Fair Work Act 2009

s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective

Application by South East Water Corporation to vary the Water Industry Award 2010 to insert an annualised salary clause.

[1] This decision concerns an application by South East Water Corporation (SEW) to vary the Water Industry Award 2010 1 (the Water Award) to include an annualised salary clause. The application is made under s.157 of the Fair Work Act 2009 (the Act).

[2] In proceedings before us SEW was represented by Ms Paul. She also represented Australian Industry Group (AiG) which supported the variation sought by SEW. Mr Rizzo appeared on behalf of the Australian Municipal, Administrative, Clerical and Services Union (ASU) and Mr Nook and Ms Baulch appeared for The Association of Professional Engineers, Scientists and Managers, Australia (APESMA).

[3] The application, as amended, sought a clause to be inserted into the Water Award in the following terms:

“19. Annualised salaries

The following provisions are to apply to employees employed in classifications Level 9 and 10 in accordance with Schedule B of the award

19.1 Annual salary instead of award provisions

(a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award:

(i) clause 14—Minimum weekly wages;

(ii) clause 20—Allowances;

(iii) clauses 26.5 and 27—Overtime and penalty rates; and

(iv) clause 28.3- Annual leave loading.

(b) Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary.

19.2 Annual salary not to disadvantage employees

(a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).

(b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.

19.3 Base rate of pay for employees on annual salary arrangements

For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in clause 14—Minimum weekly wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.”

[4] In the hearing there were two other versions of an annualised salaries clause addressed by the parties. They were each proposed by the ASU. Although the ASU was not opposed "in principle" to the insertion of an annualised salaries clause into the Water Award it submitted that any such clause should contain safeguards additional to those in the clause proposed by SEW. The first clause proposed by the ASU, and described as its preferred clause, is based largely on the terms of the annualised salaries clause in the Local Government Industry Award 2010. 2 The second clause, described as the ASU’s alternative clause, is based on the terms of clause 9.4 of the South East Water Limited Senior Officers and Managers Award 20033 (SE Water Award) which clause is titled “Total Remuneration arrangements”.

[5] As is apparent from the drafting of the clause sought by SEW it is to be restricted to employees in classification Levels 9 and 10. The two clauses proposed by the ASU are also similarly restricted to these two classification levels.

Related application to make a modern enterprise award

[6] This matter is related to an application filed by SEW to make a modern enterprise award. 4 Its current enterprise award is the SE Water Award and, as its name suggests, covers only senior officers and managers. APESMA and the ASU are identified as being bound by it. SEW indicated that its sole reason for making the application for a modern enterprise award was to enable it to maintain a provision dealing with annualised salaries for its senior employees. In the event this Full Bench ruled, as we have, that we would deal with the s.157 application then SEW would not pursue the application to have a modern enterprise award made to replace the SE Water Award.

The Legislative Framework

[7] Modern awards may contain a provision dealing with annualised salaries. In this respect s.139 of the Act provides:

“Terms that may be included in modern awards--general

(1) A modern award may include terms about any of the following matters:................

(f) annualised wage arrangements that:

(i) have regard to the patterns of work in an occupation, industry or enterprise; and

(ii) provide an alternative to the separate payment of wages and other monetary entitlements; and

(iii) include appropriate safeguards to ensure that individual employees are not disadvantaged; .......”

[8] As we have earlier noted the SEW application to vary the Water Award is made pursuant to s.157 of the Act. The relevant provisions of that section read as follows:

“FWC may vary etc. modern awards if necessary to achieve modern awards objective

(1) The FWC may:

(a) make a determination varying a modern award, otherwise than to vary modern award minimum wages or to vary a default fund term of the award; ................

if the FWC is satisfied that making the determination or modern award outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.”

[9] Section 134 sets out the modern awards objective. It is in these terms:

“134 The modern awards objective

What is the modern awards objective?

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

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

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

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

(da) the need to provide additional remuneration for:

(i) employees working overtime; or

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(iv) employees working shifts; and

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

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

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

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

This is the modern awards objective.”

The Part 10A Process and the making of the Water Industry Award 2010

[10] Annualised salaries clauses were only briefly discussed during the Part 10A Award Modernisation process. In its decision regarding the making of priority awards and addressing certain general issues the Full Bench said 5:

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

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

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

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

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

[11] Nothing was said regarding annualised salaries by the Full Bench in its statement accompanying the exposure draft of the Water Award 6 nor did the exposure draft contain an annualised salaries clause. The Full Bench observed that the water industry is characterised by federal and state enterprise awards that had a public sector history. Only two non-enterprise awards were identified, they were the Regional Water Authorities Award 19997 and the Rural Water Industry Award 20018 each of which operated in Victoria only. In the decision published by the Full Bench when the Water Award was made nothing was said about annualised salaries and, as is apparent from the current application being made, no such clause was contained in the award.9

Other relevant applications dealing with annualised salaries clauses

[12] In November 2009 an application was made by the ASU to vary the Clerks-Private Sector Award 2010 10 (Clerks Award) by deleting the exemption clause. In its decision concerning that application the Full Bench said:11

“[8] Exemption provisions are clauses expressed in a variety of ways which provide that certain clauses of the award do not apply to particular classes of employees. They are most common in instruments covering “white collar” employment. In some cases they are expressed to exclude the application of particular clauses of the award and in other cases they specify the particular clauses which do apply. The range of matters excluded varies but usually includes clauses dealing with hours of work and overtime. The class of employee to which the exemption provision applies is commonly defined by reference to a particular wage or salary level or a margin above the relevant classification rate. In some cases the right of an employer to remunerate above the exemption provision is not subject to employee agreement. In other cases agreement is required.


[9] The ASU submits that the effect of inserting an exemption provision into the Clerks—Private Sector Award 2010 is to exclude certain employees who are not high income employees from most award provisions.

[10] Employers submit that the exemption provision provides flexibility, particularly in relation to senior employees who tend to be employed to perform the duties of a role rather than the more traditional requirement of spending particular periods of time at work.”

[13] The Full Bench then proceeded to discuss the history of exemption provisions within clerical awards which had operated throughout Australia. It observed that clerical employees often played a key support role to more senior employees and management as well as providing an important interface with external customers and clients. It said that the need for flexible working arrangements to meet the needs of business was probably more important in the modern business world where operating hours no longer conform to a standard 9-to-5 pattern. 12 It then said:

“[25] In all of the circumstances we consider that the exemption provision should be removed but that flexible working arrangements should be available with respect to clerical employment and that these should be subject to appropriate safeguards and processes to ensure that employees clearly understand and agree to any arrangements which may differ from base award entitlements. We propose to delete the exemption provision in cl.17. However, we propose to insert an annualised salaries clause. The wording of the clause is in line with clauses in some other modern awards. It provides for an alternative way to remunerate employees, safeguards against disadvantage and a formal process to establish and maintain the annualised salary arrangement...”

[14] The annualised salaries clause determined by the Full Bench was in terms which are not relevantly different to the clause here sought by SEW. We refer to this Full Bench decision as the November 2009 Clerks Award decision.

[15] An annualised salaries clause in the same terms as that decided upon in the November 2009 Clerks Award decision was also inserted into the Banking Finance and Insurance Award 2010 (BFI Award). That was the outcome of a Full Bench decision 13 concerning an application by the Finance Sector Union of Australia to remove the exemption clause in the BFI Award. The same clause was also put into the Mining Industry Award 2010 in a Full Bench decision dealing with an application by the Australian Mines and Metals Association to insert such clause.14

[16] The ASU made a further application to vary the annualised salaries clause in the Clerks Award so that agreement between the employer and employee was required before any such arrangement could be entered into. In its decision dealing with that application the Full Bench said: 15

“[6] The ASU contends that annual salary clauses in pre-existing awards required agreement and mutual agreement is commonly a requirement for annualised salary arrangements. It contends that the only arrangements for payment of clerical employees should be those expressly permitted by the award and the award should not allow remuneration by way of annualised salaries unless the employee expressly agrees to such an arrangement.

[7] The Australian Industry Group, the Australian Federation of Employers and Industries and the Oil Industry Industrial Committee oppose the application. They contend that the matter has already been addressed by the Full Bench in the course of inserting the annualised salary clause into the award in lieu of the exemption rate which had been inserted previously. They contend that the ASU makes selective reference to the content of pre-existing awards and that the exemption provisions in awards and notional agreements preserving State awards (NAPSAs) applying in New South Wales, Western Australian and the Australian Capital Territory Award and the common law contractual position should also be considered. The employers submit that the clause approved by the Full Bench is consistent with the consolidated award modernisation request made by the Minister for Employment and Workplace Relations and caters fairly and effectively for the needs of private sector clerks and the businesses which employ them.

[8] Awards operate in conjunction with contracts of employment. It is generally accepted that clerical employees are commonly remunerated by way of annualised salaries whether the relevant award expressly provides for such arrangements or not. It is also generally accepted that if the salary is expressly paid in compensation of all award entitlements and the amount paid exceeds the amount due under the award then the arrangement is not inconsistent with the award. The intention of the ASU in making its application is that the only arrangements which can legally be entered into are those expressly provided for in the award.

[9] It is apparent that the terms of the relevant awards and NAPSAs were taken into account in formulating the annualised salaries clause in the Commission’s decision of 16 November 2009. We believe that the safeguards in the modern award are appropriate in the circumstances of clerical employment. Further, we are concerned that the variation sought by the ASU may reduce existing flexibility and require changes in practices which have operated for many years. The ASU has not made a case for imposing a limitation on existing arrangements.”

[17] The Full Bench dismissed the ASU application. We will refer to this as the “February 2010 Clerks Award decision”.

[18] A further Full Bench decision was published dealing with an application by the Oil Industry Industrial Committee to vary the annualised salaries clause then in the Oil Refining and Manufacturing Award 2010. 16 The Full Bench noted that it was addressing a similar issue to that raised in the February 2010 Clerks Award decision. The issue was whether the agreement of an employee should be required before an employer may pay that employee an annualised salary. The Full Bench decided to insert an annualised salaries clause in the same terms as had been inserted into the Clerks Award observing that annualised salaries for clerks were widespread in the oil industry and that the clause contained safeguards to ensure an employee is not disadvantage by being remunerated by way of an annualised salary.17

The two year review of modern awards

[19] No application was made to insert an annualised salaries clause into the Water Award in the two year review of modern awards undertaken in accordance with Item 6 of Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments Act) 2009 (TPCA Act).

[20] Two applications were made by the ASU as part of the two year review to delete annualised salaries clauses which were in two other modern awards. Both matters were heard by SDP Kaufman. The first application was in relation to the Contract Call Centres Award 2010. 18 His Honour concluded that to delete the clause would create confusion for both employees and employers as to what award entitlements could be offset if an annualised salary was paid and what procedures were to be followed. He also found that the deletion of the clause would disadvantage the employees affected because, as a matter of law, they could be remunerated by way of annualised salaries without any of the protections provided by the clause. He was not persuaded by the ASU's argument that the retention of the clause in the award was contrary to the modern awards objective.

[21] The second application made by the ASU was to vary a number of clauses in the Clerks Award. 19 One was to delete the annualised salaries clause. Senior Deputy President Kaufman declined to delete the clause based on his reasoning in his decision concerning the Contract Call Centres Award which we have referred to in the foregoing paragraph. An appeal against this decision was dismissed by a Full Bench in a decision published in March 2013.20 In its reasons for decision the Full Bench referred to the November 2009 Clerks Award decision and paragraph [25] in particular. It observed that the Act did not require annualised wage arrangements in modern awards to provide for the parties agreement to such arrangements. They did not think there was any warrant for ‘regarding the words “arrangements" or “alternative" in s.139(1)(f) of the FW Act as incorporating the concept of "agreement’.21 The Full Bench also referred to the paragraphs we have earlier extracted from the February 2010 Clerks Award decision where that Full Bench had declined to vary the relevant annualised salaries clause so as to require the agreement of both the employer and employee to such an arrangement.

Our considerations

[22] It is not in issue that the Act expressly provides that annualised salaries provisions may be included in modern awards. The clause sought by SEW is restricted to employees at Levels 9 and 10. The classification definitions contained within Schedule B of the Water Award identify Level 9 employees as those typically involving key specialists in a specific field and the undertaking of a management function. The level also covers "experienced professionals". Level 10 employees are those with a management focus upon the attainment of operational and strategic directives. This level will include senior managers who report to senior executive officers. We accept that persons engaged at these two levels are principally in managerial positions and have traditionally been paid by way of an annual salary.

[23] The existence of annual salaries for employees, and especially employees at more senior levels, was widespread in the industry now covered by the Water Award. To the extent there was award coverage of employers and employees in the industry it was generally by way of enterprise specific awards. 22 Overwhelmingly, these awards expressed the remuneration to be paid to an employee in terms of an annual salary. This of course is not the same as an annualised salary. The extent to which these awards contained an annualised salaries clause or other provisions which dealt with compensation for entitlements such as overtime or penalty rates was addressed by the parties.

[24] There was a difference of opinion between SEW and APESMA about the extent to which these predecessor awards in the industry contained an annualised salaries clause or a clause having a similar effect. SEW and APESMA each compiled lists of awards and commented on the salaries and related clauses in them. We note that a number of those awards contain clauses limiting the obligation to pay penalty rates in addition to the annual salaries expressed in them. A number have exemptions from the payment of overtime. A number placed a limit on the amount of overtime that could be paid by reference to a particular classification cut off level which level was below the higher levels in the award. Some awards contained remuneration packaging or total employment provisions allowing for absorption into an employee’s remuneration of amounts that would otherwise be payable for overtime or penalty rates. We accept the submission of SEW that these awards reflect the fact that eligibility or exemption provisions limiting senior employees entitlements to overtime were commonplace. We also accept the submission of SEW that annualised salaries are a common feature in the industry, regardless of whether any relevant award concerned an annualised salary clause.

[25] The clause sought by SEW is in terms similar to the clause introduced into the Clerks Award in the November 2009 Clerks Award decision which we have earlier referred to. It has also been endorsed in subsequent Full Bench decisions when application had been made to delete or modify it. We have earlier indicated in paragraphs [15] and [18] that a similar clause has been inserted in other modern awards. A clause in the same terms is also in the Salt Industry Award 2010, 23 Legal Services Award 2010,24 Hydrocarbons Industry (Upstream) Award 2010,25 and the Wool Storage, Sampling and Testing Award 2010. 26

[26] The ASU opposed the clause proposed by SEW describing it as a weak clause with inadequate safeguards. It prefers the terms of other annualised salaries clauses and, in this respect, identified the provisions found in the Pharmacy Industry Award 2010, 27 Manufacturing and Associated Industries and Occupations Award 2010,28 Rail Industry Award 2010,29 Oil Refining and Manufacturing Award 2010,30 (ORM Award) and Broadcasting and Recorded Entertainment Award 2010.31 We should observe that in fact the clause in the ORM Award dealing with annualised salaries for clerical employees is in the same terms as that here sought by SEW. There is a different clause for non-clerical employees which we assume is the one the ASU relies on. We have earlier noted that the ASU also identified the annualised salaries clause in the Local Government Award 2010 as being in terms preferable to that sought by SEW.

[27] We observe that the clauses in the modern awards referred to by the ASU were inserted by consent of the parties and not the subject of Full Bench scrutiny in any contested hearing. We also observe that to some extent the ASU identifies provisions it submits are superior from a number of awards. It identifies these provisions as containing what it called "inbuilt features" which constitute additional safeguards it submits should be contained in an annualised salaries clause. 32 It summarised those features. They were that the annualised salary must be agreed and in writing, that the parties to it must have genuinely made the agreement without coercion or duress, the components of the annualised salary agreement must be listed, there was to be no disadvantage to the employee, a copy of the agreement must be kept as a time and wages record, there must be annual reviews of the agreement, the employee was entitled to involve a relevant union or an employee nominated representative and, finally, the agreement can be terminated by either party with 12 months' notice or at anytime if agreed.

[28] Although we have closely considered the desirability of each of these additional provisions sought by the ASU we think the principal ones are the claimed need for agreement and an express provision identifying the notice period to terminate any such arrangement. In this respect we note the relevant SE Water Award clause did not contain a termination provision but did provide that SE Water and a Senior Officer “may enter into a salary agreement......” of the kind envisaged by that clause.

[29] Ms Paul conceded, quite properly, that there was no evidence before us which suggested that the necessity for agreement in the SE Water Award had caused any difficulties for SEW or any of its employees. There was no suggestion that the manner in which the clause had operated had impacted in any negative way upon the employment arrangements of senior officers at SEW. This is a significant consideration. However it is to be weighed against the fact that Full Bench decisions have expressly ruled that the standard annualised salaries clause they have decided upon should not contain a provision necessitating the prior agreement of the employee.

[30] Subject to the matters we address in paragraph [32], we have not been persuaded that there is anything about the employers and employees at classification Levels 9 and 10 in the Water Award that warrants a departure by this Full Bench from taking a similar approach to that taken in earlier Full Bench decisions dealing with contested cases about the terms of an annualised salaries clause. The observations made by the Full Benches in the November 2009 Clerks Award decision and the February 2010 Clerks Award decision are equally applicable to this matter. No persuasive submission was made for us to rule in a manner inconsistent with those decisions. Similarly, the decision of the Full Bench in March 2013, which endorsed the comments Senior Deputy President Kaufman had made about the need for a clause in terms similar to those SEW here seeks are also applicable to this application.

[31] We have not been persuaded there is anything about the attributes of the water industry or its administrative and professional employees at the higher classification levels in the Water Award which justifies us departing, in any significant way, from making a ruling consistent with each of the Full Bench decisions we have identified above.

[32] We have, however, decided to introduce three additional requirements into the clause that we have decided should be inserted into the Water Award. They will, to some extent, address the need for the “safeguards” the ASU submitted were necessary. The requirements concern additional details which are to be in writing, including the classification level of the employee, the identification of the date on which the annualised salary arrangement commences and that a copy of the arrangement is to be provided to the employee. Nothing that was put to us in the hearing suggests that these requirements will place any unreasonable burden on employers or employees.

[33] We have not made any reference to the role a union may have. If any employee has concerns about the operation of the clause or their annualised salary arrangement they may raise that concern under clause 9 of the Water Award, the dispute resolution clause. That clause makes it clear that an employee is entitled to have a person, organisation or association represent them in any dispute to which the clause applies. Depending on the nature of the complaint an employee may have, they may also have rights which may be pursued under the general protections provisions of the Act.

[34] We have also not found it necessary to place any additional obligations upon an employer in respect to the written wages records it should keep. In this respect, we note that obligations about the details that must be kept are adequately regulated by Part 3-6 of the Fair Work Regulations 2009.

[35] We have considered the submissions of APESMA opposing the introduction of any annualised salaries clause into the Water Award. For the reasons we have given we were persuaded such a clause was appropriate for employees at the higher classification levels in the Water Award. For the same reasons we do not accept the submission that annualised salaries can adequately be introduced under the terms of clause 7, the award flexibility clause.

[36] We are satisfied that the clause we have decided upon is necessary to achieve the modern awards objective. In this respect it is a clause which is consistent with s.134(1)(d) in that it will promote flexible modern work practices and the efficient and productive performance of work. Consistent with s.134(1)(f) it should have a positive impact on the regulatory burden on employers and reduce employment costs associated with payroll. It should provide to both employers and employees, wishing to enter into an annualised salaries arrangement, a simple and easy to understand provision consistent with s134(1)(g).

Conclusion

[37] We have decided to insert an annualised salaries clause into the Water Award. Before we finalise the terms of the clause we ask the parties to consider whether it should be numbered clause 19 as is proposed by SEW. Our preference is to limit the consequential renumbering of other clauses as much as possible. The parties are asked to confer about this matter and advise the chambers of Senior Deputy President Harrison of the outcome of their consideration of this issue.

[38] For the time being we will retain the numbering of the clause as proposed by SEW. The clause we have decided should be inserted into the Water Industry Award is as follows:

“19. Annualised salaries

The following provisions are to apply to employees employed in classifications Level 9 and 10 in accordance with Schedule B of the award

19.1 Annual salary instead of award provisions

(a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award:

(i) clause 14—Minimum weekly wages;

(ii) clause 20—Allowances;

(iii) clauses 26.5 and 27—Overtime and penalty rates; and

(iv) clause 28.3- Annual leave loading.

(b) Where an annual salary is paid the employer must provide written advice to the employee of the following:

(i) the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary:

(ii) the date on which the salary arrangement commences

(iii) the award level classification for the role.

(iv) the terms of clause 19.2 of this award.

19.2 Annual salary not to disadvantage employees

(a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).

(b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.

19.3 Base rate of pay for employees on annual salary arrangements

For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in clause 14—Minimum weekly wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.”

SENIOR DEPUTY PRESIDENT

Appearances:

Ms V Paul of Australian Industry Group on behalf of South East Water Pty Ltd.

Mr M Rizzo on behalf of the Australian Services Union.

Mr T Nook and Ms J Baulch on behalf of Professionals Australia (APESMA).

 1   MA000113.

 2   MA000112.

 3   AP835789.

 4   EM2013/73.

 5   [2008] AIRCFB 1000.

 6   [2009] AIRCFB 865.

 7   AP795612.

 8   AP806351.

 9   [2009] AIRCFB 945.

 10   MA000002.

 11  [2009] AIRCFB 922.

 12   Ibid at [21].

 13   [2009] AIRCFB 923.

 14   [2009] AIRCFB 958.

 15   [2010] FWAFB 969.

 16   MA000072.

 17   [2010] FWAFB 1805.

 18   [2012] FWA 9025.

 19   [2012] FWA 9731.

 20   [2013] FWCFB 1228.

 21   Ibid paragraph [23].

 22   With the exception of two other enterprise awards which will be subject to a decision whether to replace them with a modern enterprise award all other enterprise awards have now terminated - Item 9, Schedule 6 TP&C Act 2009.

 23   MA0000107.

 24   MA0000116.

 25   MA000062.

 26   MA000044.

 27   MA000012.

 28   MA000010.

 29   MA000015.

 30   MA000072.

 31   MA000091.

 32   ASU 1 paragraph 7.

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<Price code C, MA000113  PR553778 >