of annual leave as a result of the part-day public holiday.”
[16] We note that during the course of the hearing of this matter on 7 November 2013, a number of employer organisations expressed their support for the AiG proposal and this then became the preferred variation proposed by those employer organisations agitating for a variation.
[17] SA Unions, with the support of United Voice, the Shop, Distributive and Allied Employees Association (SDA), Construction, Forestry, Mining and Energy Union (CFMEU), and the Maritime Union of Australia (MUA) contend that in the absence of cogent evidence that the awards are not operating effectively or have created actual adverse consequences, the awards concerned should not be varied other than to cover the 2013 Christmas and New Year part-day public holidays.
[18] Business SA submitted that the interim schedules have operated as intended by providing necessary clarity for those businesses operating on any of the two part-day public holidays. Accordingly, it supports the retention of the schedules for the 2013 Christmas and New Year period.
[19] The Australian Shipowners Association and the Motor Trades Association of SA have also proposed that the relevant interim arrangements be extended to cover 2013 without further variation.
[20] The Construction, Forestry, Mining and Energy Union, Forestry and Furnishing Products Division has indicated that the alleged concerns raised by ABI do not apply to the Timber Industry Award 2010 and the interim arrangements for that award should be continued for the upcoming part-day public holidays without amendment.
[21] In a report dated 25 October 2013, Commissioner Hampton set out a recommended approach for dealing with the issue raised by ABI and others:
“[39] Given the present circumstances, it would be prudent to deal separately with those modern awards where the issues do not arise. That is, where the subclause in question is not part of the relevant schedules, those modern awards could be varied immediately to confirm the continuation of the interim arrangements for the upcoming Christmas and New Year period.
[40]A draft determination giving effect to that approach is attached to this Report.
[41] In terms of the remaining modern awards, the Full Bench will need to consider whether there is sufficient uncertainty associated with the provision, and if so, whether it should be dealt with as part of this present exercise. This could involve consideration as to whether the existing provisions are likely to operate in the manner speculated by some parties and whether any proposed amendments raise further uncertainties.
[42] The Full Bench could then issue determinations covering all of the remaining modern awards containing the part-day public holiday schedule in question, in the same terms as the draft attached to this Report, with additional variations, if required.
[43] Although the issues could be dealt with by the Full Bench on the papers, it would appear to be more efficient for the Full Bench to convene a single short hearing to give all interested parties an opportunity to be heard.
[44] If this course of action is adopted, the Full Bench should convene in early to mid November 2013 to permit the matters to be determined well in advance of the upcoming Christmas and New Year period.” 10
[22] At the hearing on 7 November 2013 there was general support for the draft determination proposed by Commissioner Hampton in relation to the Fast Food Industry Award 2010 and the Timber Industry Award 2010. No party opposed the making of the determination in the manner proposed and accordingly we have made the determination in those terms. 11
[23] We now turn to deal with the remaining 111 modern awards which contain a schedule dealing with part-day public holidays.
[24] The essential issue is whether the existing provision has left an ambiguity or uncertainty that should be addressed at this point. This requires an appreciation of the background and intended operation of the schedule. Much of the background is set out in the decision 12 leading to the making of the determinations in 2012 and what follows should be read in that context.
[25] The exception that appears in the subclause in question arises from the operation of the National Employment Standards (NES). In particular, s.116 of the Act which provides as follows:
“116 Payment for absence on public holiday
If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.
Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.”
[26] Further, the operation of the right to be absent from work on a public holiday as provided by s.114 of the Act is directly relevant. The provision is in the following terms:
“114 Entitlement to be absent from employment on public holiday
Employee entitled to be absent on public holiday
(1) An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
Reasonable requests to work on public holidays
(2) However, an employer may request an employee to work on a public holiday if the request is reasonable.
(3) If an employer requests an employee to work on a public holiday, the employee may refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.
(4) In determining whether a request, or a refusal of a request, to work on a public holiday is reasonable, the following must be taken into account:
(a) the nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;
(b) the employee’s personal circumstances, including family responsibilities;
(c) whether the employee could reasonably expect that the employer might request work on the public holiday;
(d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;
(e) the type of employment of the employee (for example, whether full-time, part-time, casual or shiftwork);
(f) the amount of notice in advance of the public holiday given by the employer when making the request;
(g) in relation to the refusal of a request—the amount of notice in advance of the public holiday given by the employee when refusing the request;
(h) any other relevant matter.”
[27] The relationship between the modern awards and the NES is established by s.55 and s.56 of the Act in the following terms:
“55 Interaction between the National Employment Standards and a modern award or enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or
(b) by regulations made for the purposes of section 127.
Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Note: See also the note to section 63 (which deals with the effect of averaging arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).
56 Terms of a modern award or enterprise agreement contravening section 55 have no effect
A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.”
[28] It is clear that the terms of a modern award (or an enterprise agreement) may replicate the terms of the NES, which will then operate in parallel, and may also deal with matters that are expressly delegated to modern awards by the NES. In addition, modern awards may also include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES or which supplement the NES, provided that the effect of those terms is not detrimental to an employee in any respect, when compared to the NES.
[29] Further, the terms of a modern award must not contravene the terms of the NES and any such provision is of no effect.
[30] The operation of the NES and the modern award provisions more generally, in the context of a part-day public holiday occurring at the end of what would be for many a normal work day, creates particular circumstances that have led to the schedules and subclause in question.
[31] The provisions of subclause X.1(a) of the schedules recognise the import of s.114 of the Act and subclause X.1(b) reflect the import of s.116. Subclause X.1(g) must be read within that context. The schedule as a whole is intended to address the fact that where an employee reasonably refuses to work those of his or her rostered hours which fall into the part-day public holiday hours in accordance with s.114, the employee is entitled to receive their ordinary rate of pay for such hours not worked, in accordance with s.116 of the Act.
[32] Accordingly, the exclusion in subclause X.1(g). is intended to clarify that the provision is not to be read as depriving the employee of the pay for those rostered hours falling within the part-day public holiday which were not worked in those particular circumstances.
[33] The subclause was not intended to detract from or supplement the NES, but rather to operate consistently with the standards in the context of these part-day public holidays.
[34] We note that although the RCA did advise that some issues were raised by some of its members, there is no evidence that the present provisions have caused actual difficulties in their application. We are also not aware of any disputes concerning these matters being notified to the Commission. In these circumstances, we would not normally be inclined to consider any variation. However, in our original decision concerning these matters we did find that ambiguities or uncertainties arose from the concept of the part-day public holidays in the relevant modern awards. 13 We also expressly provided for the variations to operate on an interim basis.
[35] On balance, we are satisfied that there is some remaining uncertainty about the operation of the schedules in the relevant modern awards.
[36] We add that during the course of the hearing of this matter, there was some discussion of the operation of the NES in the context of casual employees. It is not necessary or appropriate to deal with these issues given the limited nature of these proceedings and the above observations.
Conclusions
[37] In light of the above, there is no basis to make any significant change to the subclause, or the schedules, in question. We do however accept that some qualification to confirm the relationship between the modern award provisions concerned and the NES would assist to remove any remaining uncertainty on the immediate issue.
[38] Accordingly, we will make a determination varying each relevant schedule to add the following term:
“This schedule is not intended to detract from or supplement the NES.”
[39] We note that the term “NES” is defined in each of the relevant modern awards.
[40] The determination will also confirm the extension of the schedules to deal with the relevant 2013 part-day public holidays as supported by all parties.
[41] A determination 14 varying the relevant awards is being made in conjunction with this decision. The determination establishes that the variation will come into effect on Thursday 21 November 2013. We note that the effect of the Act is that the determination will take effect in relation to employees at the start of each employee’s first full pay period that commences on or after that date.15
PRESIDENT
Appearances:
M. Adler for the Housing Industry Association.
D. Blairs for the Shop, Distributive and Allied Employees Association.
A. Borg for the Construction, Forestry, Mining and Energy Union.
T. E. Evans for the Australian Hotels Association.
L. Harrison for United Voice.
H. Lepahe for Australian Business Industrial.
A. Parkes for Restaurant and Catering Australia.
D. Putland for the Master Builders Association of South Australia, Master Builders Association of Australia and its various State-based registered organisations.
R. Read for the Construction, Forestry, Mining and Energy Union, Forestry and Furnishing Products Division.
E. Schuidder for the SA Wine Industry Association.
M. Sheehan for the Motor Trade Association of South Australia.
S. Smith for the Australian Industry Group.
A. Story for SA Unions and the Maritime Union of Australia.
H. Wallgren for Business SA.
Hearing details:
Adelaide, Brisbane, Melbourne and Sydney (video hearing)
7 November 2013.
2 PR532628, PR532630, PR532631, PR532632 and PR532633.
3 United Voice wrote to the Commission on behalf of a number of parties including the Shop, Distributive and Allied Employees Association (SDA) and SA Unions. United Voice advised that the SDA had also had discussions with Business SA. This piece of correspondence is published on the Commission’s website: http://www.fwc.gov.au/documents/awardmod/review/AM2012355_corr_UV_220813.pdf.
5 The RCA initially also raised other issues however these go to the substance of the part-day public holidays rather than the interim provisions.
6 Subclause (g) in those modern awards varied by Determinations PR532630 and PR532631 and subclause (f) in those modern awards varied by Determination PR532628.
7 Determination PR532630 issued 21 December 2012.
8 ABI written submission, 4 October 2013.
9 AiG originally raised this formulation during the proceedings conducted in December 2012.
13 Ibid at par [12].
15 S.165 of the Act.
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