[2015] FWCFB 2835

[2015] FWCFB 2835 [Note: Judicial review of this decision [NSD 569 of 2015]; refer to the Federal Court decision dated 14 September 2015 [2015] FCAFC 131 for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 YEARLY REVIEW OF MODERN AWARDS - TRANSITIONAL PROVISIONS

(AM2014/190)

JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER BULL

SYDNEY, 7 MAY 2015

4 yearly review of modern awards - common issue - transitional provisions - decision not to grant ACTU application to delete sunset provisions in relation to accident pay and district allowance transitional provisions in decision [2014] FWCFB 7767 - removal of sunset provisions in relation to Broken Hill allowance in decision [2015] FWCFB 644 - whether there is an obvious error within the meaning of s.602.

[1] This is a matter raised by the Australian Chamber of Commerce and Industry (ACCI) concerning the decisions made by the Full Bench in relation to transitional provisions in modern awards on 31 October 2014 1 (the October 2014 decision) and 11 February 20152 (the February 2015 decision). The ACCI has submitted that there is an inconsistency between the decisions and an error in the latter decision regarding the treatment of Broken Hill allowance.

[2] In the decisions, the Full Bench dealt with several applications relating to transitional provisions dealing with accident pay, district allowances and redundancy entitlements. These included: applications by the Australian Council of Trade Unions (ACTU) and unions which inter alia sought the deletion of the sunset provision in the transitional clauses dealing with district allowances; and applications by the Australian Industry Group (AiG) seeking the deletion of the transitional provisions relating to accident pay, district allowances and redundancy from modern awards.

[3] The October 2014 decision was given at the conclusion of the hearings which were conducted on 29-31 October 2014. As the Full Bench explained:

“[4] Given the operative periods for the transitional provisions in modern awards, we consider that it is appropriate for the Full Bench to announce our decision, at least in relation to some of the matters before us, as early as possible.”

[4] The ACTU application seeking the deletion of the sunset provisions was not granted by the Full Bench. The Full Bench said:

“[5]We have decided not to grant the ACTU application to delete the sunset provisions in the transitional Accident Pay and District Allowance provisions in modern awards. We do not consider that the case has been made out for the continuation of those transitional provisions having regard to the basis on which they were inserted by the Award Modernisation Full Bench in 2008 and to the submissions and material presented in the proceedings before us.

[6]In particular we note that no party has sought the inclusion in modern awards of a national standard on accident pay to apply to all award covered employees, as was anticipated by the Award Modernisation Decision 2008. 3 We also note that no substantive case has been advanced such that the allowances applying in Western Australia and the Northern Territory “should be a permanent feature of the awards and, if so, the basis for their fixation and adjustment.”4 We also refer to the requirement that the Commission have regard, in considering the ACTU application, to the modern awards objective in section 134 and the requirements of sections 139 and 154 of the Fair Work Act 2009.

...

[8]In relation to the AiG application to delete transitional arrangements relating to redundancy in modern awards, we have decided to vary the relevant awards with effect from 1 January 2015. In this regard, we note that the transitional redundancy provisions will by their terms cease to operate on 31 December 2014 and that no party has opposed the removal of these provisions from awards.”

[5] The Full Bench indicated that:

“[9]We will publish the reasons for this decision, and our decision on the other applications relating to the Transitional Provisions Common Issues which were dealt with in the proceedings, in due course.”

[6] The February 2015 decision provided the reasons for the matters determined in the October 2014 decision and decisions in relation to the various other matters before the Full Bench.

[7] In relation to district allowances, the submissions made by the ACTU and the unions, and those of the opposing employer parties, including ACCI and AiG, are summarised in the February 2015 decision. Those submissions overwhelmingly concentrated on the district allowances which applied in Western Australia and the Northern Territory. In relation to those allowances, the Full Bench provided its reasons for the rejection of the union application to delete the sunset provision from the district allowances clause. The Full Bench said:

“[53]The main reason for this decision is simply that the current transitional district allowances provisions cannot be retained in awards consistent with s.154 of the Act. By the terms of those provisions, they operate only in respect of Western Australia and the Northern Territory. Subsection 154(1)(b) provides that a modern award must not include terms that "are expressed to operate in one or more, but not every, State or Territory." In these circumstances, it would be inappropriate to remove the sunset provisions and thereby purport to continue in operation the current district allowance provisions.

[54]Apart from this, we do not consider that those provisions can be retained in awards consistent with the modern awards objective (ss.134 and 138). In particular, we consider that the provisions in their present form are complex, difficult to understand and apply and contrary to what is sought to be achieved through the modern award system (see s.134(1)(f) and (g)).

[55]Further, we do not consider that a proper case has been made out in the present matter for this Full Bench to depart from the decision taken by the Award Modernisation Full Bench in 2008, namely that the district allowances operating in Western Australia should be preserved in modern awards for a transitional period only and ‘until there is a proper opportunity to consider whether they should be a permanent feature of the awards and, if so, the basis for their fixation and adjustment.’ 5...”

[8] The modern awards which were before the Full Bench in the proceedings included four awards which contained provision for a Broken Hill allowance. 6 The provision for the Broken Hill allowance was set out in the district allowances clause in those awards and the sunset provision in that clause applied in relation to the whole clause, including to the Broken Hill allowance. For example, the district allowances clause in the General Retail Industry Award 2010 provides as follows:

“20.13 District allowances

(a) Northern Territory

An employee in the Northern Territory is entitled to payment of a district allowance in accordance with the terms of an award made under the Workplace Relations Act 1996 (Cth):

(i) that would have applied to the employee immediately prior to 1 January 2010, if the employee had at that time been in their current circumstances of employment and no agreement-based transitional instrument or enterprise agreement had applied to the employee; and

(ii) that would have entitled the employee to payment of a district allowance.

(b) Western Australia

An employee in Western Australia is entitled to payment of a district allowance in accordance with the terms of a notional agreement preserving a State award or an award made under the Workplace Relations Act 1996 (Cth):

(ii) that would have entitled the employee to payment of a district allowance.

(c) Broken Hill

An employee in the County of Yancowinna in New South Wales (Broken Hill) will in addition to all other payments be paid an hourly allowance for the exigencies of working in Broken Hill of 4.28% of the standard rate.

(d) Clause 20.13 ceases to operate on 31 December 2014.”

[9] In considering the future of the Broken Hill allowance, the Full Bench noted in the February 2015 decision that little attention was given specifically to that allowance in the written submissions of the parties or in the hearings.

“[59]There was little put by way of submission in the proceedings as to what should be the position regarding the Broken Hill allowance. The ACTU applications sought the removal of the sunset provision which would leave the Broken Hill allowance, together with the district allowances in Western Australia and the Northern Territory, in operation. We have rejected the ACTU applications for the removal of the sunset provisions so far as they relate to district allowances in Western Australia and the Northern Territory. We must however decide whether this should be the result also in relation to the Broken Hill allowance in the four modern awards.

[60] Little or no attention was given to this matter by most parties to the proceedings. The South Australia, Northern Territory and Broken Hill Branch of the SDA submitted that the maintenance of the allowance meets the modern awards objective and in particular provides entitlements under the relevant awards for low-paid workers who would be adversely affected by the removal of the allowance.

[61] The Ai Group in its applications sought the deletion from modern awards of the transitional provisions relating to district allowances on the basis that such clauses would be obsolete after 31 December 2014 and are no longer necessary to achieve the modern awards objective (s.138). It was submitted that the district allowances with respect to employees in Western Australia, Broken Hill and Queensland were, in a similar way as the allowances in the Northern Territory, no longer relevant.”

[10] The Full Bench decided that the Broken Hill allowance would be retained in the four awards. The Full Bench said:

“[62] We note that the Broken Hill allowance is in different terms to the transitional provisions relating to district allowances in Western Australia and the Northern Territory. The entitlement to the allowance is specified in the four awards and is expressed as a percentage figure of the standard rate under the award. It does not require reference to any other instruments. The calculation of the allowance is therefore straightforward and the allowance is not a term or condition of employment determined by reference to State or Territory boundaries.

[63]In these circumstances, we cannot conclude on a similar basis as in relation to the district allowances in Western Australia and the Northern Territory that the Broken Hill allowance should not be maintained as part of the safety net for workers covered by the relevant awards. On the basis of the limited material before us, we are satisfied that the maintenance of the Broken Hill allowance in the awards is appropriate having regard to the modern awards objective (ss.134 and 138) and other relevant considerations. The allowance will therefore be retained in the awards.”

[11] The Full Bench directed that the Shop, Distributive and Allied Employees’ Association (SDA) should prepare and file draft orders in relation to the four awards containing provision for Broken Hill allowance. 7

Issues raised by ACCI

[12] Following the publication of the February 2015 decision and the filing of draft orders by the SDA in relation to the four awards, the ACCI wrote to the Commission on 19 February 2015 submitting that there was a conflict between the October 2014 decision and the February 2015 decision regarding the Broken Hill allowance. It was said that the February 2015 decision and the SDA orders have the effect of varying the earlier decision and that this error should be rectified by the Full Bench pursuant to s.602 of the Fair Work Act 2009 (the Act). The ACCI sought to be heard in relation to the making of the orders.

[13] Directions were issued by the Full Bench on 27 February 2015 for the parties to make written submissions on the matters raised by the ACCI. The ACCI filed its submission on 6 March in accordance with these directions. The ACTU and the SDA (South Australian, Northern Territory and Broken Hill Branch) filed their submissions on 13 March and 11 March respectively. No other submissions were filed by employer or union parties in accordance with the directions.

Submissions by the parties

[14] The ACCI submitted that the February 2015 decision varied the October 2014 decision by permitting the Broken Hill allowance to remain in the four awards. The February 2015 decision was therefore inconsistent with the earlier decision which had rejected the ACTU application for the deletion of the sunset provision in the district allowances clause in modern awards. It was said that the Broken Hill allowance applications formed part of the ACTU application being dealt with in the proceedings leading to the October 2014 decision. This was evident from the submissions filed by the ACTU, ACCI and AiG in relation to those proceedings and the ACTU’s confirmation during the proceedings that the Broken Hill allowance applications formed part of its claim. It was said that all relevant parties to the proceedings understood that the effect of the October 2014 decision was that the ACTU application to delete the sunset clause in so far as it operated with respect to Broken Hill allowance had not succeeded. In this regard, the ACCI referred to the SDA applications in subsequent proceedings seeking the making of Take-Home Pay Orders 8 and the witness statements filed relating to the losses to Broken Hill employees.

[15] It was submitted by the ACCI that the variation of the October 2014 decision was prohibited by s.603 of the Act, as that was a decision made under Part 2-3 which deals with modern awards (see s.603(3)(a)). Although the February 2015 decision did not expressly vary or revoke the earlier decision, its direct effect was to reverse in part the outcome of that decision. Accordingly it was submitted that the February 2015 decision had the effect of varying the earlier decision and that such an outcome was not permitted by s.603(3) of the Act.

[16] The ACCI submitted that the Commission can rectify the issues identified in relation to Broken Hill allowance by exercising the powers under s.602 of the Act.

[17] The ACTU and the SDA submitted that there was no inconsistency or obvious error in the February 2015 decision. It was said that the October 2014 decision does not deal with the Broken Hill allowance and that the issue concerning that allowance was determined in the February 2015 decision. It would therefore not be appropriate to use the powers under s.602 of the Act as sought by the ACCI.

[18] It was also submitted that the February 2015 decision does not vary or revoke the earlier decision and is therefore not prohibited by s.603 of the Act. In the alternative, it was submitted that even if the February 2015 decision did vary that decision in any meaningful way, the Commission was permitted to do so under s.156 of the Act.

[19] In relation to the applications for the making of Take-Home Pay Orders, the SDA submitted that in the absence of a specific decision by the Full Bench on Broken Hill allowance in October 2014, the prudent course of action for it to take in making such applications was to seek orders in relation to any employees who might suffer a reduction in take-home pay due to the operation of the sunset clause. It was said that the fate of the Broken Hill allowance was not known until the February 2015 decision which determined that the sunset clause in the district allowances clause in the relevant awards would not operate with respect to the Broken Hill allowance.

Consideration

[20] We have considered the submissions of the parties and have decided that it would not be appropriate or open to the Commission to take the action proposed by the ACCI. In particular, we do not consider that it has been shown that there is "any obvious error, defect or irregularity" in relation to the February 2015 decision concerning the Broken Hill allowance which requires correction.

[21] The applications by the ACTU and unions before the Full Bench were for the deletion of the sunset provision in the transitional provisions relating to accident pay and district allowances in some 112 modern awards. In the brief decision given at the conclusion of the hearings of those applications, the Full Bench indicated that it had decided not to grant the ACTU applications to delete the sunset provisions. The reasons given in that decision included that the case had not been made out for the continuation of those transitional provisions having regard to the basis on which they were inserted into modern awards by the Award Modernisation Full Bench in 2008 9 and that no substantive case had been advanced such that “the allowances applying in Western Australia and the Northern Territory ‘should be a permanent feature of the awards and, if so, the basis for their fixation and adjustment.’ ”10

[22] It should have been apparent from the reasons given by the Full Bench in the October 2014 decision that the primary concern was to announce a decision in relation to the main transitional matters under consideration in the proceedings, namely the continued operation beyond 31 December 2014 of the accident pay provisions and the provisions relating to district allowances in Western Australia and the Northern Territory. These were the matters dealt with in the Award Modernisation Decision 2008 11 and the transitional provisions which were inserted by the Award Modernisation Full Bench in 2008. The Broken Hill allowance was not considered in the Award Modernisation Decision 2008 and the provisions for Broken Hill allowance were inserted into the relevant four awards by decisions made in 2010.12

[23] The October 2014 decision also dealt with the AiG application for the deletion of transitional provisions from modern awards. The Full Bench decided only to grant the AiG application so far as it related to redundancy provisions. This was also an indication that the final position relating to the removal of accident pay and district allowances clauses from modern awards was not yet determined.

[24] Whilst we recognise that the position might have been set out more clearly in the October 2014 decision, namely that the Full Bench was not making any decision in relation to the Broken Hill allowance at that time, we do not accept that the February 2015 decision had the effect of varying or revoking any earlier decision taken by the Full Bench in relation to the Broken Hill allowance. Accordingly we do not consider that s.603 of the Act, which deals with the powers of the Commission to vary or revoke decisions and orders, is applicable in the present circumstances.

[25] Section 602 of the Act provides the Commission with a power to correct or amend errors in relation to decisions. The section provides as follows:

“602 Correcting obvious errors etc. in relation to the FWC's decisions

(1) The FWC may correct or amend any obvious error, defect or irregularity (whether in substance or form) in relation to a decision of the FWC (other than an error, defect or irregularity in a modern award or national minimum wage order).

Note 1: If the FWC makes a decision to make an instrument, the FWC may correct etc. the instrument under this section (see subsection 598(2)).

Note 2: The FWC corrects modern awards and national minimum wage orders under sections 160 and 296.

(2) The FWC may correct or amend the error, defect or irregularity:

(a) on its own initiative; or
(b) on application.”

[26] The power in s.602 should be used with caution and in circumstances analogous to those where the ‘slip and error rule’ is used by courts to correct certain errors in orders. 13 In relation to the February 2015 decision, it is not been shown that there is any obvious error in relation to the consideration of the Broken Hill allowance arising from any accidental slip or omission as should be corrected by the Full Bench under s.602 of the Act.

[27] For all the above reasons, we have decided to reject the submissions of the ACCI. In particular, we do not consider that it has been demonstrated that there is any error in relation to the consideration of the Broken Hill allowance in the February 2015 decision or that there is any inconsistency between that decision and the October 2014 decision.

[28] Orders will be made in relation to the four awards containing provision for Broken Hill allowance to give effect to the February 2015 decision.

SENIOR DEPUTY PRESIDENT

Written submissions:

ACCI:

6 March 2015

SDA (SA/NT/BH Branch):

11 March 2015

ACTU:

13 March 2015

1 [2014] FWCFB 7767.

2 [2015] FWCFB 644.

3 [2008] AIRCFB 1000 at [87].

4 Ibid at [81].

5 [2008] AIRCFB 1000 at [80].

6 Fast Food Industry Award 2010, MA000003, clause 19.9(c); General Retail Industry Award 2010, MA000004, clause 20.13(c); Hair and Beauty Industry Award 2010, MA000005, clause 22.3; and Pharmacy Industry Award 2010, MA000012, clause 19.7(c).

7 [2015] FWCFB 644 at [77].

8 The proceedings concerned applications by the ACTU and several unions for the making of Take Home Pay Orders (see AM2014/290; AM2014/ 291; AM2014/292; AM2014/293; AM2014/294; AM2014/295; AM2014/296; AM2014/297; AM2014/298; AM2014/302; AM2014/303; AM2014/307).

9 [2014] FWCFB 7767 at [5].

10 [2014] FWCFB 7767 at [6].

11 [2008] AIRCFB 1000.

12 See [2010] FWBFB 290 (Hair and Beauty Industry Award 2010); [2010] FWBFB 305 (General Retail Industry Award 2010); [2010] FWBFB 379 (Fast Food Industry Award 2010); [2010] FWBFB 662 (Pharmacy Industry Award 2010).

13 See Explanatory Memorandum to the Fair Work Bill 2008 at paragraph 2316 and the decisions in RotoMetrics Australia Pty Ltd T/A RotoMetrics v “ Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) and others [2011] FWAFB 7214; and Re Timber and Allied Industries Award 1999 [2003] AIRC 1137.

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