[2015] FWCFB 3406 |
FAIR WORK COMMISSION |
Fair Work Act
2009
s.156—4 yearly review of modern
awards
4
yearly review of modern awards—Annual leave
(AM2014/47)
Justice Ross, President |
MELBOURNE, 11 June
2015 |
4
yearly review of modern awards - annual leave common issue - excessive
annual leave - cashing out of annual leave - close-down - granting leave in
advance - payment of annual leave entitlements on termination - electronic
funds transfer and paid annual leave - purchased leave.
CONTENTS
Chapters |
Paragraph |
|
1. |
Introduction |
|
2. |
The Context |
|
3. |
The Evidence |
|
4. |
The Claims |
|
|
4.1
Excessive annual leave |
|
|
4.2
Cashing out of annual leave |
|
|
4.3
Annual Close-down |
|
|
4.4
Granting leave in advance |
|
|
4.5
Payment of annual leave entitlements on termination |
|
|
4.6
Electronic funds transfer and paid annual leave |
|
5. |
Purchased
Leave |
|
6. |
Next Steps |
|
Attachments |
|
|
A |
Employer Group
Parties |
|
B |
Index of
Material |
|
C |
Witness
Statements |
|
D |
New Subclause
for Excessive Annual Leave |
|
E |
Replacement
Subclause for Excessive Annual Leave |
|
F |
Analysis of Excessive Annual Leave Provisions in Awards |
|
G |
New Subclause
for Close-Down |
|
H |
New Subclause
for Annual Leave in Advance |
|
I |
New Subclause for EFT Payment
|
|
J |
Legislative
Provisions relating to Annual Leave |
|
ABBREVIATIONS
ABS |
Australian Bureau of Statistics |
ACCI |
Australian
Chamber of Commerce and Industry
|
Act |
Fair Work Act 2009
(Cth) |
ACTU |
Australian Council of Trade Unions |
AFPCS |
Australian Fair Pay and Conditions Standard |
Ai Group |
Australian Industry Group |
AIRC |
Australian
Industrial Relations Commission |
AMWU |
“Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’
Union (AMWU) |
AWALI 2010 |
Australian
Work and Life Index 2010 |
2008 Award Modernisation decision |
Award Modernisation decision of 19 December 2008 re making of
priority modern awards |
CFMEU |
Construction, Forestry, Mining and Energy Union |
Commission |
Fair Work Commission |
EFT |
Electronic Funds Transfer |
Employer Group |
See Group of employers listed at
Attachment A |
FWC |
Fair Work Commission |
HILDA |
Household, Income and Labour Dynamics in Australia survey |
NAPSA |
Notional Agreement Preserving State Award |
NES |
National Employment Standards |
Review |
4 yearly review of modern awards under s.156 of the Fair Work Act
2009 |
SDA |
Shop, Distributive and Allied Employees Association |
TAI 2002 |
The Australia Institute Survey, 2002 |
TCFUA |
Textile, Clothing and Footwear Union of Australia |
Transitional Review |
Transitional (or 2 year) review of modern awards under Item 6 of
Schedule 5 to the Fair Work
(Transitional Provisions and Consequential Amendments) Act 2009 |
Transitional Review—Annual Leave
decision |
Modern Awards Review 2012—Annual Leave
decision |
Work Choices Act |
Workplace Relations Amendment (Work Choices) Act 2005
(Cth) |
WR Act |
Workplace Relations Act 1996
(Cth) |
[1]
The
Fair Work Act 2009 (Cth) (the
Act) provides that the Fair Work Commission (the Commission) must ensure
that modern awards together with the National Employment Standards (NES)
provide a fair and relevant minimum safety net of terms and conditions.
Modern awards and the NES interact in different ways. A modern award may
include any terms that the award is expressly permitted to include by a
provision of Part 2-2 of the Act (which deals with the NES). A modern award
may also include terms that are ancillary or incidental to the operation of
an entitlement of an employee under the NES or that supplement the NES. One
of the minimum standards in the NES is paid annual leave. This decision is
part of the 4 yearly review of modern awards and it deals with the variation
of modern awards in relation to a number of issues regarding paid annual
leave.[1]
Background
[2]
Section
156 of the Act provides that the Commission must conduct a 4 yearly review
of modern awards (the Review) as soon as practicable after 1 January 2014.
[3]
As
detailed in a statement issued on 6 February 2014,[2]
the Review consists of an Initial stage, dealing with
jurisdictional issues, a Common issues stage and an Award
stage.
[4]
What constitutes a
“common issue” was defined in a statement issued on 17 March 2014[3]
in terms of a proposal for a significant variation or change across the
award system, such as applications which seek to change a common or core
provision in most, if not all, modern awards. A matter identified as a
common issue will be referred to a Full Bench for determination in a “stand
alone” proceeding, as distinct from having the issue determined on an
award-by-award basis during the Award stage of the Review.
After a consultation process the
Commission determined the matters which would be dealt with as “common
issues” during the Review; one of those matters was annual leave.
[4]
[5]
The
scope of the matters to be considered in the context of the annual leave
common issue was published in
a statement on 7 April 2014 as follows:
(i)
cashing out of annual leave;
(ii)
excessive annual leave;
(iii)
annual close-down;
(iv)
granting leave in advance;
(v)
purchased leave;
(vi)
payment of annual leave entitlements on termination; and
(vii)
electronic funds transfer (EFT) and paid annual leave.
[5]
[6]
This
decision deals with the above matters.
[7]
In
relation to the issue of purchased leave, the Australian Industry Group (Ai
Group) initially proposed a model clause to be inserted into each modern
award that would allow employees additional annual leave in a year with a
corresponding reduction in salary, either for the period of their annual
leave (such as half pay for twice the standard annual leave period) or
throughout the year.[6]
This claim was not pressed further during these proceedings and we return to
the matter later in this decision.
[8]
Interested parties were directed to file proposed variation determinations
and a list of awards to which the proposed variations would apply.
Directions were also issued regarding the filing of comprehensive written
submissions and any evidence to be relied upon in support of the
propositions advanced. Hearings took place on 20 and 21 August
2014, 16 October 2014 and 1 December 2014.
Ai Group and the
Australian Chamber of
Commerce and Industry
(ACCI) coordinated discussions with various employer groups (the Employer
Group)[7]
and presented a common position in respect of proposed variations relating
to each of the matters addressed in this decision. The full list of
organisations making up the Employer Group is at Attachment A.
[9]
A series
of conciliation conferences took place in conjunction with the hearings
outlined above, but ultimately a consent position could not be reached and
all of the matters were contested.
[10]
We propose to deal
with some contextual issues first, before turning to the particular claims
before us.
[11]
We begin by making
some brief observations about the legislative context for the Review. We
note that these issues are canvassed in more detail in the
4 yearly Review of Modern Awards:
Preliminary Jurisdictional Issues decision[8]
and we adopt and apply that decision.
[12]
The Act
provides that the Commission must conduct a 4 yearly review of modern awards
(s.156(1)). Section 156(2) deals with what has to be done in a Review:
“(2)
In a 4 yearly review of modern awards, the FWC:
(a)
must review all modern awards; and
(b)
may make:
(i)
one or more determinations varying modern awards; and
(ii)
one or more modern awards; and
(iii)
one or more determinations revoking modern awards; and
(c)
must not review, or make a determination to vary, a default fund term
of a modern award.
Note 1: Special criteria
apply to changing coverage of modern awards or revoking modern awards (see
sections 163 and 164).
Note 2: For reviews of
default fund terms of modern awards, see Division 4A.”
[13]
Subsections 156(3) and (4) deal with the variation of modern award minimum
wages in a Review and are not relevant for present purposes.
[14]
Section
156(5) provides that in a review each modern award is reviewed in its own
right, however, this does not prevent the Commission from reviewing two or
more modern awards at the same time.
[15]
The
general provisions relating to the performance of the Commission’s functions
apply to the Review. Sections 577 and 578 are particularly relevant in this
regard. In conducting the Review the Commission is able to exercise its
usual procedural powers, contained in Division 3 of Part 5-1 of the Act.
Importantly, the Commission may inform itself in relation to the Review in
such manner as it considers appropriate (s.590).
[16]
The
modern awards objective is central to the Review.
The modern awards objective applies to the performance or exercise of the
Commission’s “modern award powers”, which are defined to include the
Commission’s functions or powers under Part 2-3 of the Act. The Review
function in s.156 is in Part 2-3 of the Act and so will involve the
performance or exercise of the Commission’s “modern award powers”. It
follows that the modern awards objective applies to the Review.
[17]
The
modern awards objective is set out in s.134 of the Act, as follows:
“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.
When does the modern awards objective apply?
(2)
The modern awards objective applies to the performance or exercise of
the FWC’s
modern award powers, which
are:
(a)
the FWC’s functions or powers under this Part; and
(b)
the FWC’s functions or powers under Part 2–6, so far as they relate
to modern award minimum wages.
Note:
The FWC must also take into account the objects of this Act and any other
applicable provisions. For example, if the FWC is setting, varying or
revoking modern award minimum wages, the minimum wages objective also
applies (see section 284).”
[18]
The
modern awards objective is directed at ensuring that modern awards, together
with the NES, provide a “fair and relevant minimum safety net of terms and
conditions” taking into account the particular considerations identified in
paragraphs 134(1)(a) to (h). The objective is very broadly expressed.[9]
The obligation to take into account the matters set out in paragraphs
134(1)(a) to (h) means that each of these matters must be treated as a
matter of significance in the decision-making process.[10]
[19]
No
particular primacy is attached to any of the s.134 considerations and not
all of the matters identified will necessarily be relevant to a particular
proposal to vary a modern award.
[20]
There is
a degree of tension between some s.134 considerations. The Commission’s task
is to balance the various considerations and ensure that modern awards,
together with the NES, provide a fair and relevant minimum safety net of
terms and conditions.
[21]
The modern awards
objective requires the Commission to take into account, among other things,
the need to ensure a “stable” modern award system (s.134(1)(g)). The need
for a “stable” modern award system supports the proposition that a party
seeking to vary a modern award in the context of the Review must advance a
merit argument in support of the proposed variation. The extent of the merit
argument required will depend on the variation sought. As the Full Bench
observed in the 4 yearly Review of
Modern Awards: Preliminary Jurisdictional Issues decision:
“Some
proposed changes may be self evident and can be determined with little
formality. However, where a significant change is proposed it must be
supported by a submission which addresses the relevant legislative
provisions and be accompanied by probative evidence properly directed to
demonstrating the facts supporting the proposed variation.”[11]
[22]
The
Review is broader in scope than the transitional
(or 2 year) review (Transitional Review) of modern
awards provided for in Item 6 of Schedule 5 to the
Fair Work (Transitional Provisions
and Consequential Amendments) Act
2009,
and is the first full opportunity to consider the content of modern awards.
However, the broad scope of the Review does not obviate the need for a merit
argument to be advanced in support of a proposed variation. As the Full
Bench in Re Security Services
Industry Award 2010 recently observed:
“[8] While
this may be the first opportunity to seek significant changes to the terms
of modern awards, a substantive case for change is nevertheless required.
The more significant the change, in terms of impact or a lengthy history of
particular award provisions, the more detailed the case must be. Variations
to awards have rarely been made merely on the basis of bare requests or
strongly contested submissions. In order to found a case for an award
variation it is usually necessary to advance detailed evidence of the
operation of the award, the impact of the current provisions on employers
and employees covered by it and the likely impact of the proposed changes.
Such evidence should be combined with sound and balanced reasoning
supporting a change. Ultimately the Commission must assess the evidence and
submissions against the statutory tests set out above, principally whether
the award provides a fair and relevant minimum safety net of terms and
conditions and whether the proposed variations are necessary to achieve the
modern awards objective. These tests encompass many traditional merit
considerations regarding proposed award variations.”[12]
[23]
In the
Review the Commission will proceed on the basis that
prima facie the modern award
being reviewed achieved the modern awards objective at the time that it was
made.[13]
The proponent of a variation to a modern award must demonstrate that if the
modern award is varied in the manner proposed then it would only include
terms to the extent necessary to achieve the modern awards objective (see
s.138). What is “necessary” in a particular case is a value judgment based
on an assessment of the s.134 considerations having regard to the
submissions and evidence directed to those considerations.[14]
[24]
In
performing functions and exercising powers under a part of the Act
(including Part 2-3—Modern Awards) the Commission must take into account the
objects of the Act and any particular objects of the relevant part (see
s.578(a)). The object of Part 2-3 is expressed in s.134 (the modern awards
objective) to which we have already referred. The object of the Act is set
out in s.3 as follows:
“3
Object of this Act
The object of this Act is to
provide a balanced framework for cooperative and productive workplace
relations that promotes national economic prosperity and social inclusion
for all Australians by:
(a)
providing workplace relations laws that are fair to working
Australians, are flexible for businesses, promote productivity and economic
growth for Australia’s future economic prosperity and take into account
Australia’s international labour obligations; and
(b)
ensuring a guaranteed safety net of fair, relevant and enforceable
minimum terms and conditions through the National Employment Standards,
modern awards and national minimum wage orders; and
(c)
ensuring that the guaranteed safety net of fair, relevant and
enforceable minimum wages and conditions can no longer be undermined by the
making of statutory individual employment agreements of any kind given that
such agreements can never be part of a fair workplace relations system; and
(d)
assisting employees to balance their work and family responsibilities
by providing for flexible working arrangements; and
(e)
enabling fairness and representation at work and the prevention of
discrimination by recognising the right to freedom of association and the
right to be represented, protecting against unfair treatment and
discrimination, providing accessible and effective procedures to resolve
grievances and disputes and providing effective compliance mechanisms; and
(f)
achieving productivity and fairness through an emphasis on
enterprise-level collective bargaining underpinned by simple good faith
bargaining obligations and clear rules governing industrial action; and
(g)
acknowledging the special circumstances of small and medium-sized
businesses.”
[25]
We now
turn to the provisions of the Act relating to annual leave.
[26]
As we have mentioned,
the Act provides that modern awards, together with the NES, are intended to
provide a fair and relevant minimum safety net of terms and conditions of
employment. The NES are minimum standards that apply to the employment of
national system employees. The NES are set out in Part 2-2 of the Act.
Division 6 of Part 2-2 (ss.86–94) deals with annual leave.
[27]
Part 2-1 of the Act
provides that the NES cannot be excluded by modern awards or enterprise
agreements. Section 55 deals with the interaction between the NES and a
modern award or enterprise agreement:
“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).”
[28]
A term of a modern
award or enterprise agreement has no effect to the extent that it
contravenes s.55 of the Act.
[29]
Relevantly, for the
purpose of s.55(2), Part 2-2 provides that a modern award is expressly
permitted to include terms:
·
providing for the cashing
out of annual leave (ss.93(1) and (2));
·
requiring an employee, or
allowing for an employee to be required, to take paid annual leave in
particular circumstances, but only if the requirement is reasonable
(s.93(3)); and
·
otherwise dealing with the
taking of paid annual leave (s.93(4)).
[30]
We deal with these
provisions later.
[31]
A modern award may
also include terms that are incidental or ancillary to the operation of NES
entitlements and terms that supplement the NES, provided that the effect of
those terms is not detrimental to an employee in any respect when compared
to the NES (s.55(4)).
[32]
In
dealing with matters arising in the Review, the Commission will have regard
to the relevant historical context and will take into account previous
decisions relevant to any contested issue. The particular context in which
those decisions were made will also be
considered.
[33]
The annual leave provisions in modern awards have been the subject of
consideration by the Commission and its predecessors over many years. On 30
May 2014, the Commission released a background paper[15]
which sets out the legislative basis of the annual leave provisions in
modern awards and the history of annual leave entitlements in awards.
[34]
During the
award
modernisation process conducted by the Australian Industrial Relations
Commission (AIRC) under Part 10A of the
Workplace Relations Act 1996
(WR
Act) a number of employer organisations sought to
have cashing out provisions included in modern awards. The Award
Modernisation Full Bench deemed that cashing out provisions would “undermine
the purpose of annual leave and give rise to questions about the amount of
annual leave to be prescribed”.[16]
[35]
The substance of a
number of the matters before us were also the subject of claims during the
Transitional Review.
[36]
In the
Modern Awards Review 2012—Annual
Leave decision
(Transitional
Review—Annual Leave decision)[17]
the Full Bench, by majority, rejected a range of applications to vary the
annual leave provisions in various modern awards. The majority’s decision
turned on the limited nature of the Commission’s task in the Transitional
Review. The scope of the Transitional Review was the subject of detailed
consideration by a five member Full Bench in the
Modern Awards Review 2012
decision.[18]
The Full Bench said:
“To summarise, we reject the proposition that the Review involves a fresh
assessment of modern awards unencumbered by previous Tribunal authority. It
seems to us that the Review is intended to be narrower in scope than the 4
yearly reviews provided in s.156 of the FW Act. In the context of this
Review the Tribunal is unlikely to revisit issues considered as part of the
Part 10A award modernisation process unless there are cogent reasons for
doing so, such as a significant change in circumstances which warrants a
different outcome. Having said that we do not propose to adopt a “high
threshold” for the making of variation determinations in the Review, as
proposed by the Australian Government and others.”[19]
[37]
In the
Transitional Review—Annual Leave
decision the majority applied the above statement and dismissed the
applications.[20]
[38]
Of
course, as we have mentioned, this Review is broader in scope than the
Transitional Review and provides the first full opportunity to consider the
content of modern awards.
[39]
Ai Group, ACCI and
other employer bodies conducted a joint employer survey in May 2014 about
matters relating to annual leave (the Employer Survey).[21]
[40]
The Ai Group’s
submission notes that the scope of the Employer Survey was limited to
Ai Group, ACCI and affiliate organisation members.[22]
The survey instrument was distributed by the employer organisations to their
membership lists together with a covering email which, in neutral terms,
requested employers to complete the survey.[23]
Some 4137 employers responded to the survey, consisting of 3713 full
responses and 424 incomplete responses. Responses varied according to the
survey question, with partial responses for certain questions.[24]
The number of responses to the Employer Survey was significantly larger than
other employer surveys, such as the ACCI Small Business Survey, which only
had around 1500 responses.[25]
[41]
The Australian Council
of Trade Unions (ACTU) and a number of individual unions advanced a number
of criticisms of the Employer Survey, including:
·
it lacked methodological
rigour;
·
the Employer Survey was
not sent to a random, stratified population of employers and so cannot be
said to be representative of employers as a whole;
·
some of the questions were
leading, in the sense that they suggested answers; and
·
on analysis, the responses
to the Employer Survey did not support the contentions advanced by the
Employer Group.[26]
[42]
The ACTU submitted
that the Employer Survey should be given
no weight in the Commission’s
consideration of the Employer Group’s claims.[27]
[43]
There is some force to
a number of the criticisms made of the Employer Survey.
[44]
The Employer Survey is
not a stratified random sample of the Australian business population,[28]
nor does it purport to be.[29]
However, the Employer Survey was said to be broadly representative of the
population of employers in each state and territory.[30]
At least one of the survey questions (Question 8) may be regarded as
leading, but we do not regard this as a substantive criticism. The questions
predominantly allowed for objective responses and, where a question appeared
to assume a particular state of affairs, that was explained by the
sequencing of the questions. For example, Questions 5 and 6 asked:
“Since
1 January 2010, have any of your organisation’s employees asked to cash out
a portion of their annual leave? Choose one of the following answers.
·
Yes
·
No
·
Unsure”
“If
yes, how many requests have you received?
·
1
·
2–5
·
5–20
·
20+”
[45]
The Employer Survey
was completed online and Question 6 was only asked if there was an
affirmative response to Question 5.[31]
[47]
Taking account of all
these issues we are satisfied that the Employer Survey provides a valuable
insight into the practical issues facing employers in the management of the
existing annual leave arrangements and we will take the Employer Survey
responses into account. The Employer Survey utilised the available
databases in order to maximise the number of responses. A substantial
number of responses were received (relative to other employment surveys) and
the respondents were reasonably representative of the population of
employers in each state and territory. The methodological limitations with
the survey (i.e. it was not a random stratified sample) mean that the
results cannot be extrapolated such that they can be said to be
representative of all employers.
[48]
In addition to the
Employer Survey, various employer bodies and the “Automotive, Food, Metals,
Engineering, Printing and Kindred Industries Union” known as the Australian
Manufacturing Workers’ Union (AMWU) tendered witness statements during the
course of the proceedings:
Ai Group |
Ms Kristina Flynn |
ACCI |
Ms Fiona Corbett |
Ai Group and ACCI |
Mr Eugene Kalenjuk |
Accommodation Association of Australia |
Mr Stuart Lamont |
Restaurant & Catering Australia |
Mr David Murrie |
Master Builders Australia Limited |
Mr Geoffrey Charles Thomas |
Housing Industry Association |
Ms Melissa Adler |
AMWU |
Mr Warren Butler |
[49]
We propose to make
some general observations about some of this evidence now and we refer to it
in more detail in our consideration of the particular claims.
[50]
ACCI and Ai Group
filed a joint expert accounting report by Mr Eugene Kalenjuk, a partner at
PricewaterhouseCoopers, which dealt with the financial impact of employees
accruing substantial leave balances.
[51]
The evidence of Mr Ben
Waugh related to the Employer Survey and the evidence of Ms Kristina Flynn,
Ms Fiona Corbett and Ms Melissa Adler dealt with issues raised by employer
members of their respective organisations.
[52]
The statements of Mr
Stuart Lamont, Ms Nicki Passanisi, Ms Joyce Lawson, Mr David Murrie and Mr
Antonio D’Arienzo (tendered by the Accommodation Association of Australia
and Restaurant & Catering Australia) were in the form of a common template
and all asserted that:
·
annual leave liability and
excessive accrual of leave is an ongoing issue for their respective
companies;
·
they believe that the
cashing out of annual leave would be beneficial for their companies and
employees; and
·
they support the
applications by their respective organisations.
[53]
Evidence of this
character is of very little assistance. It is plainly in a template form and
expresses the witnesses’ belief as to the benefits of a cashing out
provision, but not the factual basis for that belief. Statements by five
employers that they support the claims made by their association on their
behalf adds nothing to the substance of the arguments advanced in support of
the employer claims.
[54]
A similar observation
may be made about much of Mr Geoffrey Charles Thomas’ statement. Mr Thomas’
statement was largely in the form of a submission in support of the claims
sought by the Employer Group. He expressed a range of opinions said to be
based on his “experience as outlined in paragraph 1” of his statement, as
follows:
“I make this
statement based on my experience as an industrial relations practitioner in
the Departments of Navy (1973 to 1975) and Defence (1975 to 1985), the
Australian Nuclear Science and Technology Organisation (1988 to 1996) and
the Master Builders Association of New South Wales (1998 to 2013).”[32]
[55]
This statement does
not qualify Mr Thomas as an expert, in the sense of qualifying him to give
opinion evidence.
[56]
The AMWU (Vehicle
Division) filed two witness statements from Mr Warren Butler. The majority
of Mr Butler’s evidence related to close-down provisions and the
manufacturing and vehicle repair, service and retail industries.
[57]
In addition to the
Employer Survey and the witness evidence, the submissions referred to other
research relevant to the determination of the claims. We deal with this
material later in our consideration of the specific claims before us. We
also note that during the course of oral submissions a number of parties
made a range of factual assertions from the bar table,[33]
which were challenged by other parties.[34]
We have not had regard to any of the challenged assertions.
[58]
We now
turn to deal with each of the specific claims before us.
4.1 Excessive
annual leave
[59]
The
Employer Group sought to insert the following clause into 70 modern awards:
“Excessive Annual Leave
Despite
anything
else
in this
clause,
an employer
may
direct
an employee
to take
paid annual leave
if:
(a)
the
employee
has
accrued
at least
six (6)
weeks
of
annual
leave;
(b)
the
employer
gives
the
employee
four
(4)
weeks’
notice
to
take the
annual
leave;
and
(c)
the
employee
retains
at least
four
(4)
weeks
of
accrued
annual leave
after
the
direction
is
given
by
the
employer.”[35]
[60]
The ACCI and Ai Group
submissions advanced a number of arguments in support of their proposal. It
is convenient to deal first with the propositions which relate to the
various matters the Commission must take into account pursuant to s.134(1)
of the Act.
Promoting the
efficient and productive performance of work (s.134(1)(d))
[61]
ACCI relied on a
number of research reports[36]
in support of the proposition that taking annual leave is critical to
preventing burnout and poor health[37]
and that such leave assists in maintaining job safety and satisfaction.[38]
In addition to the academic research, ACCI relied on a number of arbitral
decisions which have accepted that the actual taking of leave increases
productivity as a result of a more balanced and rested workforce. It is
contended that allowing employers to direct the taking of annual leave
“should ensure a more balanced, rested and (accordingly) productive
workforce”[39]
and that such an outcome advances the objectives of s.134(1)(d).
The likely impact
on business, including on productivity, employment costs and the regulatory
burden (s.134(1)(f))
[62]
Ai Group and ACCI
submitted that excessive leave accruals create substantial contingent
liabilities for businesses and give rise to cash flow problems when accrued
annual leave is paid upon the termination of employment. ACCI submitted
that:
“
By allowing employers to
direct employees to reduce excessive leave accruals, the model clause
reduces the regulatory burden on employers. It allows employers to
positively manage their finances, allowing for investment in other
profit-generating aspects of a business.”[40]
[63]
It was contended that
allowing employers to direct employees to reduce excessive leave accruals by
taking leave advances the objectives of s.134(1)(f).
A simple, easy to
understand, stable and sustainable modern award system (s.134(1)(g))
[64]
ACCI submitted that
prior to 2006 (when the responsibility for annual leave broadly shifted to
the federal jurisdiction) employers had the ability to direct employees to
take annual leave, subject to adequate notice (said to be “typically but not
invariably two weeks”).[41]
On this basis ACCI advanced the following submission:
“7.26 There
is no indication on the face of the FW Act or elsewhere that Parliament
intended to depart from this prevailing position. Rather, and as discussed
at section 4 above, it should be understood from the structure of Division 6
of Part 2-2 of the FW Act that Parliament expected the Commission to
establish industry-specific machinery in awards to allow for the continued
directing of annual leave by employers (particularly where agreement cannot
be reached for the taking of leave).
7.27
The history that has allowed employers to direct employees to take excessive
annual leave suggests that the Australian population generally has an
appreciation and understanding of this machinery within industrial
regulation. It is not a concept that would be confusing or difficult for the
population to adapt to. Rather, it has been in existence for the majority of
recent history.
7.28 In
such circumstances, allowing employers to direct employees to take excessive
annual leave does not conflict with section 134(1)(g) and, in many ways,
advances the objectives of the section.”[42]
[65]
It was also submitted
that granting the Employer Group’s claim would reduce the potential for
disputes about the taking of annual leave.
Employment growth
and the sustainability, performance and competitiveness of the national
economy (s.134(1)(h))
[66]
ACCI submitted that
granting the Employer Group’s claim would advance the objectives of
s.134(1)(h) by reducing the regulatory burden on employers and through the
positive impact the increased taking of leave will have on the Australian
tourism industry:
“7.29 For
the reasons already outlined at paragraphs 7.16 to 7.23, the model clause
will reduce the regulatory burden on businesses and allow them to divert
funds currently set aside for excessive leave accruals to profit generating
investments.
7.30
Additionally, however, compelling employees to take leave is directly
supportive of a major industry within the economy – Australian tourism. If
employees take leave, one of the most likely outcomes is that such employees
will travel on holidays. Although some travel may occur overseas, one of the
key beneficiaries of employee travel will likely be the Australian tourism
industry. It is for this reason that Tourism Australia is currently running
a campaign, ‘No Leave No Life’, encouraging employees to take their annual
leave. Campaign materials have been filed as ACCI Exhibit D.”[43]
[67]
In addition to the
submissions set out above, Ai Group pointed to the fact that the Act places
no restriction on the time period during which accrued annual leave
entitlements must be taken:
“This means
that, absent an award provision, many employees may simply elect to
perpetually accrue their annual leave and only ever receive the benefits of
the entitlement as a payment on termination.”[44]
[68]
Ai Group
submitted that granting the Employer Group’s claim would encourage employees
to take their accrued leave consistent with the traditional justification
for annual leave entitlements:
“It is trite to observe that taking a break through a period of annual leave
will have benefits for employees and for their families. However, it will
also have positive effects for businesses such as increased productivity and
workforce morale, and reduced work health and safety risks.”[45]
[69]
The ACTU
accepted that it was desirable that employees take, rather than excessively
accrue, their entitlement to paid annual leave:
“We strongly agree that employees should be taking leave for their rest and
recreation and also for occupational health and safety reasons ... It is
clear that employees should be taking leave: it is beneficial for them
personally but also it makes them more productive employees and reduces the
risk of workplace illness.”[46]
[70]
However,
the ACTU opposed the Employer Group’s claim—both at a conceptual level and
in relation to the elements of the model term proposed.
[71]
At a
conceptual level, the ACTU submitted that the problem of excessive annual
leave accruals “substantially lies not with employees seeking to hoard
annual leave, but rather that despite section 88 of the FW Act, employers
are unwilling to grant annual leave at times that suit the employee”.[47]
The ACTU submitted that employers should not have “the ultimate or default
say in when annual leave is taken”[48]
and that the Employer Group’s model term was unlikely to achieve its
objectives:
“The proposed clause is unlikely to achieve the benefits espoused by the
employer groups because it fails to provide an employee with any autonomy as
to when they take their annual leave. The proposal fails to foster any
positive interaction between the employer and employee; rather, it simply
provides an employer with the ability to dictate to an employee who has
accrued six weeks’ annual leave to take it with four weeks’ notice.”[49]
[72]
While
the ACTU criticised the model advanced by the Employer Group it did not
advance any viable alternative means of addressing the problem of excessive
accruals of paid annual leave. The ACTU did, however, propose a number of
“additional safeguards” in the event that the Commission was minded to adopt
an excessive leave term.[50]
We have had regard to these submissions, and the employer submissions in
reply, in framing a proposed model clause.
[73]
As to
the particular elements of the Employer Group’s model clause, the ACTU
advanced the following criticisms:
·
the
proposed model clause fails to include any obligation on an employer to
first seek to reach agreement with an employee before directing that a
period of accrued leave be taken;[51]
·
six
weeks’ annual leave is not an excessive accrual[52],
and two years of accrued leave was proposed as a definition of “excessive”
accrued leave[53];
and
·
four
weeks’ notice is inadequate for an employee to get his or her affairs in
order to take a period of paid annual leave[54]
and at least eight weeks’ notice is required.[55]
[74]
While
there is some force in the ACTU’s criticisms, they ultimately go to the
content of any model term rather than mounting a persuasive case that it is
not appropriate to make any variations to modern awards to address the
problem of excessive accruals of paid annual leave.
[75]
We
propose to deal with the relevant historical and legislative context first
before turning to the merits of the claim.
[76]
Prior to the
commencement of the NES and modern awards, federal and state legislation and
awards commonly provided employers with a right to direct employees to take
annual leave.
[77]
For example, the
pre-modern Metal, Engineering and
Associated Industries Award 1998 provided:
“7.1.9
Time of taking leave
7.1.9(a)
Annual leave shall be given at a time fixed by the employer within a
period not exceeding six months from the date when the right to leave
accrued.
7.1.9(b)
An employer can require an employee to take annual leave by giving
not less than four weeks’ notice of the time when such leave is to be taken.
7.1.9(c)
By agreement between an employer and an employee, annual leave may be
taken at any time provided it is done within two years from the date when
the right to leave accrued.”
[78]
In New South Wales,
s.3 of the Annual Holidays Act 1944
(NSW) provides:
“(4) The
annual holiday shall be given by the employer and shall be taken by the
worker before the expiration of a period of six months after the date upon
which the right to such holiday accrues: Provided that the giving and taking
of the whole or any separate period of such annual holiday may, with the
consent in writing of the Industrial Registrar, or Deputy Industrial
Registrar appointed under the
Industrial Relations Act 1996, be postponed for a period to be specified
by such Registrar in any case where he or she is of opinion that
circumstances render such postponement necessary or desirable. ...
(6)(a)
The employer shall give each worker at least one month’s notice of
the date from which the worker’s annual holiday shall be taken.”
[79]
The capacity to
postpone a period of annual leave by application to the Industrial
Registrar, envisaged by s.3(4) of the
Annual Holidays Act 1944 (NSW), is rarely utilised.[56]
[80]
Section 12 of the
Queensland Industrial Relations Act
1999 deals with taking of annual
leave:
“12
Taking annual leave
(1)
An employee and employer may agree when the employee is to take
annual leave.
(2)
If the employee and employer cannot agree, the employer —
(a)
may decide when the employee is to take leave; and
(b)
must give the employee at least 14 days written notice of the
starting date of the leave.”
[81]
A joint Ai Group, ACCI
and ACTU document setting out the legislative provisions relating to annual
leave in the WR Act and relevant state and territory legislation is at
Attachment J (the Joint Exhibit).[57]
[82]
The
Workplace Relations Amendment (Work Choices) Act 2005
(Work Choices Act)
shifted the vast majority of the workforce[58]
to the federal system and introduced a statutory set of minimum conditions,
the Australian Fair Pay and Conditions Standard (the AFPCS), which applied
to all federal system employees. The Work Choices Act also inserted s.16(1)
into the WR Act which, relevantly for present purposes, had the effect of
excluding any state or territory law which dealt with annual leave. Section
16(1) had the effect of creating an “exclusion zone”[59]
for federal system employers and employees from the operation of state and
territory annual leave laws.
[83]
The AFPCS is a legislative antecedent to what is now the NES. Section 236 of
the WR Act dealt with the taking of leave, as follows:
“236
Rules about taking annual leave
General rules
(1)
Subject to this section and section 233, an employee is entitled to
take an amount of annual leave during a particular period if:
(a)
at least that amount of annual leave is credited to the employee; and
(b)
the employee’s employer has authorised the employee to take the
annual leave during that period.
(2)
To avoid doubt, there is no maximum or minimum limit on the amount of
annual leave that an employer may authorise an employee to take.
(3)
Any authorisation given by an employer enabling an employee to take
annual leave during a particular period is subject to the operational
requirements of the workplace or enterprise in respect of which the employee
is employed.
(4)
An employer must not unreasonably:
(a)
refuse to authorise an employee to take an amount of annual leave
that is credited to the employee; or
(b)
revoke an authorisation enabling an employee to take annual leave
during a particular period.
Shut downs
(5)
An employee must take an amount of annual leave during a particular
period if:
(a)
the employee is directed to do so by the employee’s employer because,
during that period, the employer shuts down the business, or any part of the
business, in which the employee works; and
(b)
at least that amount of annual leave is credited to the employee.
Extensive accumulated annual leave
(6)
An employee must take an amount of annual leave during a particular
period if:
(a)
the employee is directed to do so by his or her employer; and
(b)
at the time that the direction is given, the employee has annual
leave credited to him or her of more than 1/13 of the
number of nominal hours worked by the employee for the employer during the
period of 104 weeks ending at the time that the direction is given; and
(c)
the amount of annual leave that the employee is directed to take is
less than, or equal to, ¼ of the amount of credited annual leave of the
employee at the time that the direction is given.”
[84]
The Explanatory Memorandum to the
Workplace Relations Amendment (Work Choices) Bill 2005 states:
“533.
Section 92H(6) [which became s.236] would enable an employer to
direct an employee to take a period of paid annual leave if the employee has
an annual leave credit greater than 1/13 of the number
of nominal hours worked over a two year period (an amount equivalent to
8 weeks for an employee working 38 hours per week over that period). In this
situation, the employer may direct the employee to take up to ¼ of his or
her annual leave credit. The intention of this provision is to ensure that:
·
employees regularly take periods of leave for rest and recreation, and
·
employers are not required to pay out excessive untaken leave accruals when
an employee’s employment ends.
Illustrative Example
Lucas has been employed by Chocolates Galore Pty Ltd for four and a half
years, working 38 nominal hours each week. In that time, he has accrued 684
hours (the equivalent of 90 days) of annual leave, of which he has taken 228
hours (the equivalent of 30 days), leaving a balance of 456 hours (or 60
days).
As Lucas enjoys his job he’s only ever taken a week or two of his annual
leave each year to go surfing.
Lucas’s current balance of annual leave is more than 304 hours (or 40 days),
which is what he would normally accrue over a 24 month period.
In this case, his employer could direct him to take up to one quarter (or 76
hours) of his accrued annual leave balance.”
[85]
Section 236(6) of the WR Act provided that an employer could direct an
employee to take an amount of annual leave during a particular period if the
employee had “extensive accumulated annual leave”. “Extensive accumulated
annual leave” was defined by s.236(6)(b) and generally amounted to eight
weeks’ accrued leave for full-time employees. There was no notice
requirement for an employer directing an employee to take excessive leave,
but there was a limit to the quantum of leave that the employee could be
directed to take, being 25 per cent of the employee’s balance. So if an
employee had eight weeks’ accrued leave the employee could be directed to
take up to two weeks’ leave.
[86]
We now
turn to the relevant provisions of the Act.
[87]
The Act
does not require an employee to take their accrued paid annual leave within
any particular timeframe. Section 88, which deals with the taking of annual
leave, states:
“88
Taking paid annual leave
(1)
Paid annual leave may be taken for a period agreed between an
employee and his or her employer.
(2)
The employer must not unreasonably refuse to agree to a request by
the employee to take paid annual leave.”
[88]
Sections
93 and 139(1) are relevant insofar as they deal with the terms which may be
included in a modern award.
“Terms
about
requirements to take paid annual leave
(3)
A modern award or enterprise agreement may include terms
requiring an employee, or allowing for an employee to be required, to
take paid annual leave in particular circumstances, but only if the
requirement is reasonable.
Terms about taking paid annual leave
(4)
A modern award or enterprise agreement may include terms otherwise
dealing with the taking of paid annual leave.” (emphasis added)
[90]
Section
139(1)(h) provides that a modern award may include terms about any of the
following matters:
“(h)
leave, leave loadings and arrangements for taking leave.”
(emphasis added)
[91]
Subject
to the requirement to take leave being reasonable, it seems to us that a
modern award term which provides that an employee can be required to take a
period of annual leave to reduce the employee’s excessive level of accrued
paid annual leave is a term of the type contemplated by s.93(3) of the Act.
We are fortified in this conclusion by the terms of the Explanatory
Memorandum to the Fair Work Bill 2008 which states:
“381. Subclause 93(3) permits terms to be included in an award or agreement
that require an employee, or that enable an employer to require or direct an
employee, to take paid annual leave in particular circumstances, but only if
the requirement is reasonable. This may include the employer requiring an
employee to take a period of annual leave to reduce the employee’s excessive
level of accrual or if the employer decides to shut down the workplace over
the Christmas/New Year period.
382. In assessing the reasonableness of a requirement or direction under
this subclause it is envisaged that the following are all relevant
considerations:
·
the needs of both the employee and the employer’s business;
·
any agreed arrangement with the employee;
·
the custom and practice in the business;
·
the timing of the requirement or direction to take leave; and
·
the reasonableness of the period of notice given to the employee to take
leave.”
[92]
As to
s.93(4), the words “otherwise dealing
with the taking of annual leave” (emphasis added) is a reference to a
term for dealing with the taking of annual leave other than a term of the
type contemplated by s.93(3). The relevant extract from the Explanatory
Memorandum provides as follows:
“Subclause 93(4) enables an award or agreement to include other terms about
the taking of paid annual leave – e.g., the taking of paid annual leave in
advance of accrual.”[60]
[93]
We also
note that different arrangements apply in relation to award/agreement free
employees. Subsections 94(5) and (6) provide as follows:
“Requirements to take paid
annual leave
(5)
An employer may require an award/agreement free employee to take a
period of paid annual leave, but only if the requirement is reasonable.
Note:
A requirement to take paid annual leave may be reasonable if, for
example:
(a)
the employee has accrued an excessive amount of paid annual leave; or
(b)
the employer’s enterprise is being shut down for a period (for
example, between Christmas and New Year).
Agreements about taking paid
annual leave
(6)
An employer and an award/agreement free employee may agree on when
and how paid annual leave may be taken by the employee.
Note:
Matters that could be agreed include, for example, the following:
(a)
that paid annual leave may be taken in advance of accrual;
(b)
that paid annual leave must be taken within a fixed period of time
after it is accrued;
(c)
the form of application for paid annual leave;
(d)
that a specified period of notice must be given before taking paid
annual leave.”
[95]
In its 19 December
2008 Award Modernisation decision
(2008 Award Modernisation decision), the Award Modernisation Full Bench made
some observations about the right of an employer to direct an employee to
take accrued leave, as set out below:
“[95] As we
noted in our statement of 12 September 2008, it has not been possible to
develop a single model clause for annual leave. While some parties have
sought greater uniformity in the area, there is a wide range of differing
provisions in the awards and NAPSAs that we are dealing with. In many cases
the provisions are more generous to employees than the provisions of the
NES. Areas in which this can be observed are the quantum of holiday pay,
leave loading and the definition of shift worker. In considering what should
be included in the modern award on each of these matters we have attempted
to identify or formulate a standard entitlement in the area covered by the
modern award rather than preserving a range of differing entitlements. This
involves a degree of rationalisation at the award level only and will not
result in standard provisions across all awards.
[96]
There are also some issues concerning the time of taking leave. The time of
taking leave is referred to in para.33 of the consolidated request and
s.36(1)(b) of the NES. Section 36(1)(b) reads:
‘36
Modern awards may include certain kinds of provisions
(1)
A modern award may include provisions of any of the following kinds:
…
(b)
provisions requiring an employee (or allowing for an employee to be
required) to take paid annual leave in particular circumstances;
...’
[98]
One issue that has arisen repeatedly, and is provided for in the NES, is the
right of an employer to require that an employee take arrears of annual
leave. We think that an employer should have the ability to reduce annual
leave liability by compelling employees to take annual leave provided
appropriate notice is given. While there may be different approaches to this
question, in each of the awards there will be some provision which will give
the employer the ability to take action to reduce arrears.”[61]
[96]
In 2010,
the Award Modernisation Full Bench considered seven applications to vary the
General Retail Industry Award 2010.[62]
In relation to excessive leave, it considered an application by the Shop,
Distributive and Allied Employees Association (SDA) which sought to limit
the ability of an employer to compel an employee to take leave where more
than eight weeks’ leave had accrued.[63]
The Full Bench dismissed the application stating that the SDA had not made
an appropriate case to support the application.[64]
[97]
The Full
Bench also considered three applications to vary the
Fast Food Industry Award 2010.[65]
One application, which was jointly filed by the National Retail
Association Ltd and Ai Group, sought to include a provision permitting an
employer to direct an employee to take annual leave where more than eight
weeks’ leave was accrued. The SDA opposed the variation.[66]
The Full Bench denied the application to vary the award to include a
provision in relation to excessive leave on the grounds that no history of
such provisions had been established and the variation was opposed.[67]
[98]
At
present, 79 modern awards contain excessive leave provisions.[68]
We deal with these provisions and the awards that the Employer Group is
seeking to vary later in our decision.
[100]
The evidence clearly
establishes that most employees accrue a portion of their paid annual leave
entitlement and that a significant proportion of employees have six weeks or
more of such accrued leave.
[101]
A paper by Skinner and
Pocock examined, among other things, the utilisation of paid leave and the
reasons why employees did not utilise their full paid entitlement.[69]
It presents data which is a subset of the Australian Work and Life Index
2010 (AWALI 2010) survey. The AWALI 2010 survey is a national stratified
random survey of 2803 Australian workers conducted using computer assisted
telephone interviews over four weekends in March and April 2010. The survey
asked questions about the use of paid annual leave in 2009. The authors’
study replicates and extends a study conducted by The Australia Institute in
2002 (TAI 2002) on Australian’s uptake of paid leave.[70]
[102]
Skinner and Pocock
found that in 2009, only 40.3 per cent of full-time employees used all of
their paid leave, leaving about 60 per cent who had not taken some portion
of their leave. Similar results were obtained in the TAI 2002 survey (only
38.8 per cent of employees used all their paid leave).
[103]
As shown in Table 1,
women and men reported that they utilised their full leave entitlement at
similar levels. As to the uptake of leave by reference to employee
circumstances, Skinner and Pocock noted:
“Uptake of
leave, or the lack thereof, is consistent across family type, life stage and
household income, although there are some differences in the rate of leave
uptake, with more of those who are older, single parents and middle-income
earners using all of their leave (data available upon request). It is
interesting to note that the presence of children under 18 is not associated
with a higher rate of leave use.”[71]
Table 1:
Used all paid leave by gender, age and parenting status, AWALI 2010
and TAI 2002
AWALI 2010 |
TAI 2002 |
||||||
|
Men
(%) |
Women
(%) |
All
(%) |
Men
(%) |
Women
(%) |
All
(%) |
|
All |
41.0 |
39.2 |
40.3 |
37.7 |
41.2 |
38.8 |
|
Age |
|||||||
18–24 years |
34.3 |
37.3* |
35.3 |
- |
- |
- |
|
25–34 years |
40.1 |
31.9 |
37.5 |
- |
- |
37.2 |
|
35–49 years |
41.1 |
42.9 |
41.7 |
- |
- |
35.8 |
|
50–59 years |
45.6 |
43.6 |
44.6 |
- |
- |
50.2 |
|
60+
years |
44.9 |
38.5 |
43.2 |
- |
- |
- |
|
Parenting responsibility |
|||||||
Children
< 18 years |
40.5 |
39.6 |
40.3 |
- |
- |
43.5 |
|
No
Children < 18 years |
41.4 |
38.9 |
40.3 |
- |
- |
35.7 |
|
Household composition |
|||||||
Single
parent |
57.9* |
42.9* |
47.5 |
- |
- |
||
Couple
with children |
41.7 |
40.4 |
41.5 |
- |
- |
||
Couple
without children |
40.7 |
41.0 |
40.8 |
- |
- |
||
Single
without children |
42.0 |
36.0 |
40.0 |
- |
- |
||
Household income |
|||||||
<
$30,000 |
** |
** |
** |
- |
- |
** |
|
$30,000–$59,999 |
44.2 |
39.6 |
42.5 |
- |
- |
42.1 |
|
$60,000+ |
40.1 |
39.0 |
39.7 |
|
- |
- |
38.5 |
Notes:
*Estimates unreliable due to insufficient sample size; **Estimate not
provided due to inadequate sample size “-” data not available. TAI data only
included those aged 25–59 years.
Source:
Skinner N
and Pocock B (2013), ‘Paid annual leave in Australia: Who gets it, who takes
it and implications for work-life interference’,
Journal of Industrial Relations
55(5), p.686.
[104]
The Skinner and Pocock
findings are consistent with three other research papers[72]
and the results from the Employer Survey.
[105]
Wooden and Warren reported on the extent of usage of paid annual leave in
Australia
using
new data collected in Wave 5 of the Household, Income and Labour Dynamics in
Australia (HILDA) survey, and concluded that the majority of employees do
not take their full annual leave entitlement each year.[73]
[106]
The
HILDA survey is a household panel survey that began in 2001, with a large
nationally representative sample of Australian households. All members of
responding households from Wave 1 form the basis of the panel to be followed
over time, though interviews are only conducted with persons aged 15 years
or older. The data on annual leave comes from responses to two questions.
The first identifies whether a respondent has spent any time on paid annual
leave during the 12 months preceding the interview.
All persons answering in the affirmative are then asked how many days
(or weeks) they spent on paid annual leave during that
12
month period. These questions were
included for the first time in Wave 5 and so we only have information about
patterns of leave usage over a single one year period.
[107]
Table
2
presents
summary statistics on both the proportion of workers taking any paid annual
leave and the average number of days taken by persons employed at the date
of interview. The table shows that just over half of all employed persons
took at least one day of paid annual leave during the one year reference
period and on average, just nine days of annual leave were taken.
Table 2:
Paid annual leave by current employment status, HILDA survey Wave 5
Employment status |
% taking any paid leave |
Mean leave days |
Mean leave days taken by those who took leave |
Employees |
60.2 |
10.0 |
16.7 |
Employees of own business |
39.9 |
6.9 |
17.4 |
Own account workers |
12.4 |
1.7 |
14.0 |
All employed |
53.8 |
8.9 |
16.6 |
Source:
Wooden M and
Warren D (2008), ‘Paid Annual Leave and Working Hours: Evidence from the
HILDA Survey’, Journal of Industrial
Relations 50(4), p.666.
[108]
Table 2 shows that a large proportion of employees did not take any paid
annual leave in the one year reference period, and that average leave usage
was only half of the entitlement of most full-time employees (i.e. four
weeks). But, as Wooden and Warren noted, the data presented in the above
table does not provide a good guide to how usage of leave compares with
entitlements.[74]
There are a number of reasons for this, including that: over one-quarter of
the employee workforce are employed on a casual basis and so do not have any
annual leave entitlements; part-time employees will typically be entitled to
less than 20 days’ paid annual leave; and some workers covered by the data
in Table 2 will have been employed with their current employer for less than
one year and so will not have accrued four weeks’ leave.
[109]
A better guide to the extent to which leave entitlements are being used
is
provided by focusing on the sub-sample of employees who
state that their employer
provides them with paid annual leave, they have been employed with their
current employer for at least one year, and report usual weekly
working hours of 35
or more. Wooden and Warren stated that almost
90 per cent of this group
reported taking at least one day
of paid annual leave during the year, with the mean leave taken
being 16.1 days. Further information on the pattern of leave
usage for this group is provided
in Chart 1, which reveals a wide distribution around the
mean.
Chart 1:
Distribution of paid annual leave days—Full-time employees with leave
entitlements and at least one year’s service
Source:
Wooden M and
Warren D (2008), ‘Paid Annual Leave and Working Hours: Evidence from the
HILDA Survey’, Journal of Industrial
Relations 50(4), pp.667.
[110]
On the basis of the data set out in Chart 1, Wooden and Warren concluded as
follows:
“While
20 days (or 4 weeks) is the most common response, the majority (63%)
reported taking less than 20 annual leave days during the year.”[75]
[111]
Cameron and Denniss
report on the results of a survey conducted by the Australian Institute and
beyondblue. The relevant aspects of their findings and conclusions are set
out below:
“Over half of the
respondents (52 per cent), equating to six million workers, did not take all
their leave in 2012. Higher earners, with incomes over $80,000, are less
likely to take all their leave and those in large workplaces (with more than
100 employees) are less likely to take their full annual leave: 69 per cent
of respondents working in organisations of 100–200 employees and 59 per cent
in organisations with more than 200 employees, compared to an average 48 per
cent of respondents across all other workplaces. It is worth noting,
however, that half of respondents in all workplaces with up to 100 employees
reported that they did not take all their annual leave entitlement in 2012.”[76]
[112]
ACCI
also tendered material produced by Tourism Australia for the “No leave, No
life” campaign. This material included research findings—about annual leave
accrual in Australia. For the purpose of this research, “leave stockpilers”
were defined as employees with 25 days or more of accrued annual leave. The
“Key Facts” reported from the research are set out below:
“Key Facts
1.
Australia has 129 million days of accrued annual leave by full-time
employees. This equates to $33.3 billion in wages as of September 2011 (Roy
Morgan Research)
2.
Annual leave accrual by full-time employees has grown by 11% from
December 2006 to December 2008 (Roy Morgan Research)
3.
Annual leave accrual is endemic across all
sizes
of business and industries. No business is too big or small to feel the
impact
of accrued leave.
Annual leave
stockpiling has become entrenched workplace behaviour potentially affecting
every
business regardless of size or type
4.
1 in 4 of Australian full-time employees are leave stockpilers (Roy
Morgan Research)
5.
73% of stockpilers consider work/life balance (WLB) an important
aspect of their life
·
Female stockpilers place greater importance on WLB [80%] compared to males
[69%]
6.
70% of stockpilers agree that annual leave positively impacts
work/life balance (WLB)
·
Stronger amongst females (78%) than males (67%)
7.
Only 56% of stockpilers believe that their employer is generally
supportive of leave taking
·
Highest amongst government employees [60%] and lowest amongst SME (49%)
·
Stockpilers who believe
their
employer is supportive of leave-taking have higher intention to take an
Australian holiday [64%) than those who do not (51%)
8.
80% of
stockpilers
cite personal barriers to leave-taking
·
Availability of funds is the biggest concern (40%)
·
Fitting around partner’s availability is also difficult
(28%)
·
Deliberate accrual for emergencies (26%) or big trip (24%) is third most
common reason
9.
57% of stockpilers consider work related barriers prevent them from
taking leave
compared to 48% of non stockpilers
·
Concern about workload before and after leave is the main barrier (30%)
·
Lack of resources for cover is second (26%)
·
Difficulty of scheduling leave when desired [21%] or around
projects
(21%) rank third
10.
Stockpilers’ strongest perceived benefits of annual leave are passive
in nature
·
Relaxation (75%)
·
Quality time with family and friends (73%)
·
Long term health (69%)
11.
Females are more likely to have sole
responsibility
for decisions
about leave
taking (47%) compared to males (34%)
12.
Whilst over half of leave
stockpilers are employed in private industry, employees in the
public sector are more likely to accrue leave than their private sector
counterparts.”
[113]
The
Tourism Australia material tendered provides little information about the
methodology used and for that reason we do not place much weight on the
above findings, other than to note that they are consistent with the other
research.
“11.
What
percentage of your employees have annual leave balances of 6 or more weeks:
·
none
·
1–20%
·
21–50%
·
51–70%
·
70%+
·
Unsure”
[115]
Some 2552 employers
(about 68 per cent of all responses) had at least one employee with an
accrued paid annual leave balance of six weeks or more. Of these employers,
683 reported that over 20 per cent of their employees had accrued paid
annual leave balances of six weeks or more.[77]
[116]
The
evidence canvassed above (at paragraphs
[99]–
[115])
supports the following findings:
(i)
most employees do not use their full paid annual leave entitlement
(the NES provides that non-casual employees are
entitled to four weeks’ paid annual leave (shiftworkers as referred to in
s.87(1) are entitled to five weeks));
and
(ii)
the lack of annual leave utilisation is broadly consistent across
family type, life stage and household income; and
(iii)
a significant proportion of employees have six weeks or more accrued
annual leave.
“There is also a physiological and psychological need for opportunities for
rest and recovery from periods of sustained daily and weekly effort at work
(Van Hooff et al., 2007).
The issue of paid annual leave is less frequently discussed in working time
research and in wider public policy discourse. Longer breaks from work in
the form of paid leave are a crucial aspect of working time that have
significant implications for health and well-being. Breaks from work of more
than a day or two provide the opportunity for more substantial rest and
recovery from work demands than a lunch break, evening at home or weekend
can provide (Trenberth and Dewe, 2002). This is especially the case in
typically busy dual-earner or sole-parent/-worker households, in which
weekdays and weekends are often busy and tightly scheduled, and especially
so for parents.
Not taking paid leave is a serious threat to health. Middle-aged men at risk
of cardiovascular disease significantly reduce their risk of death from this
disease and other causes when they take more annual vacations (Gump and
Matthews, 2000). In a large longitudinal cohort study of healthy women, it
was found that infrequent vacations and tension increase the risk of both
heart attack and coronary death (Eaker et al., 1992). Paid leave often
provides greater opportunities to engage in enjoyable and meaningful leisure
activities, which have been shown to be an effective therapy for depression,
anxiety and burnout.”[78]
[119]
The adverse impact of
not taking annual leave is canvassed by Cameron and Denniss who state that
the results of the survey they conducted
indicate a strong correlation between
work-related stress and anxiety and not taking leave breaks:
“...
respondents
who did not take all their annual leave in 2012 were markedly more likely to
report having negative feelings about work than those who did take all their
leave entitlement.”[79]
[120]
Chart 2 shows that of the group who did not take their full leave
entitlement, 39 per cent felt stressed about work; 28 per cent felt anxious;
24 per cent were worried and 21 per cent were overwhelmed by their work. By
comparison, of those who did take their full annual leave, 29 per cent were
stressed; 24 per cent were anxious; 17 per cent were worried and 14 per cent
felt overwhelmed by their work.
Chart 2:
Taking full annual leave and feelings about work
Source:
Cameron P
and Denniss R (2013), ‘Hard to get a break? Hours, leave and barriers to
re-entering the Australian workforce’, The Australia Institute, Institute
Paper No. 13, November 2013
at p. 27.
[121]
Cairncross and Waller
surveyed the implications of employees working longer hours and not taking
their full annual leave entitlements. The authors expressed some tentative
conclusions and identified a need for further research:
“In light of the
data pertaining to the impost on the Australian economy of workplace
accidents and occupational stress, it is currently guesswork to surmise what
the benefits may be of holidays in terms of increased productivity and
decreased accident and illness costs in Australia. However, it is reasonable
to assume given the value of a holiday to the tourism and hospitality
industry (Bureau of Tourism Research), and the physical (Dennis 2003) and
psychological costs of long working hours (Bent 1998) together with the
value of a holiday in reducing stress (Etzion 2003), there is value in
further research establishing the true economic value of taking full annual
leave entitlement each year. ...
The examination of
the literature suggests that in-depth research is required into the
psychological and economic reasons for Australians not taking their holidays
Etzion (2003), for example, has established that people who take their leave
are more productive and exhibit fewer symptoms of workplace stress. The
potential social and physical cost to individuals and the potential cost to
the economy of the current low uptake of annual leave makes it imperative to
see if a lower workplace accident rate can be obtained by those employees
who do have a reasonable holiday break each year. If this is the case then
it may be that there is some value in compulsory leave clauses being
negotiated into employment instruments.”[80]
[122]
There is little doubt
that not taking annual leave gives rise to a risk of fatigue at work. Safe
Work Australia describes fatigue as “a state of mental and/or physical
exhaustion which reduces a person’s ability to perform work safely and
effectively”. Fatigue can adversely affect health and safety at the
workplace—it reduces alertness which may lead to errors and an increase in
incidents and injuries.[81]
Safe Work Australia observed that the best way to control the health and
safety risks arising from fatigue is to eliminate the factors causing
fatigue at the source. One of the control measures for fatigue risks which
Safe Work Australia suggests can be built into a work schedule is:
“ ...
implementing processes to manage accrued leave balances and requests for
leave, for example setting maximum limits of leave accrual to encourage
workers to use it.”[82]
[123]
The accumulation of
leave is also a significant issue for employers.
[124]
As mentioned earlier,
ACCI and Ai Group filed a joint expert accounting report by Mr Eugene
Kalenjuk, a partner at PricewaterhouseCoopers. No objection was taken to
this evidence and no party sought to cross-examine Mr Kalenjuk.
[125]
In the course of his
statement Mr Kalenjuk expressed the following opinion about the commercial
implications that arise for employers where employees accrue substantial
annual leave balances (i.e. balances in excess of six weeks). Mr Kalenjuk
provided a series of examples (which we need not set out) to support the
following opinions:
“In general
terms, the financial impact of an employee accruing a substantial annual
leave balance is that there is a reduction in the reported profitability of
the employers business (all else being equal) where an employee’s annual
leave accrual increases. The other side of the entry is to increase the
liability thereby decreasing the net assets of the business.”[83]
[126]
The
Employer Survey also highlighted some of the difficulties associated with
accrued leave. Questions 12 and 13 from the Employer Survey provided as
follows:
“12. Does your
organisation
have a view about employees accruing more than 6 weeks of annual leave?
·
No particular view
·
It is not really an issue in our organisation
·
We do not like employees accruing more than 6 weeks of leave
13. If you answered that your organisation does not like employees accruing
more than 6 weeks’ annual leave, why does it not?
Please specify: _________________________”
[127]
As to Question 12,
some 2031 employers (over half of those who responded to this question)
stated that they “do not like employees accruing more than 6 weeks of
leave”. Some 948 employers stated that employees accruing more than six
weeks’ paid annual leave was “not really an issue” in their organisation,
and 781 employer responses had “no particular view” on the issue.[84]
[128]
Question 13 was set up
to receive an open field response from the respondent. This means that the
respondent was invited to type in their answer to the question rather than
selecting between specified options. Question 13 was conditional on the
respondent having answered the previous question by indicating that their
organisation did not like employees accruing more than six weeks’ leave.
Table 3:
Summary
of terms used in response to survey Question 13
Search term |
Number of hits |
Cost |
353 |
Cashflow/cash
flow |
153 |
Liability |
434 |
Balance sheet |
83 |
Budget |
41 |
Life balance |
77 |
Health |
153 |
Fatigue |
18 |
Cover (i.e.
cover employee while on leave) |
143 |
Small business |
176 |
[130]
The Employer Survey
also canvassed whether employers sought the right to direct employees to
take accrued leave. Question 14 provided as follows:
“14. Does your organisation wish to
have the right to direct employees who have accrued more than 6 weeks to
take annual leave?
·
Yes
·
No
·
No view”
[131]
In response to
Question 14, 2859 employers (about 76 per cent of those who responded to
this question) said that their organisation wanted to have the right to
direct employees who have accrued more than six weeks’ paid annual leave to
take annual leave. Some 413 employers did not seek such a right and 487
answered “unsure”.
[132]
Consistent with the survey responses to Question 13, Skinner and Pocock also
noted that the accumulation of leave is “a significant issue for employers
as unused leave represents a significant financial liability and tax
disadvantage, for paid leave cannot be claimed as a tax deduction until it
is paid out”.[85]
Skinner and Pocock also explored the implications of their research for
policy and practice, and in that context made the following observation:
“Unused leave also represents a significant financial liability for
enterprises; hence, there are substantial benefits to employers for ensuring
uptake of paid leave. Organisational policies related to the management of
paid leave, including monitoring paid leave uptake and ensuring that a
minimum number of paid leave days are taken over 12 to 24 months, would also
appear beneficial.”[86]
[133]
As well as the
financial cost associated with leave accruals, ACCI submitted that providing
a mechanism to reduce excessive leave accruals “should ensure a more
balanced, rested and (accordingly) productive workforce”.[87]
[134]
Historically,
industrial tribunals have accepted that taking annual leave can give rise to
an increase in productivity. ACCI referred to two decisions in support of
this proposition. In Re Professional
and Shopworkers No.2 Award,[88]
Heydon J dealt with an appeal concerning the jurisdiction of a wages board
(the Professional and Shopkeepers’ Group No. 2 Board) to grant a claim for
“three weeks holiday on full pay”. The claim was not opposed by the
employers but the Board held that it had no power to grant the claim. In
upholding the appeal Heydon J made the following observation about benefits
of a provision of the type sought:
“... the result of investigations by
expert students into the whole question of rest for workers of all classes
indicated that it is assuming enormous importance, and it has been shown in
occupations of the most varied character that a diminution of the time
worked by granting longer and more frequent intervals of rest has resulted
in greater and better production of work.”[89]
[135]
The judgment of
Dethridge CJ (of the Commonwealth Court of Conciliation and Arbitration) in
The Printing and Allied Trades
Employers Federation of Australia & Anor v The Printing Industry Employees
Union of Australia & Ors[90]
was one of the earliest arbitrated decisions to grant a period of annual
leave. In awarding one week’s paid leave, his Honour made the following
observation:
“Unless an industry
is finding difficulty in maintaining itself, in my opinion the institution
of paid annual leave is a very desirable boon for employers. Although at
first it might cause some increase in labour cost, this probably would not
be commensurate with the shortening of the working year and ultimately might
be virtually balanced by increased vigour and zeal of employees. The
publication already referred to (International Labour Office (1935)
‘Holidays with Pay at p 82) has the following passage ‘It would undoubtedly
be a fallacy, even from a purely economic point of view, to regard paid
holidays as a burden to the employer for which he receives no return. On the
contrary, he obtains a very real return by finding his employees fresh and
eager for work when they return from their holidays. He reaps an advantage
in higher output, fewer spoilt goods, less absence, less sickness and fewer
accidents.’”
[91]
[136]
The evidence on
whether paid leave improves productivity appears to be somewhat mixed and
inconclusive.[92]
However, there is evidence that absenteeism is reduced after a period of
paid annual leave. Westman and Etzion,[93]
found that absenteeism for non-health reasons “remained lower than before
vacation even six weeks after returning from vacation”. Westman and Etzion
also reported other benefits associated with taking vacations:
“...
vacation relief decreases psychological and behavioural strains caused by
job stress ...
The
vacation alleviated perceived job stress and thus also the experience of
burnout as predicted, replicating findings that a respite from work has the
effect of lessening strain ...
Measuring job stress and burnout three times enabled us to discover that
vacation has an abrupt, positive impact that fades gradually.”[94]
“Taking a
vacation was found to affect stress and burnout. Upon return from vacation
there was a significant drop in stress compared with the initial
pre-vacation level. However, approximately three weeks after the return to
work, the level of stress had reverted to its initial pre-vacation level.
Among the comparison group members, no change in levels of stress occurred
over time. The level of burnout also fell significantly after the vacation,
and had still retained its low level 3 weeks after returning to work ...
Employees who took long vacations reported lower levels of stress than those
who took short vacations ... and the length of the vacation tended to
moderate the relationship between satisfaction with the vacation and stress
and burnout ...
It
seems that the effects of taking a vacation are also positive when the
employees are able to determine its dates and duration voluntarily.
Employees return from their vacation less stressed and burned out, and — it
may be reasonably assumed, although we have no direct proof — their
productivity increases, at least for the short term.”[95]
[138]
The
evidence canvassed above (at paragraphs
[118]–
[137])
supports the following findings:
(i)
Not taking a reasonable portion of leave can give rise to a serious
threat to the health and safety of the employees concerned.
(ii)
Excessive annual leave accruals are a significant issue for
employers. Such accruals represent a significant financial liability and can
give rise to cash flow problems (particularly for small businesses) when
paid out on termination.
(iii)
The taking of accrued paid annual leave can have mutual benefits for
employees and employers:
(a)
Taking paid annual leave provides employees with a period of rest and
recovery from work and has significant positive implications for employee
health and wellbeing. As well as providing an opportunity for rest and
recovery, taking paid annual leave also provides employees with the time and
opportunity to attend to their family and other commitments and to engage in
social, community and personal interests.
(b)
While the evidence on whether taking paid leave improves productivity
appears to be somewhat mixed and inconclusive, there is evidence that
absenteeism is reduced after a period of leave and of a strong correlation
between workplace stress and anxiety and not taking leave breaks. A period
of paid leave is also likely to reduce fatigue at work and improve workplace
health and safety.
[139]
Based on
the material before us and the findings set out at paragraphs
[116]
and
[138],
we are persuaded that modern awards should include a mechanism for dealing
with “excessive leave”. We now turn to the form and content of that
mechanism.
[140]
In
considering an appropriate response to the issue of ‘excessive’ paid annual
leave accruals it is important to consider the reasons why employees do not
fully utilise their accrued paid leave. We propose to consider this issue
first before turning to the Employer Group claim.
Reasons for excessive annual leave accruals
[141]
As shown in Table 4
below, Skinner and Pocock found that the most common reason given by
employees for not taking their full leave entitlement was ‘saving it for a
future holiday’. This reason was indicated by 41 per cent of all workers in
both 2002 and 2010. However, 30 per cent of employees said they were too
busy at work to take all of their leave. This was very close to the
proportion who provided this response in the 2002 survey (29.1 per cent). A
larger proportion of women said that they were too busy to take leave in
2009 than in 2002, while there was no change for men. A total of 13 per cent
of employees in 2010 said that they could not get the time off that suited
them, and a similar proportion (12.5 per cent) provided such a response in
2002. That is, they could not reach agreement with their employer to take
leave at a time of their choosing.[96]
[142]
These
were also the dominant reasons, in the above order, among parents and those
without children. Younger workers were more likely to say that they were
saving their leave for a future holiday, while older workers were more
likely to say that they were too busy to take leave.[97]
Table 4:
Reasons for not taking full leave entitlement—AWALI 2010 and TAI 2002
|
AWALI 2010 |
TAI 2002 |
||||
|
Men
(%) |
Women
(%) |
All
(%) |
Men
(%) |
Women
(%) |
All
(%) |
Saving leave for future holiday |
41.8 |
39.5 |
41.0 |
39.5 |
37.3 |
38.8 |
Could not get time off that suited you |
13.1 |
13.5 |
13.2 |
11.3 |
15.1 |
12.5 |
Too busy at work |
29.1 |
33.8 |
30.7 |
29.4 |
28.2 |
29.1 |
Rather have the money than extra holidays |
8.1 |
5.4* |
7.2 |
3.9 |
3.2 |
3.7 |
Preferred to work rather than take holidays |
10.0 |
6.8 |
8.9 |
8.1 |
5.7 |
7.4 |
Leave paid out when changed jobs |
6.4 |
4.0* |
5.6 |
8.3 |
2.7 |
6.6 |
Other reason |
17.2 |
15.6 |
16.6 |
2.2* |
7.3 |
3.7 |
Note: *Estimate unreliable due to insufficient sample size.
Source: Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia: Who
gets it, who takes it and implications for work-life balance, Journal of
Industrial Relations, 21 August 2013, Vol. 55 at p. 688.
[143]
Table 5
shows workers’ reasons for not taking their full leave entitlement by
various employment characteristics. Those working long hours (45 or more)
were much more likely than those working 35–44 hours to say that they were
too busy to take leave. They were also less likely to say that they were
saving their leave for a future holiday. Skinner and Pocock suggested that
“it appears that those working long hours struggle to take paid leave in the
face of work demands” and that “those working long hours are affected by a
compounding work–life disadvantage: their long hours are associated with
much worse work–life interference compared to other workers ... as is their
lower rate of annual leave-taking”.[98]
Table 5:
Reasons
for not taking full leave entitlement by work hours, employment contract and
occupation—AWALI 2010
|
Work hours |
Contract |
Occupation |
|||
35–44
(%) |
45+
(%) |
Ongoing
(%) |
Fixed-term
(%) |
Prof.
(%) |
Other
(%) |
|
Saving leave for future holiday |
45.6 |
35.6 |
42.3 |
28.0 |
39.0 |
42.1 |
Could not get time off that suited you |
13.4 |
13.1 |
12.8 |
17.1* |
11.5 |
14.5 |
Too busy at work |
22.5 |
40.3 |
29.8 |
39.0 |
36.9 |
25.4 |
Rather have the money than extra holidays |
81.0 |
5.9 |
6.8 |
** |
3.3* |
10.4 |
Preferred to work rather than take holidays |
10.0 |
7.7 |
9.1 |
** |
6.4 |
11.3 |
Leave paid out when changed jobs |
6.6 |
4.2* |
5.0 |
** |
4.3* |
6.2 |
Other reason |
18.3 |
14.6 |
16.2 |
20.7* |
16.0 |
17.5 |
Source : (Skinner & Pocock 2013, p. 689)
Notes: *Estimate unreliable due to insufficient sample size; **Estimate not
provided due to inadequate sample size. Multiple responses were allowed on
this item.
[144]
The above data suggest
that a significant barrier to the use of leave entitlements by employees is
work pressures, with 43.9 per cent of employees in the AWALI survey being
either too busy at work (30.7 per cent) or unable to take leave at a time
that suited them (13.2 per cent). This suggests that employers are not
creating workplaces that allow for employees to use their entitlements.
[145]
Skinner
and Pocock argued that these findings create a case for “renovating”
Australia’s annual leave system to ensure that more Australians have access
to paid leave, including:
“[T]o address the barriers that appear to affect taking leave in the year in
which it is accumulated. Work pressures are clearly a significant factor
affecting almost a third of full-timers. Although the Fair Work Act 2009
states that employers must not unreasonably refuse to grant an employee’s
request for paid leave, this has not prevented a widespread problem of
reluctant leave deferral. It seems that managerial and cultural barriers to
the uptake of paid leave, such as intense and demanding work, now affect
many workers.”[99]
[146]
We now
turn to the Employer Group’s claim.
The
Employer Group’s claim
[147]
The
Employer Group seek to insert a standard “excessive annual leave” model term
in 70 modern awards (see paragraph [59]).
[148]
We now
deal with the content of such a model term and whether
all modern awards should be
varied to insert the model term. It is convenient to deal with the second
issue first.
[149]
The
Employer Group was not seeking to insert its model “excessive annual leave”
clause into all modern awards.
Rather it was proposed that the Employer Group’s model clause be inserted
into 70 modern awards.[100]
The proposed variations are split into two categories:
(i)
the 39 modern awards which do not currently contain any provisions
allowing employers to direct employees to take excessive annual leave (see
Attachment D);
and
(ii)
the 31 modern awards which do currently contain provisions regarding
excessive leave but those provisions do not provide the same ability to
direct the taking of excessive leave as is proposed in the Employer Group’s
claim (see
Attachment E).
[150]
The Employer Group
does not seek to vary the 52 modern awards that already contain provisions
allowing employers to direct the taking of excessive leave in a manner
similar to (or in some circumstances more flexible than) the model clause
proposed. To understand the practical effect of the Employer Group’s claim
we need to
say
something about those modern awards which already contain excessive leave
provisions.
[151]
Some 79
modern awards already contain “excessive leave” provisions[101]
and these can be summarised as follows:
·
52
awards (67 per cent) provide that the employer’s right to direct an employee
to take annual leave is only enlivened once the employee has accrued eight
weeks’ or more annual leave. A further 17 awards have the threshold at six
weeks’ accrued leave.[102]
·
25
awards (32 per cent) provide that an employee can only be directed to take a
period of annual leave after “the employer has genuinely tried to reach
agreement with an employee as to the timing of taking annual leave”.
·
22
awards (28 per cent) provide that annual leave must be taken within a
specified period after accrual.
[103] Most of these awards (14) provide
that annual leave must be taken “within 18 months of the entitlement
accruing”[104]
and four provide that leave must be taken within six months of accrual.
·
75
awards (95 per cent) provide that an employer must give at least four weeks’
notice of the time when such leave is to be taken; two of these awards
provide for eight weeks’ notice.[105]
·
33
awards (42 per cent) limit the amount of accrued paid annual leave that an
employer can direct an employee to take: 28 of these awards limit the amount
to 25 per cent of the employee’s accrued paid annual leave balance and four
awards provide that the employee must retain an entitlement to at least four
weeks’ accrued paid leave after
taking the leave as directed.
[152]
The
practical effect of the Employer Group’s proposal, if granted, would be to
provide some greater consistency in relation to the mechanisms in modern
awards for dealing with excessive accruals of paid annual leave (70 awards
would contain consistent provisions).
[153]
However,
in many of the 31 modern awards which presently contain excessive leave
provisions, and which the Employer Group sought to vary to insert its model
term, such consistency would have the consequence of reducing the existing
safeguards in those awards. Some 30 of the modern awards the Employer Group
sought to vary presently limit an employer’s right to direct an employee to
take paid annual leave to circumstances where the employee has at least
eight weeks’ accrued paid annual leave. The Employer Group’s claim sought to
reduce this threshold to six weeks’ accrued leave.
[154]
Further,
if the Employer Group’s claim was granted, some 52 of the 122 modern awards
would not contain the model term. In many of these modern awards there is an
existing term which allows an employer to direct an employee to take
all of their accrued annual
leave, such that the employee does not have the right to retain a minimum
amount of accrued paid leave. Under the Employer Group’s claim the employee
would retain at least four weeks’ accrued annual leave
after the direction is given by
the employer.
[155]
We are
not bound by either the terms of the relief sought by a party nor by the
scope (i.e. the awards to be varied) of the variations proposed. Context is
important in this regard.
[156]
These
issues arise in the 4 yearly review of all modern awards. The Review is
essentially a regulatory function and the Commission must ensure that modern
awards, together with the NES, provide a fair and relevant minimum safety
net of terms and conditions. The role of modern awards and the nature of the
Review are quite different from the arbitral functions performed by the
Commission in the past. In the Review context, the Commission is
not creating an arbitral award in
settlement of an inter partes
industrial dispute—it is reviewing a regulatory instrument.
[157]
In
considering whether a particular term should
prima facie be consistently
inserted into all modern awards it is important to consider the subject
matter of the term itself.
[158]
Modern
awards and the NES interact in different ways:
·
A modern
award may include any terms that the award is expressly permitted to include
by a provision of Part 2-2 (which deals with the NES) (s.55(2)).[106]
·
A modern
award may include terms that:
(i)
are ancillary or incidental to the operation of an entitlement of an
employee under the NES; or
(ii)
terms that supplement the NES (s.55(4)).
[159]
The
statutory notes to s.55(4) provide examples. Note 1 states:
“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.”
[160]
Note 2
states:
“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).”
[161]
Note 3
states:
“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.”
[162]
Section
139(1)(h) is also relevant, it provides:
“A modern award may include terms about any of the following matters:
. . .(h)
leave, leave loadings and arrangements for taking leave.”
[163]
Annual
leave is one of the minimum standards specified in the NES. The NES is
intended to provide a consistent set of minimum standards that apply to the
employment of national system employees. The NES annual leave provisions
provide both a consistent set of substantive rights (e.g. quantum of leave;
method of accrual; and payment for leave) as well as a degree of conditional
flexibility.
[164]
Section
93(3) is an example of what we mean by conditional flexibility (see
paragraph
[89]).
It provides, relevantly, that a modern award may include terms “requiring an
employee ... to take paid annual leave in particular circumstances”.
However, such flexibility is conditional; an employee can only be required
to take leave “if the requirement is reasonable”.
[165]
A model
term dealing with the taking of paid annual leave to address the excessive
accrual of such leave is plainly a term of the type contemplated by ss.93(3)
and (4). That is, the model term is a term that is expressly permitted to be
included in a modern award. It seems to us that it will generally be
desirable for greater consistency in respect of terms of this character.
This is particularly so in circumstances where the regulatory boundary
between the NES and modern awards is clearly delineated and the legislature
has plainly contemplated (by permitting such terms) that the terms of a
modern award may provide some conditional flexibility to the provisions of
the NES.
[166]
This may
be contrasted with terms which supplement the NES, for example by providing
an additional period of paid leave. Ordinarily one would expect such
supplementation to reflect the circumstances applicable to particular modern
awards, with the desirability of consistency across modern awards a less
important consideration.
[167]
In its 20 June 2014
submission, Ai Group highlighted the benefits of greater consistency in
modern award provisions pertaining to annual leave:
“There is substantial
merit in the Commission seeking to achieve a greater level of consistency in
award provisions pertaining to annual leave. There is also merit in seeking
to achieve a level of consistency in the rules governing the operation of
annual leave entitlements for award covered and award/agreement free
employees.
We do
not suggest that it is necessarily appropriate for all awards to have
exactly the same provisions (the Commission has always provided for
deviations from model award clauses if industry-specific circumstances
warrant this) but there is nonetheless scope for much greater consistency.
The Employer proposals represent an important and timely step in the right
direction ...
Achieving a level of consistency in award entitlements relating to annual
leave is consistent with the obligation under the modern awards objective
for the FWC to ensure modern awards, together with the NES, provide a fair
and relevant safety net taking into account “…
the need to ensure a simple, easy to
understand, stable and sustainable modern award system for Australia …”.
Achieving greater uniformity between individual awards will make the system
simpler and easier to understand.
A
reduction in variances between award entitlements will, in itself, reduce
the regulatory burden on businesses that are required to apply multiple
awards, consistent with paragraph 134(1)(g) of the modern awards objective.
These benefits will be magnified where such amendments provide employers
with greater flexibility or control in relation to the management of annual
leave or where incompatible provisions relating to matters such as
close-downs are addressed. There are obvious benefits that flow from
enabling employers to adopt a uniform approach to the management of annual
leave across their workforce, regardless of the award coverage of particular
groups of workers.”[107]
[169]
It
follows from the foregoing that our provisional view is that a model term
dealing with the taking of annual leave should be consistently inserted in
all modern awards. We accept, of course, that some modern awards have
particular leave provisions necessitating a degree of “tailoring” to the
model term. But, that said, our provisional view is that the model term
should be inserted in all modern awards.
[170]
As to
the issue of content, the Employer Group sought a term which provides that
in certain circumstances an employer may direct an employee to take paid
annual leave. Such a direction may only be made if:
(i)
the employee has accrued at least six weeks of annual leave;
(ii)
the employer gives the employee four weeks’ notice to take the annual
leave; and
(iii)
the employee retains at least four weeks’ accrued leave after the
direction is given by the employer.
[171]
Two
general observations may be made about the model term sought.
[173]
First,
the adoption of a six week threshold ignores the fact that different annual
leave entitlements accrue to different categories of employees.
Specifically, shiftworkers (as referred to in s.87(1)(b) of the Act) are
entitled to five weeks’ paid annual leave for each year of service, whereas
employees other than shiftworkers are entitled to four weeks. Any definition
of excessive accrued leave should take account of this difference.
[174]
Second,
over two-thirds (52) of the 79 modern awards which presently contain
excessive leave provisions provide that an employer’s right to direct an
employee to take annual leave is only enlivened once the employee has
accrued an entitlement to eight
weeks’ or more paid annual leave.
[176]
Later in
this decision we return to the proposed safeguards dealing with notice (at
(ii)) and the quantum of retained leave after a direction has been given and
implemented (at (iii)).
[177]
We also
observe that the Employer Group’s model term does not require an employer to
enter into any dialogue with an employee before directing them to take part
of their annual leave. In particular, the employer is under no obligation to
discuss the issue of excessive annual leave accrual with the employee or to
seek to reach an agreement with the employee about the time for taking such
leave. It is plainly preferable if these matters can be resolved by
agreement between the employer and employee, without the need for a
direction. We note that about one-third (25) of the 79 modern awards which
presently contain excessive leave provisions provide that an employee can
only be directed to take a period of annual leave
after the “employer has genuinely
tried to reach agreement with an employee as to the timing of taking annual
leave”.
[178]
We now
turn to the second general observation about the Employer Group’s model
term. This observation concerns the limited capacity of the model term to
address the problem to which it is directed.
[179]
It will
be recalled that s.88 of the Act deals with the taking of paid annual leave,
as follows:
“Taking paid annual leave
(1)
Paid annual leave may be taken for a period agreed between an
employee and his or her employer.
(2)
The employer must not unreasonably refuse to agree to a request by
the employee to take paid annual leave.”
[180]
The
Skinner and Pocock research suggests that the excessive accrual of paid
annual leave is predominantly a consequence of:
(i)
employee choice (i.e. employees choosing to accrue leave, usually to
save it for a future holiday);
(ii)
employees being too busy at work to take all of their leave; or
(iii)
employees not being able to take their leave at a time that suited
them (i.e. they could not reach agreement with their employer to take leave
at a time of their choosing).
[181]
The
Employer Group’s model term only partially addresses the reasons for the
accrual of excessive leave. It will provide a mechanism for dealing with the
voluntary leave hoarder ((i) above) and may address circumstance (iii), by
requiring employees to take leave at a time that may not suit them, but it
does not address circumstance (ii).
[182]
Circumstance (ii) is, essentially, where work pressure prevents an employee
from taking all of their paid annual leave. It is the reason nominated by 30
per cent of employees in the Skinner and Pocock survey for not taking all of
their leave. It is a significant factor in the excessive accrual of annual
leave and it was not addressed in the Employer Group’s model term.
[183]
The
Employer Group’s claim, understandably enough, provided a mechanism to
address employer concerns about the accumulation of leave—that is, it
provides a means of reducing a significant financial liability.
[184]
But the
Employer Group’s model term provided no avenue for an employee to exercise
any control over the time at which their leave is to be taken.
[185]
In this
context it is important to observe that the Employer Group’s claim simply
sought to replicate (in form if not substance) previous legislative and
award mechanisms to address excessive annual leave accruals. As we have
mentioned, before the Work Choices Act amendments, some state and territory
annual leave laws provided employers with a right to direct employees to
take their annual leave. Further, some 79 modern awards also contain
“excessive leave” provisions.
[186]
But,
importantly, experience has shown that providing employers with a right to
direct employees to take their annual leave has
not provided a complete solution
to the issue of excessive annual leave accruals.
[187]
Skinner
and Pocock found that in 2009 only 40.3 per cent of full-time employees used
all of their paid annual leave. Hence, about 60 per cent of full-time
employees accrued a portion of their leave. Similar results were obtained in
a 2002 survey (only 38.8 per cent of employees used all of their paid
leave). As a result, most employees accrued annual leave despite the fact
that employers had the right to direct them to take that leave.
[188]
Ai Group described the
Employer Group’s claim as “a modest step towards restoring employers”
capacity to manage leave accruals’.[108]
But the Employer Group’s claim sought to “restore” a right of direction
which has only had, at best, limited success in the past in addressing the
issues associated with excessive annual leave accruals.
The
model term—Excessive Annual Leave Accruals
1.
Excessive Annual Leave Accruals
This
clause contains provisions additional to the NES about taking paid annual
leave, to deal with excessive paid annual leave accruals.
1.1
Definitions
Shiftworker
means [insert definition]
An
employee has an excessive leave
accrual if:
(a)
the employee is not a shiftworker and has accrued more than eight
weeks’ paid annual leave; or
(b)
the employee is a shiftworker and has accrued more than 10 weeks’
paid annual leave.
1.2
Eliminating excessive leave accruals
(a)
Dealing with excessive leave accruals by agreement
Before an employer can direct
that leave be taken under subclause 1.2(b) or an employee can give notice of
leave to be granted under subclause 1.2(c), the employer or employee must
request a meeting and must genuinely try to agree upon steps that will be
taken to reduce or eliminate the employee’s excessive leave accrual.
(b)
Employer may direct that leave be taken
This subclause applies if an
employee has an excessive leave accrual.
If agreement is not reached
under subclause 1.2(a), the employer may give a written direction to the
employee to take a period or periods of paid annual leave. The direction
must state that it is a direction given under subclause 1.2(b) of this
award.
Such a direction must not:
(i)
result in the employee’s remaining accrued entitlement to paid annual
leave at any time being less than six weeks (taking into account all other
paid annual leave that has been agreed, that the employee has been directed
to take or that the employee has given notice of under subclause 1.2(c));
(ii)
require the employee to take any period of leave of less than one
week;
(iii)
require the employee to take any period of leave commencing less than
eight weeks after the day the direction is given to the employee;
(iv)
require the employee to take any period of leave commencing more than
12 months after the day the direction is given to the employee; or
(v)
be inconsistent with any leave arrangement agreed between the
employer and employee.
An employee to whom a direction
has been given under this subclause may make a request to take paid annual
leave as if the direction had not been given. The employer is not to take
the direction into account in deciding whether to agree to such a request.
Note:
The NES state that the employer must not unreasonably refuse to agree to a
request by the employee to take paid annual leave.
If leave is agreed after a
direction is issued and the direction would then result in the employee’s
remaining accrued entitlement to paid annual leave at any time being less
than six weeks, the direction will be deemed to have been withdrawn.
The employee must take paid
annual leave in accordance with a direction complying with this subclause.
(c)
Employee may require that leave be granted
This subclause applies if an
employee has had an excessive leave accrual for more than six months and the
employer has not given a direction under subclause 1.2(b) that will
eliminate the employee’s excessive leave accrual.
If agreement is not reached
under subclause 1.2(a), the employee may give a written notice to the
employer that the employee wishes to take a period or periods of paid annual
leave. The notice must state that it is a notice given under subclause
1.2(c) of this award.
Such a notice must not:
(i)
result in the employee’s remaining accrued entitlement to paid annual
leave at any time being less than six weeks (taking into account all other
paid annual leave that has been agreed, that the employee has been directed
to take or that the employee has given notice of under this subclause);
(ii)
provide for the employee to take any period of leave of less than one
week;
(iii)
provide for the employee to take any period of leave commencing less
than eight weeks after the day the notice is given to the employer;
(iv)
provide for the employee to take any period of leave commencing more
than 12 months after the day the notice is given to the employer; or
(v)
be inconsistent with any leave arrangement agreed between the
employer and employee.
The employer must grant the
employee paid annual leave in accordance with a notice complying with this
subclause.
(d)
Dispute resolution
Without limiting the dispute
resolution clause of this award, an employer or an employee may refer the
following matters to the Fair Work Commission under the dispute resolution
clause:
(i)
a dispute about whether the employer or employee has requested a
meeting and genuinely tried to reach agreement under subclause 1.2(a);
(ii)
a dispute about whether the employer has unreasonably refused to
agree to a request by the employee to take paid annual leave; and
(iii)
a dispute about whether a direction to take leave complies with
subclause 1.2(b) or whether a notice requiring leave to be granted complies
with subclause 1.2(c).
[190]
The model term is
intended to establish mechanisms to assist both employers and employees to
reduce or eliminate “excessive leave accruals” consistent with the statutory
framework and subject to appropriate safeguards.
It incorporates both terms requiring an employee to take leave in particular
circumstances (s.93(3)) and terms otherwise dealing with the taking of paid
annual leave (s.93(4)).
[191]
Subclause 1.1 defines
“excessive leave accrual” as more than eight weeks’ paid annual leave, or 10
weeks’ paid annual leave in the case of a “shiftworker” (as defined in the
modern award for the purposes of the additional week of annual leave
provided for in the NES). This threshold of eight weeks is consistent with
s.236(6) of the former WR Act and with the majority of current modern award
clauses which contain excessive leave provisions (see further the discussion
at paragraphs [172]–[175]
above). As with paid annual leave entitlements under the NES generally, the
eight or 10 week threshold is based upon an employee’s ordinary weekly hours
of work (see s.87(2) of the Act).
[192]
Where an employee has
an excessive leave accrual, the model term requires the employer or employee
firstly to request a meeting to try to resolve the matter by agreement. If
agreement cannot be reached, the model term provides for the employer to
issue a direction that certain leave be taken and/or for the employee to
give the employer a written notice requiring that certain leave be granted.
[193]
Subclause 1.2(a)
provides that, before an employer can issue such a direction or an employee
can give such a notice, the employer or employee must:
·
request a meeting; and
·
genuinely try to agree
upon steps that will be taken to reduce or eliminate the employee’s
excessive leave accrual.
[194]
An excessive leave
accrual would be eliminated if, immediately after all of the agreed steps
had been taken, the employee’s accrued leave entitlement would be less than
eight weeks for a non-shiftworker or 10 weeks for a shiftworker. This might
be achieved in a number of stages, through the
employee taking a number of agreed periods of annual leave. The employee
might also choose to cash out some annual leave in accordance with the
award’s cashing out provisions.
Example
Brendan is a part-time employee
not working shifts whose ordinary hours of work are 19 per week. Brendan
usually takes four weeks’ annual leave at Christmas (76 hours), but for the
past three years has taken only one week and at the start of the year has an
accrued entitlement to nine weeks’ paid annual leave.
Brendan and his supervisor meet
to discuss Brendan’s excessive leave accrual. Brendan explains that he is
hoping to take six weeks’ annual leave to travel overseas in the middle of
the year and then to resume taking four weeks’ leave at Christmas. This
leave can be readily accommodated by the employer, but Brendan’s supervisor
requests that Brendan take an additional week’s leave on top of the six
weeks and again at Christmas so as to reduce his leave accrual at the start
of the following year to one week. Brendan and his supervisor agree to these
arrangements and no direction to take leave is
issued by the employer.
[195]
Subclause 1.2(a)
requires the employer or employee to
genuinely try to reach an agreement. The notion of genuinely trying to
reach agreement appears in a number of contexts in the Act, including:
determining whether there is pattern bargaining (ss.412(2)–(5)); industrial
action being protected (s.413(3)); suspension or termination of protected
industrial action (s.423(4)(f)); and an application for a protected action
ballot order (s.443(1)(b)).
[196]
Where an
employer and employee are unable to agree on steps to eliminate the
employee’s excessive leave accrual, subclause
1.2(b) provides for the employer to give the employee a written direction to
take a specified period or specified periods of paid annual leave. The
employee must take paid annual leave in accordance with an employer
direction that complies with the requirements of this subclause.
[197]
As a procedural
safeguard, the direction must be in writing, and
must state that it is given under subclause 1.2(b) of the modern award. This
will assist in ensuring that the employee is aware of his or her obligation
to comply with the direction and of the limitations on such a direction.
These limitations are intended to ensure that a requirement to take leave
under the model term is “reasonable” in terms of s.93(3) of the Act. The
Full Bench in Australian Federation
of Air Pilots v HNZ Australia Pty Ltd recently observed that in
assessing the reasonableness of such a requirement, “all relevant
considerations needed to be taken into account including those which are set
out in paragraph [382] of the Explanatory Memorandum to the
Fair Work Bill 2008”[109]
(see paragraph [89] above).
[198]
Paragraphs (i) to
(iv) of subclause 1.2(b) set out limitations on the period or periods of
leave that may be required under the direction.
[199]
Paragraph
1.2(b)(i)
limits the amount of leave that the employee may be directed to take, by
requiring that the direction must not result in the employee’s remaining
accrued leave entitlement at any time being less than six weeks.
[200]
Maintenance of a six
week minimum is consistent with s.236(6) of the former WR Act and with the
majority of current modern award clauses which limit the amount of accrued
paid annual leave that an employer can direct an employee to take. It also
accommodates the circumstance of an employee seeking to accrue leave so that
he or she can take a reasonable extended holiday. The minimum is applied by
considering the effect on the employee’s leave accrual of the directed leave
being taken, taking into account all previously agreed paid annual leave,
any previous directions to take leave and any previous notices given by the
employee under subclause 1.2(c).
[201]
Paragraph 1.2(b)(ii)
requires the minimum length of any period of directed leave to be one week.
This is to avoid an employee being required to take leave in a series of
single days or clusters of a small number of days.
[202]
Paragraph 1.2(b)(iii)
requires that the employee be given at least eight weeks’ notice of the
commencement of the directed leave. This is intended to ensure that the
employee has a reasonable amount of time to make arrangements for activities
during the leave period and/or to coordinate his or her leave with family
members. The same notice period applies in circumstances where an employee
gives written notice to the employer, pursuant to subclause 1.2(c).
[203]
Paragraph 1.2(b)(iv)
requires that the directed leave commence in not more than 12 months. This
is intended to ensure that the excessive leave accrual is dealt with
reasonably promptly, but still allow sufficient scope for the leave to occur
at a time that is suitable to both the employer and the employee.
[204]
Paragraph 1.2(b)(v)
requires that the direction not be inconsistent with any leave arrangement
agreed to by the employer and employee. For example, general arrangements
for taking leave might have been agreed in the employee’s contract of
employment, or there may have been a one-off agreement between the employer
and employee that the employee could accrue excessive leave for a particular
purpose.
[205]
A further limitation
intended to ensure that a requirement to take leave under the model clause
is reasonable is that a direction under subclause 1.2(b)
operates subject to s.88(2) of the Act. Subclause 1.2(b) provides
that an employee given a direction to take leave may make a request to take
paid annual leave as if the direction had not been given. Under the NES
(s.88(2)) the employer must not unreasonably refuse such a request. Further,
the giving of the
direction will not be a relevant factor in determining whether refusal of
such a subsequent leave request is unreasonable. If leave is agreed after a
direction is issued and the direction in combination with the agreed leave
would then result in the employee’s leave accrual at any time being reduced
below six weeks, the direction will be deemed to have been withdrawn.
[206]
In effect, this
limitation means that the employee retains his or her entitlement under s.88
of the Act to take accrued paid annual leave, notwithstanding a direction to
take leave under subclause 1.2(b). For example, the employee might request
to take some or all of the directed leave at a time or times that better
suit the needs of the employee and if such a request is made it cannot be
unreasonably refused by the employer.
[207]
This limitation has
been provided to make clear how this arrangement enables the particular
circumstances of the employee and employer at the time (including matters
personal to the employee) to be taken into account. (See
Australian Federation of Air Pilots v
HNZ Australia Pty Ltd.)[110]
[208]
The note regarding the
NES in subclause 1.2(b) is an incidental term within the meaning of s.142 of
the Act and/or an ancillary or incidental term within the meaning of
s.55(4), and will assist in ensuring that the operation of the modern award
clause is easy to understand in terms of s.134(1)(g).
Example
Sam is a full-time shiftworker
who has not taken any annual leave in the three years she has worked for her
employer and so has an accrued entitlement to 15 weeks’ leave after three
years. Sam’s employer encourages its employees to take their full five weeks
of annual leave each year in two periods—one during the middle of the year
and one towards the end of the year.
Sam’s supervisor meets with her
to propose that she take seven weeks’ leave at midyear and a further seven
weeks towards the end of the year, so as to reduce her leave accrual to six
weeks by the end of the fourth year. However, the only leave that Sam will
agree to is one period of five weeks before the middle of the year and no
agreement is reached. Sam’s supervisor issues a direction that she is to
take the two leave periods the supervisor had proposed.
After the direction is issued,
Sam applies to take five weeks’ leave before the middle of the year. While
this is not the most convenient time for the employer, it can accommodate
this leave period without significant additional cost or disruption to its
business. As the employer is aware that it must not unreasonably refuse the
requested leave, and that the issuing of the direction is not a relevant
factor to take into account, the employer approves the leave.
As the direction would require
Sam to take a further 14 weeks’ leave and this would reduce her accrued
entitlement at the end of the year to one week, the direction is deemed to
be withdrawn. However, as Sam will not agree to take any further leave even
though she has been granted the leave she requested, the employer issues a
new direction requiring her to take a further five week leave period during
the middle of the year and a further four week period towards the end of the
year. This will leave Sam with at least six weeks’ accrued leave at the end
of the fourth year, after she has taken the agreed leave and the two
directed periods of leave.
[209]
Subclause 1.2(c) provides for an employee to give a written notice to the
employer that the employee wishes to take paid annual leave. This is
intended to address circumstances such as where an employee’s requests to
take his or her full leave accrual have repeatedly been refused by the
employer, or the employee has repeatedly been dissuaded from applying to
take his or her full leave accrual. The proposed subclause provides that the
employer must grant the employee paid annual leave in accordance with a
notice complying with this subclause. While subclause 1.2(c) may be
characterised as supplementing the NES (within the meaning of s.55(4)), we
acknowledge that there may be some tension between the proposed subclause
and s.88. These issues can be canvassed in the opportunity provided to make
further submissions (see paragraph [219]).
[210]
Such a
notice can only be given by the employee if the employee has had an
excessive leave accrual for at least six months. This provides the employer
with a reasonable opportunity to deal with the employee’s excessive leave
accrual before the employee is able to require that leave to be granted. If
the employer has already given the employee a direction complying with
subclause 1.2(b) to take leave and the directed leave will eliminate the
employee’s excessive leave accrual, then the employee cannot issue any
notice. If a direction has been given but after the directed leave is taken
the employee will still have an excessive leave accrual, the employee could
issue a notice under this subclause.
[211]
Similarly to an
employer direction to take leave, the model term
requires the employee first to request a meeting and to genuinely try to
resolve the employee’s excessive leave accrual by agreement.
[212]
The procedural
safeguards and limitations on the period or periods of leave that can be
specified in a notice under subclause 1.2(c) mirror those that apply to an
employer direction to take leave under paragraphs (i) to (v) of subclause
1.2(b), as outlined above.
Example
Ramesh is a full-time employee
not working shifts in a busy, small workplace. Ramesh has sought to take his
full leave entitlement to spend time with his family each year for the
previous four years, but his employer has granted him only one week’s leave
each year, on the basis that the business is too busy to cover a longer
absence.
Ramesh has an accrued
entitlement to 12 weeks’ leave and wishes to take at least four weeks’ leave
in six months time. Ramesh meets with his employer and requests the leave,
but the employer will only agree to him taking one week’s leave at the usual
time.
As Ramesh has had an excessive
leave accrual for over six months and has not been given a direction by the
employer that would eliminate his excessive leave accrual, Ramesh may issue
a notice to his employer requiring the employer to grant the four week leave
period he wishes to take.
[213]
Subclause 1.2(d) of
the model term draws attention to the capacity of the employer or the
employee to refer a dispute about a matter arising under the model term to
the Commission. As subclause 1.2(a) requires discussion between the employer
and employee, it is not necessary for there to be further discussions under
the terms of the dispute resolution clause before the dispute can be
referred to the Commission.
[214]
Our provisional view
is that the variation of modern awards to incorporate the model term is
necessary to ensure that each modern award provides a fair and relevant
minimum safety net, taking into account the s.134 considerations (insofar as
they are relevant) and would also be consistent with the objects of the Act.
This is so because of the various safeguards provided within the term itself
and because it facilitates the making of mutually beneficial arrangements
between an employer and employee.
[215]
When
leave is taken so as to reduce or eliminate excessive leave accruals,
employees will benefit from a period of rest and
recovery from work, which has significant positive implications for employee
health and wellbeing. Reducing fatigue at work and improving workplace
health and safety is also of benefit to employers,
and the evidence indicates that absenteeism is
also reduced after a period of leave. In addition, there is employer
evidence that
excessive leave accruals represent a significant financial liability and can
give rise to cash flow problems (particularly for small businesses) when
paid out on termination. Employers therefore
benefit
from a
mechanism to reduce their contingent liabilities.
[216]
Section
134(1)(d) of the modern awards objective requires the Commission to take
into account the need to promote flexible modern work practices and the
efficient and productive performance of work, and under s.134(1)(f)
the Commission must also take into account the likely impact of any exercise
of modern award powers on business, including on productivity, employment
costs and the regulatory burden.
[217]
The
issue of excessive leave accruals and untaken annual leave is of
significance to both employers and employees. For the reasons outlined
above, the insertion of the model term would assist in ensuring that modern
awards are relevant to the needs of the modern workplace, and would assist
businesses.
[218]
Finally,
the insertion of the model term into modern awards is also consistent with
the objects of the Act by: providing workplace relations laws that are fair
to working Australians and are flexible for businesses (s.3(a)); ensuring a
guaranteed safety net of fair, relevant and enforceable minimum terms and
conditions through the NES and modern awards (s.3(b)); assisting employees
to balance their work and family responsibilities by providing for flexible
working arrangements (s.3(d)); and acknowledging the special circumstances
of small and medium-sized businesses (s.3(g)). In respect of s.3(g), as
relatively few employees employed in small businesses are covered by a
collective agreement, a modern award variation of the type proposed would
ensure that all such businesses have capacity to deal with excessive leave
accruals.
4.2 Cashing out of
annual leave
[220]
The claim advanced by the Employer Group sought to insert the following
clause into 120 modern awards:
“Cashing
out of annual leave
With the agreement of the employer, an employee may cash out an amount of
accrued paid annual leave provided that:
(a)
the employee retains at least four (4) weeks of accrued annual leave
immediately after the agreed amount is cashed out;
(b)
each cashing out of a particular amount of accrued paid annual leave
must be agreed by a separate agreement in writing; and
(c)
the employee must be paid the full amount that would have been
payable had the employee taken the leave at the time that it is cashed out.”[111]
[221]
We
propose to deal with the relevant historical and legislative context before
turning to the merits of the claim advanced.
[222]
Under
previous legislative regimes, predecessor bodies to the Commission
consistently rejected proposals for the cashing out of annual leave on the
basis that such provisions undermined the purpose of annual leave, namely,
“to provide a reasonable period of physical and mental respite from work”.[112]
Enterprise agreement provisions providing for the cashing out of annual
leave were regarded as being contrary to the public interest as they
constituted a reduction in a “well established and accepted community
standard”.[113]
[223]
The Work Choices Act
amended the WR Act to provide that employees could
cash out
their annual leave in certain circumstances. The Work Choices Act inserted
s.233 into the WR Act, which provided that an employee could “cash out” an
accrued annual leave entitlement by written election and, with the agreement
of their employer, provided that the workplace agreement binding upon the
employee and his or her employer made provision for the cashing out of
annual leave. The quantum of accrued annual leave that could be cashed out
in any 12 month period was limited by s.233(2), which was in the following
terms:
“(2)
However, during each 12 month period, an employee is not entitled to
forgo an amount of accrued leave credited to the employee by an employer
that is equal to more than 1/26
of the nominal hours worked by the employee for the employer during the
period.”
[224]
The
practical effect of s.233(2) of the WR Act was that most full-time employees
could only cash out two weeks’ accrued annual leave in each 12 month period.
Section 233(3) provided additional safeguards, as follows:
“(3)
An employer must not:
(a)
require an employee to forgo an entitlement to take an amount of
annual leave; or
(b)
exert undue influence or undue pressure on an employee in relation to
the making of a decision by the employee whether or not to forgo an
entitlement to take an amount of annual leave.”
[225]
We have earlier described the award modernisation process which marked the
transition from the WR Act to the
Act (see paragraph
[94]).
[226]
During
the award modernisation process a number of employer organisations sought to
have provisions for cashing out annual leave included in modern awards. In
its 2008 Award Modernisation decision, the Award Modernisation Full Bench
rejected these submissions on the following basis:
“[99]
A number of employer interests sought provisions for cashing out of annual
leave by agreement. Such arrangements are apparently included in many
Australian Workplace Agreements (AWAs) and workplace agreements. Should
cashing out of annual leave become widespread it would undermine the purpose
of annual leave and give rise to questions about the amount of annual leave
to be prescribed. We think some caution is appropriate when dealing with
this issue at the safety net level. We do not intend to adopt a model
provision. Consistent with our approach to annual leave provisions generally
we shall be influenced mainly by prevailing industry standards, and the
views of the parties, in addressing this issue.
[100]
It has also been suggested that if awards do not provide for cashing out of
annual leave it will not be legally permissible to make workplace agreements
which provide for cashing out. In our opinion cashing out arrangements are
an appropriate matter for bargaining. If, when the legislative regime is
settled, it is apparent that workplace agreements cannot provide for cashing
out of annual leave unless there is a relevant provision in a modern award
it may be necessary to revisit the question.”[114]
[227]
It is important that
the above observation be placed in the context of the sequence of the
various iterations of the award modernisation request. The original request
was made by the Minister on 28 March 2008. On 16 June 2008 the request was
varied to include the following paragraph:
“33. The NES
provides that particular types of provisions are able to be included in
modern awards even though they might otherwise be inconsistent with the NES.
The Commission may include provisions dealing with these issues in a modern
award. The NES allows, but does not require, modern awards to deal with,
among other things:
·
provision for loadings to be paid to school-based trainees and school-based
apprentices in lieu of certain entitlements;
·
averaging of hours of work;
·
cashing out of paid annual leave – provided that modern awards contain a
prohibition on undue influence or undue pressure and require payment of
cashed out leave at full value;
·
the taking of paid annual leave;
·
particular circumstances in which an employee may be required to take paid
annual leave;
·
cashing out of paid personal/carer's leave – provided that modern awards
contain a prohibition on undue influence or undue pressure and require
payment of cashed out leave at full value;
·
the kind of evidence required to be provided by an employee when taking paid
personal/carer's leave, unpaid carer's leave or compassionate leave;
·
substitution of public holidays; and
·
the amount of notice an employee may be required to provide when terminating
their employment.”
[228]
On 18 December 2008, a
further variation was made which replaced the above with the following:
“33. The NES
provides that particular types of provisions are able to be included in
modern awards even though they might otherwise be inconsistent with the NES.
The Commission may include provisions dealing with these issues in a modern
award. The NES allows, but does not require, modern awards to include terms
that:
·
provide for loadings to be paid to school-based trainees and school-based
apprentices in lieu of certain entitlements;
·
enable the averaging of hours of work over a specified period;
·
provide for the cashing out of paid annual leave by an employee, provided
that such terms require:
-
the retention
of a minimum balance of 4 weeks’ leave after the leave is cashed out;
-
the cashing
out of each amount be by separate agreement in writing; and
-
payment of
cashed out leave be at at least the full amount that would have been payable
to the employee had the employee taken the leave that the employee has
forgone;
·
require employees, or allow employees to be required, to take paid annual
leave, but only if the requirement is reasonable;
·
otherwise deal with the taking of paid annual leave;
·
provide for the cashing out of paid personal/carer’s leave, provided that
such terms require:
-
the retention
of a minimum balance of 15 days’ leave after the leave is cashed out;
-
the cashing
out of each particular amount be by separate agreement in writing; and
-
the payment
of cashed out leave be at least at the full amount that would have been
payable to the employee had the employee taken the leave that the employee
has forgone;
·
relate to the kind of evidence required to be provided by an employee when
taking paid personal/carer’s leave, unpaid carer’s leave or compassionate
leave;
·
provide for the substitution of public holidays by agreement between an
employer and employee; and
·
specify the period of notice an employee may be required to give when
terminating their employment.”
[229]
It is apparent from a
subsequent statement on 23 January 2009 and a decision on 3 April 2009, that
the 18 December 2008 variation to the award modernisation request was
not taken into account in the
Full Bench’s 2008 Award Modernisation decision of 19 December 2008. In a
statement issued on 23 January 2009[115]
the Award Modernisation Full Bench said:
“[3] The
Commission made 17 modern awards in the priority stage of award
modernisation on 19 December 2008. Some matters were not finally dealt with
in those awards and some matters have arisen since which require further
consideration in conjunction with Stage 2 of the process.
Coverage, award flexibility and
annual leave
[4] The
award modernisation process was initiated by a request signed by the
Minister for Employment and Workplace Relations (the Minister) on 28 March
2008 pursuant to s.576C(1) of the
Workplace Relations Act 1996 (the Act). The Minister varied the request
on 16 June 2008 and 18 December 2008 pursuant to s.576C(4) of the Act. We
shall refer to the request as amended as the consolidated request. The
variations to the consolidated request made on 16 June 2008 were taken into
account in the proceedings leading to the making of the priority modern
awards and do not require any further comment at this stage. The variations
to the consolidated request made on 18 December 2008, however, have not been
considered in the award modernisation process so far. They have the
potential to affect a number of terms of the priority modern awards which
the Commission made on 19 December 2008. Those terms are, at least, the
coverage clause, the award flexibility clause and the annual leave clause.
...
[8]
Clause 33 of the amended request provides that modern awards may require
employees, or allow employees to be required, to take paid annual leave but
only if the requirement is reasonable. The requirement for reasonableness
was not part of cl.33 prior to the variations on 18 December 2008.
Similarly, it was not taken into account in the making of the priority
modern awards.
[9] We
intend to deal with these variations to the consolidated request, and any
others that might be relevant, in making the Stage 2 awards, provided it is
practical to do so. We encourage interested parties to bring forward
proposals and submissions as to how these new requirements should be
reflected in the coverage, award flexibility and annual leave clauses. The
Stage 2 exposure drafts do not attempt to take account of the 18 December
variations.”
[230]
We note that while the
above statement referred to variations to the consolidated request made on
18 December 2008, no specific reference was made to the cashing out of
annual leave.
[231]
The following
observation was made in the Award
Modernisation Full Bench decision of 3 April 2009:
“The award
modernisation process is governed by the provisions in Part 10A of the
Workplace Relations Act 1996 (the
Act) and a request made by the Minister for Employment and Workplace
Relations (the Minister) pursuant to s.576C(4) of the Act. The Minister’s
request was made on 28 March 2008 and subsequently amended on 16 June and 18
December 2008. We shall refer to the request as amended as the consolidated
request. The priority modern awards were made by the Commission on 19
December 2008. Because of the timing there was no opportunity to take the
amendment to the request made on 18 December 2008 into account before
publishing the priority modern awards. In its statement of 23 January
2009 the Commission sought views on how the amendment might affect the terms
of modern awards. It appears that there are three main areas in which the 18
December amendment might have effect. Those areas are: coverage, award
flexibility and annual leave. We deal first with coverage.”[116]
(emphasis added)
[232]
In a number of
subsequent decisions the Award Modernisation Full Bench rejected proposals
to insert cashing out provisions in modern awards, consistent with the views
it had expressed in its 2008 Award Modernisation decision.[117]
The Award Modernisation Full Bench did not give any detailed consideration
to that part of the 18 December 2008 variation to the award modernisation
request which dealt with the NES provisions in respect of the cashing out of
annual leave.
[233]
The
Seafood Processing Award 2010 is
the only modern award made in the award modernisation process that contains
a provision for cashing out annual leave.[118]
The clause was contained in draft awards provided by the Seafood Processors
and Exporters Council and others.[119]
The clause was not opposed by the relevant unions and was not the subject of
any particular comment in the Full Bench decision which made the award.
[234]
The Act now makes specific provision for the cashing out of annual leave.
Section 92 provides that paid annual leave “must not be cashed out”, except
in accordance with the cashing out terms included in a modern award or
enterprise agreement pursuant to s.93, or an agreement between an employer
and an award/agreement free employee under s.94(1).
[235]
Section
93 of the Act provides as follows:
“93
Modern awards and enterprise agreements may include terms relating to
cashing out and taking paid annual leave
Terms about cashing out paid
annual leave
(1)
A modern award or enterprise agreement may include terms providing
for the cashing out of paid annual leave by an employee.
(2)
The terms must require that:
(a)
paid annual leave must not be cashed out if the cashing out would
result in the employee’s remaining accrued entitlement to paid annual leave
being less than 4 weeks; and
(b)
each cashing out of a particular amount of paid annual leave must be
by a separate agreement in writing between the employer and the employee;
and
(c)
the employee must be paid at least the full amount that would have
been payable to the employee had the employee taken the leave that the
employee has forgone.
...”
[236]
The
model clause proposed by the Employer Group meets the requirements of
s.93(2) of the Act.
[237]
Three particular
observations may be made about s.93. The first is that it is evident from
the terms of s.93(1) that it was within the contemplation of the legislature
that the Commission may include in modern awards a term providing for the
cashing out of paid annual leave, subject to the inclusion of the prescribed
safeguards. In our view the legislative determination of appropriate
safeguards is significant because it represents an important contextual
consideration which was not present when cashing out provisions were
considered during the award modernisation process.
[238]
The second observation
we would make is that any term providing for the cashing out of paid annual
leave must include the safeguards set out in s.93(2), as a minimum, but a
modern award may also include terms that supplement the NES (see
s.55(4)(b)). Accordingly, if we were persuaded to include a term in modern
awards providing for the cashing out of paid annual leave by an employee,
then we could prescribe additional safeguards that are in addition to the
requirements of s.93(2).
[239]
The final observation
we would make about s.93 is that, subject to the requirements of s.93(2), an
enterprise agreement can include terms providing for the cashing out of paid
annual leave by an employee. The inclusion of such a term in enterprise
agreements was considered by a Full Bench in
Armacell Australia Pty Ltd and others.[120]
The Full Bench dealt with three appeals against decisions refusing
applications for approval of an enterprise agreement. Each agreement
contained terms dealing with the cashing out of annual leave. At first
instance the Commission decided, in each case, that the cashing out of leave
provision was an obstacle to the approval of the agreement. The Commission
reasoned that although the provisions were consistent with s.93, their
operation was a matter to be considered when applying the better off overall
test (see ss.186(2)(d) and 193) and, on a proper application of that test,
the cashing out of annual leave was such a significant disadvantage that the
agreement did not meet the better off overall test. The Full Bench held that
the Commission made an error in concluding that the terms of the agreement
which met the requirements of s.93 and did not contravene s.55, nevertheless
resulted in the agreement failing to pass the better off overall test. In
short, the Full Bench held that there was no basis for concluding that the
agreement failed the better off overall test because of the annual leave
cashing out provisions. The Full Bench stated that:
“[13]
...While an enterprise agreement may include terms providing for the cashing
out of paid annual leave, the matters in s.93(2) are in the nature of
protections for employees and could be described as safeguards. Annual leave
cannot be cashed out if the leave balance would be less than four weeks,
each cashing out must be the subject of a written agreement and there must
be no discounting of the payment. It seems clear, as a matter of
interpretation, that the legislature considered the question of safeguards
and that it intended the ones specified in s.93(2) to be sufficient. It
would be inconsistent with that intention to hold that the safeguards are
inadequate and that more or other safeguards should be applied.
[14]
The Commissioner was concerned that although the relevant term complied with
s.93(2), situations could occur in which employees might not take annual
leave and the purpose of annual leave might be frustrated. This was an
error. Whether the Commissioner’s concern is a valid one is beside the
point. The legislation makes it plain that an enterprise agreement may
include a term for cashing out providing it complies with s.93.”[121]
[240]
It needs to be borne
in mind that the above observations were made in the context of an appeal
from a decision refusing to approve an enterprise agreement. The Act
contains significant procedural and substantive safeguards to facilitate the
making of a democratic and informed decision on whether an enterprise
agreement should be made.[122]
The question of whether to insert a cashing out term into modern awards, and
if so the features of such a term, give rise to different considerations.
The safeguards provided in s.93(2) set out the
minimum requirements of such a
term, they do not constitute a code, and modern awards may also include
terms that supplement the NES. In our view these differences warrant the
imposition of additional safeguards in the modern award context.
[241]
We also
note that award/agreement free employees are able to enter into arrangements
to cash out their accrued annual leave consistent with s.94 of the Act.
Section 94 is in the following terms:
“94
Cashing out and taking paid annual leave for award/agreement free
employees
Agreements to cash out paid
annual leave
(1)
An employer and an award/agreement free employee may agree to the
employee cashing out a particular amount of the employee’s accrued paid
annual leave.
(2)
The employer and the employee must not agree to the employee cashing
out an amount of paid annual leave if the agreement would result in the
employee’s remaining accrued entitlement to paid annual leave being less
than 4 weeks.
(3)
Each agreement to cash out a particular amount of paid annual leave
must be a separate agreement in writing.
(4)
The employer must pay the employee at least the full amount that
would have been payable to the employee had the employee taken the leave
that the employee has forgone.
...”
[242]
Arrangements
which facilitate the cashing out of accrued annual leave (pursuant to either
s.93(1) or s.94(1)) appear to be a relatively common feature of employment
conditions set by enterprise agreements or by individual agreement between
an employer and an award/agreement free employee.
[243]
The Workplace
Agreement Database contains information on the incidence and coverage of
provisions dealing with the cashing out of annual leave. The Workplace
Agreement Database is a census database compiled by the Department of
Employment that contains information about federal enterprise agreements
that have been certified or approved by the relevant statutory authority
since the introduction of enterprise bargaining in 1991.[123]
On average about 8000 agreements are added by staff of the Department of
Employment to the Workplace Agreement Database each year with around 200
separate data fields coded.
[244]
The
Workplace
Agreement Database shows that of the enterprise
agreements approved between 1 March 2011 and 31 March 2014, about one-third
(covering 62.9 per cent of employees covered by a federal agreement)
contained provisions which permit the cashing out of paid annual leave.
[245]
On 21 November 2014,
the Commission released a background paper which outlined the parties’
submissions in relation to the cashing out of annual leave and examined the
extent to which such provisions currently exist in enterprise agreements
approved by the Commission. Parties were invited to make submissions on the
background paper and a number did so.[124]
The background paper included the results of a review by the Commission of
the types of cashing out of annual leave provisions currently found in
enterprise agreements approved by the Commission in the six month period
from 1 January to 30 June 2014. In this six month period, 2555 agreements
were approved and over one-quarter of these agreements (26.6 per cent)
contained cashing out provisions.
[246]
The cashing out
provisions in these agreements have generally been drafted to include the
minimum entitlements outlined in the NES, namely that:
·
each instance of cashing
out of annual leave must be by mutual agreement between the parties and in
writing;
·
the employee’s total
accrued annual leave must not be reduced below four weeks as a result of the
cashing out; and
·
the employee must be paid
at least the full amount that would have been paid had the employee taken
the leave.
[247]
However a significant
proportion of the enterprise agreements which include a term permitting the
cashing out of annual leave contain additional limitations. Of the
118 provisions identified within the March quarter of 2014, 28 (or 23.7 per
cent) include safeguard provisions in excess of those prescribed in the NES.
The most common supplementary safeguard (in 12.7 per cent of agreements)
prevent employees from cashing out more than two weeks of accrued annual
leave in any 12 month period, in addition to the NES requirement that
employees maintain an accrued entitlement to four weeks’ leave after cashing
out.
[248]
For example, the
Joyce Foam Pty Ltd Trading as Joyce
Foam Products, Moorebank Enterprise Agreement 2013[125]
contains the following clause:
“5.5.2
Employees may request to cash out up to two weeks of their credited annual
leave entitlement every twelve (12) months (or the pro-rata equivalent for
part-time employees). Approval of such requests is at the discretion of the
company ...”
[249]
Some agreements permit
cashing out of annual leave contingent upon particular circumstances such as
financial or personal hardship.[126]
Some agreements only permit cashing out when an employee has reached a
threshold duration period of employment.[127]
[250]
A further seven of the
118 agreements which provide for the cashing out of annual leave (5.9 per
cent) provide that employees must use a minimum amount of annual leave
before they can cash out any additional leave, or must take an equal amount
of leave to that leave which is being cashed out.[128]
[251]
It is apparent that
provisions permitting the cashing out of annual leave are a relatively
common feature of enterprise agreements approved by the Commission. Further,
while most of these terms simply reflect the minimum requirements in s.93, a
significant proportion contain additional limitations, the most common being
that employees cannot cash out more than two weeks’ accrued annual leave in
any 12 month period.
[252]
The provisions in
enterprise agreements show that there is some demand for provisions of this
type and illustrate the range of safeguards which may be provided. However,
we are conscious of the need to exercise care when assessing the provisions
in enterprise agreements in the context of a review of modern awards.
Enterprise agreements are negotiated by the parties and approved by the
Commission against various statutory criteria. The legislative context
relevant to the review of modern awards is quite different. As the Full
Bench in the Modern Awards Review
2012—Penalty Rates decision observed:
“... in
approving agreements the Commission is not making an assessment as to
whether the instrument meets the modern awards objective or would be
appropriate in circumstances other than those applying at the enterprise
concerned.”[129]
[253]
The Employer Group
contended that the inclusion of cashing out provisions in modern awards
would:
·
create equity between
award and non-award/agreement employees; and
·
promote workplace
flexibility and the modern awards objective.
[254]
We note that the
unions opposed the insertion of cashing out of annual leave provisions in
modern awards and we will address their submissions later in this decision.
[255]
We are persuaded that
the Employer Group’s claim should be granted, subject to some modifications.
The model term will permit the
cashing out of annual leave, subject to a number of safeguards as follows:
1.
Cashing Out of Annual Leave
1.1
Paid annual leave must not be cashed out except in accordance with
this clause.
1.2
An employer and an employee may agree to the employee cashing out a
particular amount of the employee’s accrued paid annual leave provided that
the following requirements are met:
(a)
each cashing out of a particular amount of accrued paid annual leave
must be by a separate agreement between the employer and the employee which
must:
(i)
be in writing and retained as an employee record;
(ii)
state the amount of accrued leave to be cashed out and the payment to
be made to the employee;
(iii)
state the date on which the payment is to be made, and
(iv)
be signed by the employer and employee and, if the employee is under
18 years of age, the employees’ parent or guardian;
(b)
the employee must be paid at least the full amount that would have
been payable to the employee had the employee taken the leave at the time
that it is cashed out;
(c)
paid annual leave must not be cashed out if the cashing out would
result in the employee’s remaining accrued entitlement to paid annual leave
being less than 4 weeks; and
(d)
employees may not cash out more than two weeks’ accrued annual leave
in any 12 month period.
Note 1: Under s.344 of the
Fair Work Act 2009, an employer
must not exert undue influence or undue pressure on an employee to make an
agreement to cash out paid annual leave under this award clause.
Note 2: Under s.345 of the
Fair Work Act 2009, a person must
not knowingly or recklessly make a false or misleading representation about
an employee’s workplace rights under this award clause.
[256]
The model term meets
the requirements of s.93(2) of the Act. A modern award may also include
terms that supplement the NES (see s.55(4)(b)), and on that basis the model
term incorporates four additional safeguards, that are in addition to the
requirements of s.93(2).
[257]
First, a maximum of
two weeks’ paid annual leave can be cashed out in any 12 month period. In
the case of part-time employees, the two weeks’ leave is based on the
employees’ weekly ordinary hours (see s.87(2) of the Act). As noted earlier,
the most common supplementary safeguard in enterprise agreements which
permit the cashing out of annual leave is a limitation upon the amount of
leave which can be cashed out in any 12 month period. Such a limitation is
directed at ensuring that employees take at least half of their accrued
annual leave, as leave.
[258]
Second, there are
requirements in the model term about the content of any agreement to cash
out accrued annual leave (subclause 1.2(a)) and the employer’s obligation to
keep such agreements as an employee record (subclause 1.2(a)(i)). These
requirements are consistent with an employer’s existing obligations under
Regulation 3.36(2) of the Fair Work
Regulations 2009. Regulation 3.36(2) states:
“If an
employer and employee agree to cash out an accrued amount of leave:
(a)
a copy of the agreement is a kind of employee record that the
employer must make and keep; and
(b)
a kind of employee record that the employer must make and keep is a
record that sets out:
(i)
the rate of payment for the amount of leave that was cashed out; and
(ii)
when the payment was made ...”
[259]
Third, if the employee
is under 18 years of age the agreement to cash out a particular amount of
accrued paid annual leave must be signed by the employees’ parent or
guardian. A safeguard of this type was proposed by the ACTU and CFMEU. Ai
Group and ACCI submitted that such a provision was unnecessary,[130]
however, other employer representatives, from the hospitality sector, either
had no objection to the inclusion of such a safeguard or endorsed it as an
appropriate protection for young workers.[131]
There is a similar safeguard in the model flexibility term in modern awards
and it is appropriate that such a safeguard be included in the model term
dealing with the cashing out of annual leave.
[260]
Finally, the two notes
at the end of the model term draw attention to the general protections in
Part 3-1 of the Act against undue employer influence and misrepresentation
in relation to rights under the clause. As observed earlier, such
notes can be considered incidental terms within the meaning of s.142
of the Act and/or terms that are ancillary or incidental within the meaning
of s.55(4), and assist in ensuring that the operation of the modern award
clause is easy to understand (s.134(1)(g)).
As we
have also observed earlier, it seems to us that
the effectiveness of any safety net is substantially dependent upon those
who are covered by it being able to know and understand their rights and
obligations.
[261]
The
general protections provisions apply to an agreement to cash out annual
leave in accordance with a term of a modern award. In particular s.344
provides, relevantly:
“An employer must not exert undue influence or undue pressure on an employee
in relation to a decision by the employee to:
... (b) make, or not
make, an agreement or arrangement under a term of a modern award...that is
permitted to be included in the award...under subsection 55(2)...”
[262]
In
addition, s.345 provides:
“(1)
A person must not knowingly or recklessly make a false or misleading
representation about:
(a)
the workplace rights of another person; or
(b)
the exercise, or the effect of the exercise, of a workplace right by
another person; or
...
(2)
Subsection (1) does not apply if the person to whom the
representation was made would not be expected to rely upon it.”
[263]
Relevantly for present
purposes, under s.341(1) of the Act, a person has a “workplace right” if the
person is entitled to the benefit of, or has a role or responsibility under,
a modern award.
[264]
Sections
344 and 345(1) are civil remedy provisions (see s.539).
[265]
The variation of
modern awards to incorporate the model term will ensure that each modern
award provides a fair and relevant minimum safety net. In so deciding we
have taken into account the s.134 considerations, insofar as they are
relevant, and we are satisfied that such a variation is necessary to achieve
the modern awards objective. We are also satisfied that the model term is
consistent with the objects of the Act. We propose to address the relevant
statutory considerations before dealing with the submissions of those who
opposed the Employer Group’s claim.
[266]
As we
have mentioned, the insertion of the model term will ensure that each modern
award provides a “fair and relevant
minimum safety net”. The model term is “fair” because of the various
safeguards provided within the term itself and because it facilitates the
making of mutually beneficial agreements between an employee and his or her
employer. Employees benefit by being able to exercise a preference they may
have to receive cash rather than take leave and employers benefit by being
able to reduce their contingent liabilities. The mutual benefits which may
flow from such arrangements provide an explanation for why such provisions
are a relatively common feature of enterprise agreements approved by the
Commission.
[267]
The
insertion of the model term will ensure that modern awards are “relevant” to
the needs of the modern workplace. The evidence indicates that there is a
significant demand for a provision which facilitates the cashing out of
accrued leave.
[268]
Questions 5–8 of the Employer Survey are directed at the cashing out of
annual leave, as follows:
“Since 1 January 2010, have any of
your organisation’s employees asked to cash out a portion of their annual
leave? Choose one of the following answers.
·
Yes
·
No
·
Unsure
If yes, how many requests have you received?
·
1
·
2–4
·
5–20
·
20+
What percentage of these requests have been granted?
·
none
·
1–25%
·
26–50%
·
51–75%
·
75%+
·
Unsure
If requests have been refused, what has been the reason or reasons giving
rise to the refusal? Tick each appropriate box:
·
The employee had less than 4 weeks of annual leave accrued.
·
We were unable to agree because of our award or agreement does not permit
cashing out of leave.
·
The Company does not wish to allow employees to cash out annual leave.
·
Other. Please specify: _________________________”
[269]
Some
1863 employers (45 per cent of all responses) stated that since 1 January
2010 they had received at least one employee request to cash out a portion
of their annual leave. Of those employers who had received at least one such
request, over 1412 employers had received between 2 and 20 requests and 153
employers had received over 20 such requests.
[270]
A
significant number of the requests to cash out annual leave were not
granted.[132]
[271]
The
responses to Question 8 of the Employer Survey are set out below:
If
requests have been refused, what was the reason or reasons for the refusal?
|
Count |
% |
The employee had less than 4 weeks of annual leave accrued
|
651 |
15.74 |
We were unable to agree because our award or agreement did not
permit cashing out of leave
|
499 |
12.06 |
The Company does not wish to allow employees to cash out annual
leave
|
160 |
3.87 |
Other |
700 |
16.92 |
[272]
We have
already mentioned the practical problem which arises in relation to the
responses to Question 8 (see paragraph
[46]
above) but it is apparent that in a significant proportion of cases a
request to cash out annual leave was refused because the relevant award or
agreement did not expressly permit it. The evidence of Ms Kristina Flynn, Ms
Fiona Corbett and Ms Melissa Adler dealt with issues raised by employer
members of their respective organisations.
[273]
Ms
Kristina Flynn is the National Manager of BIZassistInfoline, Ai Group’s
national workplace relations telephone advisory service for Ai Group
members. The BIZassistInfoline is operated by 15 workplace advisers who
provide advice on all workplace related issues, including leave
entitlements. The BIZassistInfoline has received about 199 740 calls since
1 January 2010. The details of each call are logged. A report of all calls
to the BIZassistInfoline since 1 January 2010 showed that 5794 calls were
about annual leave, of which 1058 were about the cashing out of annual
leave. Approximately half (521) of the calls about the cashing out of annual
leave concerned employees in circumstances where an award applied to their
employment. In her evidence Ms Flynn stated:
“In my
experience it is not uncommon for employers to call the BIZassistInfoline to
ask whether they can agree to requests from employees, to whom a modern
award applies, to cash out their annual leave.”
[133]
[274]
Ms Fiona
Corbett gave evidence about the operation of the Workplace Advice Unit
operated by Australian Business Lawyers & Advisors Pty Ltd on behalf of
Australian Business Industrial and the NSW Business Chamber. The Workplace
Advice Unit performs essentially the same function as Ai Group’s
BIZassistInfoline for the members of the employer organisations mentioned.
In the 12 month period 1 June 2013 to 31 May 2014, the Workplace Advice Unit
in Sydney took 511 calls relating to annual leave and of these 91 were about
the cashing out of annual leave. The majority of such calls were about
“whether an award covered employee was able to cash out their annual leave”.
In her evidence Ms Corbett stated:
“Based on the enquiries that I have answered in relation to cashing out
annual leave whilst working in the Workplace Advice Unit answering queries
on numerous awards and from enquiries that the other advisors have received,
I have found that:
(a)
most calls follow an employee’s request to cash out their annual
leave;
in a large number of cases, the employee’s request is made as the result of
a financial or personal hardship.”[134]
[275]
In terms
of the particular matters referred to in the modern awards objective, we are
persuaded that the model term meets the needs of the low paid (consistent
with s.134(1)(a)).
[276]
As noted
in the Annual Wage Review
2013–14 decision, a sizeable
proportion of award-reliant workers are low paid and low-wage households
typically report more financial stress than higher wage households.[135]
The ability to cash out up to two weeks’ accrued annual leave each year will
provide low-paid employees with some additional capacity to meet unexpected
financial demands and may also provide the money to enable them to take a
holiday.
[277]
In its
submission of 27 November 2014 the ACTU contended that “concerns about
award-dependent employees facing financial hardship could be easily
addressed through an increase in the minimum wage and not by including
cashing out provisions in modern awards”.[136]
The adjustment of minimum wages is not as simple as the ACTU submission
might suggest. The Act requires the Expert Panel to take into account a
number of considerations in reviewing modern award minimum wages and the
national minimum wage order. As the Expert Panel observed in the
Annual Wage Review 2013–14
decision:
“It is
important to appreciate that there is often a degree of tension between the
economic, social and other considerations which the Panel must take into
account. For example, a substantial wage increase may better address the
needs of the low paid and improve the relative living standards of
award-reliant employees, but it may (depending upon the prevailing economic
circumstances) also reduce the capacity to employ the marginalised and hence
reduce social cohesion. It is this complexity that has led the Panel to
reject a mechanistic or decision rule approach to wage fixation, such as the
adoption of real wage maintenance. The real wages of award-reliant employees
are relevant to our task, but not determinative. The range of considerations
we are required to take into account calls for the exercise of broad
judgment rather than a mechanistic approach to fixing minimum wages.”[137]
(references omitted)
[278]
We deal
with the need to promote collective bargaining (s.134(1)(b)) later in
addressing the submissions opposing the Employer Group’s claim.
[279]
We are
also satisfied that the model term reflects flexible modern work practices
and accordingly the insertion of such a term in modern awards will promote
such practices, consistent with s.134(1)(d).
[280]
Section
134(1)(f) is also relevant. It provides that we must take into account:
“the likely impact of any exercise of modern award powers on business,
including on productivity, employment costs and the regulatory burden ...”
[281]
As the
model term will facilitate agreements to cash out accrued leave it will,
when utilised, reduce the employer’s contingent liabilities. ACCI and others[138]
submitted that a term which permits the cashing out of accrued leave will
reduce employment costs and the regulatory burden on employers. We accept
that the insertion of the model term in modern awards will have such an
impact.
[282]
A number
of parties supporting the Employer Group’s claim asserted that granting the
claim would improve productivity. No merit argument was advanced in support
of such assertions and the connection between an award provision permitting
the cashing out of accrued annual leave and productivity is not obvious to
us.
[283]
“Productivity” is not
defined in the Act, but given the context in which the word appears it is
clear that it is being used to signify an economic concept. It may be
regarded as a technical word and hence evidence may be admitted to interpret
its meaning.[139]
[284]
The legislative
context is also important. The modern awards objective provides that the
Commission must take into account the likely impact of any exercise of
modern award powers on business, including on productivity, employment costs
and the regulatory burden.[140]
The reference to both “productivity” and “employment costs” within the same
provision recognises that the cost of labour constitutes a separate and
distinct statutory consideration to productivity.
[285]
As noted in the
Annual Wage Review 2012–13
decision:
“... the term productivity, as
used in the Act, is directed to the economic concept of the quantity of
output relative to the quantity of inputs.[141]
Considerations of the price of inputs, including the cost of labour, raise
separate statutory considerations relating to the performance and
competitiveness of the national economy and other economic considerations,
such as inflation.”[142]
[286]
On the
limited material before us we are not persuaded that either the Employer
Group’s claim or the model term will have any positive impact on
productivity.
[287]
The
insertion of the model term into modern awards is also consistent with the
objects of the Act. In particular the model term acknowledges “the special
circumstances of small and medium-sized businesses” (s.3(g)). Absent the
insertion of the model term, such businesses could only permit their modern
award covered employees to cash out their accrued paid annual leave by
entering into an enterprise agreement. In this context we acknowledge the
force of ACCI’s submission that the reluctance of particular businesses to
collectively bargain can arise from various factors including “small
business employers lacking the expertise and resources to implement an
enterprise agreement”.[143]
[288]
The ACTU
rejected the proposition that small businesses encountered difficulties in
engaging in collective bargaining and pointed to the extent of small
businesses who utilised Australian Workplace Agreements (AWAs) introduced by
the WR Act. In support of this submission the ACTU relied on a report by
Mitchell and Fetter.
[289]
Mitchell
and Fetter found that “most employers with AWAs were small and medium size
businesses”.[144]
However, as the authors note, this understates the importance big business
is the utilisation of AWAs: ‘whilst big business constitutes only the
smaller proportion of businesses with AWAs, they nevertheless cover the
largest proportion of employees with AWA coverage’. It is also relevant to
observe that the use of AWAs tended to be concentrated in particular sectors
of the economy. As Mitchell and Fetter noted:
“Despite the increasing trend in the rate of approvals, AWAs statistically
constitute only a very minor aspect of Australian industrial regulation,
covering a tiny proportion of the workforce (1.9%). Whilst the uptake of
AWAs has reached into most parts of the economy to some degree, they tend to
be only of importance in terms of concentration (by employee) in
communication services, government, mining cultural and recreational
services, and electricity, gas and water. Key areas of industry such as
construction retail, transport and manufacturing by contrast have relatively
low levels of AWA penetration”.[145]
(references omitted)
[290]
We are
not persuaded that the Mitchell and Fetter report supports the ACTU’s
contention. As the report states, key areas of the economy—including award
reliant sectors—had low levels of AWA penetration. Further, there are
significant differences between the legislative framework which applied to
AWAs[146]
and Part 2-4 of the FW Act dealing with enterprise agreements.
[291]
During
these proceedings the Commission produced an information note entitled
‘Bargaining by business size’. The note was available on the Review section
of the Commission’s website and interested parties were able to comment on
the note and its relevance to these proceedings. The note indicated that the
Australian Bureau of Statistics (ABS) Employee Earnings and Hours
publication collects information on a range of data including the number of
employees by method of setting pay and in what sized business they are
employed in Australia. The methods of pay collected are:
·
Award
only;
·
Collective agreement;
·
Individual arrangement; and
·
Owner
manager of incorporated enterprise.
[292]
The ABS
definition of a “collective agreement” encompasses collective agreements
registered at the state or federal level as well as unregistered written or
verbal collective agreements.[147]
[293]
Employees are allocated to the collective agreement category if they had the
main part of their pay set by a registered or unregistered collective
agreement or enterprise award.[148]
[294]
The ABS
definition of individual arrangements includes individual contracts, letters
of offer and common law contracts (which also includes overaward payments).[149]
[295]
The ABS
definition of an award-only arrangement is where a state or federal award is
the predominate mechanism used to set the pay and/or conditions and where
that employee is paid at exactly the rate of pay specified in the award.[150]
[296]
An
“owner manager of incorporated enterprise” is defined as:
“A
person who works in their own incorporated enterprise - that is, a business
entity which is registered as a separate legal entity to its members or
owners (also known as a limited liability company) ...”[151]
[297]
The ABS
Employee Earnings and Hours publication collects business size data
according to the following splits:
·
Under 20
employees;
·
20–49
employees;
·
50–99
employees;
·
100–999
employees; and
·
1000 and
over employees.
[298]
The size
splits collected reflect the ABS definition of a small business, which is a
business that employs fewer than 20 persons.[152]
[299]
The
most recent data
show
that,
in
May
2014,
the
majority
of employees
in
small
businesses
were
employed
on
individual
arrangements,
with
a
small
proportion
of employees
on
collective
agreements
(see Chart
3).
The
number
of employees
in
small
businesses
on
collective
agreements
and
individual
arrangements
were
126 700 and
1 393 200
respectively.[153]
Chart 3:
Proportion of employees with their pay set by method of setting pay
and business size—May 2014
Note: Data
on method of setting pay by business size exclude owner managers of
incorporated businesses.
Source:
ABS, Employee Earnings and Hours,
Australia, May 2014,
Catalogue No. 6306.0.
[300]
Chart 3 demonstrates that there
is
a positive
correlation
between
business
size
and
collective
agreements,
with
an increase
in
business
size
associated
with
an increase
in the
proportion
of employees
on
collective
agreements.
[301]
Relatively few employees employed in small businesses are covered by a
collective agreement. This supports our earlier observation about the
practical impediments facing small businesses that wish to enter into such
agreements. A modern award variation of the type we propose will ensure that
all employees have access to cashing out arrangements.
[302]
It seems
to us to be somewhat anomalous that award-free employees and
agreement-covered employees can negotiate arrangements permitting the
cashing out of accrued annual leave, but employees whose terms and
conditions of employment are regulated by a modern award cannot. Some of the
practical difficulties which may arise from this differential treatment are
highlighted in BHP Billiton’s submission of 27 November 2014:[154]
“BHP Billiton has a large collective agreement-covered workforce who are
entitled to have cashing out of annual leave terms included in enterprise
agreements through bargaining. BHP Billiton also employs managerial,
professional and administrative staff whose employment is generally not the
subject of any collective agreement. These staff members may be covered by
one or other modern award. They have no equivalent access to cashing out of
annual leave in the absence of any modern award term dealing with the
matter.
BHP Billiton submits that it was not Parliament’s intention for the type of
industrial instrument governing an employee’s employment to dictate whether
or not the employee can exercise a choice to cash out annual leave. It is
anomalous that, within a workforce, an employer could offer one group of
employees the ability to access this choice through enterprise bargaining
but would not be able to offer the facility to another group, or even accept
individual requests from within that group, because the modern award lacks a
provision dealing with cashing out.”
[303]
In this context we
note that the ACTU submitted that the major difference between award-covered
employees and award-free or agreement-covered employees is that the latter
typically have “significantly more industrial ‘power’ than their colleagues
who are award reliant”; award/agreement free employees are “likely to have
significantly more bargaining power due to their personal or individual
status” which enables them to achieve positive industrial outcomes, and
agreement covered employees “achieve their industrial ‘power’ through
collective bargaining”. Therefore, the ACTU submitted that arguments based
on providing parity or equity are “misconceived”.[155]
We acknowledge that such a distinction can be made, but, even if this is so,
that does not make the current situation any less anomalous, and we have
addressed the difference in bargaining power by the additional safeguards
provided in the model term.
[304]
The union parties
opposed the claim advanced by the Employer Group on two broad bases:
·
if granted the claim would
undermine the purpose of annual leave; and
·
granting the claim would
be inconsistent with the encouragement of enterprise bargaining.
Undermining the purpose of annual leave
[305]
The ACTU’s fundamental
objection to the insertion of any
provision in modern awards which facilitates the cashing out of annual leave
was that such a provision would undermine the NES minimum entitlement to
annual leave by converting annual leave into “a financial figure, rather
than an entitlement”. The essence of the ACTU’s submission is set out in its
submission in reply:[156]
“Frustrating
the purpose of a safety net entitlement such as annual leave in a modern
award has the potential to do significant damage to the basic rights and
entitlements of employees. Regardless of whether or not the safeguards in
sections 92 and 93 are applied, the purpose of annual leave will be
frustrated; it will become nothing more than a payment to employees and will
lose its long established importance and benefit as a break from work ...
We
submit that no matter which or how many safeguards apply, the cashing out of
annual leave in the safety net will do significant damage to the
entitlement.”
[306]
The AMWU also
contended that cashing out eliminates annual leave taken for rest and
recreation and does not address the underlying reasons for the accumulation
of large leave balances.[157]
The AMWU further submitted that the proposed Employer Group’s claim “can
result in serial cashing out of annual leave, and thus eliminate the taking
of leave altogether” and that:
“The
employer group proposal gives only a safeguard of requiring a leave balance
of four weeks, but would not stop an employee from cashing out all leave
accrued thereafter. The possibility of such an outcome should be avoided.
Any acceptable safety net must require that a minimum amount of leave has
actually been granted by the employer and taken by the employee.”[158]
[307]
The
Construction, Forestry, Mining and Energy Union (CFMEU)[159]
and the Textile, Clothing and Footwear Union of Australia (TCFUA)[160]
also raised concerns about the potential for serial cashing out in the event
that the Employer Group’s claim was granted.
·
the clause has no
safeguard to ensure that employees ever actually take a period of rest and
recreation;
·
there are no protections
to ensure that employees are not pressured into cashing out annual leave;
and
·
requiring a written
agreement for each cashing out is a mere formality and offers no real
protection against abuse.[161]
[309]
In relation to the
last of the points made about the Employer Group’s proposed clause, the ACTU
asserted that it is unlikely that a written agreement will actually be
entered into on each occasion that leave is cashed out. In support of its
contention that the Employer Group’s proposed clause could be abused, the
ACTU relied on a single enquiry received by its Member Connect service
sometime in 2012–13.[162]
[310]
We do
not find these submissions persuasive.
[311]
We turn
first now to the proposition that facilitating the cashing out of annual
leave would undermine the NES entitlement to leave. In our view this
submission is misconceived.
[312]
We acknowledge that
the purpose of annual leave is to provide a period of rest and recovery from
work and, from a work-life perspective, employees need the time and
opportunity to attend to their family and other commitments and to engage in
social, community and personal interests. We also agree with the proposition
that it is important that employees take their accrued annual leave and we
have dealt with measures to facilitate the taking of leave in the previous
part of this decision. But it is important to appreciate that the
relevant standard is set by the NES.
[313]
The NES
provisions relating to annual leave (ss.86–94) set out the minimum
entitlement to annual leave for employees (other than casual employees) and
expressly permit the cashing out of such an entitlement in ss.93 and 94. As
the ACTU correctly observed, the inclusion of such a facilitative provision
in a modern award is permitted
rather than mandated. But such a
distinction misses the point. The enactment of s.93 is a clear legislative
statement that a modern award term which permits the cashing out of accrued
annual leave, and meets the minimum requirements of s.93(2), is consistent
with the NES entitlement to annual leave. Far from frustrating the purpose
of a safety net entitlement, as asserted by the ACTU, the legislature has
clearly contemplated that a modern award provision such as the cashing out
model term may be part of the safety net.
[314]
In
support of its general proposition that a modern award provision which
facilitates cashing out would undermine the NES, the ACTU relied on the
observations of the Award Modernisation Full Bench in its
2008 Award Modernisation
decision, when it decided not to adopt a model provision to permit the
cashing out of annual leave.[163]
As we have already observed, because of the timing of the 18 December 2008
variation to the award modernisation request (which set out the safeguards
which now appear in s.93(2)), that variation was not taken into account in
the 2008 Award Modernisation decision
of 19 December 2008.
[315]
The ACTU
also submitted that a subsequent decision by the Award Modernisation Full
Bench to refuse to vary the Meat
Industry Award 2010[164]
(the Meat Award) to provide for cashing out of annual leave supports
this proposition, as the Full Bench in that matter “had seen and/or
considered the safeguards that are replicated in the provisions of the Act
...”.[165]
An examination of the decision does not support this contention. After
referring to the observations made in the 2008
Award Modernisation
decision, the Full Bench dismissed an application by the Australian Meat
Industry Council to vary the Meat Award
to include a provision for cashing out of annual leave. The Full Bench’s
reasons are encapsulated in the following passage from its decision:
“[11]
We have consistently expressed misgivings about cashing out of annual
leave being included in safety net awards. Those misgivings are heightened
in circumstances where there is no argument advanced in support and
opposition exists to its inclusion. No such provision is contained in any of
the awards which were considered in the modernisation process. In all the
circumstances we have decided not to grant the application.”[166]
[316]
The decision contains
no reference to the safeguards now contained in s.93(2) and on that basis it
cannot be assumed that they were the subject of any consideration by the
Full Bench.
[317]
The decisions of the
Award Modernisation Full Bench must be considered in context. When viewed in
this way it is apparent that, for various reasons, the safeguards which are
now set out in s.93(2) were not the subject of any particular consideration
by that Full Bench.
[318]
That said, we
acknowledge and agree with the observation of the Award Modernisation Full
Bench that some caution is appropriate when dealing with this issue at the
award safety net level. We accept the proposition that there are significant
differences between the modern award context and enterprise bargaining. As
noted earlier, the Act contains significant procedural and substantive
safeguards to facilitate the making of a democratic and informed decision on
whether an enterprise agreement should be made.[167]
In our view these differences warrant the imposition of additional
safeguards in the modern award context and that is the course we have
adopted.
[319]
We acknowledge that the ACTU sought
a number of further safeguards—that is in addition to the safeguards we have
incorporated into the model term. In particular the ACTU proposed five
further safeguards:
(i)
that any provision should have a “sunset date” of 31 December 2018 so
that the provisions can be considered and reviewed during the next 4 yearly
review of modern awards;
(ii)
there must only be the possibility of cashing out annual leave once
every three years;
(iii)
an employee who elects to cash out annual leave must have taken
annual leave of “at least four weeks, or five or six or another amount if
the employee is a non-standard worker, in the 12 months prior to cashing
out”;
(iv)
cashing out cannot be a condition of employment; and
(v)
cashing out provisions should not be inserted into modern awards
which contain other mechanisms for reducing annual leave balances, such as
excessive leave terms or close down provisions.[168]
[320]
We are not persuaded
to adopt any of these proposals. The first and fourth proposed safeguards
are unnecessary. Any interested party can seek to vary or revoke the cashing
out model term in the context of the next 4 yearly review. Cashing out
cannot be a ‘condition of employment’, as the model makes clear each cashing
out of a particular amount must be the subject of a separate agreement.
[321]
The second and third
proposed safeguards would place unwarranted restrictions on the ability to
cash out paid annual leave and no persuasive merit argument was advanced in
support of the restrictions proposed. We note that the model term we have
determined includes a limitation on the amount of paid annual leave which
can be cashed out in any 12 month period.
[322]
As to the final
proposal, it proceeds on a false premise in that it assumes that the only
purpose of inserting the model term is to reduce excessive leave
balances—that is not the case. As we have mentioned, the model term
facilitates the making of mutually beneficial agreements. While such
agreements enable employers to reduce their contingent liabilities,
employees obtain the benefit of being able to exercise a preference they may
have to receive cash rather than take leave.
[323]
We now turn to the
ACTU’s submissions about the “failings” of the Employer Group’s proposed
clause (see paragraph
[308]
above).
[324]
It is
convenient to deal with the ACTU’s last point first. The Member Connect
enquiry does not support the ACTU’s contention. If the facts asserted are
correct, and the employee concerned was a national system employee, then the
employer concerned was clearly acting unlawfully. Paid annual leave can only
be cashed out in accordance with the terms of a modern award or enterprise
agreement, or by an agreement between an employer and an award/agreement
free employee (s.92). Each cashing out of a particular amount of paid leave
must be by a separate agreement in writing, between the employer and
employee (see ss.93(2)(b), 94(1) and (3) and reg.3.36(2)). The insertion of
the model term will not make such unlawful behaviour more prevalent. Indeed,
by clearly spelling out the circumstances in which accrued annual leave may
be cashed out, the model term is more likely to promote compliance with the
statutory scheme rather than non-compliance.
[325]
Nor is
there any evidentiary basis for the ACTU’s assertion that it is unlikely
that a written agreement will actually be entered into. There was no
suggestion of any non-compliance with the cashing out provisions in existing
enterprise agreements or with the terms of s.94 in relation to
award/agreement free employees. Nor did the ACTU point to any compliance
problems in relation to the cashing out provisions under s.233 of the WR
Act.
[326]
As to
the other two asserted “failings” of the Employer Group’s proposed clause,
these issues have been adequately addressed in the model term. The model
term limits the amount of annual leave which may be cashed out in any 12
month period. For a full-time employee only two weeks’ may be cashed out
every 12 months, and hence such an employee will either accrue or take at
least two weeks’ paid annual leave every 12 months (clause 1.2(d)). This
safeguard is directed at preventing what the AMWU and others described as
the potential for serial cashing out. The model term does not compel
employees to take a minimum period of paid annual leave each year, but
neither does the NES.
[327]
The two
notes at the end of the model term refer to the general protections in the
Act which prevent employees from being pressured into cashing out their paid
annual leave entitlements.
[328]
The ACTU contended
that inserting cashing out provisions into the modern awards will remove an
incentive to bargain:
“[T]he
provisions of the FW Act which provide for enterprise bargaining assume that
certain flexibilities or conditions of employment are not appropriate for
inclusion in the safety net ... Bargained outcomes should only be included
in modern awards where this is necessary to achieve the MAO of providing a
fair and relevant safety net and not simply because of the difficulties or
perceived difficulties faced by parties engaged in collective bargaining.”[169]
[329]
The ACTU
also submitted that inserting a cashing out provision in modern awards would
undermine the objects of the Act (particularly s.3(f)) as it would act as a
disincentive for an employer to engage in enterprise-level collective
bargaining and that the safety net must be set at a level which encourages
parties to collectively bargain to seek provisions which differ from the
safety net.
[170]
[330]
We acknowledge that
one of the particular matters we are required to take into account is “the
need to encourage collective bargaining” (s.134(1)(b)).
[331]
However, as we have
mentioned, no particular primacy is attached to any of the matters the
Commission is required to take into account in paragraphs 134(1)(a)–(h). The
Commission’s task is to balance the various considerations and ensure that
modern awards, together with the NES, provide a fair and relevant minimum
safety net of terms and conditions. An award term of the type we propose
will not necessarily discourage collective bargaining. The setting of an
appropriate safety net provision may create an incentive to enter into an
enterprise agreement in order to tailor the provision to better meet the
needs of a particular enterprise, subject to meeting the minimum
requirements set out in s.93(2). We acknowledge that the insertion of the
model term in modern awards may impact upon the incentive to bargain about
the cashing out of annual leave. This is a relevant consideration, and we
have taken it into account, but it is not determinative. In our view the
considerations in favour of inserting the model term into modern awards
outweigh any potential reduction in the incentive to bargain about this
issue.
[332]
For the reasons given
we are satisfied that the variation of all modern awards to insert the model
term is necessary to achieve the modern awards objective.
[333]
We note that the
Employer Group’s claim sought to vary 120 of the 122 modern awards to insert
a provision to facilitate the cashing out of annual leave. The
Seafood Processing Award 2010 was
not sought to be varied as it already contains a cashing out provision (it
is the only modern award that does so). The
Passenger Vehicle Transportation
Award 2010 was also omitted from the Employer Group’s list of modern
awards to be varied. This award does not currently contain a cashing out
provision and no reason was provided for its omission. During the course of
oral argument Ai Group were seeking to insert the model cashing out term in
all modern awards except the Seafood
Processing Award 2010.[171]
We also note that the Australian Public Transport Industrial Association
appeared in the proceedings and supported the position put by ACCI and Ai
Group in respect of the ACTU claim regarding the payment of annual leave
entitlements on termination.
[334]
During the course of
these proceedings all parties were put on notice as to the Commission’s
concerns regarding the adequacy of the safeguards in the Employer Group’s
claim. Subject to the requirements of procedural fairness, we are not bound
by either the terms of the relief sought by a party or by the scope of the
variations proposed.
[335]
We see no reason for
excluding the awards mentioned from the variations we propose. The cashing
out provision in the Seafood
Processing Award 2010 does not contain sufficient safeguards and a
variation is necessary to meet the modern awards objective. On the material
before us the omission of the
Passenger Vehicle Transportation Award 2010 from the awards sought to be
varied by the Employer Group was simply an error.
[336]
The Employer Group
sought to insert a model “close-down” clause into 65 modern awards (see
Attachment G
for the list of modern awards). The proposed model clause is in the
following terms:
“Annual Leave
Close-Down
(a)
An employer may close down (or reduce to a nucleus) an enterprise or
a part of it for the purpose of allowing paid annual leave to all or a
majority of employees in the enterprise or part of it, provided that:
(i)
the employer gives the employees at least four (4) weeks’ notice of
its intention to close down;
(ii)
in the case of any employee employed after notice has been given,
notice must be given to that employee on the date they are offered
employment.
(b)
Where an employee has been given notice pursuant to clauses X.X(a)(i)
or (ii) above and the employee has:
(i)
accrued sufficient annual leave to cover the full period of closing,
the employee must take paid annual leave for the full period of closing;
(ii)
insufficient accrued annual leave to cover the full period of
closing, the employee must take paid annual leave to the full amount accrued
and leave without pay for the remaining period of the closing; or
(iii)
no accrued annual leave, the employee must take leave without pay for
the full period of closing.
(c)
Public holidays that fall within the period of close down will not
count as a day of annual leave or leave without pay. Employees will be paid
for any absence on such days in accordance with the NES.”
[172]
[337]
In relation to
subclause (c) of the proposed clause, the Employer Group confirmed that this
was not intended to reduce any existing entitlements concerning public
holidays and it was conceded that the provision may need to be modified to
achieve that end.[173]
[338]
The 65 modern awards
sought to be varied are, in effect, split into two categories:
·
41 modern awards that do
not presently contain any provisions allowing employers to implement an
annual close-down;[174]
and
·
24 modern awards that do
contain provisions regarding an annual close-down, but the existing modern
award provisions do not provide the same level of flexibility as the model
clause.
[339]
The purpose of the
proposed provision is said to be to enable businesses to shut down and
require annual leave to be taken at the best time in terms of production or
service delivery fluctuations. It is on that basis that it was submitted
that the “close-down” proposal is not directed at the same issue being
canvassed by the variations proposed to address excessive leave balances and
should not be seen as an alternative to that claim.[175]
[340]
The 57 modern awards
that are not subject of the proposed variations already contain provisions
allowing employers to implement annual close-downs and no variations are
proposed in those awards.
[341]
The ACTU and a number
of individual unions opposed the Employer Group’s claim.
[342]
We propose to deal
with the relevant historical and legislative context before turning to the
merits of the claim.
[343]
An
annual close-down provision (also referred to as a “shut down”) was
introduced into the WR Act by the Work Choices Act in 2006.
The AFPCS provided that an employer had a right to direct employees to
take leave during a shut down for the whole, or part, of its business.
Section 236(5) of the WR Act provided:
“Shut downs
(5)
An employee must take an amount of annual leave during a particular
period if:
(a)
the employee is directed to do so by the employee’s employer because,
during that period, the employer shuts down the business, or any part of the
business, in which the employee works; and
(b)
at least that amount of annual leave is credited to the employee.”
[344]
Annual
close-down provisions were also in some awards prior to the Work Choices Act
amendments. For example the Metal
Industry Award 1971 was varied in 1977 to include such a provision.[176]
[345]
During
the award modernisation process, the Award Modernisation Full Bench, in its
2008 Award Modernisation
decision, stated that the “provisions in awards and NAPSAs governing annual
close-downs vary significantly”.[177]
The Full Bench went on to say it had “adopted the approach of attempting to
identify an industry standard in each case” which is why there may be “some
variation in the close-down provisions”.[178]
[346]
An
example of how the Award Modernisation Full Bench decided to include a
close-down provision is in the pest control industry. In making the
Pest Control Industry Award 2010
the Full Bench decided to include an annual close-down provision.[179]
Prior to the making of the modern award, three of the six pre-reform federal
awards and NAPSAs in this industry contained close-down provisions. These
included the South Australian and New South Wales NAPSAs and the Victorian
pre-reform federal award. The South Australian NAPSA, the
Pest Control Award,
required an employer to give an employee six weeks’ notice before
closing down for a period of time.[180]
The modern award provision for annual close-down, however, reflects the
Victorian pre-reform federal award and requires four weeks’ notice.
[347]
At
present, 81 modern awards contain provisions for close-down and 41 modern
awards do not.[181]
[348]
The Act
does not contain a specific provision in relation to “shut downs” or
“close-downs”, but s.93(3) provides that a close-down provision may be
included in modern awards and enterprise agreements; it reads:
“Terms about requirements to take paid annual leave
(3)
A modern award or enterprise agreement may include terms requiring an
employee, or allowing for an employee to be required, to take paid annual
leave in particular circumstances, but only if the requirement is
reasonable.”
[349]
The
Explanatory Memorandum to the Fair Work Bill 2008 makes it clear that the
subsection was intended to encompass close-down provisions. One of the
examples provided in the Explanatory Memorandum was a term which enabled an
employer to require an employee to take a period of leave in circumstances
where the employer decided to “shut down the workplace over the
Christmas/New Year period” (see paragraph
[91] above).
We return to s.93(3) shortly.
[350]
We also note that
s.139(1)(h) provides that a modern award may include terms about “leave,
leave loadings and arrangements for
taking leave”.
[351]
We now turn to the
submissions advanced in respect of the Employer Group’s claim.
[352]
The ACCI and Ai Group
submissions advanced a number of arguments in support of the Employer
Group’s claim. These submissions can be conveniently distilled into seven
broad lines of argument.
[353]
First, it was
contended that provisions similar to the proposed model close-down term are
already contained in many modern awards, including the
Asphalt Industry Award 2010, and
were adopted by the Full Bench of the Commission during the Transitional
Review in varying 18 awards.[182]
[354]
In relation to this
point we would observe that the
Transitional Review—Annual Leave decision did not endorse the close-down
provision in the Asphalt Industry
Award 2010 as an appropriate model term. The Full Bench simply dealt
with an anomaly or technical problem arising from the Part 10A award
modernisation process. The issue at the heart of the Full Bench decision was
that the obligation under the NES to accrue annual leave progressively and
make payment at the employee’s base rate of pay gave rise to an argument
that the existing award provision provided for an additional payment over
and above the amount that would otherwise be payable for an absence on
annual leave. Such an additional payment was unintended and the variations
made resolved this anomaly.[183]
[355]
Second, it was
contended that prior to the Act, the right of an employer to direct
employees to take annual leave during a close-down of the employer’s
business was clearly recognised and provided through federal and state
legislation and pre-modern award terms. In addition to the legislative
changes introduced by the Work Choices Act (to which we have already
referred) it was submitted that state legislation, such as the
Annual Holidays Act 1944 (NSW)
at s.4A, provided for the right of an employer to implement a close-down
of its business, in whole or in part, and enabled an employer to direct an
employee to take a period of unpaid leave to cover the close-down period,
when the employee had insufficient leave accrued. It was submitted that
these and other statutory arrangements applied to employees generally and,
as such, the safety net provided by modern awards should also now reflect
this position.[184]
It was also submitted that unless there was good reason to do otherwise, a
uniform approach should be adopted across all modern awards on the
close-down provisions.
[356]
For our part, we note
that a number of the earlier provisions to which reference was made by those
supporting the Employer Group’s claim contained a range of limitations upon
an employer’s right to direct an employee to take annual leave. For example:
·
the
Annual Holidays Act 1944 (NSW)
specifies that an employer can only give an employee notice of a close-down
once annually; and
·
awards and agreements also
set parameters around these provisions. For example the
Clerks’ (South Australia) Award
and the Retail Industry (South
Australia) Award provided that there could be no more than two
close-downs in any one year.
[357]
Third, it was
submitted that the variation is supported by the fact that many employers
close their operations, or part of them, over the Christmas/New Year period
and/or at other times of the year. The inclusion of close-down provisions in
the relevant modern award would ensure that an employer has the right to
direct employees to take leave during a close-down.
[358]
Fourth, it was
submitted that a close-down provision benefits both employees and employers.
A close-down enables employees to take periods of annual leave for rest and
recreation, particularly during holiday seasons where they can spend time
with family and friends. It enables employees to take leave without
employers having to secure replacement labour for the leave period.[185]
An annual close-down also benefits employers by providing a mechanism
through which employers may reduce leave liability and better manage staff
absences.[186]
[359]
Fifth, it was
submitted that many employers must observe different award provisions for
different employees, in addition to observing the NES provisions governing
the taking of leave during close-downs for award/agreement free employees.[187]
[360]
This is said to make
the safety net confusing, burdensome, unfair for employers, and in some
cases, unworkable where the employer has to deal with varying award
provisions, or in some cases no close-down provisions within the same
enterprise.[188]
[361]
Sixth, it was
submitted that the results of the Employer Survey support the claim.
Questions 9–10A of the Employer Survey are directed at the close-down issue,
as follows:
“9.
Since 1 January 2010, has your organisation closed down all or part
of its operations at any time during the year to allow employees to take
leave? Choose one of the following answers.
·
Yes
·
No
·
Unsure
10.
If so, on how many occasions since December 2009 has your
organisation closed down all or part of its operations?
·
1–2
·
3–4
·
5+”
[362]
Some 1928 employers
(46.5 per cent of all responses) stated that since 1 January 2010 their
organisation closed down all or part of its operations during the year to
allow employees to take leave. As to the number of occasions since December
2009 the organisation had closed down all or part of its operations, the
responses were as follows:
Answer |
Count |
% |
1–2 occasions |
477 |
23.8 |
3–4 occasions |
1237 |
61.8 |
5+ occasions |
215 |
10.7 |
No answer |
72 |
3.6 |
Note: Percentages shown do not
total 100 due to rounding.
[363]
We will deal with
Question 10A from the Employer Survey shortly.
[364]
Finally, it was
submitted that the modern awards to be varied do not meet the modern awards
objective and that the variations proposed are necessary to achieve that
objective.[189]
Promoting the
efficient and productive performance of work (s.134(1)(d))
[365]
ACCI submitted that
the model clause provides a mechanism whereby employers can ensure that
employees actually take their leave and that such an outcome is beneficial
to both employees and employers as it serves to:
(i)
reduce the prospects of employee “burnout” and poor health;
(ii)
assist in maintaining job safety and satisfaction; and
(iii)
ultimately help to ensure a more balanced, rested and (accordingly)
productive workforce.[190]
The likely impact
on business, including on productivity, employment costs and the regulatory
burden (s.134(1)(g))
[366]
Allowing employers to
close down their businesses on a periodic basis was said to allow an
employer to reduce its annual leave liability thereby reducing the
regulatory burden on employers.[191]
A simple easy to
understand and sustainable modern award system (s.134(1)(g)
[367]
ACCI submitted that
the practice of closing down all or part of a business’ operation is
widespread and well known. It is not a new concept and, prior to the
introduction of the Act, historically there had been a relatively uniform
approach to annual close-down provisions. Allowing employers to close down
their premises on a periodic basis advances the objectives of s.134(1)(g).[192]
Employment growth
and the sustainability, performance and competitiveness of the national
economy (s.134(1)(h))
[368]
It was contended that
the model clause will reduce the regulatory burden on businesses and allow
them to divert funds currently set aside for excessive leave accruals on
profit generating investments. Compelling employees to take leave is also
directly supportive of a major sector of the economy—tourism.[193]
[369]
The ACTU and a number
of individual unions opposed the Employer Group’s claim and contended that
the Commission cannot be satisfied that it is necessary to grant the claim
in order to ensure that modern awards are meeting the modern awards
objective. For reasons which will become apparent, it is not necessary to
canvass these submissions in any detail.
[370]
We are not persuaded
to grant the Employer Group’s claim for three reasons.
[371]
First, while we accept
that a close-down provision may be included in modern awards, it is clear
from the terms of s.93(3) that an award provision requiring an employee to
take paid annual leave in such circumstances is only permitted “if the
requirement is reasonable”. We are not satisfied that the model term
proposed is “reasonable” in the sense contemplated by s.93(3).
[372]
The model term is very
broadly expressed and is capable of being applied in a manner not
contemplated in the type of annual close-down provisions traditionally
provided in awards, in particular:
(i)
there is no restriction on the number of times a close-down can occur
in a 12 month period; and
(ii)
there is no restriction on the duration of the close-down—it could be for a
single day, a week or a number of weeks.
[373]
Further, given the
breadth of the model term we are not persuaded that a four week notice
period is reasonable.
[374]
Second, while we
generally agree with the proposition that it is desirable that provisions
dealing with the taking of annual leave be uniform across modern awards, it
seems to us that close-down provisions are an exception to this general
proposition and warrant consideration on an award-by-award basis.
[375]
Some 81 modern awards
already contain close-down provisions and the nature of the provisions
varies considerably. In its 2008 Award Modernisation decision, the Award
Modernisation Full Bench considered a number of general issues and standard
clauses in respect of modern awards. In respect of close-down related annual
leave arrangements, the Full Bench said:
“[97] The provisions in awards and NAPSAs governing annual close-downs vary
significantly. It is preferable that we do not alter provisions which have
been specifically developed for particular industries. We have adopted the
approach of attempting to identify an industry standard in each case. This
means there may be some variation in the close-down provisions.”
[194]
[376]
We have reviewed the
existing range of modern award provisions and the basis upon which they were
established in the Award Modernisation process and have considered the case
put forward to establish a common provision. We are not persuaded that it is
appropriate to adopt a common provision across the modern awards which are
the subject of the Employer Group’s claim. The circumstances in the
industries covered by modern awards and the need for such a provision vary
considerably. Accordingly, claims to vary existing close-down provisions or
to insert such a provision are more appropriately made and determined on an
award-by-award basis.
[377]
In this context we
also note that the Employer Survey does not support the proposition that
there is a need for the variations proposed. The Employer Survey provided
that if an organisation answered “no” to Question 9 (i.e. since 1 January
2010 has the organisation closed down all or part of its operations at any
time during the year to allow employees to take leave) then they were
directed to Question 10A, which was in the following terms:
“10A.
If you answered no to question 9, what was the reason for your
organisation not closing down?
·
There was no operational reason for our business to close down.
·
We were unable to close down because it was not permitted by our award or
agreement”
[378]
The responses to
Question 10A were as follows:
Answer |
Count |
% |
There was no
operational reason for our business to close down |
1642 |
87.3 |
We were unable to close
down because it was not permitted by our award or agreement |
67 |
3.6 |
No answer |
172 |
9.1 |
[379]
It is notable that
less than 4 per cent of those employers who answered this question responded
that the reason why they had not closed down all or part of their operations
since 1 January 2010 was that it was not permitted by their award or
agreement. This does not suggest that the absence of a close-down provision
in the 41 modern awards which do not presently have such a provision is
creating particular difficulties for employers.
[380]
Third, in support of
the Employer Group’s claim, Ai Group and ACCI pointed to the desirability of
employees taking leave and that the proposed model term would provide a
mechanism by which employers can reduce their leave liability. We have
addressed these issues in the context of our consideration of the Employer
Group’s “excessive leave” claim.
[381]
On the material before
us, we are not satisfied that the variations proposed are necessary to
ensure that the modern awards sought to be varied meet the modern awards
objective. In short, the proponents of the claim have not established a
merit case sufficient to warrant the granting of the claim.
[382]
We leave open the
capacity for interested parties to seek a variation to a modern award to
either vary an existing close-down provision or to insert an appropriate
provision. Such applications should be made during the Award stage of the
Review on an individual award basis. Any proposed variation will need to be
supported by cogent evidence of industry circumstances requiring such a
provision or variation.
[383]
We do accept that
there may be potential difficulties created by circumstances where an
enterprise has access to a modern award close-down provision for most of its
employees but other applicable modern awards do not contain such a
provision. The application of occupational awards may be particularly
relevant in that context. It seems to us that such issues may be addressed
by the insertion of a majority clause[195]
in applicable occupational-based awards. We invite any interested party to
make such applications and they will be dealt with as part of the Award
stage of the Review.
4.4 Granting
leave in advance
[384]
The Employer Group
sought to vary 48 modern awards to include a provision allowing for the
taking of annual leave in advance of an entitlement to such leave accruing.[196]
The proposed clause is in the following terms:
“Annual
Leave in
Advance
By
agreement
between an
employer and
employee,
a period
of paid
annual leave may
be taken
in advance
of the
entitlement
accruing.
However, if
paid
annual leave
is taken in
advance and
the
employee’s
employment terminates
before the
employee
has
accrued the
entitlement
the employer
may make
a corresponding deduction
from any
money due
to the
employee
on
termination.”
[197]
[385]
The ACTU and a number
of individual unions opposed the Employer Group’s claim.[198]
[386]
We propose to deal
with the relevant historical and legislative context before turning to the
merits of the claim.
[387]
The issue of whether
modern awards should contain provisions for granting leave in advance was
not expressly addressed during the Part 10A award modernisation process.
When dealing with the matter of annual leave generally, the Award
Modernisation Full Bench indicated that it was not possible to develop a
single model clause due to the wide range of provisions contained in
pre-modern awards and NAPSAs.[199]
In considering the terms to include in modern awards, the Full Bench decided
upon an appropriate entitlement for a particular modern award rather than
attempting to preserve the many different entitlements which previously
applied. The approach taken was described as involving a “degree of
rationalisation at the award level only” and not the insertion of a standard
annual leave provision across all awards.[200]
We note that some 74 modern awards contain a
clause permitting the taking of annual leave in advance of the entitlement
accruing.[201]
[388]
The Joint Exhibit
(referred to at paragraph [81] above) contained details of legislation, both
federal and state, which deals with annual leave entitlements and related
matters. It identified provisions which expressly deal with an employee
taking annual leave in advance of an entitlement to that leave accruing. It
appears that federal legislation has not expressly dealt with the issue but
it has been dealt with in New South Wales, Queensland and Northern Territory
legislation.[202]
In this respect, we note that s.3(3) of the
Annual Holidays Act 1944 (NSW)
provides that, if an employee and employer agree,
annual leave may be taken in advance of the employee becoming entitled
to the leave. Section 12 of the
Industrial Relations Act 1999 (Qld) and s.8 of the
Annual Leave Act (NT)
contain similar provisions.
[389]
We have earlier noted
that s.139(1)(h) of the Act allows a modern award to contain provisions
dealing with leave and “arrangements
for taking leave”. Section 93(4) of the Act which is also relevant to
this matter, is in the following terms:
“Terms about taking paid annual leave
(4)
A modern award or enterprise agreement may include terms otherwise
dealing with the taking of paid annual leave.”
[390]
It is apparent from
the Explanatory Memorandum to the Fair Work Bill 2008 that the proposed
clause is a term of the type envisaged by s.93(4). The Explanatory
Memorandum provides as follows:
“383.
Subclause 93(4) enables an award or agreement to include other terms about
the taking of paid annual leave – e.g., the taking of paid annual leave in
advance of accrual.”
[391]
Section 94 of the Act
deals with annual leave entitlements of award and agreement free employees
and a note contained in s.94(6) refers to a similar issue to the matter
before us. It provides:
“Agreements about taking paid annual leave
(6)
An employer and an award/agreement free employee may agree on when
and how paid annual leave may be taken by the employee.
Note:
Matters that could be agreed
include, for example, the following:
(a) that paid annual leave
may be taken in advance of accrual;
(b) that paid annual leave must
be taken within a fixed period of time after it is accrued;
(c) the form of application for
paid annual leave;
(d) that a specified period of
notice must be given before taking paid annual leave.”
(emphasis added)
[392]
Section 55(4) of the
Act deals with ancillary and supplementary terms which may be included in a
modern award. It provides as follows:
“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.”
[393]
Sections 323 and 324
were identified by the Employer Group as being relevant to that part of the
proposed clause which provides an employer with the right to make a
deduction of monies at the time of termination of employment. Section 323
deals with the method and frequency of payment. One requirement is that it
provides that an
employee must be paid, in full, in relation to the performance of work.
However the section also refers to an exception to this requirement as
provided for in s.324. That section deals with deductions that can be made
to payments which an employer is obliged to make to an employee. It reads:
“324 Permitted deductions
(1) An
employer may deduct an amount from an amount payable to an employee in
accordance with subsection 323(1) if:
(a) the
deduction is authorised in writing by the employee and is principally for
the employee’s benefit; or
(b) the
deduction is authorised by the employee in accordance with an enterprise
agreement; or
(c) the
deduction is authorised by or under a modern award or an FWC order; or
(d) the
deduction is authorised by or under a law of the Commonwealth, a State or a
Territory, or an order of a court.”
[394]
Section 324(1)(c) was
relied upon by the Employer Group in respect of that part of the variation
they sought which concerns the deduction of monies from an employee’s
termination payments.
[395]
We now turn to the
submissions advanced in respect of the Employer Group’s claim.
[396]
It is convenient
to refer to the evidence first.
Those supporting the Employer Group’s claim rely on the
Employer
Survey
discussed earlier in this decision. Questions 15–17 of the Employer Survey
deal with the issue of leave in advance, as follows:[203]
“15. Since 1
January 2010, have any of your employees requested a period of annual leave
in advance (ie before they have sufficient accrued leave to cover the
request)?
·
Yes
·
No
·
Unsure
16.
If you answered ‘yes’ to Question 15, on what percentage of occasions
have you agreed to these requests?
·
None
·
1–10%
·
11–25%
·
26–50%
·
51–75%
·
75+%
·
All
·
Unsure
17.
If, in the future, an employee was to request a period of annual
leave in advance, would you be willing to grant such leave?
·
Yes
·
Depends on the circumstances
·
No
·
Unsure”
[397]
The responses to
Question 15 are particularly relevant:
Answer |
Count |
% |
Yes |
2289 |
61.2 |
No |
1360 |
36.3 |
Unsure |
92 |
2.5 |
No answer |
0 |
– |
[398]
Further, the
responses to Question 16 indicated that the
majority of requests to grant leave in advance were agreed to by 42 per cent
of the employers who answered that question.[204]
Answer |
Count |
None |
206 |
1–10% |
812 |
11–25% |
153 |
26–50% |
127 |
51–75% |
128 |
75% |
247 |
All occasions |
576 |
No answer |
17 |
[399]
The Employer
Group’s submissions relied on the terms of s.139(1)(h) in support of the
proposition that a modern award may contain a clause in the terms sought.
They also relied on s.55(4)(b) of the Act and submitted that the proposed
clause can properly be characterised as a clause which supplements the NES.
[400]
The clause was
described as having two components. The first makes it clear it will only
apply where there is agreement between the employer and employee for the
taking of annual leave in advance of it having accrued. The second component
allows an employer to make a deduction from monies
payable to an employee upon termination of employment.
[401]
Ai Group pointed
to the fact that there are similar provisions in 74 modern awards and that
there was no evidence those provisions have operated in a way that is
disadvantageous or unfair to employees. They asserted that the absence of an
express provision in a modern award dealing with the granting of annual
leave in advance, and the right to make a relevant deduction from monies
owing to an employee, discourages
employers
from
granting
such leave.
They acknowledged that s.324(1)(a)
of
the
Act
provides
that
an
employer
may
deduct
an
amount
from
an
employee’s
pay
if
“the
deduction
is
authorised
in
writing
by
the
employee
and
is
principally
for
the
employee’s
benefit”
but submitted that is not an adequate provision for an employer as such an
authorisation
can
be
withdrawn
by
the
employee
at
any
time.[205]
[402]
Ai Group also
submitted that the absence of a clause in many modern awards in similar
terms to that proposed operates against the interests of employees who may
wish to take annual leave in circumstances where an entitlement to do so has
not accrued. They provided examples of such circumstances:
·
where
an
employee
needs
to
take
annual
leave
for
unexpected
family reasons
and
the employee
does
not
have
sufficient
leave
accrued;
or
·
where
the
employer
closes
down
its
operations
for
a
period
and
an
employee
does
not
have
sufficient
annual
leave
accrued.[206]
[403]
ACCI submitted
that the proposed clause is
principally focussed
upon facilitating
the taking
of employee
entitlements
at times
that are most
convenient to
employees.
It is submitted that the
self-evident
reason why
employees wish to
take leave
in advance
is that
they wish
to take
leave at
a particular
time that suits them, however their
leave accruals
at the
relevant time
do not
permit the
taking of
the leave.[207]
In this regard ACCI relied on the finding by Skinner and Pocock that a
reason given by employees for not taking their full leave entitlement was
that they had their leave paid out when they changed jobs and hence had no
accrued entitlement.[208]
(see Table 4 at paragraph [142] above.)
[404]
ACCI and Ai Group
submitted that the proposed clause would be consistent with the modern
awards objective in s.134 of the Act. The submissions advanced in this
regard may be summarised as follows:
(i)
The clause
would promote
social inclusion through
increased
workforce
participation
as is referred to in s.134(1)(c).
(ii)
The clause will promote flexible modern work practices and the
efficient and productive performance of work. The proposed variation
increases the likelihood of employees actually taking leave. In turn, the
taking of leave should ensure a more balanced, rested and productive
workforce. This will help to ensure the efficient and productive performance
of work, advancing the objective in s.134(1)(d).
(iii)
The clause will not increase the regulatory burden on employers or
increase their employment costs. By
ensuring more
leave is
taken, the
proposed variation is
likely to result in fewer employees accruing excessive leave balances. This
is likely to reduce the regulatory burden and employment costs associated
with employment, advancing the objective in s.134(l)(f) of the
Act.
(iv)
The taking of leave in advance is already widespread. Fifty-five per
cent of employers have received requests since 1 January 2010 from employees
seeking to take annual leave in advance. Of these requests, the vast
majority of employers have acceded to them at some point in time. The
implementation of the proposed clause will, accordingly, ensure that modern
awards provide a framework for a practice that is already widespread, thus
giving rise to a simple, understandable and relevant modern award. This will
advance the objective in s.134(l)(g) of the Act.
(v)
By providing employees with greater opportunities to take leave,
Australian tourism will be supported, thus contributing to the
sustainability and performance of the national economy, advancing the
objective in s.134(1)(h).[209]
[405]
As we have mentioned,
the ACTU and a number of individual unions opposed the variations sought by
the Employer Group. While acknowledging that the Act allows for such a term
to be inserted in modern awards in the form sought, the unions advanced a
range of reasons why the Employer Group’s claim should be rejected.
[406]
The ACTU
submitted that any
benefit
to
the
small
minority
of employees
who
seek
to take
annual leave
in advance is outweighed by the
potential for the provision to be abused. It was contended that employers
could
exert
pressure
on employees
to
take a
period
of annual
leave in advance
and that the proposed clause would allow employers to “pre-emptively
reduce
leave
balances”
and ensure
that
employees
are “in
debt
to
their employer
in terms
of the
annual
leave they
owe
upon the
termination
of employment”.[210]
It was also contended that employees will be forced to take their leave in
advance or be threatened with termination of employment. It was submitted
that in these circumstances, the
concept
of “agreement”
or “consent”
to
the arrangement
in this
context
is illusory.[211]
[407]
The ACTU
referred to the
legislation
which
governed
annual leave
prior
to modern awards being made and
the
commencement
of the
Act and submitted that,
generally, employees
were
not entitled
to take
annual leave
until a full
year’s entitlement
had accrued,
that is, until the
anniversary
of each
year
of employment.
Now, under s.87(2) of the Act, employees
can take
annual leave
when
and
as it accrues.
On this basis it was submitted that the
imperative
for a
provision
granting
leave
in advance
is greatly
reduced.[212]
[408]
We are satisfied that
the proposed clause is one which can be included in a modern award. We have
earlier reproduced s.93(4), which deals with the taking of paid annual
leave. The proposed clause is a term envisaged by that section. We also
accept that the proposed clause can properly be described as a provision
supplementary to the NES. In this respect, nothing in the evidence or
submissions has persuaded us that the effect of the clause would be
detrimental to an employee when compared with the NES, a consideration
raised by s.55(4).
[409]
The ACTU and
individual unions challenged the contention that the proposed clause would
be beneficial to employees and submitted that the motivation for the
proposed clause was to enhance an employer’s opportunity to pressure an
employee to take leave for reasons beneficial to the employer. In
particular, they submitted that employers will use the provision to force
employees to take annual leave at a time which suits an employer rather than
at a time which suits an employee. But these submissions amounted to little
more than a series of assertions without any evidentiary foundation. No
evidence was led by the ACTU or any of the individual unions to establish,
or even suggest, that the existence of comparable clauses in some 74[213]
modern awards had operated to the disadvantage of an employee. Nor was there
any evidence employers had misused such clauses in the manner suggested.
[410]
The ACTU also
submitted that we should place little weight on the submission that
employers had frequently been asked by their employees to take a period of
annual leave in advance of an entitlement to such leave accruing. Despite
the limitations of the Employer Survey, we accept that it does establish
that such requests are commonplace.
[411]
We are persuaded an
award term which facilitates agreements to take leave in advance will be
beneficial to employees. It will allow an employee to take paid annual
leave, albeit with the agreement of their employer, at a time when they may
not otherwise be able to. Further, there seems no good reason why the
capacity to take leave in advance of accrual should be available to
award/agreement free employees and not to employees covered by a modern
award. The insertion of such a term into modern awards will align the
entitlements of modern award covered employees with those of award/agreement
free employees.
[412]
We have redrafted the
proposed Employer Group clause to provide a model term dealing with the
provision of paid annual leave in advance of accruing an entitlement to such
leave. The model term is set out below:
“1
Annual leave in advance
1.1
An employer and employee may agree to the employee taking a period of
paid annual leave in advance of the employee accruing an entitlement to such
leave provided that the agreement meets the following requirements:
(a)
it is in writing and signed by the employee and employer;
(b)
it states the amount of leave to be taken in advance and the date on
which the leave is to commence; and
(c)
it is retained as an employee record.
1.2
This subclause applies if an employee takes a period of paid annual
leave in advance pursuant to an agreement made in accordance with clause
1.1. If the employee’s employment is terminated before they have accrued all
of the entitlement to paid annual leave which they have taken then the
employer may deduct an amount equal to the difference between the employee’s
accrued annual leave entitlement and the leave taken in advance, from any
monies due to the employee on termination.”
[413]
The main difference
between the model term we have determined and the Employer Group’s claim are
the requirements regarding the content and form of any agreement to provide
leave in advance (subclause 1.1(a)) and the employer’s obligation to keep
such agreements as an employee record (subclause 1.1(c)). These requirements
are consistent with an employer’s existing obligations under Regulation 3.36
of the Fair Work Regulations
2009.[214]
[414]
We are also persuaded
that the model term will further the modern awards objective of ensuring
that modern awards, together with the NES, provide a fair and relevant
minimum safety net. The provision will allow employees to take annual leave
at a time when they may be faced with circumstances obliging them to take a
period of leave. It will also allow them to take leave at a time which
aligns with their personal preference to do so. As such it is likely that
such a provision will encourage employees to take their annual leave. In
these respects it can be said to be consistent with ss.134(1)(a), (c) and
(d) of the Act. By aligning the annual leave entitlement of modern award
covered employees with their award/agreement free counterparts in an
industry, and expressly providing for the right of an employer to make a
relevant deduction from termination pay, the model term is likely to make a
modern award simpler and easier to understand. At the same time, it will not
impact negatively on business costs nor an employer’s regulatory burden.
These considerations are consistent with ss.134(1)(f) and (g).
[415]
The Employer Group’s
claim is only directed at 48 modern awards. We are satisfied that the
variation of those modern awards to incorporate the model term is necessary
to meet the modern awards objective. Further, for the reasons given earlier
(at paragraphs [156]–[168]) greater consistency in the provisions governing
the taking of annual leave will make the modern award safety net simpler and
easier to understand. Accordingly, our provisional view is that it is
necessary to vary all modern
awards to insert the model term in order to achieve the modern awards
objective. Any interested party who wishes to advance a contrary view will
have an opportunity to do so, in response to the draft variation
determinations arising from this decision.
4.5 Payment of
annual leave entitlements on termination
[416]
The ACTU
sought to vary 118 modern awards in relation to the payment of annual leave
entitlements on termination. The variations sought to insert a common term,
as follows:
“Payment on termination
If, when the employment of an employee ends, the employee has a period of
untaken annual leave, the employer must pay the employee the amount that
would have been payable to the employee had the employee taken that period
of leave.”[215]
[417]
Depending on the
circumstances in a particular modern award, the variation would ensure that
the payment for annual leave on termination of employment included annual
leave loading and other payments made to the employee if they had actually
taken annual leave.
[418]
It was
contended that the variations proposed are necessary to remove inconsistency
with the NES, and s.90(2) in particular. In essence, the ACTU contended that
the current provisions in a number of modern awards are inconsistent with
s.90(2) of the Act. Section 90 of the Act is as follows:
“90
Payment for annual leave
(1)
If, in accordance with this Division, an employee takes a period of
paid annual leave, the employer must pay the employee at the employee’s base
rate of pay for the employee’s ordinary hours of work in the period.
(2)
If, when the employment of an employee ends, the employee has a
period of untaken paid annual leave, the employer must pay the employee the
amount that would have been payable to the employee had the employee taken
that period of leave.”
[419]
The ACTU
submitted that the effect of the variations proposed is simply to re-state
the obligation that arises under s.90(2) of the Act and that the proposed
variations do not create a fresh obligation that does not currently arise
under the Act.
[420]
Ai Group
and a number of other employer bodies opposed the ACTU’s claim.
[421]
For
reasons which will become apparent, it is unnecessary to canvass the merit
of the ACTU’s claim or the arguments advanced in support and opposition.
[422]
The
merit of the ACTU’s claim turns on the proper construction of s.90(2).[216]
This issue was
the subject of a recent judgment of the Federal Court (Buchanan J) in
Centennial Northern Mining Services
Pty Ltd v Construction, Forestry, Mining and Energy Union (No.2).[217]
The central practical issue between the parties was whether payment for
accrued annual leave on termination of employment under the relevant
enterprise agreement must include payment of “annual leave loading” or
alternatively, rostered overtime, shift and weekend penalty payments, in
circumstances where such payments must be made for a period of annual leave
actually taken during employment.
[423]
In the proceedings
before Buchanan J, the applicant argued that the entitlement to be paid for
accrued leave on termination was referable to the obligation arising under
s.90(1), that is the base rate of pay for ordinary hours which would have
been worked during the period of annual leave. The respondent argued that
s.90(2) requires payment of the whole amount which would actually have been
payable during a period of leave, that is the amount as calculated under
clause 19.6 of the agreement. His Honour dealt with the competing arguments
at paragraphs 23–26 of his judgment and concluded in the following terms:
“Owing to
the context (award or enterprise agreement or private agreement) and the
statutory language (“at least the full amount”) it does not appear that s 93
or s 94 refer back to any minimum entitlement stated by s 90(1). What then
of s 90(2), where the phrase at issue is:
the
amount that would have been payable to the employee had the employee taken
that period of leave.
A
construction to the effect that s 90(2) protects the whole entitlement to
annual leave certainly cannot be excluded. This appears to me to be a case
where reference to extraneous material would assist.
The
Explanatory Memorandum to the FW Bill stated:
Clause 90 – Payment for annual
leave
370.
Subclause 90(1) entitles an employee to be paid at their base rate of
pay (as defined in clause 16) for the employee’s ordinary hours of work for
the period of their absence on leave.
(The
meaning of ordinary hours of work and base rate of pay are outlined at the
beginning of this Part.)
371.
This is a minimum entitlement and would not prevent an employer and
employee from agreeing to, or an award or enterprise agreement providing
for, more generous payment terms.
372.
Subclause 90(2) provides that, on termination of employment, an
employee is entitled to receive a payment in respect of any untaken paid
annual leave. The payment will be
equivalent to the amount that the employee
would have been paid if the
employee had taken the annual leave. (emphasis added.)
In my
view, this lends support to the argument that s 90(2) (unlike s 90(1)) is
not confined to a statement of a minimum obligation, but is a statement to
the effect that an employee should not suffer a reduction in the value of
unpaid annual leave if employment comes to an end while paid annual leave
remains untaken.
I
therefore reject the construction argued by the applicant. I am not
prepared, in effect, to read down s 90(2) in the face of the expectation
stated in the Explanatory Memorandum when that construction is plainly open
on the terms of s 90(2) itself.
That
does not mean necessarily that this aspect of the application should be
dismissed, although that may be the result.
Section 55(1) prohibits an enterprise agreement from excluding any provision
of the National Employment Standards. Section 55(2) allows an enterprise
agreement to include some expressly permitted terms. Clause 19.5 is not such
a term. Section 55(4), (5) and (6) permit ancillary and supplementary terms
and terms which have the same effect as provisions of the National
Employment Standards. Terms which give the same entitlement operate in
parallel with the National Employment Standards, which operate as minimum
standards (s 55(6)).
The
provisions of cl 19.5 purport to state an entitlement which is less than the
entitlement I have determined is granted by s 90(2), when read with cl 19.6.
In my view, although there may be some argument to the contrary (i.e. that
there is no necessary inconsistency), cl 19.5 does operate on its face (“an
employee is paid”) in a way which
excludes the operation of s 90(2). Clause 19.5, therefore, has no effect
(s 56).”[218]
[424]
On 19
March 2015 a Notice of Appeal was filed in respect of His Honour’s decision
alleging, in part, that His Honour erred in finding that s.90(2) of the Act
is not confined to a statement of minimum obligation and is a statement to
the effect that an employee should not suffer a reduction in the value of
unpaid annual leave if employment comes to an end while paid annual leave
remains untaken. The appeal is yet to be determined.
[425]
We also note that issues
associated with the interaction of modern award terms and s.90 were
canvassed in the report of the Fair Work Act Review Panel.[219]
At section 5.27 of the report the Review Panel stated:
“5.2.7 Annual leave loading on
termination
A
principal concern raised by stakeholders about annual leave provisions under
the NES is the payment of annual leave loading on termination, an issue that
has received some public attention recently and was raised in many
submissions and meetings with the Panel. The concern arises with the
interpretation of s. 90(2), which provides:
(2) If,
when the employment of an employee ends, the employee has a period of
untaken paid annual leave, the employer must pay the employee the amount
that would have been payable to the employee had the employee taken that
period of leave.
The
provision has been interpreted by the FWO, based on advice from Senior
Counsel, as requiring the payment of an annual leave loading entitlement,
even where award or agreement provisions specifically preclude payment of
the loading. Stakeholders including the ACCI and the Ai Group propose
amendment to the legislation to clarify that leave loading is only payable
on termination if provided for in the relevant industrial instrument.
The
provision of annual leave loading was originally to compensate employees for
the notional loss of overtime earnings while on leave, although the benefit
then spread to most sectors of the workforce, including areas not generally
subject to overtime payments. A common feature of award leave loading
provisions historically was that leave loading was not payable on
termination. Advice tendered to the Senate’s Education, Employment and
Workplace Relations Committee by the FWO was that 112 modern awards include
provision for annual leave loading, 29 of which either explicitly or
implicitly provide that the loading is not payable on termination of
employment, a further nine provide that it is payable and 74 are silent on
the issue.
While
it is not clear beyond doubt whether s. 90(2) was intended to preserve
existing arrangements for the payment of leave loading on termination, the
interpretation of the provision by the FWO, in contradistinction to the
interpretation by many employer representatives, has meant that longstanding
arrangements under awards and enterprise agreements have been disturbed.
For
employers who traditionally have not had to pay annual leave loading on
termination, they have incurred an additional cost in paying out the annual
leave on termination. Leave loading typically amounts to 17.5 per cent on
the base rate of pay, depending on the relevant modern award or enterprise
agreement. It is impossible to quantify the cost of this change to the
economy overall, as there is no way to gauge how much leave is owed to
employees whose employment has been terminated, what their base rate of pay
is, what the relevant leave loading is, how many employees are covered by
awards or agreements that provide leave loading and whether all employers
have been meeting the new requirement. It is, however, noted that the
interpretation of the requirement would have the most negative impact on
affected small businesses. The benefit to employees covered by instruments
that previously had not attracted leave loading on separation is that they
are entitled to be paid leave loading on top of leave owed to them when
leaving their employment.
Backed
with the weight of past practice and to provide certainty on the issue, the
Panel therefore recommends that s. 90(2) of legislation be amended to
provide that leave loading is only payable on separation where expressly
provided under the relevant modern award or enterprise agreement for both
new and existing employees.
Recommendation 6:
The Panel recommends that s. 90 be amended to provide that annual leave
loading is not payable on termination of employment unless a modern award or
enterprise agreement expressly provides to that effect.” (references
omitted)
[426]
The Fair
Work Amendment Bill 2014
responded to a number of
outstanding recommendations from the Fair Work Review Panel’s June 2012
report, including the recommendation relating to the payment of annual leave
entitlements on termination. The bill proposes to repeal section 90(2) and
provide as follows, in substitution:
“(2)
If, at the time (the
termination time) when the
employment of an employee ends, the employee has a period of untaken paid
annual leave:
(a)
the employer must pay the employee a rate for each hour of the
employee’s untaken paid annual leave; and
(b)
that rate must not be less than the rate that, immediately before the
termination time, is the employee’s base rate of pay (expressed as an hourly
rate).
Note:
See also section 55 (which deals with the interaction between the
National Employment Standards and a modern award or enterprise agreement).”
[427]
The
amendment was described in the Second Reading Speech for the bill as a
change to “restore the longstanding position, that employees are only
entitled to annual leave loading when their employment ends if it is
expressly provided for in their award or workplace agreement”.[220]
The bill is yet to be passed by the Senate.
[429]
In these circumstances
we propose to adjourn our consideration of the ACTU’s claim at this stage.
Any interested party may seek to have the matter called back on for further
programming and submissions.
4.6
Electronic funds transfer and paid annual leave
[430]
The
Employer Group sought to insert the following clause into 51 modern awards:
“Electronic Transfer Payment of Annual Leave
Despite
anything else in this clause, an employee paid by electronic funds transfer
(EFT) may be paid in accordance with their usual pay cycle while on paid
annual leave.”[221]
[431]
The 51 awards sought to be varied (see Attachment I) currently contain a
term which requires the employer to pay an employee for annual leave
prior to the employee taking the
leave. For example, clause 34.4(a) of the
Food, Beverage and
Tobacco Manufacturing Award 2010
provides:
“34.4 Payment for period of
annual leave
(a)
Instead of the base rate of pay as referred to in s.90(1) of
the Act, an employee under this award, before going on annual leave,
must be paid the wages they would have received in respect of the ordinary
hours the employee would have worked had the employee not been on leave
during the relevant period.” (emphasis added)
[432]
The
effect of the proposed variation is that where employees are paid by EFT
they may be paid their annual leave in accordance with their usual pay
cycle, rather than being paid prior to commencing their period of annual
leave. The Employer Group’s claim did not seek to change the status quo
(i.e. payment for leave being made in advance of taking the leave) in
respect of employees who are paid by cash or cheque.
[433]
The
Employer Group contended that the proposed variations are necessary to
ensure that the 51 modern awards which are the subject of the claim meet the
modern awards objective by:
·
ensuring
that modern awards provide a relevant minimum safety net; and
·
reducing
the regulatory burden on employers.
[434]
The
union parties opposed the Employer Group’s claim.
[435]
The ACTU
submitted that the Employer Group had not made out a case for changing a
long standing award entitlement. While the ACTU conceded that cash payments
are less common than they used to be, it advanced the following submissions
in support of its contention that “there are sound reasons for ensuring that
all employees receive payment for annual leave in advance”:
“a.
Payment in advance is a long standing award entitlement. The
regulatory burden and administrative costs associated with the provisions
are not new.
b.
Annual leave accrues progressively throughout a year of service and
at the time an employee intends to take his or her annual leave it is an
entitlement they have already earned by providing service to their employer
throughout the year. Annual leave is an entitlement vested in an employee
and it is unfair to deny an employee access to the payment that is due to
them.
c.
There are significant leave-related costs that employees incur prior
to and throughout the period of leave. Employees would be significantly
disadvantaged if the long-standing award entitlement to payment in advance
was removed.
d.
The additional costs incurred by employers as a result of the
requirement to pay employees in advance are likely to be minimal as
businesses can comply with the provision by making payments in the ordinary
pay cycle preceding the period of annual leave. Electronic payment processes
have also substantially reduced general administrative costs.
e.
The applicant’s claim may produce inequitable outcomes for employees
paid by EFT vis a vis employees that receive cash payment in advance of
taking the leave. It is also possible that some employees will not receive
cash payments to which they are entitled if the award provision is altered
to create two different sets of obligations.”[222]
[436]
The
existing award provisions which require annual leave to be paid prior to
taking leave do not appear to have been the subject of any detailed arbitral
consideration. It is likely that they simply reflect the position as it was
in some pre-modernised awards and in state and territory legislation.[223]
During the award modernisation process these provisions were then simply
translated into the existing 51 modern awards which are the subject of the
Employer Group’s claim, without any consideration of the merits of the
provisions.
[437]
Modern
award terms requiring the payment of annual leave at or prior to the
commencement of leave relate back to a time when employees were
predominantly paid by either cash or cheque, usually with an associated
requirement to attend the workplace to receive payment. In such
circumstances a requirement for the payment of annual leave at the
commencement of the leave makes sense—it avoids the need for the employee to
attend work (during their annual leave) simply for the purpose of collecting
their pay. But the question is whether such a provision is still relevant in
contemporary circumstances.
[438]
Questions 18–21 of the Employer Survey are directed at this claim. Question
18 provided as follows:
“18.
Do you pay any of your permanent employees by cash or cheque (or some
other non-electronic transfer method) on a regular basis?”[224]
[439]
Some
3166 employers (about 85 per cent of all responses) answered no to this
question (528 answered yes and 19 were unsure). Hence a substantial majority
of respondents pay their employees by EFT. It is also apparent from the
responses to Question 20 that a significant number of survey respondents
said that they were charged extra fees for processing payroll outside their
usual pay period—as may be the case if leave was paid at the commencement of
the leave as opposed to during the usual pay cycle.[225]
[440]
Changes
in consumer behaviour are also relevant. ACCI tendered the May 2014 ‘HP-RFI
Australian Payments Research Report’.[226]
The report indicates that only 35 per cent of consumer transactions are now
undertaken in cash, with the remainder being by a variety of methods
including credit cards, charge cards, BPAY, store gift cards and other
transactions. By dollar value, credit card transactions represent a far
greater proportion of consumer expenditure (27 per cent) than cash
transactions (16 per cent).
[441]
The data
in the report show a trend away from cash-based transactions and towards
either credit card usage or direct transfer and BPAY methods.
[442]
The
variety of payment methods available and the data as to usage suggest that
employees are now more likely to rely on payments made in advance of taking
leave (i.e. BPAY and direct transfers) or credit card usage during annual
leave in order to meet leave related expenses. Cash payments during the
course of leave are unlikely to be the main source of payment used for leave
related expenses.
[443]
We are
persuaded that the Employer Group’s claim should be granted.
[444]
The variation of
modern awards to incorporate the model term will ensure that each modern
award provides a fair and relevant minimum safety net. In so deciding we
have taken into account the s.134 considerations, insofar as they are
relevant, and we are satisfied that such a variation is necessary to achieve
the modern awards objective.
[445]
The
variation of the relevant modern awards will ensure that each of these
modern awards provides a “fair and
relevant minimum safety net”. The variations will ensure that these
modern awards are “relevant” to the needs of the modern workplace.
[446]
We are
also satisfied that the model term reflects flexible modern work practices
and, accordingly, the insertion of such a term in modern awards will promote
such practices, consistent with s.134(1)(d).
[447]
Section
134(1)(f) is also relevant in that the variations will reduce employment
costs and the regulatory burden on business.
[448]
As to
the arguments advanced by the ACTU, while we accept that the variations
proposed will remove an existing employee entitlement, we are not persuaded
that employees will be “significantly disadvantaged” by such an outcome. The
suggestion seems to be that employees require payment in advance in order to
meet “significant leave-related costs that employees incur prior to ... the
period of leave”.[227]
Contrary to the ACTU’s assertion we think it is more likely that employees
either save money over time to pay for a holiday or use credit. The lump-sum
payment immediately prior to the commencement of leave is unlikely to assist
as employees will continue to incur their usual living expenses (e.g. rent,
mortgage, other interest payments, utilities etc.) during their period of
leave. Paid annual leave provides a respite from work, but does not
generally provide any additional income (unless a leave loading is payable).
[449]
The ACTU
also submitted that removing the existing entitlement would disadvantage
employees in two further respects:
·
an
employee who travels overseas or to a remote domestic location may have
difficulty contacting their employer to resolve any problems with their pay;
and
·
an
employer may become insolvent while the employee is on leave.
[450]
Neither
of these arguments is particularly persuasive. Given modern communications
and the extent of internet connectivity the first issue is unlikely to be a
common problem. As to the second point, insolvency can arise at any time and
result in employee disadvantage, for example between pay cycles. There are
statutory and administrative mechanisms for employees to recover the
payments owed to them in such circumstances.
[451]
For
completeness, we note that during the course of the ACTU’s oral submissions
it argued that s.90 required
annual leave to be paid in advance.[228]
If this is the argument put, we do not think it correct.
[452]
There is
no legislative requirement that the payment for annual leave be made prior
to taking the leave. Section 90(1) of the Act provides:
“90
Payment for annual leave
(1)
If, in accordance with this Division, an employee takes a period of
paid annual leave, the employer must pay the employee at the employee’s base
rate of pay for the employee’s ordinary hours of work in the period.”
[453]
By the
use of the word if at its
commencement s.90(1) identifies a condition or contingency upon the
satisfaction or occurrence of which a specified requirement applies. The
condition or contingency is that “an employee takes a period of paid annual
leave” and the requirement is that “the employer must pay the employee’s
base rate of pay for the employee’s ordinary hours of work in the period”.
It follows that the requirement to make payment in respect of paid annual
leave arises when the employee actually takes the annual leave.[229]
[454]
Section
323 of the Act deals with the method and frequency of payment of certain
employment entitlements:
“323
Method and frequency of payment
(1)
An employer must pay an employee amounts payable to the employee in
relation to the performance of work:
(a)
in full (except as provided by section 324); and
(b)
in money by one, or a combination, of the methods referred to in
subsection (2); and
(c)
at least monthly.
Note 1:
This subsection is a civil remedy provision (see Part 4–1).
Note 2:
Amounts referred to in this subsection include the following if they
become payable during a relevant period:
(a)
incentive-based payments
and bonuses;
(b)
loadings;
(c)
monetary
allowances;
(d)
overtime or penalty
rates;
(e)
leave payments.
(2)
The methods are as follows:
(a)
cash;
(b)
cheque, money order, postal order or similar order, payable to the
employee;
(c)
the use of an electronic funds
transfer system to credit an account held by the employee;
(d)
a method authorised under a
modern award or an enterprise agreement.
(3)
Despite paragraph (1)(b), if a modern award or an enterprise
agreement specifies a particular method by which the money must be paid,
then the employer must pay the money by that method.
Note:
This subsection is a civil remedy provision (see Part 4–1).”
[455]
In
Re Canavan Building Pty Ltd Enterprise
Agreement 2013[230]
a Full Bench considered the interaction between s.90(1) and s.323:
“Section 90(1) therefore confirms that the statutory scheme is founded on
there being a temporal connection between the taking of annual leave and the
payment for such leave. Section 323(1)(c), which deals with the frequency of
payment for amounts payable to employees in relation to the performance of
work - including, as the accompanying statutory note indicates, leave
payments - further confirms this, in that such payments must be made “at
least monthly”. In relation to annual leave, this provision only makes
sense if read as a requirement for employers to pay for annual leave within
the pay cycle that the leave is taken, such pay cycle being at least monthly
in frequency. Paragraph 1283 of the Explanatory Memorandum for the Fair
Work Bill supports s.323(1)(c) together with the statutory note being
read in this way (underlining added):
‘The legislative note after this subclause makes clear that the payment rule
covers a wide range of payments, where they fall due during the relevant
payment period - including incentive-based payments and bonuses,
loadings, monetary allowances, overtime or penalty rates and leave
payments.’”
[456]
Finally,
we are satisfied that a variation of the type proposed is an ancillary or
incidental term within the meaning of s.55(4) of the Act. The statutory
notes to s.55(4) provide examples of terms that are “ancillary”,
“incidental” or “supplementary”. Note 1 is relevant in the present context:
“Note 1: Ancillary or incidental terms
permitted by paragraph (a) include (for example) terms:
...
(b)
that specify when payment under section 90 for paid annual leave must
be made.”
[457]
The
variations proposed are of the type contemplated by s.55(4)(a) and the
effect of such a variation is not detrimental to an employee, in any
respect, when compared to the NES.
5.
Purchased Leave
[458]
As we
have mentioned, Ai Group initially advanced a claim in respect of “purchased
leave”. It was proposed that a model term be inserted into all modern
awards, in the following terms:
“X.4
Purchased leave
By
agreement between an employer and an employee, a “purchased leave”
arrangement may be implemented under which the employee chooses to forgo an
amount payable to the employee in relation to the performance of work but
receives a corresponding additional amount of annual leave.”[231]
[459]
The
model term would allow, by agreement, additional annual leave each year in
exchange for a corresponding reduction in salary. Ai Group later decided not
to pursue its “purchased leave” proposal during these Common issue
proceedings, but reserved its right to pursue the matter in one or more
individual Group 3 or Group 4 awards.[232]
[460]
It seems
to us that a provision of the type proposed by Ai Group can be properly
characterised as an ancillary or incidental term within the meaning of
s.55(4)(a). It is a term of the type contemplated in Note 1 to s.55(4),
which states:
“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; ...”
[461]
The
material before us suggests that there is a level of interest in providing
arrangements which facilitate the “purchase” of additional annual leave.
Skinner and Pocock explored this issue, to some extent. One of their survey
questions asked respondents to choose between more paid leave and a pay
rise: “Bearing in mind that two weeks is about 4% of a full year. If you had
a choice between a 4% pay rise or an additional two weeks of paid leave each
year, which one would you prefer to have?”[233]
These questions replicated a 2002 survey.[234]
Table 6
compares the 2002 and 2010 results.
Table
6:
Full-time employees’ preference for a pay rise or additional two weeks’ paid
leave by gender, age and parenting status—AWALI 2010 and TAI 2002
AWALI 2010 |
|
|
|
TAI 2002 |
|
||||||
4% pay rise |
2 weeks’ paid leave |
4% |
2 weeks |
||||||||
|
Men
(%) |
Women
(%) |
All
(%) |
Men
(%) |
Women
(%) |
All
(%) |
All
(%) |
All
(%) |
|||
All |
43.4 |
43.5 |
43.4 |
56.6 |
56.5 |
56.6 |
44.7 |
51.6 |
|||
Age |
|||||||||||
18–24 years |
51.4 |
44.4 |
49.0 |
48.6 |
55.6 |
51.0 |
- |
- |
|||
25–34 years |
45.5 |
47.8 |
46.2 |
54.5 |
52.2 |
53.8 |
39.7 |
57.2 |
|||
35–49 years |
38.5 |
40.0 |
38.9 |
61.5 |
60.0 |
61.1 |
47.1 |
48.6 |
|||
50–59 years |
43.5 |
45.0 |
44.1 |
56.5 |
55.0 |
55.9 |
48.9 |
47.6 |
|||
60+
years |
57.1 |
44.0* |
52.1 |
42.9 |
56.0* |
47.9 |
- |
- |
|||
Parenting responsibility |
|||||||||||
Children
< 18 years |
40.1 |
42.3 |
40.7 |
59.9 |
57.7 |
59.3 |
47.8 |
47.9 |
|||
No
Children < 18 years |
46.8 |
44.0 |
45.6 |
53.2 |
56.0 |
54.4 |
42.5 |
54.1 |
|||
Household composition |
|||||||||||
Single
parent |
** |
42.1 |
41.5 |
** |
57.9 |
58.5 |
- |
- |
|||
Couple
with children |
38.3 |
39.6 |
38.7 |
61.7 |
60.4 |
61.3 |
- |
- |
|||
Couple
without children |
48.7 |
46.0 |
47.5 |
51.3 |
54.0 |
52.5 |
- |
- |
|||
Single
without children |
44.9 |
41.0 |
43.6 |
55.1 |
59.0 |
56.4 |
- |
- |
|||
Household income |
|||||||||||
$30 000–$59 999 |
53.1 |
42.3 |
48.8 |
46.9 |
57.7 |
51.2 |
53.7 |
43.7 |
|||
$60 000+ |
41.5 |
43.7 |
42.2 |
58.5 |
56.3 |
57.8 |
41.1 |
56.2 |
|||
Notes: *Estimate unreliable due to insufficient sample size; **Estimate not
provided due to inadequate sample size.
TAI data only included those aged 25–59 years. TAI data not available for
gendersocio-demographic categories. Insufficient sample size for household
income<$30,000.
[462]
In 2002,
51.6 per cent of respondents said that they would prefer a two week holiday
to an equivalent pay rise of 4 per cent.[235]
In 2010, the preference for paid leave over money was slightly more
pronounced, with 56.6 per cent of respondents saying that they would choose
more paid leave over a pay rise.
[463]
In a logistic
regression analysis with work hours, employment contract and occupation as
predictors, whether or not workers had taken their full leave entitlement in
the previous year was associated with different preferences for more time
than more money. Skinner and Pocock provide the following commentary on
these matters:
“Whether or not
workers had taken their full leave entitlement in the previous year was also
associated with different preferences for more time or money. Those who had
taken their full leave entitlement in 2009 were more likely to prefer an
additional two weeks’ leave (62.1%) compared to those who had not taken
their full leave entitlement (53.6%) (x²(1)=10.61,
p<.01). Those who had not taken
all their paid leave were more likely to prefer a pay rise (46.4%, compared
to 37.9% of those who had taken all their leave). In a logistic regression
controlling for occupation, those who had taken all their leave (Yes =1)
were more likely to prefer additional leave (OR =1.41, CI 1.13–1.75,
p=.002). Indeed, considering all
the employment predictors (hours, contract, occupation), workers’
leave-taking behaviour (took all leave or not) in the past year was the only
statistically significant predictor of preferences for more time or money...
... It is not
surprising that those who use up all their paid leave are more likely to
want more, while those who do not are more likely to choose a pay rise over
additional leave. However, it is interesting to note that when asked to
choose, more than half (53.6%) of those who do not use all their leave would
like more of it over more money; these represent a group of ‘unholidayed
holiday-preferers’. A seeming contradiction between deferring paid leave and
yet preferring more might be explained by the fact that most workers (83.5%)
can carry over their leave and take it later: the ‘unholidayed
holiday-preferers’ appear to value accumulating a bank of leave over having
more money in their hand.”
[236]
[464]
An ACTU claim for
“purchased leave” was considered in the
Family Provisions Case 2003–05.[237]
Ai Group advanced its own purchased leave claim and also agreed with some
elements of the ACTU’s claim, but disputed other aspects. Ultimately the
AIRC rejected both claims, largely on the ground of complexity:
“[218]
It
seems to us
that
this claim while having some acceptable aspects, also has some negatives.
The ACTU has not made out its case for a right to an additional six weeks of
unpaid leave. Even though the purpose of the leave is to be confined, it
would be an unwarranted imposition on employers. Furthermore the process to
be followed in the event of disagreement as to the timing of the leave is
unnecessarily cumbersome and time-consuming. In addition, the purchase
element of the claim is too complex. Like the AiG proposal we deal with
later, the provision is unnecessarily detailed and has the potential to
create confusion over a relatively simple matter. Averaging over a longer
period of pay foregone during a period of unpaid leave could assist
employees with their budgeting and can be done in ways which are unlikely to
disadvantage employers greatly if at all. In this area a significant amount
could be achieved by agreement without the need for award variation.”[238]
[465]
The AIRC later
observed that “a simpler approach is needed”[239]
and urged the parties to enter into further discussions with a view to
developing such an approach. It appears that subsequent discussions were
unsuccessful and the issue was then overtaken by legislative events.
[466]
It seems to us that a
facilitative provision dealing with purchased leave is worthy of further
consideration. It appears that the Act may permit such a provision to be
inserted in modern awards and, on the face of it, such a provision may meet
the objective of “assisting employees to balance their work and family
responsibilities by providing for flexible working arrangements” (s.3(d)).
Depending on the form of such a provision, consideration may need to be
given as to whether a purchased leave arrangement constitutes a “permitted
deduction” within the meaning of s.324. We propose to publish a discussion
paper on the issue of purchased leave shortly.
6.
Next Steps
[467]
The
outcomes of this decision will be applied in accordance with the following
steps.
[468]
Where a
claim has been granted in part or in full, the Commission will prepare draft
determinations varying each of the affected awards for comment. As outlined
in the statement issued on 7 April 2014:
“[4] It is proposed that once the Annual Leave
Common Issue proceedings are completed, the Full Bench will issue an in
principle decision, along with any draft determinations for all modern
awards. Interested parties will then have the opportunity to comment upon
the draft determinations as they relate to each individual modern award, and
make submissions related to tailoring any provisions to specific awards ...
[5]
... [T]his phase will be used for tailoring clauses to
suit particular awards and should not be viewed as an opportunity to
re-agitate issues already determined by the Annual Leave Full Bench.”
[240]
6.1 Excessive
annual leave
[469]
As
outlined in paragraph
[219],
the model term set out in paragraph
[189]
only reflects our provisional view. Interested parties will be provided with
an opportunity to make further submissions directed at both the model term
and the proposition that all
modern awards be varied to insert the model term. Directions will be issued
in relation to the filing of further submissions and a final oral hearing.
Submissions filed in accordance with those directions should also address
the modern awards objective. We will only reach a concluded view in respect
of these issues after considering all of the further submissions.
6.2 Cashing
out of annual leave
[470]
A
standard clause will be inserted into all modern awards in the form outlined
at paragraph [255]. Draft determinations will be prepared and published on
the Commission’s website for comment.
6.3 Close-down
[471]
This
claim was rejected. Parties who wish to pursue a claim to insert or vary
close-down provisions should do so on an award-by-award basis through the
Award stage of the Review.
6.4 Granting
leave in advance
[472]
A
standard clause will be inserted into the 48 modern awards which were the
subject of this claim, as detailed at Attachment H, in the form set out at
paragraph
[384].
Draft determinations will be prepared and published on the Commission’s
website for comment. Further, for the reasons given at paragraph [415],
draft determinations will be prepared and published on the Commission’s
website in respect of the remaining 74 modern awards which already contain
similar provisions. Interested parties will have an opportunity to comment
on the draft determination.
6.5 Payment of
annual leave entitlements on termination
[473]
For the
reasons given at paragraphs [428]-[429] we have adjourned our consideration
of this claim. Any interested party may seek to have the matter called back
on for further programming and submissions.
6.6 Electronic
funds transfer and paid annual leave
[474]
A
standard clause will be inserted into each modern award listed in Attachment
I in the form outlined at paragraph
[430].
Draft determinations will be prepared and published on the Commission’s
website for comment.
6.7 Purchased
leave
[475]
Interested parties are asked to consider whether a provision for purchased
leave should be included in modern awards. Submissions should be made in
accordance with the directions to be issued and focus on what a purchased
leave provision would contain and whether such a provision should be
inserted into all modern awards.
6.8 Enterprise
awards
[476]
Since
these applications were made, a number of modern awards applying to only one
enterprise have been made. Parties to those enterprise awards may make
submissions in accordance with the directions issued to outline their views
as to how this decision should apply to each modern enterprise award.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<Price code O, PR567520>
Appearances:
T Clarke, J Dolan and
R Carter for the Australian
Council of Trade Unions.
S Maxwell and
G Nabor for the Construction,
Forestry, Mining and Energy Union.
S Smith, B Ferguson and R Bhatt
for The Australian Industry Group.
L Izzo, D Grozier and
A
Matheson for the Australian
Chamber of Commerce and Industry.
L Izzo for the New South
Wales Business Chamber and Australian Business Industrial.
L Izzo
and
R Calver for Master Builders
Australia Limited.
S Crawford for The
Australian Workers’ Union.
J Sweetman and
T Evans
for the Australian Hotels Association.
W Chesterman for the
Victorian Automobile Chamber of Commerce
and Motor Trades Associations.
S Elliffe for the National
Retail Association.
K McCosh for the
National Electrical Contractors Association.
J Moriarty and M Nguyen for
the
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU).
L Weber for the
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU)—Vehicle
Division.
D De Martino for the Shop,
Distributive and Allied Employees Association.
V Wiles
for the Textile, Clothing and Footwear Union of Australia.
L Svendsen
for the Health Services Union of Australia.
J Nucifora
and
J Knight for the Australian Municipal, Administrative, Clerical and
Services Union.
M Adler
for the Housing Industry Association.
G Parkes
for the Accommodation Association of Australia, Restaurant & Catering
Australia and the Motor Inn, Motel and Accommodation Association.
T Angelopoulos
for the Horticulture Taskforce.
B Hodgson
for the Fair Work Ombudsman.
P Eberhard for The Master
Plumbers’ and Mechanical Services Association of Australia.
G Johnston for the
Australian Meat Industry Council.
C McElroy for Local
Government New South Wales and the State and Territory Local Government
Associations.
S Forster
for the Australian Federation of
Employers and Industries.
J Shingles
and E Larkin for the Australian
Childcare Alliance and Australian Childcare Centres Association.
M Burns
and
W McNally for The Maritime Union of Australia.
J O'Dwyer
for Master Electricians Australia.
G Liggins
for the Aged and Community Services
Association.
M Roddam
and A Breen for the Minister for
Employment on behalf of the Commonwealth.
K Mark
for the Pharmacy Guild of Australia.
S McKinnon
and R Martin for the National
Farmers’ Federation.
I McDonald
for the Australian Public Transport
Industrial Association.
M Diamond
for the Building Services
Contractors Association of Australia.
D Harris
for the South Australian Chamber of
Commerce and Industry trading as Business SA.
Hearing details:
2014.
Sydney, Melbourne, Adelaide, Brisbane and Canberra (video hearing
August 20, 21.
October 16.
December 1.
List of references
Bent, S. 1998,
‘The psychological effects of extended working hours’, in The
Twelve Hour Workday: emerging issues, K. Heiler, (ed), Australian Centre
for Industrial Relations Research and Training (ACIRRT), Sydney.
Bureau of Tourism Research, 2004,
‘Datacard’, accessed
February 2004.
Cairncross G
and Waller I (2004) ‘Not taking Annual Leave: What Could it Cost Australia’,
Journal of Economic and Social Policy,
Vol: 9, Issue 1, Article 3.
Cameron P and
Denniss R (2013), ‘Hard to get a break? Hours, leave and barriers to
re-entering the Australian workforce’, The Australia Institute, Institute
Paper No. 13, November 2013, pp. 26–27.
Commonwealth,
Parliamentary Debates, House of Representatives, Fair Work Amendment Bill
2014—Second
reading Speech (the Hon. Christopher Pyne), 27 February 2014, p. 1085.
Denniss R (2003)
Annual Leave in Australia: An
Analysis of Entitlements Usage and Preferences. The Australia Institute
Discussion Paper No. 56 Canberra: The Australia Institute.
Eaker ED, Pinsky
J and Castelli WP (1992) Myocardial infarction and coronary death among
women: Psychosocial predictors from a 20-year follow-up of women in the
Framingham study. American Journal of Epidemiology 135(8): 854–864.
Eden D (2001),
‘Vacations and other respites: Studying stress on and off the job’, in
Robertson I (eds) International
Review of Industrial and Organisational Psychology, Vol 16, New York,
John Wiley & Sons pp. 121–146.
Etzion, D (2003) ‘Annual vacation:
duration of relief from job stressors and burnout.’
Anxiety, Stress and Coping, 16(2), pp. 213–226.
Fair Work Act
Review Panel (2012)
Towards more productive and equitable workplaces: An evaluation of the Fair
Work legislation’, Report prepared by the Fair Work Act Review Panel,
August 2012, DEEWR.
Guide for Managing the Risk of Fatigue at Work,
November 2013, Safe Work Australia.
Gump B and
Matthews K (2000) Are vacations good for your health? The 9-year mortality
experience after the multiple risk factor intervention trial. Psychosomatic
Medicine 62(5): 608–612.
Joudrey A and
Wallace J (2009) Leisure as a coping resource: A test of the job
demand-control-support model. Human Relations 62(2): 195–217; Walsh R (2011)
Lifestyle and mental health. American Psychologist, advance online
publication, 17 January.
Mitchell R and Fetter
J (2003) ‘The individualisation of employment relationships and the adoption
of high performance work practices: Final Report’, University of Melbourne.
‘No leave, No life’ Tourism Australia campaign material [http://www.tourism.australia.com/campaigns/no-leave-no-life.aspx].
Skinner, N and
Pocock, B (2013) Paid Annual Leave in
Australia: Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55,
pp. 681-698.
Trenberth L and
Dewe P (2002) The importance of leisure as a means of coping with work
related stress: An exploratory study. Counselling Psychology Quarterly
15(1): 59–72.
Van Hooff M,
Geurts S, Kompier M, and Taris T (2007) Workdays, in-between workdays and
the weekend: A diary study on effort and recovery. International Archives of
Occupational and Environmental Health 80(7): 599–613.
Wooden M and
Warren D (2008) Paid annual leave and working hours: Evidence from the HILDA
survey, Journal of Industrial
Relations 50(4).
Attachment A—Employer
Group Parties
In addition to ACCI and the Ai Group, the joint employer parties supporting
the proposed variations include:
•
Accommodation Association of Australia
•
Aged and Community Services
•
Australian Business Industrial and the NSW Business Chamber
•
Australian Child Care Association
•
Australian Childcare Centres Association
•
Australian Federation of Employers and Industries
•
Australian Hotels Association
•
Australian Meat Industry Council
•
Australian Mines and Metals Association
•
Australian Public Transport Industrial Association
•
Chamber of Commerce and Industry Queensland
•
Chamber of Commerce and Industry, Western Australia
•
Clubs Australia Industrial
•
Hair and Beauty Industry Association
•
Horticulture Taskforce
•
Leading Age Services Australia
•
Live Performance Australia
•
Local Government Association of Northern Territory
•
Local Government Association of Queensland
•
Local Government Association of South Australia
•
Local Government Association of Tasmania
•
Local Government New South Wales
•
Municipal Association of Victoria
•
National Farmers’ Federation
•
National Retailers Association
•
Printing Industries Association of Australia
•
Pharmacy Guild of Australia, The
•
Queensland Hospitality Association
•
Restaurant & Catering Australia
•
Victorian Employer’s Chamber of Commerce and Industry
•
Victorian Automobile Chamber of Commerce
•
Western Australian Local Government Association
Attachment B—Index of Material
BACKGROUND
PAPERS/RESEARCH MATERIAL |
||
Background
paper—Cashing out of annual leave |
21 November
2014 |
|
Background
paper—Annual leave common issue |
30 May 2014 |
|
Background
paper—Scope of annual leave common issue |
25 March 2014 |
|
Analysis of
bargaining by business size |
20 August 2014 |
|
STATEMENTS |
||
1 October 2014 |
||
7 August 2014 |
||
7 April 2014 |
||
REPORTS |
|
|
The
individualisation of employment relationships and the adoption of
high performance work practices—final report (filed by the
Australian Council of Trade Unions)
|
21 October
2014 |
|
Report to Full
Bench of Conciliation |
15 August 2014 |
|
PWC expert
accounting report (joint document of the
Australian
Chamber of Commerce and Industry
and the
Australian Industry Group—see
also Mr Eugene Kalenjuk witness evidence) |
2 July 2014 |
|
SUBMISSIONS AND CORRESPONDENCE |
||
Accommodation
Association of Australia |
Correspondence |
19 June 2014 |
Submission |
20 March 2014 |
|
“Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’
Union (AMWU) |
Outline of
submissions in reply |
1 August 2014 |
“Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’
Union (AMWU)—Vehicle
Division |
Submissions in
reply |
1 August 2014 |
The
Association for Payroll Specialists |
Correspondence |
29 July 2014 |
The
Australasian Railway Association |
Submission |
1 August 2014 |
Australian
Chamber of Commerce and Industry |
Correspondence |
2 March 2015 |
Further
submission |
19 December
2014 |
|
Submission |
27 November
2014 |
|
Legislative
provisions relating to annual leave (joint document) |
14 November
2014 |
|
Small business
statistics (joint document) |
12 November
2014 |
|
Submission |
28 October
2014 |
|
Correspondence |
15 October
2014 |
|
Submission |
19 September
2014 |
|
Correspondence |
19 September
2014 |
|
Correspondence |
5 August 2014 |
|
Submissions in
reply |
1 August 2014 |
|
Correspondence
and outline of submissions |
20 June 2014 |
|
Correspondence |
21 May 2014 |
|
Correspondence |
11 April 2014 |
|
Submission |
19 March 2014 |
|
Australian
Childcare Centres Association and Australian Childcare Alliance |
Submission |
20 June 2014 |
Australian
Council of Trade Unions
|
Submission |
27 November
2014 |
Legislative
provisions relating to annual leave (joint document) |
14 November
2014 |
|
Small business
statistics (joint document) |
12 November
2014 |
|
Correspondence |
9 October 2014 |
|
Correspondence |
6 October 2014 |
|
Submission |
19 September
2014 |
|
Correspondence |
6 August 2014 |
|
Submissions in
reply |
1 August 2014 |
|
Correspondence |
23 July 2014 |
|
Submission |
20 June 2014 |
|
Correspondence |
21 May 2014 |
|
Correspondence |
11 April 2014 |
|
Submission |
20 March 2014 |
|
Australian
Government (Department of Employment) |
Response |
19 September
2014 |
Correspondence |
21 August 2014 |
|
Australian
Hotels Association |
Submission |
20 March 2014 |
Australian
Industry Group
|
Submission |
27 November
2014 |
Legislative
provisions relating to annual leave (joint document) |
14 November
2014 |
|
Small business
statistics (joint document) |
12 November
2014 |
|
Submission |
28 October
2014 |
|
Correspondence |
15 October
2014 |
|
Correspondence
and chart detailing accumulation of annual leave |
14 October
2014 |
|
Submission in
reply |
7 October 2014 |
|
Submission |
19 September
2014 |
|
Reply
submission |
1 August 2014 |
|
Submission |
20 June 2014 |
|
Correspondence |
21 May 2014 |
|
Submission |
20 March 2014 |
|
Australian
Meat Industry Council |
Submission |
20 March 2014 |
Australian
Mines and Metals Association Inc. |
Outline of
submissions |
20 June 2014 |
Australian
Public Transport Industrial Association |
Submission in
reply |
1 August 2014 |
Correspondence |
29 May 2014 |
|
BHP Billiton |
Correspondence
and submission |
27 November
2014 |
Construction,
Forestry, Mining and Energy Union—Construction and General Division |
Correspondence |
7 August 2014 |
Submission in
reply |
1 August 2014 |
|
Construction,
Forestry, Mining and Energy Union—Forestry and Furnishing Products
Division |
Submission |
20 June 2014 |
Correspondence |
21 May 2014 |
|
Clubs
Australia Industrial |
Submission |
19 June 2014 |
Correspondence |
2 June 2014 |
|
Coal Mining
Industry Employer Group |
Submission |
9 July 2014 |
Communications, Electrical and Plumbing Union |
Correspondence |
17 October
2014 |
Horticulture
Taskforce |
Outline of
submissions |
1 August 2014 |
Correspondence |
23 June 2014 |
|
Housing
Industry Association Limited |
Correspondence |
27 November
2014 |
Submission |
20 June 2014 |
|
Correspondence |
26 May 2014 |
|
Correspondence |
20 March 2014 |
|
Australian
Entertainment Industry Association t/as Live Performance Australia |
Submission |
27 November
2014 |
Local
Government Associations |
Submission |
20 March 2014 |
Master
Builders Australia Limited |
Submission |
20 June 2014 |
Correspondence |
23 May 2014 |
|
Correspondence |
11 April 2014 |
|
Master
Electricians Australia |
Correspondence |
20 October
2014 |
Correspondence |
27 May 2014 |
|
Maritime Union
of Australia, The |
Submissions |
20 June 2014 |
Media,
Entertainment and Arts Alliance |
Correspondence |
21 November
2014 |
National
Farmers’ Federation |
Correspondence |
9 October 2014 |
Submissions in
reply |
1 August 2014 |
|
Outline of
submissions |
20 June 2014 |
|
Queensland
Funeral Directors’ Association Ltd and Funeral Directors Association
of New South Wales Ltd |
Submissions |
20 March 2014 |
Pharmacy Guild
of Australia |
Submissions |
20 March 2014 |
Restaurant &
Catering Australia |
Submission in
reply |
1 August 2014 |
Correspondence |
20 June 2014 |
|
Submission |
20 March 2014 |
|
Shop,
Distributive and Allied Employees’ Association |
Correspondence
and deactivation guidelines |
1 December
2014 |
Textile
Clothing and Footwear Union of Australia |
Submission |
27 November
2014 |
Submission |
1 August 2014 |
|
LIST OF
AUTHORITIES |
||
Australian
Industry Group |
List of
authorities and materials |
22 August 2014 |
Australian
Council of Trade Unions |
List of
authorities |
20 August 2014 |
Attachment C—Witness Statements
NAME |
FILED BY |
DATE |
Mr Stuart Lamont |
Accommodation Association of Australia |
19 June 2014 |
Ms Nicki Passanisi |
Accommodation Association of Australia |
5 June 2014 |
Ms Joyce Lawson |
Accommodation Association of Australia |
7 August 2014 |
Ms Joyce Lawson |
Accommodation Association of Australia |
14 August 2014 |
Ms Fiona Corbett |
Australian Chamber of Commerce and Industry |
20 June 2014 |
Mr Julian Frederick Arndt |
Australian Chamber of Commerce and Industry |
28 October 2014 |
Mr Ben Waugh
|
Australian Industry Group |
20 June 2014 |
Ms Kristina Flynn |
Australian Industry Group |
18 June 2014 |
Mr Eugene Kalenjuk (see also PWC expert
accounting report) |
Australian Chamber of Commerce and Industry and
the Australian Industry Group |
2 July 2014 |
Mr Warren Butler
|
"Automotive, Food, Metals, Engineering, Printing
and Kindred Industries Union" known as the Australian Manufacturing
Workers' Union (AMWU)—Vehicle Division |
1 August 2014 |
Mr Warren Butler |
"Automotive, Food, Metals, Engineering, Printing
and Kindred Industries Union" known as the Australian Manufacturing
Workers' Union (AMWU)—Vehicle Division |
18 August 2014 |
Ms Melissa Adler
|
Housing Industry Association Limited |
19 June 2014 |
Ms Melissa Adler
|
Housing Industry Association Limited |
6 August 2014 |
Mr Geoffrey Charles Thomas |
Master Builders Australia Limited |
18 June 2014 |
Mr David Murrie |
Restaurant & Catering Australia |
18 June 2014 |
Mr Antonio D’Arienzo |
Restaurant & Catering Australia |
5 June 2014 |
Attachment D—New Subclause for Excessive Annual Leave
The
awards the Employer Group proposes to be varied to include the new subclause
relating to excessive annual leave (Employer Group propose insertion of new
provision (Schedule 2))[1]
Award title |
Aged Care Award 2010 |
Amusement, Events and Recreation
Award 2010 |
Animal Care and Veterinary Services
Award 2010 |
Book Industry Award 2010 |
Building and Construction General
On-site Award 2010
|
Cleaning Services Award 2010 |
Corrections and Detention (Private
Sector) Award 2010 |
Cotton Ginning Award 2010 |
Dredging Industry Award 2010 |
Dry Cleaning and Laundry Industry
Award 2010 |
Educational Services (Post-Secondary
Education) Award 2010 |
Fast Food Industry Award 2010 |
Fire Fighting Industry Award 2010 |
Fitness Industry Award 2010 |
Funeral Industry Award 2010 |
Hair and Beauty Industry Award 2010 |
Health Professionals and Support
Services Award 2010
|
Hydrocarbons Field Geologists Award
2010 |
Labour Market Assistance Industry
Award 2010 |
Live Performance Award 2010 |
Mannequins and Models Award 2010 |
Maritime Offshore Oil and Gas Award
2010 |
Market and Social Research Award
2010 |
Meat Industry Award 2010 |
Medical Practitioners Award 2010 |
Miscellaneous Award 2010 |
Pharmacy Industry Award 2010 |
Plumbing and Fire Sprinklers Award
2010 |
Professional Diving Industry
(Industrial) Award 2010
|
Professional Diving Industry
(Recreational) Award 2010 |
Professional Employees Award 2010 |
Seagoing Industry Award 2010 |
Social, Community, Home Care and
Disability Services Industry Award 2010 |
State Government Agencies
Administration Award 2010 |
Stevedoring Industry Award 2010 |
Storage Services and Wholesale
Industry Award 2010 |
Surveying Award 2010 |
Travelling Shows Award 2010 |
Waste Management Award 2010 |
Attachment E—Replacement Subclause for Excessive Annual Leave
The
awards the Employer Group proposes
to be varied to include the new subclause relating to excessive annual leave
(Employer Group propose replacing current
provision (Schedule 3))[2]
Award title |
Existing clause |
Aircraft Cabin Crew Award 2010 |
25.4 |
Airport Employees Award 2010 |
31.5 |
Aluminium Industry Award 2010 |
22.6 |
Business Equipment Award 2010 |
31.7 |
Car Parking Award 2010 |
25.5 |
Cemetery Industry Award 2010 |
24.3 |
Coal Export Terminals Award 2010 |
19.7 |
Concrete Products Award 2010 |
26.5 |
Contract Call Centres Award 2010 |
27.5 |
Electrical, Electronic and
Communications Contracting Award 2010 |
28.5 |
Food, Beverage and Tobacco
Manufacturing Award 2010 |
34.7 |
Graphic Arts, Printing and
Publishing Award 2010 |
37.7 |
Horticulture Award 2010 |
25.7 |
Joinery and Building Trades Award
2010 |
32.5 |
Manufacturing and Associated
Industries and Occupations Award 2010 |
41.6 |
Marine Tourism and Charter Vessels
Award 2010 |
23.4 |
Nursery Award 2010 |
27.5 |
Oil Refining and Manufacturing Award
2010 |
26.7 |
Pastoral Award 2010 |
23.5 |
Pest Control Industry Award 2010 |
24.4 |
Pharmaceutical Industry Award 2010 |
26.5 |
Poultry Processing Award 2010 |
27.5 |
Road Transport and Distribution
Award 2010 |
29.4 |
Road Transport (Long Distance
Operations) Award 2010
|
23.3 |
Seafood Processing Award 2010 |
27.6 |
Telecommunications Services Award
2010 |
23.4 |
Timber Industry Award 2010 |
33.6 |
Transport (Cash in Transit) Award
2010 |
29.5 |
Vehicle Manufacturing, Repair,
Services and Retail Award 2010 |
29.4 |
Water Industry Award 2010 |
27.4 |
Wine Industry Award 2010 |
30.5 |
Attachment F—Analysis of Excessive Annual Leave Provisions in Awards
Modern award |
Amount of leave
accrued |
Notice to be given
by employer |
Maximum amount of
leave to be taken |
Retained balance of
leave after leave taken |
Employer and
employee unable to reach agreement |
2 = insert |
Aboriginal Community
Controlled Health Services Award 2010 |
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
Aged Care Award 2010 |
No excessive leave
provision |
2 |
||||
Within 12 months of accrual or 15 months of the start of the last
period of leave |
- |
- |
- |
- |
n/a |
|
>8 wks |
>=4 wks |
=25% of balance |
- |
- |
3 |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>=8 wks |
>=4 wks |
<= 25% of balance |
- |
Y |
3 |
|
>30 days |
>=4 wks |
- |
- |
- |
n/a |
|
>8 wks |
>= 4 wks |
- |
>=8 wks |
- |
3 |
|
Within 6
months of accrual or other by agreement |
>=4 wks
( or 7 days^) |
4 wks, or other amount by agreement |
- |
Y |
n/a |
|
Amusement, Events and Recreation Award 2010 |
No excessive leave
provision |
2 |
||||
Animal Care and Veterinary Services Award 2010 |
No excessive leave
provision |
2 |
||||
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
Within 4
months of accrual or 12 months by agreement |
>=1 month |
<=2 wks |
- |
Y |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
Within 12 months of accrual unless otherwise agreed |
>=4 wks |
- |
- |
- |
n/a |
|
Book Industry Award 2010 |
No excessive leave
provision |
2 |
||||
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
Car
Parking Award 2010
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
>= 18 months |
- |
- |
- |
- |
3 |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>=8 wks (>=10 wks)* |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>8 wks (or a proportionate amount
for a PT employee) |
>=4 wks |
- |
- |
- |
n/a |
|
>=8 wks |
>=4 wks |
<= 25% of balance |
- |
Y |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
n/a |
|||||
No excessive leave
provision |
n/a |
|||||
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
n/a |
|
Electrical, Electronic and Communications Contracting Award 2010
|
>8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
>=30 days |
>=2 months |
- |
- |
- |
n/a |
|
>=30 days |
>=2 months |
<=20 days |
- |
- |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision
(but may direct employee to take leave) |
n/a |
|||||
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
No excessive leave
provision |
2 |
|||||
> 8 wks |
>=4 wks |
- |
>=8 wks |
- |
n/a |
|
No excessive leave
provision |
2 |
|||||
Manufacturing and Associated Industries and Occupations Award 2010
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
n/a |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
No excessive leave
provision |
2 |
|||||
Within 6 months of accrual |
>= 4 wks |
|
|
|
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
Within 6 months of accrual |
|
|
|
|
n/a |
|
>8 wks |
>=4 wks |
- |
>=1 year’s accrual |
Y |
3 |
|
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
Within 6 months of accrual |
>=14 days |
- |
- |
- |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
>4 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>8 wks |
>=4 wks |
- |
Employee can retain at least 4 wks |
- |
n/a |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
|
>=8 wks |
>=4 wks |
<= 25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
Within 24 months of accrual |
>=28 days |
- |
- |
Y |
n/a |
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
Social, Community, Home Care and Disability Services Industry Award
2010 |
No excessive leave
provision |
2 |
||||
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
|
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
>8 wks |
>=4 wks |
- |
- |
- |
n/a |
|
No excessive leave
provision |
2 |
|||||
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
Textile, Clothing, Footwear and Associated Industries Award 2010
|
Within 18 months of accrual |
>=4 wks |
- |
- |
Y |
n/a |
>=8 wks |
>=4 wks |
<= 25% of balance |
- |
Y |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
No excessive leave
provision |
2 |
|||||
Vehicle Manufacturing, Repair, Services and Retail Award 2010
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
No excessive leave
provision |
2 |
|||||
>8 wks |
>=4 wks |
- |
>= 8 wks |
- |
3 |
|
>=8 wks |
>=4 wks |
<=25% of balance |
- |
Y |
3 |
|
>8 wks |
>=4 wks |
- |
- |
Y |
n/a |
* Employees
who are entitled to 5 weeks’ annual leave may accrue up to 10 weeks’ leave.
^ In
unforeseen circumstances only.
Attachment G—New Subclause for Close-Down
The 44
awards the Employer Group proposes
to be varied to include the new subclause relating to close down (Employer
Group propose insertion of new provision).[3]
|
Award title
|
Aged Care
Award 2010 |
|
Air
Pilots Award 2010 |
|
Airport
Employees Award 2010 |
|
Amusement, Events and Recreation Award 2010 |
|
Architects Award 2010 |
|
Book
Industry Award 2010 |
|
Clerks—Private Sector Award 2010
^ |
|
Commercial Sales Award 2010
^ |
|
Corrections and Detention (Private Sector) Award 2010 |
|
Cotton
Ginning Award 2010 |
|
Dredging
Industry Award 2010 |
|
Dry
Cleaning and Laundry Industry Award 2010 |
|
Educational Services (Schools) General Staff Award 2010
^ |
|
Educational Services (Teachers) Award 2010
^ |
|
Fast Food
Industry Award 2010
|
|
Fire
Fighting Industry Award 2010 |
|
Fitness
Industry Award 2010 |
|
Funeral
Industry Award 2010 |
|
Health
Professionals and Support Services Award 2010
^ |
|
Horticulture Award 2010 |
|
Hydrocarbons Field Geologists Award 2010 |
|
Labour
Market Assistance Industry Award 2010 |
|
Live
Performance Award 2010 |
|
Mannequins and Models Award 2010 |
|
Marine
Tourism and Charter Vessels Award 2010 |
|
Marine
Towage Award 2010 |
|
Maritime
Offshore Oil and Gas Award 2010 |
|
Market
and Social Research Award 2010 |
|
Medical
Practitioners Award 2010 |
|
Pastoral
Award 2010 |
|
Pharmacy
Industry Award 2010 |
|
Port
Authorities Award 2010 |
|
Ports,
Harbours and Enclosed Water Vessels Award 2010 |
|
Professional Diving Industry (Industrial) Award 2010 |
|
Professional Diving Industry (Recreational) Award 2010 |
|
Rail
Industry Award 2010 |
|
Seagoing
Industry Award 2010 |
|
Social,
Community, Home Care and Disability Services Industry Award 2010 |
|
Sporting
Organisations Award 2010 |
|
State
Government Agencies Administration Award 2010 |
|
Stevedoring Industry Award 2010 |
|
Transport
(Cash in Transit) Award 2010 |
|
Travelling Shows Award 2010 |
|
Waste
Management Award 2010 |
|
Notes:
^ These five awards currently contain close-down provisions.
Two awards that do not contain close-down provision were not the subject of
the Ai Group claim:
·
Higher Education Industry—Academic Staff—Award 2010
·
Passenger Vehicle Transportation Award 2010
21 awards to be varied to include the new subclause relating to close-down
(Employer Group propose insertion of new
provision).[4]
Award
title |
Airline
Operations—Ground Staff Award 2010 |
Building and Construction General On-site Award 2010 |
Cleaning Services Award 2010 |
Electrical, Electronic and Communications Contracting Award 2010 |
Food,
Beverage and Tobacco Manufacturing Award 2010 |
Graphic
Arts, Printing and Publishing Award 2010 |
Joinery
and Building Trades Award 2010 |
Manufacturing and Associated Industries and Occupations Award 2010 |
Meat
Industry Award 2010 |
Mobile
Crane Hiring Award 2010 |
Pharmaceutical Award 2010 |
Plumbing and Fire Sprinklers Award 2010 |
Poultry
Processing Award 2010 |
Professional Employees A ward 2010 |
Seafood
Processing Award 2010 |
Telecommunications Services Award 2010 |
Textile, Clothing, Footwear and Associated Industries Award 2010 |
Timber
Industry Award 2010 |
Vehicle
Manufacturing, Repair, Services and Retail Award 2010 |
Water
Industry Award 2010 |
Wine
Industry Award 2010
|
Attachment H—New Subclause for Annual Leave in Advance
The 48
awards the Employer Group proposes
to be varied to include the new subclause relating to taking annual leave in
advance of accrual (Employer Group propose
insertion of new provision (Schedule 6)).[5]
Award title |
Aboriginal Community Controlled
Health Services Award 2010 |
Aged Care Award |
Air Pilots Award 2010 |
Aircraft Cabin Crew Award 2010 |
Ambulance and Patient Transport
Industry Award 2010 |
Amusement, Events and Recreation
Award 2010 |
Architects Award 2010 |
Book Industry Award 2010 |
Building and Construction General
On-site Award 2010
|
Cemetery Industry Award 2010 |
Coal Export Terminals Award 2010 |
Corrections and Detention (Private
Sector) Award 2010 |
Cotton Ginning Award 2010 |
Dredging Industry Award 2010 |
Dry Cleaning and Laundry Industry
Award 2010 |
Educational Services (Teachers)
Award 2010 |
Electrical Power Industry Award 2010 |
Fire Fighting Industry Award 2010 |
Fitness Industry Award 2010 |
Funeral Industry Award 2010 |
Higher Education Industry—Academic
Staff—Award 2010 |
Higher Education Industry—General
Staff—Award 2010 |
Hospitality Industry (General) Award
2010 |
Hydrocarbons Field Geologists Award
2010 |
Labour Market Assistance Industry
Award 2010 |
Mannequins and Models Award 2010 |
Maritime Offshore Oil and Gas Award
2010 |
Medical Practitioners Award 2010 |
Miscellaneous Award 2010 |
Nurses Award 2010 |
Plumbing and Fire Sprinklers Award
2010 |
Ports, Harbours and Enclosed Water
Vessels Award 2010 |
Professional Diving Industry
(Industrial) Award 2010
|
Professional Diving Industry
(Recreational) Award 2010 |
Professional Employees Award 2010 |
Registered and Licensed Clubs Award
2010 |
Restaurant Industry Award 2010 |
Seagoing Industry Award 2010 |
Social, Community, Home Care and
Disability Services Industry Award 2010 |
Sporting Organisations Award 2010 |
State Government Agencies
Administration Award 2010 |
Stevedoring Industry Award 2010 |
Storage Services and Wholesale
Industry Award 2010 |
Supported Employment Services Award
2010 |
Surveying Award 2010 |
Textile, Clothing, Footwear and
Associated Industries Award 2010 |
Travelling Shows Award 2010 |
Waste Management Award 2010 |
Note: Attachment C of the Fair
Work Commission Background paper—Annual leave common issue, 30 May 2014
included the following additional awards in the 76 modern awards classified
as containing limited provisions permitting taking leave in advance of
accrual:
·
Maritime Offshore Oil and Gas
Award 2010
·
Nurses Award 2010
Attachment I—New Subclause for EFT Payment
The 51
awards the Employer Group proposes
to be varied by inserting new subclause relating to the electronic transfer
payment (EFT) of annual leave.
Award title |
Air Pilots
Award 2010 |
Aircraft
Cabin Crew Award 2010 |
Airline
Operations—Ground Staff Award 2010 |
Airport
Employees Award 2010 |
Ambulance
and Patient Transport Industry Award 2010 |
Aquaculture Industry Award 2010 |
Asphalt
Industry Award 2010 |
Black Coal
Mining Industry Award 2010 |
Broadcasting and Recorded Entertainment Award 2010 |
Building
and Construction General On-site Award 2010 |
Car
Parking Award 2010 |
Cement and
Lime Award 2010 |
Coal
Export Terminals Award 2010 |
Concrete
Products Award 2010 |
Contract
Call Centres Award 2010 |
Electrical, Electronic and Communications Contracting Award 2010 |
Food,
Beverage and Tobacco Manufacturing Award 2010 |
Gardening
and Landscaping Services Award 2010 |
Graphic
Arts, Printing and Publishing Award 2010 |
Horse and
Greyhound Training Award 2010 |
Horticulture Award 2010 |
Hydrocarbons Industry (Upstream) Award 2010 |
Joinery
and Building Trades Award 2010 |
Legal
Services Award 2010 |
Live
Performance Award 2010 |
Manufacturing and Associated Industries and Occupations Award 2010 |
Market and
Social Research Award 2010 |
Meat
Industry Award 2010 |
Mining
Industry Award 2010 |
Nursery
Award 2010 |
Nurses
Award 2010 |
Oil
Refining and Manufacturing Award 2010 |
Pastoral
Award 2010 |
Pest
Control Industry Award 2010 |
Pharmaceutical Industry Award 2010 |
Premixed
Concrete Award 2010 |
Professional Diving Industry (Industrial) Award 2010 |
Quarrying
Award 2010 |
Racing
Clubs Events Award 2010 |
Racing
Industry Ground Maintenance Award 2010 |
Real
Estate Industry Award 2010 |
Road
Transport (Long Distance Operations) Award 2010 |
Salt
Industry Award 2010 |
Seafood
Processing Award 2010 |
Security
Services Industry Award 2010 |
Silviculture Award 2010 |
Storage
Services and Wholesale Award 2010 |
Telecommunications Services Award 2010 |
Timber
Industry Award 2010 |
Transport
(Cash in Transit) Award 2010 |
Vehicle
Manufacturing, Repair, Services and Retail Award 2010 |
Attachment J—Legislative Provisions Relating to Annual Leave
During proceedings before a Full Bench
of the Fair Work Commission on 16 October 2014, His Honour, Justice Ross,
directed the Ai Group, the ACCI and the ACTU to file a joint document that
summarises the legislative provisions contained in the Workplace Relations
Act 1996 and state/territory legislation regarding annual leave. The table
below contains the key legislative provisions regarding annual leave, as agreed
between the aforementioned parties, extracted from the joint submission provided
on
14 November 2014. The table also indicates where the
relevant legislation has been repealed. State/territory legislation that has not
been repealed only has application to employees of employers who are not
national system employers.
General Rules regarding Taking Annual Leave |
Accrual and Accumulation |
Close-Down |
Right of Employer to Direct Employee to Take Annual Leave |
Cashing Out |
Payment for Annual Leave` |
Leave in Advance |
Federal: Workplace Relations Act 1996 (repealed) |
||||||
Section 236(1) – (4) Rules about taking annual leave |
Section 234(1) and (4) Annual leave – accrual, crediting and
accumulation rules |
Section 236(5) Rules about taking annual leave |
Section 236(6) Rules about taking annual leave |
Section 233 Entitlement to cash out annual leave |
Section 235 Annual leave – payment rules |
|
New South Wales: Annual Holidays Act 1944 |
||||||
Section 3(2) - (4) Annual holidays with pay |
Section 3(1) Annual holidays with pay |
Section 4A(2)-(7) Annual close-down |
Section 3 (6)(a) Annual holidays with pay |
Section 3(5) Annual holidays with pay |
Section 3(6)(b) Annual holidays with pay |
Section 3(3) and (7) Annual holidays with pay |
Queensland: Industrial Relations Act 1999 |
||||||
Section 12(1) Taking annual leave
Section 71EC(1) |
Section 11(2) and (7)
Entitlement
Section 71EA(1) and (4) |
|
Section 12(2) Taking annual leave
Section 71EC(2) |
Section 71EG Requirements for cashing out annual leave |
13 Payment for annual leave
Section 71EE |
Section 12(3) - (4) Taking
annual leave
Section 71AE(3) – (4) |
South Australia: Fair Work Act 1994 |
||||||
Schedule 4 Minimum standard for annual leave
4(1)—Taking annual leave |
Schedule 4 Minimum standard for annual leave
3—Accrual of annual leave entitlement |
Schedule 4 Minimum standard for annual leave
4(2)(b)—Taking annual leave |
Schedule 4 Minimum standard for annual leave
4(2)(a) and (3)—Taking annual leave |
|
Schedule 4 Minimum standard for annual leave
5 – Annual leave to be on full pay |
|
Western Australia: Minimum Conditions of Employment Act 1993 |
||||||
25(1) and (2) Annual leave, when may be taken |
23(1), (2) and (2a) Paid annual leave, entitlement to |
|
|
8 Limited contracting-out of annual leave conditions |
24(1) Annual leave payments, when to be
made |
|
Tasmania: Industrial Relations Act 1984
Section 47AA(2) Division 2A - Minimum conditions of employment
relating to all employees - Purpose and application of Division |
||||||
47AE(4)-(6) Annual leave |
47AE(1) and (8) Annual leave |
|
Section 47AE(7) Annual leave |
|
|
|
Victoria: Industrial Relations Act 1979 (repealed)
Section 59(1)(a) |
||||||
Section 58(1)(a) and (d) |
|
Section 58(1)(b) |
Section 58(1)(d) |
|
Section 58(1)(d) |
|
Australian Capital Territory: Annual Leave Act 1973
(repealed) |
||||||
Section 4(1) Annual Leave
Section 7Leave to be taken within 6 months |
Section 4(1) and 5 |
Section 12 Close-down |
Section 10 Employer may require employee to take annual leave |
Section 11(1) No payment instead of leave |
Section 8 Payment of leave pay |
|
Northern Territory: Annual Leave Act |
||||||
Section 6(1)- (3) and (8) -(9) Annual leave |
|
Section 12 Close down
|
Section 6(9) Annual leave |
Section 6(4) Annual leave |
Section 9 Pay for annual leave
Section 14 When payment to be made |
Section 8 Annual leave taken before due |
[1]
This decision also deals with
unpaid annual leave in the context of close-down.
[3]
[2014] FWC 1790 at paras 5–6.
[5]
[2014] FWC 2279
at para 2.
[6]
Ai Group submission, 20 March
2014 at para 2.19.
[7]
ACCI
correspondence, 21 May 2014.
[9]
Shop, Distributive and Allied
Employees Association v National Retail Association (No 2)
(2012) 205 FCR 227 at [35] per Tracey J.
[10]
Friends of Hichinbrook Society
Inc v Minister for Environment (No 3)
(1997) 77 FCR 153; Australian
Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA
1121; Edwards v Giudice
[1999] FCA 1836.
[11]
[2014] FWCFB 1788
at para 60.
[12]
[2015] FWCFB 620
at para 8.
[13]
Preliminary Jurisdictional Issues
[2014] FWCFB 1788
at para 24.
[14]
Preliminary Jurisdictional Issues
[2014] FWCFB 1788
at paras 35–36.
[15] Fair
Work Commission Background
paper—Annual leave common issue, 30 May 2014.
[16]
[2008] AIRCFB 1000 at para 99.
[19]
[2012] FWAFB 5600 at para 99.
[20]
Also see
Modern Awards Review 2012 - Award
Flexibility
[2013] FWCFB 2170
at para 10–12.
[21]
Ai Group submission and witness
statements, 20 June 2014, Witness statement of Mr Ben Waugh, Attachment
A.
[22] Ai
Group submission and
witness statements, 20 June 2014, Witness
statement of Mr Ben Waugh, paras 14-15.
[23] Ai
Group submission and
witness statements,
20 June 2014, Witness statement of Mr Ben
Waugh, Attachment C.
[24] Ai
Group submission and
witness statements,
20 June 2014, Witness statement of Mr Ben
Waugh, para 19.
[25] ACCI
Small Business Survey, August
2014.
[26]
ACTU submissions in
reply, 1 August 2014, paras 42–55; AMWU outline of submission in reply,
1 August 2014 at para 3.
[27]
Transcript at para 1181.
[28]
Transcript at para 1041; The ABS
defines a stratified random sample as a sample that first identifies
relevant subgroups from within the population and random samples are
selected from within each strata. ABS
Statistical Language - Census and
Sample, July 2013,
http://www.abs.gov.au/websitedbs/a3121120.nsf/home/statistical+language+-+census+and+sample,
accessed 12 September 2014.
[29]
Transcript at para 1041.
[30]
ACCI’s correspondence and outline
of submissions, 20 June 2014 at para 5.3.
[31]
Transcript at paras 1048–1059.
[32]
Master Builders Australia
submission and witness statement, 20 June 2014, Witness statement of
Geoffrey Charles Thomas at p. 3.
[33]
See for example, Transcript at
paras 1129–1131, 1152 and 1223–1225.
[34]
See for example, Transcript at
paras 1176 and 1281.
[35]
Ai Group correspondence, 21 May
2014; ACCI correspondence, 21 May 2014.
[36]
See Exhibits A, D, E, G and H to
ACCI correspondence and outline of submissions, 20 June 2014.
[37]
Denniss R (2003)
Annual Leave in Australia: An
Analysis of Entitlements Usage and Preferences. The Australia
Institute Discussion Paper No. 56 Canberra: The Australia Institute.
[38]
Cameron P and Denniss R (2013),
‘Hard to get a break? Hours, leave and barriers to re-entering the
Australian workforce’, The Australia Institute, Institute Paper No. 13,
November 2013, pp. 26–27.
[39]
ACCI outline of submissions, 20
June 2014 at para 7.14.
[40]
ACCI outline of submissions, 20
June 2014 at para 7.22.
[41]
ACCI outline of submissions, 20
June 2014 at para 7.24.
[42]
ACCI outline of submissions, 20
June 2014 at paras 7.26–7.28.
[43]
ACCI outline of submissions, 20
June 2014 at paras 7.29–7.30.
[44]
Ai Group submission and witness
statements, 20 June 2014, p. 12 at para 34.
[45]
Ai Group submission and witness
statements, 20 June 2014, p. 18 at para 47.
[46]
ACTU reply submission, 1 August
2014, pp. 25–26 at paras 109 and 111.
[47]
ACTU reply submission, 1 August
2014, p. 23 at para 93.
[48]
ACTU reply submission, 1 August
2014, p. 27 at para 120.
[49]
ACTU reply submission, 1 August
2014, p. 26 at para 113.
[50]
Transcript at paras 1877–1889.
[51]
ACTU reply submission, 1 August
2014, p. 20 at paras 81–82 and pp. 29–30 at paras 132–133.
[52]
ACTU reply submission, 1 August
2014, pp. 28–29 at paras 125–128.
[53]
Transcript at paras 1877–1881.
[54]
ACTU reply submission, 1 August
2014, p. 29 at paras 129–131.
[55]
Transcript at para 1886.
[56]
See generally ACCI further
submission, 28 October 2014, Affidavit of Julian Fredrick Arndt: 218
such applications were made in the period 30 August 1998 to 4 November
2010.
[57] Also
see Fair Work Act
1994 (SA): Schedule 4;
Industrial Relations Act
1984 (Tas): s.47AE(5)–(7);
Annual Leave Act
1973 (ACT): s.10;
Annual Leave Act (NT):
s.6(9).
[58]
When the Work Choices Act was
introduced the Commonwealth Government suggested that the resulting
system would cover 85 per cent of all Australian employees: see Work
Choices: A New Workplace Relations System, Australian Government,
Canberra 2005 p.11, citing unpublished ABS data. Attempts since the Work
Choices Act to estimate the respective coverage of federal and state
laws have produced conflicting results. Research conducted for the
Queensland Government suggested that the new federal system would cover
76 per cent of employees: Queensland Government, ‘The Coverage and
Characteristics of the State Jurisdiction under a New Industrial
Relations System’, Submission to Queensland Industrial Relations Inquiry
into the Impact of Work Choices on Queensland Workplaces, Employees and
Employers, Appendix 1, Queensland Government, Brisbane, 2006. A
subsequent analysis published by the ABS found that the federal system
covered at least 79 per cent of all Australian employees, compared with
12 per cent in the state systems and 9 per cent being uncertain: ABS
(2008) ‘Jurisdictional Coverage of Pay-Setting Arrangements’, Australian
Labour Market Statistics 2008, ABS Cat 6105.0. See generally Peetz D
‘How Wide is the Impact of Work Choices?’ in Abbott K et al (eds) Work
Choices: Evolution or Revolution, Heidelberg Press, pp.23–41.
[59]
See Stewart A ‘Testing the
Boundaries: Towards a National System of Labour Regulation’ in Forsyth A
and Stewart A (eds) ‘Fairwork: The New Workplace Laws and the Work
Choices Legacy’, Federation Press, 2009, pp.19–39, p.24.
[60]
Explanatory Memorandum to the
Fair Work Bill 2008 at para
383.
[62]
Re General Retail Industry Award
2010
[2010] FWAFB 305 at
para 1.
[63]
Re General Retail Industry Award
2010
[2010] FWAFB 305 at
para 30.
[64]
Re General Retail Industry Award
2010
[2010] FWAFB 305 at
para 30.
[65]
Re Fast Food Industry Award 2010
[2010] FWAFB 379 at para 1.
[66]
Re Fast Food Industry Award 2010
[2010] FWAFB 379 at
para 28.
[67]
Re Fast Food Industry Award 2010
[2010] FWAFB 379 at
para 28.
[68] Fair
Work Commission Background
paper—Annual leave common issue, 30 May 2014,
Attachment C at p.33. Note
the figure of 82 modern awards in this paper includes 3 awards that
provide that an employer can direct an employee to take leave but this
is not restricted to excessive leave.
[69]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55,
p.82. at p. 685.
[70]
Denniss R (2003)
Annual Leave in Australia: An
Analysis of Entitlements Usage and Preferences. The Australia
Institute Discussion Paper No. 56 Canberra: The Australia Institute.
[71]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55,
p.82. at
p.686.
[72]
Wooden M and Warren D (2008) Paid
annual leave and working hours: Evidence from the HILDA survey,
Journal of Industrial Relations
50(4);
Cameron P and Denniss R (2013),
‘Hard to get a break? Hours, leave and barriers to re-entering the
Australian workforce’, The Australia Institute, Institute Paper No. 13,
November 2013, pp. 26–27; and Tourism
Australia (2012).
[73]
Wooden M and Warren D (2008) Paid
annual leave and working hours: Evidence from the HILDA survey,
Journal of Industrial Relations
50(4) at p. 666.
[74]
Wooden M and Warren D (2008) Paid
annual leave and working hours: Evidence from the HILDA survey,
Journal of Industrial Relations
50(4) at p. 666.
[75]
Wooden M and Warren D (2008) Paid
annual leave and working hours: Evidence from the HILDA survey,
Journal of Industrial Relations
50(4) at p. 666.
[76]
Cameron P and Denniss R (2013),
‘Hard to get a break? Hours, leave and barriers to re-entering the
Australian workforce’, The Australia Institute, Institute Paper No. 13,
November 2013, pp. 26–27.
[77] Ai
Group submission and witness statements, 20 June 2014, Witness statement
of Mr Ben Waugh,
Attachment E at p. 25.
[78]
Joudrey A and Wallace J (2009)
Leisure as a coping resource: A test of the job demand-control-support
model. Human Relations 62(2): 195–217; Walsh R (2011) Lifestyle and
mental health. American Psychologist, advance online publication, 17
January at p. 682.
[79]
Cameron P and Denniss R (2013),
‘Hard to get a break? Hours, leave and barriers to re-entering the
Australian workforce’, The Australia Institute, Institute Paper No. 13,
November 2013 at p. 27.
[80]
Cairncross G and Waller I (2004) ‘Not taking Annual Leave: What Could it
Cost Australia’, Journal of
Economic and Social Policy, Vol: 9, Issue 1, Article 3.
[81] Safe
Work Australia ‘Guide for Managing the Risk of Fatigue at Work’,
November 2013 at p. 2.
[82] Safe
Work Australia ‘Guide for Managing the Risk of Fatigue at Work’,
November 2013 at p. 9.
[83] ACCI,
Expert
accounting report of Mr Eugene Kalenjuk, 2 July 2014 at p. 4.
[84]
Ai Group submission and witness
statements, 20 June 2014, Witness statement of Mr Ben Waugh, Attachment
E at p. 27.
[85]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at
p. 682.
[86]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at
p.694.
[87]
ACCI outline of submissions, 20
June 2014 at para 7.14.
[88]
[1915] AR 235 at [237]–[238].
[89]
[1915] AR 235 at [237]–[238].
[90] (1936)
36 CAR 738.
[91] (1936)
36 CAR 738 at [747].
[92]
Eden D (2001), ‘Vacations and
other respites: Studying stress on and off the job’, in Robertson I
(eds) International Review of
Industrial and Organisational Psychology, Vol 16, New York, John
Wiley & Sons pp 121-146, cited in
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at p.682
[93] Cited
in Skinner, N and Pocock,
B (2013) Paid Annual Leave in
Australia: Who gets it, who takes it and implications for work-life
balance, Journal of Industrial Relations, 21 August 2013, Vol. 55,
p.82. at pp. 682–683
[94]
Westman & Etzion (2001) at pp. 595, 602–603, cited in
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55,
at p.682
[95]
Etzion, D. 2003,
‘Annual vacation: duration
of relief from job stressors and burnout.’ Anxiety,
Stress and Coping, 16(2), at pp. 223–224.
[96]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at pp. 688–689
[97]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at p.689
[98]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55
at
p. 689.
[99]
Skinner, N and Pocock, B (2013)
Paid Annual Leave in Australia:
Who gets it, who takes it and implications for work-life balance,
Journal of Industrial Relations, 21 August 2013, Vol. 55 at p. 695.
[100]
Ai Group correspondence,
21 May 2014, Attachment A at p. 1; varied by Ai Group correspondence, 15
October 2014, Attachment A at p. 1.
[101]
See also
Attachment F;
figure amended from 83 in the 30 May 2014 Background Paper.
[102]
Sometimes described as ‘18
months of annual leave accrued’:
Cemetery Industry Award 2010 at clause 24.3.
[103]
Nurses Award 2010,
cl.31.2; Security Services
Industry Award 2010,
cl.24.3; Asphalt Industry Award
2010, cl.25.5;
Broadcasting and Recorded
Entertainment Award 2010, cl.23.6;
Cement and Lime Award 2010,
cl. 24.5; Gardening and
Landscaping Services Award
2010, cl. 24.4; Gas Industry
Award 2010, cl.25.4;
Horse and Greyhound Training
Award 2010, cl. 23.4;
Premixed Concrete Award
2010, cl. 24.5;
Quarrying Award
2010, cl.29.5;
Racing Clubs Events Award 2010,
cl.30.4; Racing Industry
Ground Maintenance Award 2010,
cl.24.3; Silviculture Award
2010, cl.29.4;
Sporting Organisations Award
2010, cl.25.4;
Textile, Clothing, Footwear and
Associated Industries Award
2010, cl.41.4; Black Coal
Mining Industry Award 2010,
cl.25.4; Air Pilots Award 2010,
cl.27.4; Architects Award
2010, cl.20.2;
Ambulance and Patient Transport
Industry Award 2010,
cl.30.8; Mobile Crane Hiring
Award 2010, cl.25.2;
Ports, Harbours and Enclosed
Water Vessels Award 2010,
cl.22.4; Aquaculture Industry
Award 2010, cl. 23.4.
[104]
The
Nurses Award
2010 (cl.31.2) provides that
‘Annual leave will be given and taken within six months of the employee
becoming entitled to annual leave of more than five weeks’; Also see the
Black Coal Mining Industry Award
2010, cl.25.4 (‘unless otherwise agreed, annual leave will be taken
within 12 months of the date the employee received the annual leave
entitlement’); Air Pilots Award
2010, cl.27.4 (‘Normally,
annual leave will be granted and will be taken within 12 months from the
date on which it falls due or alternatively 15 months from the date of
commencement of the preceding period of leave’);
Architects Award
2010, cl.20.2 (‘The employee
must be allowed to take annual leave at a time agreed with the employer,
within four months after it is due’);
Ambulance and Patient Transport
Industry Award 2010,
cl.30.8 (‘Annual leave will be taken within six months of the employee
becoming entitled to take it unless alternative arrangements are agreed
between the employer and employee’);
Mobile Crane Hiring Award
2010, cl. 25.2 (‘Leave will
be given and will be taken within six months from the date when the
right to annual leave occurred and after not less than four weeks notice
to the employees’); Ports,
Harbours and Enclosed Water Vessels Award 2010, cl.22.4 (‘Annual
leave must be taken within six months of the entitlement accruing’).
[105]
Higher Education Industry—General
Staff—Award
2010, cl.30.1(a) and
Higher Education
Industry—Academic Staff—Award 2010, cl.23.1 (‘at least two months
prior to the date on which the employee is to take the leave’); Also
note that the Ports, Harbours and
Enclosed Water Vessels Award 2010, cl. 22.4 provides that ‘An
employer may require an employee to take a period of annual leave
provided the employee is given at least 14 days’ notice’.
[106]
Section 127 provides that
the Regulations may permit modern awards to include terms that would or
might otherwise be contrary to Part 2-2 or s.55, or prohibit modern
awards from including terms that would or might otherwise be permitted
by Part 2-2 or s.55. No such regulations have been made.
[107]
Ai Group submission and
witness statements, 20 June 2014 at paras 17–18 and 20–21.
[108]
Ai Group submission and
witness statements, 20 June 2014 at para 33.
[109]
[2015] FWCFB 3124 at para 25.
[110]
[2015] FWCFB 3124 at
paras 25–28.
[111]
Ai Group correspondence,
21 May 2014; ACCI correspondence, 21 May 2014.
[112]
Re Just Cuts (Canberra and
Queanbeyan) Agreement 2000-2003,
Print T3829, 30 November 2000 at
para 16.
[113]
Review of Wage Fixing Principles
– October 1993 (1993) 50 IR
285 at [320]; Enterprise
Flexibility Test Case (1995) 59 IR 430 at [457].
[114]
[2008] AIRCFB 1000 at paras 99–100.
[115]
[2009] AIRCFB 50 at paras 3–4 and 8–9.
[116]
[2009] AIRCFB 345 at para 4.
[117]
For example see
Re Journalists Published Media
Award 2010 (2009) 187 IR 192 at [116];
Re Commercial Sales Award 2010
[2009] AIRCFB 826 at [276];
Re Meat Industry Award 2010
[2009] AIRCFB 942 at [11].
[118]
Seafood Processing Award 2010
at clause 27.8.
[119]
Seafood Processors and Exporters Council and others Parties’ Draft
awards—Seafood Processing Industry Award, 6 April 2009.
[122]
CFMEU v Fair Work Australia and
Newlands Coal Pty Ltd
[2011] FCA 719 at [83].
[123]
Enterprise bargaining commenced in October 1991 through the ‘Prices and
Incomes Accord Mark VII’ however note the principle of enterprise
bargaining was federally legislated in 1993 via the
Industrial Relations Reform Act
1993 (Cth).
[124] ACCI
submission, 27 November 2014; ACTU submission, 27 November 2014; TCFUA
submission, 27 November 2014; Ai Group submission, 27 November 2014; BHP
Billiton correspondence and submission, 27 November 2014; Housing
Industry Association correspondence, 27 November 2014.
[125]
AE406974.
[126]
For example clause 33.4
the Downer EDI Engineering
Electrical Pty Ltd (Tasmania) Greenfield Agreement 2013 [AE406442].
[127]
For example clause 9.15.6
of the Diver Consolidated
Industries (DCI) Enterprise Agreement 2013 [AE407170]
which provides for cashing out of annual leave only once an employee has
been with the employer for 10 years or more.
[128]
For example clause 20.3 of
The
Westin Melbourne Enterprise
Agreement 2012 [AE407158].
[129]
[2013] FWCFB 1635 at para 229.
[130]
Transcript at paras 1506
and 1522.
[131]
Transcript at paras 1527
and 1532.
[132] Ai
Group submission and witness statements, 20 June 2014,
Witness statement of Mr Ben
Waugh, Attachment E at p. 15.
[133] Ai
Group submission and witness statements, 20 June 2014, Witness statement
of Ms Kristina Flynn at
para 21.
[134]
ACCI outline of
submissions, 20 June 2014, Witness statement of Ms Fiona Corbett at para
7.
[135]
[2014] FWCFB 3500 at paras 392 and 400.
[136]
ACTU submission, 27
November 2014 at para 35.
[137]
[2014] FWCFB 3500 at para 72.
[138]
ACCI outline of
submissions, 20 June 2014 at paras 6.24–6.26; Ai Group submission and
witness statements, 20 June 2014 at para 126.
[139]
Pepsi Seven-Up Bottlers Perth Pty
Ltd v FCT (1995) 62
FCR 289 at [298]–[299] per Hill J.
[140]
Fair Work Act 2009, s.134(f).
[141]
[2012] FWAFB 7858 at paras 38–45.
[142]
[2013] FWCFB 4000 at para 140.
[143]
ACCI outline of
submissions, 20 June 2014 at para 6.9.
[144]
Mitchell R
and Fetter J (2003) ‘The individualisation of employment relationships
and the adoption of high performance work practices: Final Report’,
University of Melbourne
at p. 9.
[145]
Mitchell R
and Fetter J (2003) ‘The individualisation of employment relationships
and the adoption of high performance work practices: Final Report’,
University of Melbourne
at p. 9.
[146]
Mitchell R
and Fetter J (2003) ‘The individualisation of employment relationships
and the adoption of high performance work practices: Final Report’,
University of Melbourne
at pp. 6–8.
[147]
ABS,
Employee Earnings and Hours,
Australia, May 2014, unpublished survey instrument, glossary.
[148]
ABS,
Employee Earnings and Hours,
Australia, May 2014, Catalogue No, 6306.0, glossary.
[149]
ABS,
Employee Earnings and Hours,
Australia, May 2014, Catalogue No, 6306.0, glossary.
[150]
ABS,
Employee Earnings and Hours,
Australia, May 2014, Catalogue No, 6306.0, glossary.
[151]
ABS,
Employee Earnings and Hours,
Australia, May 2014, Catalogue No, 6306.0, glossary. Data on owner
managers of incorporated enterprises were not available and hence
excluded from the analysis such that proportions calculated reflect the
total of collective agreements, individual arrangements and ‘award only’
arrangements.
[152]
It is noted that s.23 of
the FW Act defines a small business (national system employer) as an
employer that employs fewer than 15 employees.
[153]
The chart in the
background paper set out the 2012 data (which was the most recent data
at the time the background paper was released). The May 2014 data shows
the same pattern as the 2012 data.
[154]
BHP
Billiton’s submission, 27 November 2014 at paras 8–9.
[155] ACTU
submission in reply, 1 August 2014, p. 11 at paras 37–39.
[156] ACTU
submission in reply, 1 August 2014 at paras 270 and 272.
[157] AMWU
outline of submissions in reply, 1 August 2014, p. 6 at para. 4.3.
[158] AMWU
outline of submissions in reply, 1 August 2014, p. 7 at para
4.3.5.
[159]
Transcript at para 1196.
[160]
Transcript at para 1236.
[161] ACTU
submission in reply, 1 August 2014, pp. 58 and 60 at paras 288, 297 and
298.
[162] ACTU
submission in reply, 1 August 2014, p. 61 at para 299.
[163]
[2008] AIRCFB 1000 at paras 99–100.
[165]
Transcript at para 1190;
ACTU submission in reply, 1 August 2014. p. 56 at para 269.
[166]
[2009] AIRCFB 942 at para 11.
[167]
Construction, Forestry, Mining
and Energy Union v Fair Work Australia and Newlands Coal Pty Ltd
[2011] FCA 719 at [83].
[168]
Transcript at paras
1418–1420.
[169] ACTU
submission in reply, 1 August 2014, p. 5 at para 15.
[170]
ACTU submission in reply,
1 August 2014, pp. 54–55 at para 261.
[171]
Transcript at para 860.
[172] ACCI
correspondence, 21 May 2014.
[173]
Transcript at para 2539.
[174] The
Ai Group claim notes that there are 44 modern awards that do not
presently contain any provision allowing employers to implement an
annual close down. It seems to us that there are 41 modern awards that
do not presently contain the provision.
See Attachment G for explanation
of discrepancies.
[175]
Transcript at paras
2139–2140.
[176]
Re Metal Industry Award 1971
(1977) 191 CAR 598.
[177]
[2008] AIRCFB 1000 at para
97.
[178]
[2008] AIRCFB 1000 at para
97.
[179]
[2009] AIRCFB 945 at para
27.
[180]
Pest Control Award
[AN150106] at clause 15(k).
[181] Fair
Work Commission Background
paper—Annual leave common issue, 30 May 2014,
Attachment C at p.33.
[182]
[2014] FWCFB 255. See Ai Group submission and witness statements, 20
June 2014, p. 50 at para 50.
[183]
Ai Group submission 20
March 2014, p. 4 at para 2.10; Ai Group
submission and witness statements,
20 June 2014, p. 20 at para 51.
[184] Ai
Group submission and witness statements,
20 June 2014, pp. 24–26 at paras 71–74.
[185] Ai
Group submission and witness statements,
20 June 2014, p. 20 at para 52.
[186] Ai
Group submission and witness statements,
20 June 2014, p. 20 at para 53.
[187] Ai
Group submission and witness statements,
20 June 2014, p. 21–23 at paras 58, 61 and 66–70.
[188] Ai
Group submission and witness statements, 20 June 2014,
p. 21 at para 60.
[189] See
generally Ai Group submission 20 June 2014 at paragraph 76.
[190]
ACCI outline of
submissions, 20 June 2014 at paras 8.5–8.7.
[191]
ACCI outline of
submissions, 20 June 2014 at paras 8.8–8.11.
[192]
ACCI outline of
submissions, 20 June 2014 at paras 8.12–8.17.
[193]
ACCI outline of
submissions, 20 June 2014 at paras 8.18–8.20.
[194]
[2008] AIRCFB 1000 at
para 97.
[195]
For an example of a
majority clause, see Print M5600 at pp. 31–34.
[196] Ai
Group correspondence, 21 May 2014, p. 11 at Schedule 6.
[197]Ai
Group further submission, 19 September 2014, p. 4 at para 6; ACCI
correspondence, 19 September 2014 at p. 2.
[198] The
TCFUA addressed this variation in some detail and the AMWU and CFMEU did
so in brief submissions.
[199]
[2008] AIRCFB 717 at para 30;
[2008] AIRCFB 1000 at para 95.
[200]
[2008] AIRCFB 1000 at para 95.
[201]
Fair Work Commission
Background
paper—Annual leave
common issue, 30 May 2014, Attachment C. (Note the Background paper
identified two additional awards as containing limited provision
allowing for taking annual leave in advance of accrual - see Attachment
H).
[202] Joint
document filed by Ai Group, ACCI and ACTU, Legislative provisions
relating to annual leave, 14 November 2014 (Attachment
I); ACCI outline of submissions, 20 June 2014, p. 20 at para 9.4
refers to sections from this legislation.
[203] ACCI
outline of submissions, 20 June 2014, Annexure F; Ai Group submission
and witness statements, 20 June 2014, Witness statement of Mr Ben Waugh,
Attachments A–G.
[204]
Of the 2249 employers who
answered Question 16, 951 (42 per cent) said that they agreed to such
requests on 51 per cent or more occasions.
[205] Ai
Group submission and witness statements, 20 June 2014, p. 28 at para 81.
[206] Ai
Group submission and witness statements, 20 June 2014, p. 28 at para 82.
[207] ACCI
outline of submissions, 20 June 2014, p.20 at paras 9.5, 9.9 and 9.10.
[208]
Transcript at paragraphs
2176-2177.
[209] Ai
Group submission and witness statements, 20 June 2014, p. 28 at paras
81–84; ACCI outline of submissions, 20 June 2014, p. 21–22 at paras 9.12–9.19.
[210] ACTU
reply submissions, 1 August 2014, p. 46 at para 216.
[211] TCFUA
submission, 4 August 2014, p. 21 at para 7.10.
[212] ACTU
reply submission, 1 August 2014, p. 49 at para 231.
[213] The
Commission’s background
paper of 30 May 2014 noted this as 76.
[214]
Transcript at paras
2185–2186.
[215]
ACTU correspondence,
21 May 2014; ACTU submission, 20 June 2014.
[216]
A point acknowledged by
the ACTU, Transcript at paragraphs 86 and 281-282.
[217]
[2015] FCA 136.
[218]
[2015] FCA 136 at [31]-[38].
[219] ‘Towards
more productive and equitable workplaces: An evaluation of the Fair Work
legislation’ (2012) at pp. 99–100
[220]
Commonwealth, Parliamentary Debates, House of Representatives,
Fair Work Amendment Bill 2014—Second
Reading Speech (the Hon. Christopher Pyne), 27 February 2014, p. 1086.
[221]
Ai Group correspondence,
21 May 2014; ACCI correspondence, 21 May 2014.
[222]
ACTU reply submission, 1
August 2014, pp. 69–70 at para 345.
[223]
See for example s.3(6)(b)
of the Annual
Holidays
Act 1944
(NSW);
s.8
of the
Annual Leave Act 1973
(ACT);
s.9 of the Annual
Leave
Act
(NT);
s.13
of the Industrial Relations Act
1999
(Qld);
s.235 of
the Workplace
Relations
Act 1996
(Cth);
clause 7.1.3
of
the
Metal, Engineering
and Associated
Industries
Award 1998;
clause
37.12 of
the
Timber and
Allied Industries Award
1999;
clause 7.1.2(a)
of
the
Graphic
Arts—General—Award
2000;
clause 27(k)(i)
of the
Vehicle Industry—Repair, Services and Retail—Award 2002.
[224]
Ai Group
submission and witness statements, 20 June 2014, Witness statement of Mr
Ben Waugh at Attachment A.
[225]
Question 20 asked: ‘Are
you charged extra fees for processing payroll outside the usual pay
period?’ 563 employees answered ‘yes’, 1940 answered ‘no’ and 662 were
‘unsure’; Ai Group submission, 20 June 2014, Witness statement of Mr Ben
Waugh, Attachment E.
[226]
ACCI outline of
submissions, 20 June 2014 at Exhibit F.
[227]
ACTU reply submission, 1
August 2014, p. 69 at para 345.
[228]
Transcript at paras
1898–1922.
[229]
[2014] FWCFB 3202 at para 43.
[230]
[2014] FWCFB 3202 at para 44.
[231]
Ai Group submission, 20
March 2014.
[232]
Ai Group correspondence,
21 May 2014.
[233]
Skinner N and Pocock B
(2013), ‘Paid annual leave in Australia: Who gets it, who takes it and
implications for work-life interference’,
Journal of Industrial Relations
55(5), pp.681–698 and p. 685.
[234] See
Denniss R (2003)
Annual Leave in Australia: An
Analysis of Entitlements Usage and Preferences. The Australia
Institute Discussion Paper No. 56 Canberra: The Australia Institute.
[235]
Denniss R (2003)
Annual Leave in Australia: An
Analysis of Entitlements Usage and Preferences. The Australia
Institute Discussion Paper No. 56 Canberra: The Australia Institute.
[236]
Skinner, N and Pocock, B
(2013) Paid Annual Leave in
Australia: Who gets it, who takes it and implications for work-life
balance, Journal of Industrial Relations, 21 August 2013, Vol. 55
at pp. 690–691.
[1]
Ai Group correspondence,
21 May 2014; ACCI correspondence, 21 May 2014; Ai Group correspondence,
15 October 2014.
[2]
Ai Group
correspondence, 21 May 2014; ACCI correspondence, 21 May 2014; Ai Group
correspondence, 15 October 2014.
[3]
Ai Group correspondence,
21 May 2014; ACCI correspondence, 21 May 2014; Ai Group correspondence,
15 October 2014.
[4]
ACCI submission, 21 May
2014 at Schedule 5; Ai Group correspondence, 21 May 2014.
[5]
Ai Group correspondence,
21 May 2014; ACCI correspondence, 21 May 2014.