[2015] FWCFB 8810
The attached document replaces the document previously issued with the above code on 24 December 2015.
Amended to insert additional matter number in preamble and insert Attachment 2.
Associate to the President, Justice Ross
Dated 4 January 2016
[2015] FWCFB 8810 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 24 DECEMBER 2015 |
4 yearly review of modern awards – Pastoral Award 2010 – crutching rates for rams and ram stags – ‘learner shearers’ – coverage – annualised salaries – woolclassers formula.
1. Background
[1] Section 156 of the Fair Work Act 2009 (Cth) (the Act) provides that the Commission must conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014 (the Review). As detailed in a Statement issued on 6 February 2014, 1 the Review consists of an Initial stage, dealing with jurisdictional issues, a Common issues stage and an Award stage. The Pastoral Award 2010 is in Group 3 of the Award Stage. This decision deals with a number of proposed variations to the Pastoral Award 2010 that have arisen in the context of the Award Stage of the Review. The relevant background may be shortly stated.
[2] A Statement issued on 23 January 2015 2 dealt with the programming of Group 3 and 4 awards as part of the Review. Initial conferences were held on 18 November 2014 and 30 March 2015 in relation to the Group 3 awards. Prior to the conference on 30 March 2015 interested persons were provided an opportunity to identify the nature of any changes they intend to propose during the review of Group 3 awards. The Commission subsequently published a summary of proposed variations in relation to each of the Group 3 awards.
[3] A mention was held on 29 April 2015 to discuss scheduling issues relating to the Pastoral Award 2010 and a Statement issued on 30 April 3 set out the initial process for dealing with various claims to vary the award.
[4] Parties were directed to file proposed draft determinations by 4 June 2015 outlining each variation they were seeking to the award during the Review and the matter was listed for a further mention and programming on 11 June 2015. Parties were encouraged to have discussions among themselves with a view to reaching agreement in relation to the respective claims and/or narrowing the issues in dispute.
[5] After the mention on 11 June 2015, directions were issued to deal with the substantive issues in relation to the Pastoral Award 2010. Subsequent discussions between the parties resolved the various issues in dispute and the variations now sought are generally supported by the National Farmers’ Federation (NFF), the Shearing Contractors Association of Australia (the Shearing Contractors) and The Australian Workers’ Union (AWU). Before turning to those proposed variations we will make reference to the relevant legislative context for the Review.
2. The Legislative context
[6] The matters we propose to briefly refer to about the legislative context for the Review are canvassed in more detail in the 4 yearly Review of Modern Awards: Preliminary Jurisdictional Issues decision4, we adopt and apply that decision.
[7] Subsection 156(2) deals with what must be done in the 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.
(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.’
[8] Subsection 156(5) provides that in a Review each modern award must be reviewed in its own right, however, this does not prevent the Commission from reviewing two or more modern awards at the same time.
[9] The ‘scope’ of the Review was considered in the Preliminary Jurisdictional Issues Decision. 5
[10] 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 it was made. Variations to modern awards should be founded on merit based arguments that address the relevant legislative provisions, accompanied by probative evidence directed to what are said to be the facts in support of a particular claim. The extent of the argument and material required will depend on the circumstances.
[11] The modern awards objective (in s.134) 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. The modern awards objective is set out in s.134(1), 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.
[12] Section 138 of the Act is also relevant, it emphasises the importance of the modern awards objective, in these terms:
‘A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.’
[13] Section 138 provides that terms only be included in a modern award ‘to the extent necessary to achieve the modern awards objective’. To comply with s.138 the terms included in modern awards must be ‘necessary to achieve the modern awards objective’. What is ‘necessary’ in a particular case is a value judgment taking into account the s.134 considerations, to the extent that they are relevant having regard to the submissions and evidence directed to those considerations. Before varying a modern award in the Review, the Commission must be satisfied that the variation is necessary to achieve the modern awards objective.
[14] While the Commission must take into account the various matters in s.134(1)(a) to (h), the relevant question is whether the variation proposed is necessary to achieve the modern awards objective. It is, however, not necessary to make a finding that the modern award under review has failed to satisfy at least one of the s.134(1) considerations. 6
[15] There are other aspects of the statutory provisions which are relevant in the context of the present matter. The first concerns the terms that can be or must be included in a modern award. Section 136 is relevant in this regard, it provides:
‘136 What can be included in modern awards
Terms that may or must be included
(1) A modern award must only include terms that are permitted or required by:
(a) Subdivision B (which deals with terms that may be included in modern awards); or
(b) Subdivision C (which deals with terms that must be included in modern awards); or
(c) section 55 (which deals with interaction between the National Employment Standards and a modern award or enterprise agreement); or
(d) Part 2-2 (which deals with the National Employment Standards).
Note 1: Subsection 55(4) permits inclusion of terms that are ancillary or incidental to, or that supplement, the National Employment Standards.
Note 2: Part 2-2 includes a number of provisions permitting inclusion of terms about particular matters.
Terms that must not be included
(2) A modern award must not include terms that contravene:
(a) Subdivision D (which deals with terms that must not be included in modern awards); or
(b) section 55 (which deals with the interaction between the National Employment Standards and a modern award or enterprise agreement).
Note: The provisions referred to in subsection (2) limit the terms that can be included in modern awards under the provisions referred to in subsection (1).’
[16] Section 139(1) is in Subdivision B and deals with terms that may be included in modern awards. It provides, relevantly for present purposes, that:
‘(1) A modern award may include terms about any of the following matters:
(a) minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply), …
(f) annualised wage arrangements that:
(i) have regard to the patterns of work in an occupation, industry or enterprise; and
(ii) provide an alternative to the separate payment of wages and other monetary entitlements; and
(iii) include appropriate safeguards to ensure that individual employees are not disadvantaged; …
(g) allowances, including for any of the following:
(i) expenses incurred in the course of employment;
(ii) responsibilities or skills that are not taken into account in rates of pay;
(iii) disabilities associated with the performance of particular tasks or work in particular conditions or locations; …’
[17] Section 163 is also relevant to one of the proposed variations and we deal with that provision later. We now turn to the substantive claims before us.
3. The Substantive Claims
[18] This decision deals with five substantive claims:
(i) crutching rates for rams and ram stags;
(ii) provisions relating to ‘learner shearers’;
(iii) the definition of ‘broadacre field crops’;
(iv) annualised salaries; and
(v) the method of calculating the Woolclassers allowances formula.
[19] The AWU, NFF and the Shearing Contractors are in agreement in respect of matters (i), (iii), (iv) and (v). Australian Business Industrial and the NSW Business Chamber Ltd (ABI) and Business SA do not oppose the variations sought in respect of these matters. There is also a measure of agreement in respect of the AWU’s proposed variation regarding ‘learner shearers’ (matter (ii)), but part of the variation sought is the subject of a reservation by the various employer organisations. We will come to that matter in due course.
[20] The AWU, NFF and the Shearing Contractors tendered a statement of agreed facts in relation to the claims in respect of the crutching rates for rams and rams stags and regarding learner shearers 7. A copy of that statement is set out at Attachment 1.
(i) Crutching rates for rams and ram stags 8
[21] The AWU is seeking to amend clause 45.2(d) of the award that provides special rates for crutching stud ewes and lambs by inserting the following additional special rate:
‘For crutching rams and ram stags – double the rates prescribed in clause 45.2(a).’
[22] The process of crutching is a limited kind of shearing, where wool is removed ‘from the crutch area of sheep for various purposes, such as to avoid infection from the blowfly; prior to lambing; to treat skin underneath; prior to sale or slaughter’. 9 The current award prescribes minimum rates for crutching in clause 45.2(a):
Per 100 |
Per 100 | |
Full crutching, that is, shearing the inside parts of the legs, between the legs, and around and above the tail. In addition when required: • removing wool that has been struck by blowfly;
|
83.24 |
71.76 |
All other crutching |
66.02 |
57.41 |
For wigging or ringing |
31.57 |
31.57 |
For either wigging or ringing in addition to crutching |
8.61 |
8.61 |
For wigging and ringing |
51.67 |
51.67 |
For wigging and ringing in addition to crutching—crutching rate plus |
14.35 |
14.35 |
For cleaning the belly of any ewe above the teats (no more than two blows of the machine |
7.18 |
7.18 |
[23] Two other provisions of the current award are also relevant:
(i) clause 45.2(d) provides that shearers are paid one and a quarter of the rates prescribed in clause 45.1(a) for crutching stud ewes and their lambs; and
(ii) clause 45.1(b) provides that in the context of the shearer’s formula, the rate to be paid for shearing rams (other than special stud rams) and ram stags is double the rate for flock sheep.
[24] At present the Pastoral Award 2010 does not specify a particular rate for crutching rams and ram stags, such work falls into the category of ‘All other crutching’. The AWU is proposing the insertion of an additional provision to the effect that double the minimum rates must be paid for crutching rams and ram stags. The NFF and the Shearing Contractors support the proposed variation. ABI does not oppose a variation in the form sought by the AWU. 10
[25] Two broad lines of argument are advanced in support of the variation proposed:
(i) that the provision sought had been an award provision for many years but was ‘unintentionally omitted’ from the Pastoral Award 2010 in the Part 10A award modernisation process; and
(ii) the provision of double rates for crutching rams and ram stags is appropriate having regard to the nature of the work, the level of skill and responsibility and the conditions under which the work is done.
[26] The claim is supported by the uncontested evidence of four witnesses. 11 It is convenient to first deal with the relevant award history, before turning to the work value justification for the claim and the evidence.
[27] In 1907 O’Connor J, the President of the then Commonwealth Court of Conciliation and Arbitration, made an award in settlement of an industrial dispute in the pastoral industry dealing with, among other things, the rates of pay for shearers. The resultant award included the following term:
‘For shearing rams over six months old the rate shall in each State be double the rate for shearing ordinary flock sheep in that State’. 12
[28] The 1907 award did not deal with crutching, but in 1911 Higgins J made an award between substantially the same parties covering, among other things, shearing and crutching operations. In relation to crutching his Honour said:
‘There is a claim for minimum rates for crutching sheep. The practice of crutching has of late become ‘almost universal’ (according to Dalgety’s Wool Review), because of the spread of the blow fly pest. There was no claim for crutching rates in 1907, and no award on the subject; and, as a result of the want of regulation, the rates follow no definite principle, and the returns induce discontent...
Now, crutching is mostly done by shearers. Crutching is, in fact, a limited shearing; but at least three or four times as many sheep can be crutched as can be shorn at the same time, and the rates should be correspondingly less. On the other hand, the job of crutching the sheep on a station takes a much shorter time than the shearing, and does not give steady earnings for several weeks to the shearer; the time lost in travelling bears a larger proportion to the crutcher’s earnings; and some allowances have to be made on these accounts. The claim for crutching is 6s per 100 with rations, or 7s per 100 without rations; but these figures are obviously pointed to fly crutching. As far as I can make out from the very conflicting figures put before me, a rate of 5s per 100 with rations, or 6s per 100 without rations, could be fairly expected to produce for the average crutcher a weekly net wage of ₤3, including in the ₤3 the 10s for relief of the home. I do not feel justified in prescribing any higher rate as a minimum, but of course it is open to the parties to agree to a higher rate. 6s per 100, without rations, is the usual rate at present of the Federal Sheep Shearing Company, and throughout New South Wales the most general rates are the rates which I prescribe – 5s per 100 with rations, and 6s per 100 without rations. I also provide a minimum for time payment. It is important that the employers should have an option to pay the men by time, as in some cases there are reasons for crutching sheep with exceptional care. I fix the time rate at 11s per day with rations.’ 13
[29] It is to be observed that at that time there was no claim for a higher rate for crutching rams and stag rams, though as his Honour recognised in prescribing a minimum for time payment, ‘in some cases there are reasons for crutching sheep with exceptional care’.
[30] In 1936 Delthridge CJ varied the Pastoral Award in relation to, among other things, the piece rates for crutching. The variation provided for double the flock rates for rams and stag rams, and 25 per cent above the flock rates for stud ewes and their lambs. The variation essentially reflected the agreed position as between the parties, as his Honour noted in his judgment.
‘Employers ask that clause 6 be varied as to add piece-work rates for rams, stud ewes and their lambs. They suggest double flock rates for rams and 25 per cent, about flock rates for the stud ewes and their lambs. The union asks for a similar variation as to rams and ram stags claiming double rates. The clause will be varied as follows:
Order that clause to be varied thus –
Insert as items (8) and (9) in sub-clauses (1) and (2) the following:-
(8) For rams and ram stags double the amounts in the foregoing items (1) to (6) inclusive.
(9) For stud ewes and their lambs one and a quarter of the amount in the appropriate preceding item or items in this sub-clause.’ 14
[31] In 1965 Commissioner Donovan made a new award, in settlement of various disputes, to be known as the Pastoral Industry Award 1965 (the 1965 Award). The new award incorporated various increases in minimum wages, piece rates and allowances, and continued to provide that the rate for crutching rams and ram stags be double the rate prescribed for flock sheep. 15
[32] On 16 June 1987 Commissioner Merriman made an award 16- the Pastoral Industry Award 1986 (the 1986 Award) – which superceded the 1956 Award. The double rate for crutching rams and stag rams remained a term of the 1986 Award (at clause 15(a)(viii)).
[33] The definition of crutching and the piece rate applicable to lighter forms of crutching (eg the ‘New England crutch’) have been the subject of a number of arbitral decisions over the years 17, but the double rate for crutching rams and stag rams remained unaltered until 1996.
[34] It appears that the provision of double rates for crutching rams and ram stags was removed from the 1986 Award by an order of Commissioner Oldmeadow dated 24 June 1996. 18 The order sought to vary the 1986 Award to give effect to the October 1995 Third Safety Net Adjustment and Section 150A Review decision19. Prior to the order clause 15(a)(viii) of the 1986 Award provided:
‘15 Rates for Crutching
The minimum rates for crutching at sheds shall be:
(a) Piecework rates – if ‘not found’ ...
(viii) For rams and ram stags – double the rates prescribed in paragraphs (i) to (vi) ...
(x) For the purpose of this clause ‘ram stags’ and ‘stud ewes’ shall have the meanings given to them respectively in subclause 14(b) of this Award.’
[35] Commissioner Oldmeadow’s order deleted subclause 15(a) in its entirety and replaced it with a provision which omitted subclauses 15(a)(viii) and (x). It appears that the omission of these provisions was inadvertent, there is certainly nothing in the relevant decision to suggest that it was deliberate. 20
[36] On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in relation to the Pastoral Industry Award 1998. 21 Double rates for crutching rams and ram stags were not included in the 1998 Award, presumably because the provision had been removed from the predecessor award (the 1986 Award) in 1996. The transition to pre-reform awards and Australian Pay and Classification Scales from 27 March 2006 under the Work Choices legislative regime meant that the terms of the 1998 Award were effectively preserved. Award modernisation saw the terms of the pre-reform award dealing with rates for crutching adopted in the Pastoral Award 2010. There is no specific mention of crutching rates for rams and ram stags in the Statement22 accompanying the release of the exposure draft for the Pastoral Award 2010 or the subsequent Decision23 to make the Pastoral Award 2010.
[37] It is apparent that until the making of the 1998 Pastoral Industry Award double rates for crutching rams and ram stags had been a long standing award provision. It is also clear from the uncontested evidence of Messrs Hanlon 24; McCalman25; O’Connor26 and O’Hare27 that the current practice in the pastoral industry is that double rates are usually paid for crutching rams and ram stags.
[38] We now turn to the relevant provisions of the Act. As we have mentioned, s.134 (the modern awards objective) is applicable – that is, the Commission must be satisfied that the variation is necessary to ensure that the Pastoral Award 2010, together with the National Employment Standards, provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in s.134(1)(a) to (h), insofar as they are relevant.
[39] Further, when setting, varying or revoking a modern award minimum wages the minimum wages objective is also relevant. The minimum wages objective is set out in s.284, as follows:
‘284 The minimum wages objective
What is the minimum wages objective?
(1) FWC must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.
When does the minimum wages objective apply?
(2) The minimum wages objective applies to the performance or exercise of:
(a) FWC’s functions or powers under this Part; and
(b) FWC’s functions or powers under Part 2-3, so far as they relate to setting, varying or revoking modern award minimum wages.
Note: FWC must also take into account the objects of this Act and any other applicable provisions. For example, if FWC is setting, varying or revoking modern award minimum wages, the modern awards objective also applies (see section 134).
Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern awards, including:
(a) wage rates for junior employees, employees to whom training arrangements apply and employees with a disability; and
(b) casual loadings; and
(c) piece rates.
Meaning of setting and varying modern award minimum wages
(4) Setting modern award minimum wages is the initial setting of one or more new modern award minimum wages in a modern award, either in the award as originally made or by a later variation of the award. Varying modern award minimum wages is varying the current rate of one or more modern award minimum wages.’
[40] The provisions which specifically apply to the Review are in ss 156(3) and (4), which provide as follows:
‘(3) In a 4 yearly review of modern awards, the FWC may make a determination varying modern award minimum wages only if the FWC is satisfied that the variation of modern award minimum wages is justified by work value reasons.
(4) Work value reasons are reasons justifying the amount that employees should be paid for doing a particular kind of work, being reasons related to any of the following:
(a) the nature of the work;
(b) the level of skill or responsibility involved in doing the work;
(c) the conditions under which the work is done.’
[41] The AWU submits that subsections 156(3) and (4) do not apply to its proposal to vary the Pastoral Award 2010 to provide double the minimum rate for crutching rams and ram stags. It is submitted that ss.156(3) and (4) only apply to determinations ‘varying modern award minimum wages’ and that as the AWU’s claim seeks to set a minimum wage for crutching rams and ram stags, ss.156(3) and (4) have no application. It is on that basis that the AWU contends that the relevant statutory provision is the minimum wages objective in s.284.
[42] In support of its submission the AWU points to the difference in language between s.156(3) and s.284. Subsection 156(3) is directed at determinations made in the context of a 4 yearly review ‘varying modern award minimum wages’. The minimum wages objective applies to the Commission’s functions or powers in the Review ‘so far as they relate to setting, varying or revoking modern award minimum wages’ (s.284(2)(b)).
[43] It is plain from s.284(4) that the legislature intended there to be a distinction between setting and varying modern award minimum wages, as distinct meanings have been given to these terms. It follows from the difference in language between s.156(3), which only refers to ‘varying’ minimum wages, and s.284, which refers to ‘setting’, ‘varying’ or ‘revoking’ minimum wages, that there is some force in the AWU’s contention that s.156(3) does not apply to the setting or revoking of modern award minimum wages in the Review. But, for the reasons which follow, it is unnecessary for us to determine that issue in the present proceedings.
[44] Properly characterised the AWU’s proposal is not a claim to set a new modern award minimum wage for the crutching of rams and ram stags. Subsection 284(4) defines the setting of modern award minimum wages in terms of the ‘initial setting of one or more new modern minimum wages’. This is to be contrasted with the varying of modern award minimum wages which is defined as ‘varying the current rate of one or more modern award minimum wages’.
[45] The Pastoral Award 2010 already contains a minimum rate for the crutching of rams and ram stags, such work falls within the category of ‘All other crutching’. The AWU claim seeks to increase the rate currently prescribed for undertaking that work and on that basis is more aptly described as an application seeking a determination ‘varying modern award minimum wages’. Accordingly, contrary to the AWU’s submission, ss.156(3) and (4) are applicable to the claim to increase the minimum rate for crutching rams and ram stags. Further, as such a variation involves the Commission’s functions or powers under Part 2-3, the minimum wages objective is also applicable (s.284(2)).
[46] For completeness we would observe that even if s.156(3) did not apply to the current claim that would not necessarily mean that work value considerations were irrelevant to our consideration of the claim. It seems to us that such matters may well be relevant to the establishment of ‘a safety net of fair minimum wages’, as required by the minimum wages objective (s.284(1)). But it is unnecessary for us to express a concluded view on that issue and we do not propose to do so.
[47] Subsection 156(3) confers a discretion on the Commission to vary modern award minimum wages in a 4 yearly review of modern awards. The discretion is only enlivened if the Commission is satisfied that the variation is ‘justified by work value reasons’.
[48] As s.156(4) makes clear, work value reasons are ‘reasons justifying the amount that employees should be paid or doing a particular kind of work’. Work value reasons are reasons related to any of the following:
‘(a) the nature of the work;
(b) the level of skill or responsibility involved in doing the work;
(c) the conditions under which the work is done.’
[49] The factors identified in s.156(4) are consistent with the considerations which have historically informed work value assessments by the Commission and predecessor tribunals. Such assessments call for the exercise of broad judgment. 28 As Munro J observed in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v HPM Industries29:
‘…experience of work value cases suggests that work value equivalence is a relative measure, sometimes dependent upon an exercise of judgment. A history of such cases would disclose that a number of evaluation techniques have been applied for various purposes and with various outcomes from time to time.’
[50] It is common ground between the NFF, AWU and the Shearing Contractors that the variation of the Pastoral Award 2010 to provide for double rates for the crutching of rams and ram stags ‘is appropriate having regard to the nature of the work, the level of skill and responsibility and the conditions under which the work is done’. 30 The common position of the parties is supported by the uncontested evidence before us. The evidence supports the following findings:
● rams and stag rams are generally better cared for, larger in size and have more wool, than flock sheep; 31
● it takes three to four times longer to crutch rams and stag rams than it takes to crutch flock sheep; 32
● rams and stag rams take longer to crutch than flock sheep because of their size and the care that needs to be taken to ensure that they are not injured. 33
[51] We are satisfied that the variation proposed is justified by work value reasons. We now turn to the minimum wages objective.
[52] The minimum wages objective requires the Commission to ‘establish and maintain a safety net of fair minimum wages’, taking into account the matters in s.284(1)(a) to (e), insofar as they are relevant. The considerations in s.284(1)(a) and (c) are relevant for present purposes.
[53] The impact of an increase in modern award minimum wages on the ‘performance and competitiveness of the national economy’ (s.284(1)(a)) will usually be relevant to the Commission’s consideration of any such claim, though the weight attributed to this matter will depend on the circumstances. In the context of this case it is common ground that the evidence supports a finding that despite the absence of an award provision the prevailing practice is to pay double rates for crutching rams and ram stags. It follows that the economic impact of making the variation proposed will be very limited. In these circumstances, while we have taken into account the matter in s.284(1)(a), we attach little weight to this consideration.
[54] Section 284(1)(c) requires that we take into account ‘relative living standards and the needs of the low paid’. In successive Annual Wage Review decisions the Expert Panel has accepted that award reliant employees who receive a rate of pay (as a full time equivalent) which would place them below two thirds of median adult ordinary time earnings, are ‘low paid’ within the meaning of s.284(1)(c) (and s.134(1)(a)). In the Annual Wage Review
2014-15 decision the Expert Panel provided a table which estimated two-thirds of median weekly earnings based on data from the two main ABS surveys of the distribution of earnings: the Employee Earnings, Benefits and Trade Union Membership (EEBTUM); and the Employee Earnings and Hours survey (EEH). 34
[55] The lack of contemporary data on the earnings of shearers makes it difficult to determine whether they are to be regarded as ‘low paid’ within the meaning of s.284(1)(c) (and s.134(1)(a)). The most recent data available on the earnings of full-time employee shearers appears to be that provided in the ABS, Australian Census of Population and Housing (Census 2011). 35 In the 2011 Census, 1,520 persons identified as being full-time employee shearers, with a further 743 as part-time employee shearers, 90 as employees who were away from work and 78 as employees whose hours of work were not stated.36 The estimated total weekly average personal income of full-time shearers was $945.72, in 2011.37
[56] The EEBTUM shows that two-thirds of median weekly earnings in 2011 was $733.33. 38 The proportion of full-time employee shearers whose total weekly personal income fell below the EEBTUM 2011 two-thirds median weekly earnings threshold of $733.33 was 17.2 per cent, while a further 21.2 per cent of full-time employees had incomes of $600–$799.39 It is not known what proportion of these employees earned below two-third median weekly earnings.
[57] The proportion of shearers below the two-thirds threshold (17.2 per cent) may underestimate the number of full-time employee shearers who are considered low-paid based on the two-thirds median of weekly earnings. The total personal income measure from the 2011 Census captures the total of all wages/salaries, government benefits, pensions, allowances and other income (such as interest) that the persons usually receives. The EEBTUM income measure is based solely on an employee’s wages/salary.
[58] In addition to the data limitations there is little presently before us about the contemporary working patterns and arrangements applicable to shearers. As an occupation shearing has historically had a number of distinct features. As Higgins J observed in 1911:
‘These shearers are wanderers. To get a series of sheds, they usually go to northern sheds first, where the seasons come earlier, and they work southwards towards their homes. It does not pay them usually to have less than three sheds, and to get these in succession they have to follow the course of the sun, from latitude to latitude ...
The first impression given by the large tallies and the large gross earnings of shearers is undoubtedly that the men are very handsomely paid, and employers are apt, very naturally, to fix their minds on that which concerns themselves most – the big amount of money which they have to disburse – rather than on the net returns to the shearer. But the shearer is not a man in the next street to the shed awaiting employment. He has usually to be drawn from considerable distances, and has to be compensated, not only for his time at the shed, but for his time and expenses on the road, and not only for his time of actual work at the shed, but for the time he has to wait at the shed, prevented from working because of wet weather, stoppage of machinery etc.’ 40
[59] While there have clearly been changes in shearing operations since 1911 – notably in technological advances and work organisation – it remains a seasonal and, to some extent, itinerant occupation.
[60] The submissions before us proceeded on the assumption that s.284(1)(c) and (s.134(1)(a)) were relevant and on that basis we are prepared to accept, for present purposes, that at least a significant proportion of shearers are ‘low paid’. The matter may be the subject of further debate in any subsequent proceedings. For present purposes it is sufficient to note that the variation proposed will increase the wages required to be paid to shearers who undertake this work and who are presently paid the ‘All other crutching’ rate specified in the award. As such the variation proposed takes account of the ‘needs of the low paid’.
[61] We turn briefly to the other s.284(1) considerations. We are not persuaded that the matters in s.284(1)(b), (d) and (e) are relevant to this particular issue.
[62] We are satisfied that making the variation proposed will ‘establish…a safety net of fair minimum wages’, as required by the minimum wages objective.
[63] We now turn to the modern awards objective.
[64] We note first that there is a degree of overlap between the considerations set out in ss.134 and 284. The following considerations in each provision are expressed in the same terms:
● relative living standards and the needs of the low paid (s.134(1)(a) and s.284(1)(c));
● the need to promote social inclusions through increased workforce participation (s.134(1)(c) and s.284(1)(b)); and
● the principle of equal remuneration for work of equal or comparable value (s.134(1)(e) and s.284(1)(d)).
[65] Sections 134 and 284 each require the Commission to take into account a range of economic considerations, though they are differently expressed, for instance:
● employment growth and inflation are mentioned as separate considerations under the modern awards objective (s.134(1)(h)), but in the minimum wage objective these factors appear subsidiary to the performance and competitiveness of the national economy (s.284(1)(a)); and
● the modern awards objective requires the Commission to take into account ‘the likely impact of any exercise of modern award powers on … the sustainability, performance and competitiveness of the national economy’ (s.134(1)(h)), whereas the ‘sustainability’ of the national economy is not mentioned in the minimum wages objective.
[66] In the Annual Wage Review 2014–15 decision 41 the Expert Panel considered the effect of these differences in expression and concluded as follows:
‘Despite these textual differences, we accept the thrust of ACCI’s submission, that the underlying intention of the various economic considerations referred to in ss.284 and 134 is that the Panel take into account the effect of its decisions on national economic prosperity and in so doing give particular emphasis to the economic indicators specifically mentioned in the relevant statutory provisions. Such an approach is supported by the object of the Act.’ 42
[67] While the above observation was made in the context of an Annual Wage Review it is also apposite to the matter before us. For the reasons given, the variation of the Pastoral Award 2010 to provide for double rates for crutching rams and ram stags will have very limited impact and in such circumstances the various economic considerations (s.134(1)(f) and (h)) do not weigh against making the variation proposed.
[68] We turn briefly to the other s.134(1) considerations. As we have mentioned in the context of our consideration of the minimum wages objective, we have taken into account the ‘needs of the low paid’ (s.134(1)(a)).
[69] The ‘need to encourage collective bargaining’ (s.134(1)(b)) is a neutral consideration in relation to this claim. No party contended otherwise. No party suggested that the variation of the award to reflect what largely occurs in practice would have any impact on collective bargaining.
[70] We are not persuaded that the matters in s.134(1)(c), (d), (da), (e) and (g) are relevant to this particular claim.
[71] We are satisfied that making the variation proposed is necessary to ensure that the Pastoral Award 2010, together with the National Employment Standards, provides ‘a fair and relevant minimum safety net of terms and conditions’, in accordance with s.134 of the Act.
[72] For the reasons given we are satisfied that the variation proposed is justified by work value reasons; is necessary to meet the modern awards objective; and will ‘establish…a safety net of fair minimum wages’ as required by the minimum wages objective. We will grant the claim sought.
(ii) Learner shearers
[73] The AWU seeks to replace the current term dealing with ‘learner shearers’. The current award provision is:
44.4 Shearers and learner shearers
(a) Shearers will be engaged to shear and/or crutch sheep.
(b) A learner Shearer will be engaged as such on production of proof that they qualify for such status.
[74] The AWU seeks to replace the above provision with the following:
‘44.4 Shearers and learner shearers
Shearers
Shearers will be engaged to shear and/or crutch sheep.
Learner shearers
(i) A learner shall mean a shearer or intending shearer who has not yet shorn five thousand sheep.
(ii) Of every four stands used at shearing operations and in shearing operations where four stands only are used, one at least shall be given to or reserved for a learner who is available at the start of the shed. This does not require a stand to be left vacant if a learner is not available. Provided that A learner who starts in a shed as a learner may continue to be regarded as a learner under this clause for a run of sheds, although he or she becomes a shearer, not a learner, before the run of sheds is completed.
(iii) It shall be obligatory upon such learner to produce to his/her employer or intended employer a certificate, log book or equivalent in the following form showing the number of sheep he or she has shorn:
LEARNER’S CERTIFICATE TO BE PRESENTED AT EACH SHEARING
Issued to ……………………………..
Home address ………………………………
Date of issue of certificate ………………………………….
Age ……………………………………..
Date |
Station |
Total Sheep Shorn |
Average tally per day (whole days) |
Signature of Owner or Manager or Shed Overseer |
Signature of Learner |
Total shorn prior to issue of this certificate |
(iv) The earnings of a learner shearer employed in a shed of four or more stands shall not be less than he or she would have received had he or she been employed for the same period as an adult shed hand, plus a combs and cutters allowance of $19.99 per week. Provided that this guaranteed payment shall only apply to one specified learner where four stands only are used and to one specified learner in every four stands used where more than four stands are used at the shearing. The agreement of such specified learner shall be endorsed “learner” at the time it is signed.’
[75] The underlined words are the subject of some contention between the various parties
[76] The NFF submit that there is merit in helping users to understand and apply the ‘learner shearer’ provisions, including through a definition of ‘learner’ and a mechanism to record the number of sheep shorn for the purpose of applying that definition.
[77] The NFF’s position is that the agreement between the parties 43 is reflected in the draft determination proposed by the AWU. The NFF agrees to the form of words proposed provided the Commission is satisfied that the ‘one in four term’ is a permitted matter. If the Commission is not satisfied on that point then the underlined sections set out above should be deleted to address that consequence.44
[78] The NFF’s principal concern is that some aspects of the proposed learner shearer term may not be about matters that can be included in modern awards under s.136 of the Act. In particular, the first sentence of proposed clause 44.4(ii) requires a fixed minimum allocation of stands for learner shearers. It provides as follows:
‘Of every four stands used at shearing operations and in shearing operations where four stands only are used, one at least shall be given to or reserved for a learner who is available at the start of the shed.’ (the ‘one in four’ term)
[79] The NFF contends that, properly characterised, the ‘one in four’ term is about limiting certain work areas to a particular use. This is said to be different to existing clause 49.7, which deals with the allotment of stands by outlining how stands will be allocated in practice to avoid disputes, without restricting their use during a shearing. So characterised it is submitted that the ‘one in four’ term is not about a matter that must be included in modern awards (ss.143 – 149D) and nor is it about a matter that may be included in modern awards (ss.139 – 141). Further, it is submitted that the ‘one in four’ term is not incidental to any of the subject matters that must or may be included in a modern award and nor is it essential for the purpose of making the term operate in a practical way (s.142); further, the term is more than a machinery term, in that it deals with substantive workplace conditions.
[80] The NFF also observes that the proposed learner shearer terms can operate practically and effectively without any limitation on the use of stands, by defining learner shearer, setting their minimum rate of pay and providing for records to be kept so that whether a person is a ‘learner shearer’ can be readily ascertained.
[81] We note that ABI and Business SA express similar concerns about the ‘one in four’ term.
[82] The Shearing Contractors submit that the inclusion of the ‘one in four term’ would be contrary to the following modern award objectives:
(a) the need to promote flexible workplace practices and the efficient and productive performance of work (s.134(1)(d));
(b) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden (s.134(1)(f); and
(c) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy (s.134(1)(h)).
[83] The Shearing Contractors also contend, in the alternative, that the proposed wording for the ‘one in four’ term be amended, as follows:
(a) delete the words ‘or reserved for’ in subclause 44.4(ii), on the basis that those words contradict the concept of engaging a learner ‘who is available at the start of the shed’; and
(b) insert the words ‘suitable and’ before the word ‘available’ in subclause 44.4(ii), in order to take into account that not every person who presents themselves to an employer as a ‘learner shearer’ may be suitable for the position.
[84] The AWU contends that the ‘one in four’ term is a term which may be included in a modern award on the basis that it is term about ‘career structures’ (one of the matters set out in s.139(1)) or, in the alternative, it is essential for the purpose of making other terms about learner shearers operate in a practical way, as permitted by s.142.
[85] We propose to deal first with the relevant award history before turning to the proposed term and the issue in contention.
[86] An award provision reserving a certain number of pens for ‘learners’ was first introduced in 1917. In Australian Workers Union v Pastoralists’ Federal Council of Australia and others 45, Higgins J determined as follows:
‘Learners
In order to keep up the supply of competent shearers, both sides desire that compulsory provision should be made for the employment of a certain proportion of ‘learners’ – lads who have not shorn at three sheds. The clause which I have framed, for one pen in every ten to be given to or reserved for a learner, is consented by both sides.’ 46
[87] As we mentioned earlier, in 1965 Commissioner Donovan made a new award – the 1965 Award – clause 22 of which dealt with the employment of learners, in the following terms:
22- EMPLOYMENT OF LEARNERS
(a) Herein “learner” means a shearer or intending shearer who has not yet shorn five thousand sheep.
(b) Of every five stands used at shearing operations and in shearing operations where four stands only are used, one at least shall be given to or reserved for a learner. Provided that a learner who starts in a shed as a learner may continue to be regarded as a learner under this clause for a run of sheds, although he becomes a shearer, not a learner before the run of sheds is completed.
(c) It shall be obligatory upon such learner to produce to his employer or intended employer, or any authorised representative of any of the parties to this award, if and when required, a certificate in the following form, showing the number of sheep he has shorn:-
LEARNERS’ CERTIFICATE.
(To be Presented at Each Shearing)
Issued to ....................................................................................
Home address ...........................................................................
Date of issue of certificate ..................................Age .............
Date |
Station |
Total sheep shorn |
Average tally per day (whole days) |
Signature of owner or manager or shed overseer |
Signature of learner |
Total sheep shorn prior to issue of this certificate |
(d) The earnings of a learner employed in a shed of four or more stands shall be not less than the earnings to which he would have been entitled had he been employed for the same period as an adult shed hand, plus an amount of 13s. per week for combs and cutters.
Provided that the foregoing obligation upon the employer to make such guaranteed payment shall only apply to one specified learner where four stands only are used and to one specified learner in every five stands used where five or more stands are used at the shearing. The agreement of such specified learner shall at the time it is signed be endorsed “learner”.
(e) The provisions of this clause shall not apply to stud shearings. 47
[88] The 1965 Award was varied shortly after it was made to change the proportion of stands reserved for learners. Clause 22(b) was varied to provide:
‘Of every four stands used at shearing operations and in shearing operations where four stands only are used, one at least shall be given to or reserved for a learner.’
[89] In the decision which made this variation Commissioner Donovan said,:
‘After considering the submissions of the parties on this matter I have decided to vary the current award so that it will now provide that of every four stands used at shearing operations one at least shall be given to a learner.’ 48
[90] The 1965 Award was later replaced by the 1986 Award. Clause 22 of the 1965 Award – the ‘Employment of Learners’ remained, largely unaltered, as clause 22 of the 1986 Award.
[91] Clause 22 was removed from the Pastoral Award when the award was modernised in 1998. The removal of clause 22 at that time was presumably on the basis that it dealt with a non allowable matter, but it is unclear from the relevant decision. The decision in question dealt with an application by the NFF to vary the 1986 Award pursuant to Item 49 of Part 2 of Schedule 5 of the Workplace Relations and Other Legislation Act 1996. The application was consented to by the employer and union parties to the award. In a short decision dealing with the application Commissioner Merriman states:
‘In respect of this application I am satisfied as to the following matters:
1. The applicant has made reasonable attempts to reach agreement with the other parties to the award about how the award should be varied and about the treatment of matters that are not allowable matters.
2. Once varied in accordance with the application before me the award will deal only with allowable award matters.
3. The application is consistent with the criteria in sub item 7 and 8 of Item 49 of part 2 of Schedule 5 of the WROLA Act 1996.
4. The application is consistent with the Award Simplication Decision principles [Print P7500].’
[92] While it may be inferred from the above extract that the award was varied to remove non allowable matters, there is no specific reference to clause 22.
[93] In relation to the issue in contention, it is common ground that the ‘one in four’ term is not a provision which must be included in a modern award. Hence the issue is whether it is a term which may be included, pursuant to s.139, or whether it is a term permitted by s.142.
[94] The AWU contends that the term is about ‘career structures’ as expressed in s.139(1)(a), which states:
‘(1) A modern award may include terms about any of the following matters:
(a) minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply), and:
(i) skill-based classifications and career structures; and
(ii) incentive-based payments, piece rates and bonuses;...’
[95] The Explanatory Memorandum to what became s.139(1)(a) states:
‘Minimum wages
530. Paragraph 139(1)(a) provides for minimum wages to be included in modern awards. This allows modern awards to include terms about minimum wages, including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply. It would also allow modern awards to include terms about skill based classifications and career structures, incentives based payments, piece rates and bonuses.’
[96] As to s.142, it provides:
142 Incidental and machinery terms
Incidental terms
(1) A modern award may include terms that are:
(a) incidental to a term that is permitted or required to be in the modern award; and
(b) essential for the purpose of making a particular term operate in a practical way.
Machinery terms
(2) A modern award may include machinery terms, including formal matters (such as a title, date or table of contents).
[97] Hence, to be permitted by s.142 we must be satisfied that the ‘one in four’ term is incidental to a term permitted by s.139(1) and is essential for the purpose of making a particular term operate in a practical way.
[98] During the course of the proceedings on 9 December 2015 we indicated that we would be seeking further submissions in relation to this aspect of the learner shearer claim 49 and that is the course we propose to adopt. Directions will be issued shortly setting out the timetable for such submissions and providing interested parties with an opportunity to reply to any submissions filed. We will finalise our consideration of this claim after taking into account any further submissions filed.
(iii) Definition of ‘broadacre field crops’
[99] Clause 4 of the Pastoral Award 2010 deals with the coverage of the award. Subclause 4.1 states:
‘This award applies to employers through Australia in the pastoral industry and their employees in the classifications set out in this award to the exclusion of any other modern award.’ (emphasis added)
[100] The ‘pastoral industry’ is defined in subclause 4.2, relevantly for present purposes, as follows:
‘Pastoral industry means all employers and employees who are engaged in or in connection with:
…(e) the sowing, raising or harvesting of broadacre field crops and other crops grown as part of a broadacre mixed farming enterprise; …’ (emphasis added)
[101] Clause 3.1 defines ‘broadacre field crops’ in the following terms:
‘broadacre field crops means canola, wheat, hay, barley, oats, rice, triticale, maize, millet, chickpeas, cotton, faba beans, lucerne, lupins, pigeon peas, sorghum, soybean, sunflower, and other crops grown as part of a broadacre mixed farming enterprise.’
[102] The definition of ‘broadacre field crops’ also appears in the definition of ‘broadacre mixed farming enterprise’:
broadacre mixed farming enterprise:
[103] The NFF seeks to vary the definition of ‘broadacre field crops’ by replacing the current definition with the following text:
broadacre field crops means grains, seeds, grasses, silage, legumes, fibre, flowers, and other crops grown as part of a broadacre mixed farming enterprise.
[104] To make the change easier to understand, it is also proposed that the following table be included in any annotated version of the Award, once made.
Examples of crops |
Descriptor |
canola, wheat, barley, oats, rice, triticale, maize, millet |
Grains |
canola seed, sunflower seed |
Seeds |
hay, sorghum |
Grasses |
mixed grasses and grains |
Silage |
hay, soybean, pigeon peas, lupins, lucerne, faba beans, chickpeas |
Legumes |
cotton |
Fibre |
sunflowers |
Flowers |
[105] The current definition seeks to define ‘broadacre field crops’ by reference to particular crops – such as canola and wheat – rather than using more generic descriptions such as ‘grains’ and ‘legumes’. The essence of the NFF’s submission is that the current definition is inflexible and does not reflect current farming practice. We agree.
[106] The production of broadacre field crops has increased substantially over the past 20 years. A December 2010 report by the Reserve Bank of Australia on ‘Trends in the Farm Sector’ concluded:
‘The composition of farm production has shifted somewhat towards cropping over the past two decades, with crops now accounting for over half of farm output. Moreover, there have been considerable changes within the cropping and livestock sub industries in response to changes in relative prices, changing preferences and technological advances. In particular, the cropping mix has shifted away from grains in favour of other crops...’ 50
[107] The NFF submits that these developments support the need for flexibility in the provisions of the Pastoral Award 2010 which seeks to define these activities.
[108] The proposed variation is supported by the uncontested evidence of Mr Charlie Thomas. 51 According to Mr Thomas, ‘new and emerging crops are a feature of the Australian pastoral industry’.52 Two examples illustrate this point.
[109] The first is quinoa, a cereal that has recently become fashionable in the Australian consumer market as a ‘super food’. The first Australian commercial quinoa crop was grown in 2007 in Tasmania and seed trials of quinoa commenced in WA in 2013, as part of a Rural Industries Research and Development Corporation (RIRDC) funded project. An RIRDC Report of February 2015 53 concluded that a quinoa industry in Australia was ‘potentially viable’:
‘Presently there is strong demand for the grain and provided suitable varieties and Australian agronomic practices can be developed, a niche industry should be possible.’ 54
[110] In terms of the potential economic value of providing quinoa as a diversification option for farmers, the RIRDC concluded:
‘Significant – quinoa grows in marginal cropping areas and does not require good quality soils.
Quinoa is an annual that can be incorporated into existing crop rotations and used as a diversification option.’ 55
[111] The second example – alkaloid poppies – demonstrates how a new crop can expand over time. Poppies are grown commercially under licence for pharmaceutical production (primarily to produce morphine and related products) and cultivation is subject to a range of regulatory requirements.
[112] In the mid 1970’s Tasmanian Alkaloids Pty Ltd (later a subsidiary of Johnson & Johnson), contracted farmers to grow poppies in Tasmania and built a processing factory in northern Tasmania.
[113] There are now three poppy processors in Tasmania and over 800 growers with a total of 30,000 hectares of poppies under cultivation. The industry employs about 1000 people and grosses in excess of $100 million per annum. Tasmania is considered to be the most efficient (lawful) producer of poppies in the world, with the highest yield per hectare of any opiate producing country. 56 More recently, poppies are being grown commercially in Victoria and the Northern Territory.57
[114] We are satisfied that amending the definition of ‘broadacre field crops’ so that it describes crops grown in the pastoral industry in a generic way will ensure that new and emerging crops are within coverage of the Pastoral Award 2010.
[115] There are special rules in the Act dealing with the variation of coverage terms. Special rules apply to changing the coverage terms of modern awards. Section 163 provides:
‘163 Special criteria relating to changing coverage of modern awards
Special rule about reducing coverage
(1) The FWC must not make a determination varying a modern award so that certain employers or employees stop being covered by the award unless the FWC is satisfied that they will instead become covered by another modern award (other than the miscellaneous modern award) that is appropriate for them.
Special rule about making a modern award
(2) The FWC must not make a modern award covering certain employers or employees unless the FWC has considered whether it should, instead, make a determination varying an existing modern award to cover them.
Special rule about covering organisations
(3) The FWC must not make a modern award, or make a determination varying a modern award, so that an organisation becomes covered by the award, unless the organisation is entitled to represent the industrial interests of one or more employers or employees who are or will be covered by the award.
The miscellaneous modern award
(4) The miscellaneous modern award is the modern award that is expressed to cover employees who are not covered by any other modern award.’
[116] As the claim is for the variation of a modern award, s.163(2) is not relevant as it only applies to the making of a modern award. It is clear from the context that the legislature intended to draw a distinction between varying the coverage of an existing modern award and making a new modern award (compare ss 163(1) and (2), and the use of the words ‘make’ and ‘varying’ in s.163(3)).
[117] In the course of oral argument the NFF confirmed that the proposed change in the definition of ‘broadacre field crops’:
[118] We now turn to the modern awards objective. The considerations in s.134(1)(d), (f), (g) and (h) are particularly relevant. We have taken into account that the proposed variation to the definition of ‘broadacre field crops’ will:
[119] We are satisfied that making the variation proposed is necessary to ensure that the Pastoral Award 2010 achieves the modern awards objective. We will grant the claim sought.
(iv) Annualised salaries
[120] The NFF seeks a variation to the Award to insert a new annualised salaries clause, in the following terms:
‘18 - Annualised salaries
The following provisions are to apply to employees employed in any of the classifications contained in clauses 27, 33 or 39 of the award.
18.1 Annual salary instead of award provisions
(a) An employer may reach agreement with an employee to pay the employee an annual salary in satisfaction of any or all of the following provisions of the award:
(i) clauses 28, 34 and 40—Minimum weekly wages;
(ii) clauses 17 and 29 —Allowances and special allowances;
(iii) clauses 31, 36 and 42 —Overtime and penalty rates;
(iv) clause 23.4 —Annual leave loading; and
(v) clauses 26, 32, 38 and 43 – Payment for public holidays.
(b) Where an annual salary is paid, the employer must retain a written copy of the agreement reached with the employee, which includes the annual salary that is payable and the provisions of this award that will be satisfied by payment of the annual salary as well as the date on which the salary arrangement commences.
18.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.
18.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant minimum wage in clause 28, 34 or 40, whichever is applicable, and excludes any incentive based payments, bonuses, loadings, monetary allowances, overtime and penalties or payment for public holidays.
18.4 The annual salary of the employee will be paid during all periods of paid leave.
[121] The claim is supported by the uncontested evidence of Ms Gracia Kusuma 59. Ms Kusuma is the Industrial Relations Manager of NSW Farmers Association and in that capacity supervises a team which provides advice and assistance to members on workplace relations matters. Some 4500 members have access to this service. The following aspects of Ms Kusuma’s evidence are particularly relevant:
‘5. One of the frequent enquiries we receive relates to reviewing members' proposed employment conditions for their employees from a compliance perspective and subsequently formalising them as employment contracts or Individual Flexibility Agreements.
6. On average based on the team's experience, around 50% of members who seek assistance with drafting or reviewing employment contracts want annualised salary arrangements with their employees.
7. Annualised salary arrangements are preferred by members in certain circumstances because they provide consistency of pay for employees, incentivise employees to complete assigned tasks within normal work hours, and take away the need for clock watching.
8. Farming activities are very much dependent on seasonality, with somewhat predictable peaks and troughs of workload over the course of the year, especially for farmers in cropping and mixed farming. The busiest times are during sowing and harvesting, when work is rostered over 7 days of the week, and long days are common. By the same token, there are times during the year when there is little productive work to be done, for example during wet weather periods and once the harvest is complete.
9. Annualised salary arrangements enable farmers to average work hours over the course of the year, and give employees a stable income. …
15. The majority of farming operations are small businesses. In the case of our membership, around 99% of our members employ 10 or less employees.’
[122] As we have mentioned, s.139(1)(f) permits the inclusion in modern awards of a term about annualised wage arrangements. However, s.139(1)(f) only permits annualised wage arrangements that meet certain criteria (set out in s.139(1)(f)(i) to (iii)), namely arrangements that:
(i) have regard to the patterns of work in an occupation, industry or enterprise;
(ii) provide an alternative to the separate payment of wages and other monetary entitlements; and
(iii) include appropriate safeguards to ensure that individual employees are not disadvantaged.
[123] In support of its claim the NFF submitted that changing patterns of work due to seasonal variability and harvest peaks and troughs are prevalent in the pastoral industry, making it difficult to implement regular rosters and stable payment arrangements in many workplaces. It was submitted that for this reason ‘many employers implement annual salaries arrangements to provide predictability of cashflow and certainty of income for employees...’.
[124] The NFF submits that the proposed variation is necessary to ensure that the Pastoral Award 2010 achieves the modern awards objective:
‘The current working hours in the pastoral industry require flexibility in payment arrangements in the form of an annualised salary that better reflects the practical realities of this industry.’
[125] The proposed clause meets the requirements of s.139(1)(ii) and, on the basis of Ms Kusuma’s uncontested evidence, we are satisfied that the proposed clause has regard to the patterns of work in the pastoral industry (as required by s.139(1)(i)).
[126] However, a modern award can only include a term about annualised wage arrangements that, relevantly, includes ‘appropriate safeguards that ensure that individual employees are not disadvantaged’.
[127] The NFF submits that the proposed variation contains a number of safeguards to ensure that employees are not disadvantaged by the operation of the term, namely:
(i) the arrangement must be agreed in writing;
(ii) employees must receive at least what they would have received over the year under the Award;
(iii) the annual salary rate is payable during all periods of paid leave; and
(iv) the arrangements do not apply to shearing operations.
[128] Before turning to consider whether the proposed term includes ‘appropriate safeguards’ we propose to consider some of the relevant authorities and the legislative context.
[129] During the award modernisation process the Australian Industrial Relations Commission (the AIRC) did not generally insert annualised salary provisions into awards unless there was a widespread history of such provisions in the relevant antecedent instruments. 60 In its decision of 19 December 2008 the AIRC Award Modernisation Full Bench rejected the proposition that annualised payment arrangements be adopted as a general standard in modern awards, for the following reasons:
‘[69] Although annualised wage and salary provisions are a common feature of workplace agreements they are very rare in the Commission’s awards. By far the predominant method of calculating entitlements is weekly, based on ordinary hours, penalties, overtime etc. This is a system with which employees, particularly employees who are safety net dependent, are familiar. No doubt many employees arrange their affairs on that basis. While employers invoked the need for flexibility there is always the potential for employee disadvantage which through fear of reprisal or ignorance employees are unable to correct. There are also some practical problems associated with the concept in industries in which short hour employment is common and in which working hours may vary unpredictably. While flexibility might be important, when safety net entitlements are at issue employers would be required to keep a record of hours in any event to ensure that the annualised pay was sufficient to meet those entitlements. Finally, in some industries employers may be able to implement annualised pay arrangements without breaching the award. We assume that this occurs in many areas of employment already. Annual salaries are of course also a feature of many workplace agreements.
[70] As indicated we have decided not to adopt a standard provision for annualised wages and salaries in modern awards. Where such provisions already exist in relevant awards we have maintained them. The matter could be revisited in one of the regular award reviews which have been foreshadowed. We also note that the Clerks—Private Sector Award 2010 will include an overtime exemption provision which will go part of the way to addressing claims for annualised salaries in that award. We deal with this later. The parties to the Rail Industry Award 2010 agreed that the award should contain an annualised wage and salary provision but could not agree on all of the terms. We deal with that matter later also.’ 61
[130] Only 19 of the 122 modern awards contain an ‘annualised salaries’ term, 62 and in the modern awards which contain such a term it was usually the case that similar provisions were in the relevant pre-modernised instruments. Absent such a historical context the AIRC rejected a number of applications to insert provisions for annualised payment arrangements, for example in the Real Estate Industry Award 201063 and the General Retail Industry Award 201064.
[131] In most instances the annualised payment arrangement term inserted into a modern award reflected the form of such a term in relevant pre-modernised instruments and was included in the modern award by consent, or was unopposed. As a consequence the form and content of such terms was not the subject of much debate during the award modernisation process. There were two exceptions in this regard.
[132] First, in proceedings leading to the making of the Rail Industry Award 2010 the parties generally agreed on the insertion of an annualised salary term but disagreed on its contents. In its decision of 19 December 2008 the Award Modernisation Full Bench addressed this issue, in the following terms:
‘We have accepted the submissions of the parties that annualised salary arrangements are a common feature in the industry and we note that a clause dealing with this matter was contained in drafts proposed by both RSCC and the rail unions. However, they were not in the same terms.
The rail unions submitted that entering into such an arrangement should only be by agreement between the employer and employee concerned. We agree and the clause in the award has been drafted accordingly. Additionally the rail unions sought a provision about assumptions that may have been made about overtime or penalty components to be absorbed into the annualised wage. There is merit in these submissions and our clause reflects them.
We have made a number of other changes to the terms of the clause as contained in the exposure draft. It now provides that a copy of the agreement is to be given to the employee and kept by the employer as a time and wages record. We have also inserted provisions dealing with the manner in which the agreement may be terminated.’ 65
[133] The clause determined by the Award Modernisation Full Bench is at clause 18 – Annualised wage and salary arrangements – of the Rail Industry Award 2010, which states:
18 Annualised wage and salary arrangements
18.1 An employer and an employee may agree to enter into an annualised salary arrangement instead of any or all of the following provisions of this award:
Clause 14—Classifications and minimum wage rates;
Clause 15—Allowances and expenses;
Clause 23—Overtime and penalty rates; and
Clause 24.3—annual leave loading.
18.2 Where an annualised salary is paid the employer must specify in writing the annual salary that is payable and what provisions of this award will not apply as a result of the annualised salary arrangement.
18.3 The annual salary must be no less than the amount the employee would have been entitled to receive under the rates and allowances prescribed by this award. The annual salary is paid in full satisfaction of any obligation to otherwise make payments to the employee under this award and may be relied upon to set off any such obligation, whether of a different character or not.
18.4 In addition to the requirements of clause 18.3, any written agreement under this clause must specify each separate component of the annualised wage or salary arrangement and any overtime or penalty assumptions and calculations commuted into the annualised arrangement.
18.5 The employer must give the employee a copy of the agreement and keep the agreement as a time and wages record.
18.6 The agreement may be terminated:
(a) by the employer or the employee giving 12 months’ notice of termination, in writing, to the other party and the agreement ceasing to operate at the end of the notice period; or
(b) at any time, by written agreement between the employer and the individual employee.
[134] It is to be noted that the clause determined by the AIRC included the following safeguards:
[135] The second instance where the content of the term was contested was in relation to the Clerks-Private Sector Award 2010.
[136] In November 2009 an application was made by the Australian Municipal, Administrative, Clerical and Services Union (ASU) to vary the Clerks-Private Sector Award 2010 to delete the ‘exemption clause’ in the award. In its decision concerning that application the Full Bench said: 66
‘[8] Exemption provisions are clauses expressed in a variety of ways which provide that certain clauses of the award do not apply to particular classes of employees. They are most common in instruments covering “white collar” employment. In some cases they are expressed to exclude the application of particular clauses of the award and in other cases they specify the particular clauses which do apply. The range of matters excluded varies but usually includes clauses dealing with hours of work and overtime. The class of employee to which the exemption provision applies is commonly defined by reference to a particular wage or salary level or a margin above the relevant classification rate. In some cases the right of an employer to remunerate above the exemption provision is not subject to employee agreement. In other cases agreement is required.
[9] The ASU submits that the effect of inserting an exemption provision into the Clerks—Private Sector Award 2010 is to exclude certain employees who are not high income employees from most award provisions.
[10] Employers submit that the exemption provision provides flexibility, particularly in relation to senior employees who tend to be employed to perform the duties of a role rather than the more traditional requirement of spending particular periods of time at work.’
[137] The Full Bench then proceeded to discuss the history of exemption provisions within clerical awards which had operated throughout Australia and made a number of other observations before concluding as follows: 67
‘[25] In all of the circumstances we consider that the exemption provision should be removed but that flexible working arrangements should be available with respect to clerical employment and that these should be subject to appropriate safeguards and processes to ensure that employees clearly understand and agree to any arrangements which may differ from base award entitlements. We propose to delete the exemption provision in cl.17. However, we propose to insert an annualised salaries clause. The wording of the clause is in line with clauses in some other modern awards. It provides for an alternative way to remunerate employees, safeguards against disadvantage and a formal process to establish and maintain the annualised salary arrangement...’
[138] The annualised salaries clause determined by the Award Modernisation Full Bench is clause 17, which states:
17. Annualised salaries
17.1 Annual salary instead of award provisions
(a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award:
(i) clause 16—Minimum weekly wages;
(ii) clause 19 – Allowances;
(iii) clauses 27 and 29 – Overtime and penalty rates; and
(iv) clause 29.3 – Annual leave loading
(b) Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary.
17.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.
17.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in clause 16—Minimum weekly wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.
[139] An annualised salaries clause in the same terms as that inserted in the Clerks—Private Sector Award 2010 was also inserted in the Banking Finance and Insurance Award 2010 68 and in the Mining Industry Award 2010.69
[140] The ASU made a subsequent application to vary clause 17 of the Clerks—Private Sector Award 2010 so that agreement between the employer and employee was required before any such arrangement could be entered into. In its decision dismissing that application the Full Bench said: 70
‘[8] Awards operate in conjunction with contracts of employment. It is generally accepted that clerical employees are commonly remunerated by way of annualised salaries whether the relevant award expressly provides for such arrangements or not. It is also generally accepted that if the salary is expressly paid in compensation of all award entitlements and the amount paid exceeds the amount due under the award then the arrangement is not inconsistent with the award. The intention of the ASU in making its application is that the only arrangements which can legally be entered into are those expressly provided for in the award.
[9] It is apparent that the terms of the relevant awards and NAPSAs were taken into account in formulating the annualised salaries clause in the Commission’s decision of 16 November 2009. We believe that the safeguards in the modern award are appropriate in the circumstances of clerical employment. Further, we are concerned that the variation sought by the ASU may reduce existing flexibility and require changes in practices which have operated for many years. The ASU has not made a case for imposing a limitation on existing arrangements.’
[141] A later Full Bench decision dealt with an application to vary the annualised salaries clause then in the Oil Refining and Manufacturing Award 2010. 71 The Full Bench noted that it was addressing a similar issue to that raised in the Clerks Award decision referred to above, namely whether the agreement of the employee should be required before an employer may pay that employee an annualised salary. The Full Bench decided to insert an annualised salaries clause in the same terms as had been inserted into the Clerks—Private Sector Award 2010, observing that annualised salaries for clerks were widespread in the oil industry and that the clause contained safeguards to ensure an employee is not disadvantaged by being remunerated by way of an annualised salary.72
[142] We note that in both the Clerks Award and the Oil Award the decisions turned on the circumstances pertaining in those industries.
[143] There are a number of other Commission decisions dealing with annualised salaries to which we wish to refer.
[144] As part of the two year review of modern awards pursuant to Item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 1009 (Cth) (the Transitional Review), the ASU made applications to delete the annualised salaries clause in two modern awards – the Contract Call Centres Award 2010 and the Clerks – Private Sector Award 1010. Both applications were heard by Senior Deputy President Kaufman, and dismissed. 73
[145] In his decision in the Clerks – Private Sector Award 2010 the Senior Deputy President made some observations about the scope of the Transitional Review before giving his reasons for dismissing the application:
‘[15] It is apparent that those seeking a variation to a modern award in the 2012 Review must demonstrate that the award is not achieving the modern awards objective, or that it is not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process. Further, it follows, that the variation sought must address one or both of these defects, or that there are other cogent reasons for making the variation as part of the 2012 Review....
[67] The ASU seeks to remove clause 17, the annualised salaries provision, of the Award. This variation is opposed by all parties that have made an application in relation to the review of the Award, as well as the AFEI. The ACTU filed submissions in support of this variation.
[68] In pursuing this variation, the ASU tendered a survey to support the removal of clause 17. The ASU submitted that this survey indicated that a majority of employees surveyed were not given a choice as to whether or not to be paid on this basis, considered that the conditions pertaining to the arrangement had been adequately explained, had never reviewed the arrangement to compare it with award entitlements and would not, given the choice, prefer to be paid in accordance with award conditions.
[69] The ASU further submitted that the survey results showed that just under 5% of those responding believed that their annualised salary arrangement compensate them for entitlements they would otherwise have received under the Award. Approximately one third were unsure.
[70] It is worth noting that the survey tendered was based on the responses of approximately 63 people, which in reality, is a miniscule proportion of those covered by the Award
[71] On 22 October 2012 I declined to delete an annualised salaries clause in the Contract Call Centres Award 2010 (the CCC Award) 11 in the Review of that award12. The ASU had sought the deletion of that clause on similar grounds to those it propounds in this application.
[72] In my reasons for decision I traced the history of the making of the CCC Award, an analysis that required an examination of the history of the insertion of the annualised salaries clause into this Award. Although there are differences in the wording of the clauses in the CCC Award and the Award, their genesis is similar, as is their effect, albeit the clause in the Award applies to all employees covered by it.
[73] The number of award clauses against which an annualised salary can be offset is not the same between the two awards. Nevertheless, for the purposes of the Review, the differences between the two awards are not of such a nature as would lead to a different conclusion.
[74] Apart from the insufficient size of the sample surveyed, the answers given would not persuade me that there is any need to remove the annualised salaries clause from the Award.
[75] In refusing to remove the annualised salaries clause in the Award, I adopt my reasoning in the review of the Contract Call Centres Award 2010.’ 74
[146] The reasoning in respect of a similar application relating to the Contract Call Centres Award 2010, to which his Honour refers above, is as follows:
‘[21] I will treat the ASU submission as being that the variation sought should be made because the inclusion of the annualised salary arrangements clause in the CCC Award prevents it from meeting the modern awards objective in that it “does not provide a ‘fair and relevant minimum safety net of terms and conditions’ with respect to the minimum rates for employees” in the three classifications to which the clause applies, taking account of:
[22] The ASU further submits that the Award does not meet item 6(2)(b) of Schedule 5 of the Transitional Act in that, whilst it contains both an annualised salary arrangements provision and an Award Flexibility provision, the Award does not operate effectively without anomalies or technical problems arising from the Part 10A award modernisation process.
[23] As to the need to encourage collective (“enterprise” is the word used by the ASU) bargaining, the ASU submits that the employees in the three classifications the subject of cl 18.5 have no ability to bargain about the award provisions for which the annualised salary arrangements clause is required to compensate them.
[24] This submission cannot be correct. The mere fact that an annualised salary, with the various award entitlements absorbed into it, is paid does not prevent bargaining about whether an enterprise agreement should contain an annualised salary arrangements clause. Nor does it prevent bargaining about what entitlements of the nature of those set out in cl 18.5(b) should be included in any enterprise agreement, the quantum of any such allowances or which of them should be the subject of any annualised salary arrangements clause.
[25] As to the need to promote social inclusion through increased workforce participation the ASU submits:
In the paper Social Inclusion: Outlining economic implications of social inclusion/exclusion, the Department of Education, Employment and Workplace Relations (DEEWAR) broadly defines social inclusion as focus on social relations and “the extent to which people are able to participate in social affairs and attain power to influence decisions that affect them.” This includes participation in the labour market. There is no opportunity for employees in the higher classifications to participate in the determination of essential award conditions. The greater majority of employees covered by the award are female and non-unionised and are therefore already under-represented in the labour market in regard to both participation and the ability to have a say in the terms and conditions of their work.
[Reference deleted]
[26] This submission is untenable. Whether or not there is an “opportunity for employees in the higher classifications to participate in the determination of award conditions” says nothing about participation in the labour market, has no demonstrated connection with the fact that there is an annualised salary arrangements clause in the Award and ignores the fact that it is the ASU that represented clerical employees in the making of the Award. Further, those employees are not excluded from the coverage of the Award.
[27] Further, I do not consider that the annualised salary arrangements clause is relevant to the need to promote social inclusion, which is one of the matters to be taken into account in ensuring that modern awards provide a fair and relevant minimum safety net of terms and conditions (the modern awards objective).
[28] As to the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards, the ASU submits:
Individual flexibility clauses are included by statute in all modern awards and are intended to provide the appropriate safeguards for an employer and employee to negotiate and genuinely agree to a salary arrangement that will benefit both parties. An annualised salary clause circumvents this process and can create confusion about whether the award flexibility clause or the annualised salary provision should apply.
[29] Clause 7 of the Award deals with award flexibility and applies to all employees covered by the Award. Clause 18.5 only applies to the three highest classifications in the Award. The existence of cl 18.5 does not circumvent the ability of any employee to vary the application of the terms referred to in cl 7. Arguably, in the case of the three highest classifications, the entitlements for which those of them on annual salary arrangements are compensated for by the salary arrangements clauses, 20, 24 and 27.4, could nonetheless be the subject of an individual flexibility agreement. I do not accept the ASU’s submission that these employees are implicitly denied access to the individual flexibility clause, or that they are denied the right to negotiate arrangements to meet their individual needs around when work is performed, overtime rates, penalty rates, allowances and leave loading. No evidence was adduced to the effect that the coexistence of clauses 7 and 18.5 creates “confusion about whether the award flexibility clause or the annualised salary provision should apply.” Each has separate work to do and they are not inconsistent with each other.
[30] Even if I am wrong about ability of the employees in the three highest classifications to negotiate such arrangements, that does not go to the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards. Section 134(1)(g) speaks of unnecessary overlap of modern awards, not of terms within a modern award.
[31] As to the ASU’s submission that whilst the Award contains both an annualised salary arrangements provision and an award flexibility provision, the Award does not operate effectively without anomalies or technical problems arising from the Part 10A award modernisation process, the ASU largely makes the same argument that it does in relation to s 134(1)(g). There is no evidence to support the ASU’s assertions.
[32] As well as submitting that the Award, whilst containing cl 18.5 does not meet the modern awards objective, the ASU submits that there are cogent reasons for its removal and that the provision was not adequately considered by the Australian Industrial Relations Commission “when compared to the consideration given to the Award Flexibility provision.”
The cogent reasons for its removal are said to be “based on the principles of equity, fairness and changed circumstances”, which are that the provision is:
[33] In my view, none of these matters is made out, let alone is has the ASU demonstrated that there is a cogent reason for the removal of the clause. By its nature it is more appropriately applied to employees in the higher classifications. It is not unfair merely because no employee agreement is required. Most award clauses apply absent employee or employer agreement. The award flexibility clause does not do the same work as that done by cl 18.5. I do not accept that such a clause is more appropriate in an enterprise agreement, and whether or not it is, is probably irrelevant to the review…
[39] In the 2012 Review Fair Work Australia must consider whether the Award achieves the modern awards objective. If the Award fails to do so in any respect, then Fair Work Australia must consider whether the proposed variation would render the Award such that it does achieve that objective. In my view the ASU has not established that the Award, because it contains the annualised salaries clause, is not consistent with the modern awards objective. It follows that the deletion of the clause will not achieve, or better achieve, that objective.
[40] It is manifestly undesirable that an Award that resulted from the agreed adoption of the Contract Call Centres Award 2003, which itself was made by consent after lengthy negotiations involving not only the ASU and AiG, but with other unions as well as the ACTU, should not be disturbed in the 2012 Review without, Fair Work Australia being provided with very strong cogent reasons for so doing. This, the ASU has failed to do.
[41] Not only was the Award based on the Contract Call Centre’s consent award, but that award largely replicated another consent award to which the ASU was also a party - the Telecommunications Services Industry Award 2002.
[42] On 5 October 2012, I issued a statement seeking further submissions on the interaction between the common law in relation to offsetting payments against award provisions and the annualised salaries clause.
[43] At a further hearing on 19 October 2012, the ASU maintained its position that the clause should be deleted, as did the employers that it should be retained.
[44] Having heard the parties, I am further confirmed in my view that the clause should not be deleted. Whatever be the position at common law, the current clause provides the parties with certainty as to what may be offset if an annual salary is paid, what procedures must be followed, as well as providing certain safeguards to employees.
[45] In my view the deletion of clause 18 would cause confusion, particularly as to what, if anything, can be offset and as to whether employees could be paid by way of an annual salary at all. Its deletion would also, in my view, disadvantage the employees affected because, as a matter of law, they could be remunerated by way of annualised salaries without any of the protections provided by the clause.
[46] For the above reasons the application is dismissed.’ 75
[147] There was an appeal from his Honour’s decision in the Clerks Award matter. In refusing permission to appeal the Full Bench made some observations about an ACTU submission regarding the proposition that annualised salaries arrangements should be entered into by agreement with the relevant employee and employer:
‘[22] With respect to the ACTU’s submissions, we point out that the “Annualised salaries” clause in the Clerks Award is a base award entitlement, and part of the safety net of terms and conditions provided by the Clerks Award. The safety net in the FW Act being the minimum terms and conditions in the National Employment Standards, modern awards and national minimum wage orders. 76
[23] We also point out the FW Act does not require that the annualised wage arrangements in modern awards provide for the parties’ agreement to such arrangements. We do not think there is any warrant for regarding the words “arrangements” or “alternative” in s.139(1)(f) of the FW Act as incorporating the concept of “agreement”.
[24] Further, we point out that subsequent to the Full Bench decision that included the “Annualised salaries” clause in the Clerks Award, a Full Bench of FWA specifically dealt with an ASU application to vary that “Annualised salaries” clause so as to require the parties’ agreement to an annual salary. The Full Bench of FWA dismissed the ASU application…’ 77
[148] Finally, in Re South East Water Corporation (SE Water) a Full Bench of the Commission inserted an annualised salaries term into the Water Industry Award 2010. 78 The relevant term applies to persons engaged at classification levels 9 and 10 and the Full Bench observed that ‘persons engaged at these two levels are principally in managerial positions and have traditionally been paid by way of an annual salary’.79
[149] In SE Water the form of the clause was in dispute. The applicant employer sought a clause in similar terms to that in the Clerks—Private Sector Award 2010, to which we have referred earlier. The ASU opposed the applicant’s proposed clause describing it as ‘a weak clause with inadequate safeguards’ 80 and submitted that the annualised salaries clauses in a number of other modern awards were to be preferred. The modern awards identified by the ASU included the Rail Industry Award 2010, to which we earlier referred; the Pharmacy Industry Award 2010; the Manufacturing and Associated Industries and Occupations Award 2010; Oil Refining and Manufacturing Award 2010; and the Broadcasting and Recorded Entertainment Award 2010.
[150] The Full Bench made the following observations about the ASU’s submissions:
‘[27] We observe that the clauses in the modern awards referred to by the ASU were inserted by consent of the parties and not the subject of Full Bench scrutiny in any contested hearing. We also observe that to some extent the ASU identifies provisions it submits are superior from a number of awards. It identifies these provisions as containing what it called "inbuilt features" which constitute additional safeguards it submits should be contained in an annualised salaries clause. 81 It summarised those features. They were that the annualised salary must be agreed and in writing, that the parties to it must have genuinely made the agreement without coercion or duress, the components of the annualised salary agreement must be listed, there was to be no disadvantage to the employee, a copy of the agreement must be kept as a time and wages record, there must be annual reviews of the agreement, the employee was entitled to involve a relevant union or an employee nominated representative and, finally, the agreement can be terminated by either party with 12 months' notice or at anytime if agreed.’82
[151] The Full Bench went on to consider the submissions put by the parties and to determine the content of the relevant clause, as follows:
‘[30] Subject to the matters we address in paragraph [32], we have not been persuaded that there is anything about the employers and employees at classification Levels 9 and 10 in the Water Award that warrants a departure by this Full Bench from taking a similar approach to that taken in earlier Full Bench decisions dealing with contested cases about the terms of an annualised salaries clause. The observations made by the Full Benches in the November 2009 Clerks Award decision and the February 2010 Clerks Award decision are equally applicable to this matter. No persuasive submission was made for us to rule in a manner inconsistent with those decisions. Similarly, the decision of the Full Bench in March 2013, which endorsed the comments Senior Deputy President Kaufman had made about the need for a clause in terms similar to those SEW here seeks are also applicable to this application.
[31] We have not been persuaded there is anything about the attributes of the water industry or its administrative and professional employees at the higher classification levels in the Water Award which justifies us departing, in any significant way, from making a ruling consistent with each of the Full Bench decisions we have identified above.
[32] We have, however, decided to introduce three additional requirements into the clause that we have decided should be inserted into the Water Award. They will, to some extent, address the need for the “safeguards” the ASU submitted were necessary. The requirements concern additional details which are to be in writing, including the classification level of the employee, the identification of the date on which the annualised salary arrangement commences and that a copy of the arrangement is to be provided to the employee. Nothing that was put to us in the hearing suggests that these requirements will place any unreasonable burden on employers or employees.
[33] We have not made any reference to the role a union may have. If any employee has concerns about the operation of the clause or their annualised salary arrangement they may raise that concern under clause 9 of the Water Award, the dispute resolution clause. That clause makes it clear that an employee is entitled to have a person, organisation or association represent them in any dispute to which the clause applies. Depending on the nature of the complaint an employee may have, they may also have rights which may be pursued under the general protections provisions of the Act.
[34] We have also not found it necessary to place any additional obligations upon an employer in respect to the written wages records it should keep. In this respect, we note that obligations about the details that must be kept are adequately regulated by Part 3-6 of the Fair Work Regulations 2009.
[35] We have considered the submissions of APESMA opposing the introduction of any annualised salaries clause into the Water Award. For the reasons we have given we were persuaded such a clause was appropriate for employees at the higher classification levels in the Water Award. For the same reasons we do not accept the submission that annualised salaries can adequately be introduced under the terms of clause 7, the award flexibility clause.
[36] We are satisfied that the clause we have decided upon is necessary to achieve the modern awards objective. In this respect it is a clause which is consistent with s.134(1)(d) in that it will promote flexible modern work practices and the efficient and productive performance of work. Consistent with s.134(1)(f) it should have a positive impact on the regulatory burden on employers and reduce employment costs associated with payroll. It should provide to both employers and employees, wishing to enter into an annualised salaries arrangement, a simple and easy to understand provision consistent with s134(1)(g).’ 83
[152] The clause inserted into the Water Industry Award 2010 provides as follows:
14.2 Annualised salaries
The following provisions are to apply to employees employed in classification Levels 9 and 10 in accordance with Schedule B of this award.
14.2.1 Annual salary instead of award provisions
(a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of this award:
(i) clause 14—Minimum wages;
(ii) clause 19—Allowances;
(iii) clauses 25.5 and 26—shiftwork penalty rates and Overtime and;
(iv) clause 27.3—Annual leave loading
(b) Where an annual salary is paid the employer must provide written advice to the employee of the following:
(i) the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary;
(ii) the date on which the salary arrangement commences;
(iii) the award level classification for the role; and
(iv) the terms of clause 14.2.2 of this award.
14.2.2 Annual salary not to disadvantage employees
(a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).
(b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.
14.2.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in clause 14—Minimum wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.
[153] Three general observations may be made about the decisions to which we have referred.
[154] First, the Commission has adopted a cautious approach to the insertion of annualised wage arrangements in modern awards. In the 21 modern awards that contain such a term it was usually the case that similar provisions formed part of the relevant pre-modernised instruments.
[155] Second, the safeguards that have been incorporated in annualised wage arrangement terms in modern awards have varied depending on the circumstances relating to the particular award.
[156] Third, the Review is broader in scope than the Transitional Review and as such is the first real opportunity to fully examine the appropriateness of the safeguards to be incorporated in such terms.
[157] We would also make some particular observations about the SE Water decision, as it is the most recent Full Bench decision dealing with this issue.
[158] The first point is that the SE Water decision is distinguishable from the matter presently before us in the following respects:
[159] The second point is that, contrary to the Full Bench’s observation in SE Water, the annualised salaries term in the Rail Industry Award 2010 was not inserted by consent but rather, as we have set out earlier, was the subject of a contested hearing.
[160] The final point we wish to make about the SE Water decision concerns the observation (at [34] of that decision) that it was unnecessary to specify that written records be kept because that issue was adequately regulated by Part 3-6 of the Fair Work Regulations 2009. For the reasons which follow there is cause to doubt the correctness of that observation.
[161] Employer obligations in relation to employee records and pay are set out in Division 3 of Part 3-6 of the Fair Work Regulations 2009. The requirements in respect of employee records are quite specific. For instance, there is a requirement to keep a copy of an individual flexibility arrangement entered into by an employer and employee (reg. 3.38) and if an employer gives a guarantee of annual earnings under s.330 of the Act, the guarantee is a kind of employee record that the employer must make and keep (reg. 3.39). There is no requirement to make and keep a record of an annualised wage arrangement.
[162] One of the purposes of annualised salaries is to provide income stability in circumstances where the hours worked fluctuates over the course of a year. As Senior Deputy President Polites observed in Re: Energy Developments Limited – AWU Hydrocarbon Gas and Energy Award:
‘... the concept of an annualised salary is that on occasions employees will work less than the notional times provided for in the salary and on occasions they will work more.’ 84
[163] To ensure that employees are not disadvantaged by such arrangements the relevant term usually provides that the annual salary must be no less than the amount the employee would have been entitled to receive under the rates and allowances prescribed by the award. The modern award term may also provide for the review of any annual salary to ensure that it is appropriate having regard to the award provisions which are satisfied by its payment. These two elements are features of the NFF’s proposed clause.
[164] Inherent in these safeguards is the notion that the annualised wage paid can be compared to what the employee would have been paid had all of the provisions of the modern award applied. In other words, to ensure an employee is not disadvantaged the annualised wage paid must be capable of being compared to what the employee would have received if the annualised wage arrangement was not in place. Such a comparison necessarily requires that records be kept of the allowances, overtime and penalty rates that would have been payable.
[165] The difficulty is that where an employee is paid pursuant to an annualised wage term in a modern award it is unclear whether there is a requirement to keep an employee record in respect of, for example, overtime hours worked.
[166] Regulation 3.34 deals with the requirement to make and keep employee records in respect of overtime by an employee, it provides:
3.34 Records—overtime
For subsection 535(1) of the Act, if a penalty rate or loading (however described) must be paid for overtime hours actually worked by an employee, a kind of employee record that the employer must make and keep is a record that specifies:
(a) the number of overtime hours worked by the employee during each day; or
(b) when the employee started and ceased working overtime hours.
Note: Subsection 535(1) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
(emphasis added)
[167] Regulation 3.34 only requires an employee record to be made and kept if ‘a penalty rate … must be paid for overtime hours actually worked by an employee’. The essence of an annualised wage arrangement is that penalty rates for overtime hours do not need to be paid, because they are comprehended within the annualised wage. It would seem to follow that if an annualised wage arrangement is in place then there is no requirement to make and keep an employee record of the number of overtime hours worked by the employee each day.
[168] A similar issue arises in relation to recording any entitlements to allowances or penalty rates. Regulation 3.33 provides as follows:
3.33 Records—pay
(1) For subsection 535(1) of the Act, a kind of employee record that an employer must make and keep is a record that specifies:
(a) the rate of remuneration paid to the employee; and
(b) the gross and net amounts paid to the employee; and
(c) any deductions made from the gross amount paid to the employee.
(2) If the employee is a casual or irregular part-time employee who is guaranteed a rate of pay set by reference to a period of time worked, the record must set out the hours worked by the employee.
(3) If the employee is entitled to be paid:
(a) an incentive-based payment; or
(b) a bonus; or
(c) a loading; or
(d) a penalty rate; or
(e) another monetary allowance or separately identifiable entitlement;
the record must set out details of the payment, bonus, loading, rate, allowance or entitlement.
Note: Subsection 535(1) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
(emphasis added)
[169] As appears to be the case with overtime records, the obligation to make and keep an employee record of allowances or penalty rates only arises if the employee is ‘entitled to be paid’ such payments.
[170] The matters we have identified highlight the need for careful consideration to be given to the ‘appropriate safeguards’ to be incorporated in an annualised wage arrangements term to ‘ensure that individual employees are not disadvantaged’ (as required by s.139(1)(f)(iii)). We propose to give further consideration to this issue. We will issue a Statement in due course setting out some provisional views as to the content of an appropriate annualised wage arrangement term for insertion into the Pastoral Award 2010. Interested parties will be given an opportunity to comment and the matter will be the subject of a further hearing.
(vi) Woolclassers formula
[171] The variation proposed to the ‘woolclassers formula’ is a technical rather than substantive amendment and is intended to resolve an issue which arises when the minimum rates in the award are adjusted following an Annual Wage Review decision. The rates applicable to a woolclasser level 2 illustrate the issue.
[172] Woolclassers are either paid a weekly minimum rate or by a pieceworker rate. Clause 45.8(a) provides that the minimum weekly rate for a woolclasser level 2 is $1298.45. Clause 45.8(a)(ii) sets out how this minimum rate is calculated:
(ii) The woolclasser level 2 minimum weekly rate is arrived at according to the following formula:
$ | |
Base |
755.59 |
Woolrolling and other shed hands work |
75.93 |
Subtotal 1 |
831.52 |
Plus casual loading of 25% (of subtotal 1) |
207.88 |
Subtotal 2 |
1039.40 |
Plus conditions allowance |
107.15 |
Plus enterprise flexibility (including hours) and wet weather allowance |
151.89 |
Total |
1298.44 |
Rounded to the nearest 5 cents |
1298.45 |
[173] The piecework rate applicable to a woolclasser is set out in clause 45.8,:
‘The piecework rate formula is $1298.45 (Woolclasser level 2) divided by 4 = $324.61.’
[174] This piecework rate then applies per 1000 sheep and/or lambs (see clause 45.6(a)).
[175] Clause 45.8(f) contains the formula for calculating various woolclassers’ allowances,:
Employees who do not receive piecework rates may be entitled to the following allowances:
Allowance |
% of standard rate per week |
Conditions |
602.3 |
Enterprise flexibility |
853.8 |
Woolrolling |
426.8 |
Bookkeeping |
277.5 |
[176] While expressed as applying to ‘employees who do not receive piecework rates’ the formula in clause 45.8(f) is in fact also relevant to woolclassers who are remunerated by piecework. This is so because the piecework rate formula is simply a proportion of the minimum weekly rate (see clause 45.8 above), and the weekly rate includes both the base rate and allowances relevant to the woolclasser’s level of skill, experience and responsibility.
[177] The short point is that the allowances applicable to woolclassers are factored into the relevant piecework rate because that rate is calculated by reference to the woolclassers formula (which incorporates the relevant allowances) and the NFF submits that the award should be varied to reflect this position. 85
[178] The NFF seeks a variation to clause 45.8(f) of the Award to replace the following sentence:
(f) Employees who do not receive piecework rates may be entitled to the following allowances:
with:
(f) Woolclassers allowances formula
Allowances payable to Woolclassers under clause 45.8 are calculated in accordance with the following formula:
[179] The approach proposed is consistent with that taken in other parts of the Pastoral Award 2010, where formulas are used to explain how particular rates of pay, including piecework payments, are calculated. For example:
(a) The Shearers’ formula in clause 45.1(a) underpins all other wage rates for shearers in the award; and
(b) The Crutching formula in clause 45.2(c) sets out the calculation of crutching rates for both piecework rates and allowances. The heading to clause 45.2(a) and terms of clause 45.2(b) both make clear that the formula in clause 45.2(c) applies in each case, so that crutching rates are calculated in proportion to the ‘Shearers’ per 100 rate.
[180] The NFF submits that the proposed variation ‘will ensure that the text of the Award reflects both the intention and practical operation of the Woolclassers formula, so that all parties adopt the same formula when calculating adjustments to Woolclassers allowances following the Annual Wage Review’. 86
[181] We now turn to the modern awards objective.
[182] The proposed variation will make the award simpler and easier to understand which takes account of the matter in s.134(1)(g). We are not persuaded that the matters specified in s.134(1)(a), (b), (c), (d), (e), (f) and (h) are relevant to this particular claim.
[183] We are satisfied that the variation proposed is necessary to ensure that the Pastoral Award 2010 achieves the modern awards objective. We will grant the claim sought.
4. Next Steps
[184] For the reasons given we propose to vary the Pastoral Award 2010 to grant the claims made in relation to:
[185] A draft variation determination giving effect to our decision is set out at Attachment 2 and will be posted on the 4 Yearly Review of Modern Awards website. Interested parties will have until 4pm Friday 5 February 2016 to comment on the draft variation determination.
[186] Further submissions are sought in relation to the ‘one in four’ aspect of the AWU’s learner shearer claim. Directions will be issued shortly setting out the timetable for such submissions and providing interested parties with an opportunity to reply to any submissions filed.
[187] In relation to the NFF’s claim to insert an annualised wage arrangements term into the award, we will issue a Statement in due course setting out some provisional views as to the content of such a term. Interested parties will be given an opportunity to comment and the matter will be the subject of a further hearing.
[188] There is one final matter. A typographical error in clause 45.2(d) requires rectification. Clause 45.2(d) provides:
‘For crutching stud ewes and their lambs – one and a quarter of the rates prescribed in clause 45.1(a).’ (emphasis added)
[189] The cross reference to clause 45.1(a) should be to clause 45.2(a). A correction order was made on 12 December 2013, 87 but has not been translated into the published award or the exposure draft. We will take steps to ensure that this is done.
PRESIDENT
<Price code J, PR575275>
Appearances:
S Crawford for The Australian Workers’ Union
S McKinnon for the National Farmers’ Federation
J Arndt for Australian Business Industrial and the New South Wales Business Chamber
Hearing details:
Sydney.
2015.
December 9.
Attachment 1
MATTER AM2014/239 4 yearly review of the Pastoral Award 2010
STATEMENT OF AGREED FACTS BETWEEN THE AWU, NFF AND SCAA REGARDING THE CRUTCHING OF RAMS AND RAM STAGS AND LEARNER SHEARERS
Background
This document contains a statement of agreed facts between the following parties:
● The Australian Workers’ Union (AWU);
● The National Farmers’ Federation (NFF); and
● The Shearing Contractors Association of Australia (SCAA).
The document has been prepared in support of variations sought by the parties on a consent basis to the Pastoral Award 2010 2010.
Crutching rates for rams and ram stags
The parties agree that:
1. The process of crutching is a limited kind of shearing, where wool is removed “from the crutch area of sheep for various purposes, such as to avoid infection from the blowfly; prior to lambing; to treat skin underneath; prior to sale or slaughter” (Pastoral Industry Award 1986, Print J9497, 26 September 1991 at page 1).
2. Double rates for crutching rams and ram stags were first introduced by consent into the Federal Pastoral Award 2010 in 1936.
3. Wage rates under the Pastoral Industry Award 1965 were increased on work value grounds following a decision of McKenzie C of the Australian Conciliation and Arbitration Commission on 29 September 1981 (Pastoral Industry Award, 1965 352/81 MD Print E7720). Double rates for crutching of rams and ram stags were retained in the Award at this time.
4. The task of crutching has been the subject of a number of shed inspections in connection with the Pastoral Award 2010 over the years. In 1989, Deputy President Riordan of the Australian Industrial Relations Commission observed in a decision on crutching rates that: “every conceivable manner of crutching a sheep has been demonstrated in one or other of the proceedings in relation to this disputation” (P143 Dec 793/89 S Print H9979, 26 October 1989 at page 7). The decision retained the double time rate for crutching rams and ram stags.
5. In the same decision, Riordan DP observed (at page 8):
“As a result of the inspections I have reached the conclusion that a major element in the performance of the work, insofar as the time taken to perform it is concerned, relates to the effort in actually getting hold of the sheep and dragging it in a proper manner and positioning it correctly in order to be able to shear the wool required to be removed.”
6. In part, this shows the historical basis for double rates for crutching rams and ram stags - the effort required to crutch a ram or ram stag is greater because of the size and weight of the animal.
7. In addition, for both stud ewes and rams, extra care needs to be taken around the crutch given the importance of the animal as breeding stock.
8. On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in relation to the Pastoral Industry Award 1998. 88 Double rates for crutching rams and ram stags were not included in the 1998 Award.
9. The transition to pre-reform awards and Australian Pay and Classification Scales from 27 March 2006 under the Work Choices regime meant that the terms of the 1998 Award were effectively preserved.
10. From 2010, award modernisation saw the terms of the pre-reform award dealing with rates for crutching adopted in the Pastoral Award 2010 2010.
11. Including double rates for the crutching of rams and ram stags in the Pastoral Award 2010 2010 by reference to wages which have been established on work value grounds over many years is appropriate having regard to the nature of the work, the level of skill and responsibility and the conditions under which work is done.
Learner shearers
The parties agree that:
1. Learner shearer terms have been a feature of the Federal Pastoral Award 2010 for many years.
2. In 1917, the definition of “learner shearer” was “lads who have not shorn at three sheds”. This definition was maintained until 1938, when it was varied to mean “a shearer who has not yet shorn 5000 sheep”.
3. Awarding the variation, Chief Justice Dethridge stated that “the current definition limits unduly the amount of training required” and “a man does not become a fully competent shearer (as distinguished from one who should be deemed still a learner) until he has shorn several thousands of sheep at least in different sheds and in two seasons.”
4. In 1948, guaranteed minimum rates for learner shearers were introduced into the Federal Pastoral Award 2010. Justice Donovan stated that the changes were a “means of giving learners a fairer deal. They have previously found it difficult to make fair wages in their early shearing.” He went on to state that “the new arrangement will attract greater numbers of young men into the industry”. 89
5. As discussed above, wage rates under the Pastoral Industry Award 1965 were increased on work value grounds following a decision of McKenzie C of the Australian Conciliation and Arbitration Commission on 29 September 1981 (Pastoral Industry Award, 1965 352/81 MD Print E7720). Learner shearer minimum rates were retained in the Award at this time.
6. On 30 June 1998, Commissioner Merriman issued the Allowable Matters decision in relation to the Pastoral Industry Award 1998. 90 The definition of learner shearer was retained, but other terms including a guaranteed minimum rate of pay and the reservation of 1 in 4 stands for learners were removed.
7. The transition to pre-reform awards from 27 March 2006 under the Work Choices regime meant that the 1998 terms dealing with learner shearers were effectively preserved.
8. From 2010, award modernisation resulted in the terms of the pre-reform award dealing with learner shearers being reflected in the Pastoral Award 2010 2010.
9. Setting a minimum rate of pay for learner shearers in the Pastoral Award 2010 2010 by reference to wages which have been established on work value grounds over many years is appropriate having regard to the nature of the work, the level of skill and responsibility and the conditions under which work is done.
Attachment 2 – Draft determination
MA000035 PRXXXXXX |
DRAFT DETERMINATION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
PASTORAL AWARD 2010
[MA000035]
Agricultural industry | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, XX MONTH 2016 |
4 yearly review of moderns awards – award stage – review of Pastoral Award 2010 – substantive issues.
A. Further to the Full Bench Decision issued on 24 December 2015 [[2015] FWCFB 8810], the above award is varied as follows:
1. By deleting the definition of ‘broadacre field crops’ in clause 3.1 and inserting the following:
broadacre field crops means grains, seeds, grasses, silage, legumes, fibre, flowers,
and other crops grown as part of a broadacre mixed farming enterprise
2. By deleting clause 45.2(d) and inserting the following:
(d) Special crutching rates
(i) For crutching stud ewes and their lambs – one and a quarter of the rates prescribed in clause 45.2(a).
(ii) For crutching rams and ram stags – double the rates prescribed in clause 45.2(a).
3. By deleting clause 45.8(f) and inserting the following:
(f) Woolclassers allowances formula
Allowances payable to Woolclassers under clause 45.8 are calculated in accordance with the following formula:
Allowance |
% of standard rate per week |
Conditions |
602.3 |
Enterprise flexibility |
853.8 |
Woolrolling |
426.8 |
Bookkeeping |
277.5 |
B. This determination comes into operation from xx month 2016. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect until the start of the first full pay period that starts on or after xx month 2016.
PRESIDENT
5 Ibid
6 National Retail Association v Fair Work Commission [2014] FCAFC 118 at [110]
7 Joint Exhibit 1
8 Rams are male sheep that are more than six months old and ram stags are rams that have been castrated when they are 18 months or older: clause 3 – Definitions and interpretation, Pastoral Award 2010.
9 Pastoral Industry Award 1986, Print J9497, 26 September 1991 at page 1
10 Transcript at paragraph 85
11 Leslie Hanlon, Exhibit AWU 1; Victor McCalman, Exhibit AWU 2; Terry O’Connor, Exhibit AWU 3; and Danny O’Hare, Exhibit AWU 4.
12 Australian Workers’ Union v The Pastoralists’ Federal Council of Australia and others (1905-1907) 1 CAR 62 at 69-70 and 103
13 The Australian Workers Union v The Pastoralists Federal Council and others (1911) 5 CAR 48 at 88-90
14 Grazier’s Association of New South Wales and others v Australian Workers Union (1936) 36 CAR 295 at 296
15 Pastoral Industry – Award-Wages and working conditions (1965) 110 CAR 422 at 443, clause 14(a)(viii)
16 Print G6783
17 eg Graziers Association of New South Wales and others v Australian Workers Union (1937) 37 CAR 449; NSW Farmers’ (Industrial) Association and others v Australian Workers Union, Print J9497, 26 September 1991 per Peterson J, MacBean DP and Grimshaw C.
18 Pint N2255, 24 June 1996 per Oldmeadow C
19 Print M5600
20 See Print N2254, 4 June 1996 per Oldmeadow C
21 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C
22 Award Modernisation Statement [2009] AIRCFB 50 at [24]
23 Award Modernisation Decision [2009] AIRCFB 345 at [54] to [59]
24 Exhibit AWU 1 at paragraph 5
25 Exhibit AWU 2 at paragraphs 7–8
26 Exhibit AWU3 at paragraphs 8–9
27 Exhibit AWU4 at paragraphs 14-15
28 (1972) 147 CAR 172 at 179-180; cited with approval in the Equal Remuneration decision 2015 [2015] FWCFB 8200 at [280]
29 Print Q1002, 19 May 1998
30 Joint Exhibit 1 at paragraph 11
31 O’Hare statement Exhibit AWU 4 at paragraphs 6 and 7
32 Hanlon statement Exhibit AWU 1 at paragraph 7; McCalman statement Exhibit AWU 2 at paragraph 10; and O’Hare statement Exhibit AWU 4 at paragraph 11
33 O’Hare statement Exhibit AWU 4 at paragraphs 8–12
34 Annual Wage Review 2014-15 decision [2015] FWCFB 3500 at paragraph [316]
35 The 2011 Census was identified as the only known source that could provide income data for shearers at the required 4-digit level
36 Australian Bureau of Statistics, Census of Population and Housing, 2011. Employees whose total personal income was not stated, or was negative, were excluded
37 Australian Bureau of Statistics, Census of Population and Housing, 2011
38 ABS, employee Earnings, Benefits and Trade Union membership, Australia, 2011, Catalogue No. 6310
39 Ibid
40 The Australian Workers Union v The Pastoralists Federal Council and others (1911) 5 CAR 48 at 74-75
42 Ibid at [89]
43 ie the AWU, NFF and the Shearing Contractors
44 Transcript at paragraph 19
45 (1917) 11 CAR 409
46 Ibid at 409
47 Pastoral Industry-Award-Wages and working conditions (1965) 110 CAR 422 at 446
48 The Australian Workers’ Union v The Graziers’ Association of New South Wales and others (1967) 121 CAR 454 at 464
49 Transcript at paragraph 92
50 Rayner V. Tan N and Ward N. (2010) ‘Trends in Farm Sector Outputs and Exports’, RBA Bulletin December Quarter 2010 at p.8
51 Exhibit NFF 1
52 Ibid at paragraph 9
53 RIRDC (2015) ‘New and emerging plant industries three year RD & E plan: January 2015 to June 2018, publication No. PRJ-009205; Attachment E to Exhibit NFF 1
54 Ibid at p.40
55 Ibid at p.39
56 Victorian Parliamentary Library and Information Services (2014) Research Brief No. 3: Drugs, Poisons and Controlled Substances (Poppy Cultivation and Processing)Amendment Bill 2013; Attachment D to Exhibit NFF 1
57 Exhibit NFF 1 at paragraph 7
58 Transcript at paragraphs 100-122
59 Exhibit NFF 2
60 Re Application by the National Retail Association to vary the General Retail Industry Award 2010 [2010] AIRCFB 1958 at [6]
61 [2008] AIRCFB 1000 at [69]-[70]
62 Banking, Finance and Insurance Award 2010; Broadcasting and Recorded Entertainment Award 2010; Clerks – Private Sector Award 2010; Contract Call Centres Award 2010; Hospitality Industry (General) Award 2010; Hydrocarbons Industry (Upstream) Award 2010; Legal Services Award 2010; Local Government Industry Award 2010; Manufacturing and Associated Industries and Occupations Award 2010; Marine Towage Award 2010; Mining Industry Award 2010; Oil Refining and Manufacturing Award 2010; Pharmacy Industry Award 2010; Rail Industry Award 2010; Restaurant Industry Award 2010; Salt Industry Award 2010; Telecommunications Services Award 2010; Water Industry Award 2010; Wool Storage, Sampling and Testing Award 2010
65 [2008] AIRCFB 1000 at paragraphs [256]-[258]
67 Ibid at [21].
71 MA000072.
73 Re Contract Call Centres Award 2010 [2012] FWA 9025; Motor Traders’ Association of New South Wales and others [2012] FWA 9731
74 [2012] FWA 9731 at [15], [67]-[75]
75 [2012] FWA 9025 at [21]-[46]
76 Fair Work Act 2009 (Cth) s.139(1)(b)
77 Re Clerks – Private Sector Award 2010 [2010] FWAFB 969
79 Ibid at [22]
80 Ibid at [26]
81 ASU 1 paragraph 7.
82 [2014] FWCFB 5195 at [27]
83 Ibid at [30]-[36]
84 PR915956
85 Transcript at paragraphs 141-143
86 NFF written submission 6 August 2015 at paragraph 78
87 See PR545345
88 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C
Printed by authority of the Commonwealth Government Printer
Judgment – Pastoral Industry (20 August 1948), 31.
90 Re Pastoral Industry Award 1986 Q3186 (30 June 1998) per Merriman C