| [2016] FWCFB 3953 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 24 JUNE 2016 |
4 yearly review of modern awards - common issue - annual leave – draft determinations – finalisation of plain language re-drafts – confirmation of provisional views
● Background
[1] On 23 May 2016 the Full Bench issued a decision 1 (the May 2016 decision) dealing with the variation of modern awards in relation to a number of matters regarding paid annual leave. There were three main aspects to the May 2016 decision.
[2] First, the decision varied particular modern awards to insert the model terms in respect of:
(i) cashing out of annual leave;
(ii) electronic funds transfer and paid annual leave;
(iii) granting annual leave in advance; and
(iv) excessive annual leave.
[3] Draft determinations were published to provide interested parties with an opportunity to comment. A number of submissions were received and these are set out at Attachment A to this decision.
[4] Second, the decision proposed some redrafting of three model terms – cashing out of annual leave; annual leave in advance; and excessive annual leave.
[5] Third, a number of provisional views were expressed regarding the variation of certain modern awards to insert particular model terms.
● The Draft determinations
[6] Attachment 6 to the May 2016 decision set out the modern awards into which particular model terms were to be inserted. Some minor errors were identified in the draft determinations giving effect to the May 2016 decision and these will be corrected in revised draft determinations to be published this week. The award specific matters to be addressed in the revised draft determinations are summarised below:
● Plain language re-drafts
[7] As mentioned above, the May 2016 decision proposed some redrafting of three of the model terms – cashing out of annual leave; annual leave in advance; and excessive annual leave. The changes proposed were intended to make these terms easier to understand, they were not intended to change the substantive effect of any of the model terms.
[8] Attachment 2 to the May 2016 decision is a comparative document comparing the September 2015 annual leave model terms with the May 2016 plain language model terms. For ease of reference this document is set out at Attachment B to this decision.
[9] Submissions were received from Ai Group, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Textile, Clothing and Footwear Union of Australia (TCFUA) in respect of the plain language re-drafts of these model terms. It is convenient to deal with each of the model terms separately and to start with the leave in advance model term.
(i) Leave in advance
[10] Clause 1.1(b)(i) of the May 2016 plain language model term provides as follows:
‘1.1(b) An agreement must:
(i) state the amount of leave to be taken in advance and when it is to be taken; …’
[11] The AMWU submits that clause 1.1(b)(i) should be amended to specify the exact date on which the leave is to be taken. It is submitted that the existing clause 1.1(b)(i) may give rise to ‘imprecise approximations’ (ie ‘two weeks from now’, ‘next month’ etc). The AMWU proposes replacing clause 1.1(b)(i) with the following:
‘1.1(b) An agreement must:
(i) state the amount of leave to be taken in advance and the date on which the leave is to be taken.’ (emphasis added)
[12] We agree that the lack of precision in the current clause 1.1(b)(i) may give rise to problems of the kind suggested by the AMWU. However rather than requiring that an agreement specify ‘the date on which the leave is to be taken’ it makes more sense to refer to the date on which the leave is to commence. We will vary clause 1.1(b)(i) as follows:
‘1.1(b) An agreement must:
(i) state the amount of leave to be taken in advance and the date on which the leave is to commence.’
[13] Ai Group submits that clause 1.1(d) of the May 2016 plain language model term is ‘potentially unclear in its application and operation’. Clause 1.1(d) states:
‘If, on the termination of the employee’s employment, the employee has not accrued an entitlement to a period of paid annual leave already taken in accordance with an agreement under clause 1.1, the employer may deduct from any money due to the employee on termination an amount equal to the amount already paid to the employee in respect of that annual leave taken.’ (emphasis added)
[14] Clause 1.1(a) of the model term permits an employer and employee to agree to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave. Clause 1.1(d) is expressed to apply where ‘the employee has not accrued an entitlement to a period of paid annual leave already taken in accordance with an agreement under clause 1.1’.
[15] The essence of Ai Group’s concern is set out at paragraphs 12 – 13 of its submission of 2 June 2016:
‘We are concerned that clause 1.1(d) does not make clear that it operates in circumstances where an employee has taken leave in advance and the employee has not accrued some or all of the entitlement to that leave. Rather, clause 1.1(d) may be construed as referring to the entire period of paid annual leave already taken, as agreed under clause 1.1(a).
We also raise the following concern arising from the concluding words of the clause. They enable an employer to deduct any amount of money due to an employee on termination that is equal to “the amount already paid to the employee in respect of that annual leave taken”. When read in conjunction with the clause as a whole, the underlined words appear to refer to the entire period of annual leave taken in advance. The provision does not contemplate the subsequent accrual of annual leave by the employee. That is to say, the provision makes no accommodation for the possibility that an entitlement to part of the annual leave taken in advance may since have accrued to the employee.’
[16] Ai Group proposes that clause 1.1(d) be replaced by the following:
‘If the employee’s employment is terminated before they have accrued all of the entitlement to paid annual leave which they have taken, then the employer may deduct an amount equal to the difference between the employee’s accrued annual leave entitlement and the leave taken in advance, from any monies due to the employee on termination.’
[17] The AMWU and TCFUA support the alternate formulation proposed by Ai Group. We agree that the issue raised by Ai Group needs to be addressed, but we do not agree with the means proposed.
[18] The issue here arises from reading the highlighted text in the plain language version (see paragraph [13] above) as referring to the full period of the leave taken in advance, rather than just to the period of any leave taken in advance that has not accrued at the time of termination. We agree that such a reading is reasonably open.
[19] Greater clarity is desirable, but the rewording proposed by Ai Group is not appropriate. If read literally, it provides for a period of leave (’an amount equal to the difference between the ... accrued annual leave ... and the leave taken’) to be deducted from a monetary amount (’any monies due to the employee’). The model term as previously expressed also had this problem.
[20] We will vary clause 1.1(d) as follows:
‘If, on the termination of the employee’s employment, the employee has not accrued an entitlement to all of a period of paid annual leave already taken in accordance with an agreement under clause 1.1, the employer may deduct from any money due to the employee on termination an amount equal to the amount already that was paid to the employee in respect of any part of the period of that annual leave taken in advance to which an entitlement has not been accrued.’
[21] In addition to the issue raised by Ai Group, the TCFUA raises two concerns with the redrafted template agreement for leave in advance.
[22] The redrafted template agreement is in the following terms:
AGREEMENT TO ANNUAL LEAVE IN ADVANCE
Name of employee: _____________________________________________
Name of employer: _____________________________________________
The employer and employee agree that the employee will take a period of paid annual leave before the employee has accrued an entitlement to the leave:
The amount of leave to be taken in advance is: ____ hours/days
The leave will commence on: ___/___/20___
Signature of employee: ________________________________________
Date signed: ___/___/20___
Name of employer
representative: ________________________________________
Signature of employer
representative: ________________________________________
Date signed: ___/___/20___
[If the employee is under 18 years of age - include:] I agree that: if, on termination of the employee’s employment, the employee has not accrued an entitlement to a period of paid annual leave already taken under this agreement, then the employer may deduct from any money due to the employee on termination an amount equal to the amount already paid to the employee in respect of that annual leave taken. Name of parent/guardian: ________________________________________ Signature of parent/guardian: ________________________________________ Date signed: ___/___/20___ |
[23] The first issue raised by the TCFUA concerns the bolded section of the template agreement. It is submitted that the template agreement should be varied to reflect the variation proposed by Ai Group to the model term itself. We accept that the template agreement should be consistent with the model term and we will vary the template agreement accordingly.
[24] The second issue concerns the fourth and fifth paragraphs of the template agreement, namely:
The amount of leave to be taken in advance is: ____ hours/days
The leave will commence on: ___/___/___
[25] The TCFUA submits that while the intention is that the reference to ‘leave’ in paragraph 5 is to the commencement of the ‘leave in advance’, it could be interpreted as annual leave in general, which may include both accrued leave and leave in advance. It is submitted that this is particularly so in circumstances where employees would commonly be familiar with completing leave forms in relation to annual leave which do not distinguish between accrued leave and leave in advance but simply states a period of leave from a specified date to a later date.
[26] The TCFUA propose that paragraph 5 of the template agreement be amended to read:
‘the leave in advance will commence on ___/___20__’.
[27] In our view the issue raised by the TCFUA does not give rise to any real cause for concern, as it should be clear from the context that reference to ‘leave’ in the template agreement means leave in advance. However, we accept that the addition of ‘in advance’ marginally adds to clarity and on that basis we will make the proposed change.
[28] We also take this opportunity to observe that s.326 of the FW Act requires the agreement of a parent or guardian before a deduction can be made from an amount owed to an employee who is under 18 years of age. It is for that reason that the template agreement requires a parent or guardian also to agree to a leave in advance agreement. We have made a similar amendment to clause 1.1(b)(ii) of the model term.
[29] Template agreements have been drafted in respect of leave in advance and the cashing out of leave model terms to assist in reducing the regulatory burden associated with the introduction of these model terms. Variation determinations which insert these model terms will also vary the relevant modern award to insert schedules containing the template agreements. We wish to emphasise that the template agreements are included by way of example and there is no requirement to use them. A note to that effect will be inserted in the relevant model terms.
(ii) Cashing out of leave
[30] The AMWU seeks a change to clause 1.1(d)(ii) of the May 2016 plain language model term, which provides as follows:
‘(d) An agreement under clause 1.2 must state:
(i) the amount of leave to be cashed out and the payment to be made to the employee for it; and
(ii) when the payment is to be made.’
[31] The AMWU submits that the language used in clause 1.1(d)(ii) is ‘broad’ and ‘imprecise’ and proposes that it be replaced by the following:
‘(ii) the date on which the payment is to be made.’ (emphasis added)
[32] We agree that the current wording is somewhat imprecise and will adopt the change proposed by the AMWU.
(iii) Excessive annual leave
[33] The AMWU submits that the expression ‘when any other paid leave arrangements … are taken into account’, in clauses 1.4(b)(i) and 1.5(b)(ii), may cause confusion as it does not specifically refer to paid annual leave entitlements.
[34] We agree. While it is implicit from the context that the model term is referring to other paid annual leave arrangements, it would be better if this was expressly stated. In the interests of consistency the word ‘annual’ will also be added to clause 1.5(c)(i).
[35] The AMWU also propose amending clause 1.5(c)(iv) to include the word ‘other’ before ‘leave arrangement agreed by the employer and employee’, as follows:
‘must not … be inconsistent with any other leave arrangement agreed by the employer and employee.’
[36] The subject of clause 1.5(c) is ‘a notice given by the employee’ requesting to take one or more periods of paid annual leave, which is not a ‘leave arrangement agreed by the employer and employee’. Accordingly, adding ‘other’ would detract from clarity, rather than improving it and for that reason we do not propose to adopt the AMWU’s suggestion.
[37] These three model terms and template agreements have now been finalised. Attachment C sets out marked up final versions of these terms and agreements.
[38] In addition to the above matters Ai Group drew attention to the fact that the draft determinations inserting the excessive annual leave model term did not include the transitional provision determined in the May 2016 decision.
[39] This issue is addressed at paragraphs [83]-[88] of the May 2016 decision. Relevantly, it was determined that any variation determination inserting the model excessive leave term into a modern award will provide that clause 1.5 – Excessive leave accruals: request by employee for leave – commences operation 12 months after the commencement of the balance of the excessive leave model term clauses.
[40] Ai Group proposes that the award clause itself state that subclause operates from a nominated date, which would be 12 months after the commencement of the variation determination. This proposal has the advantage of alerting award users to the date of operation of the provision, but the difficulty is that the award would continue to refer to that operative date, long after the date has passed and the reference has no practical effect.
[41] During the course of the hearing on 8 December 2015 a proposal was discussed which adopted Ai Group’s suggestion, with the addition of a self-executing provision in the variation determination which would remove Ai Group’s proposed provision in 12 months’ time. Ai Group agreed with this proposal and no other party opposed it. 5 Accordingly, that is the basis upon which we propose to proceed and the revised draft determinations will be varied accordingly. An example of how such a provision will operate is set out at Attachment D.
● Provisional views
[42] In the May 2016 decision the Full Bench expressed some provisional views regarding the insertion of certain model terms into particular modern awards. In each instance interested parties were provided with an opportunity to notify the Commission, by 1 June 2016, if they wished to contest the Full Bench’s provisional views in respect of any of these matters. If any expressions of interest were received then directions would be issued for the filing of further submissions and evidence.
[43] On 26 May 2016 those parties who had previously made submissions in relation to the awards which were the subject of the Full Bench’s provisional views were sent a reminder of the 1 June 2016 deadline. Further, AMMA was granted an extension, to 5.00pm on Monday 13 June 2016, within which to consider whether it would contest the provisional views expressed in respect of certain Resource Sector Awards.
[44] No notifications were received by the various due dates. It follows, consistent with the May 2016 decision, that we will now give effect to the provisionally expressed views. As a consequence, the following modern awards will be varied to insert the model excessive leave term:
[45] In relation to the Medical Practitioners Award 2010 the variation determination will include the variation set out at paragraph [199] of the May 2016 decision.
● Next Steps
[46] Draft determinations varying modern awards in accordance with the May 2016 decision and the changes addressed in this decision will be published on the Fair Work Commission website by close of business on Friday 1 July 2016. If any technical issues are identified, parties should email [email protected] by 4.00 pm on Monday 11 July 2016. Determinations will be then be issued in final form.
[47] Further, as outlined in paragraphs [238] and [290] of the May 2016 decision, the following awards have been listed for a further hearing on 1 July 2016:
[48] Directions have been issued in relation to these awards directing interested parties to provide a written outline of their submissions and any evidence upon which they wish to rely by 4.00 pm on Wednesday 29 June 2016. If an interested party no longer opposes the insertion of the model terms into these awards, they should provide this advice in writing prior to the hearing.
[49] Finally, Commissioner Hampton will hold a conference to enable the parties to canvass their respective positions regarding the taking of leave issue in the awards outlined in categories (i) and (ii) at paragraph [123] of the May 2016 decision. This conference will be held on the afternoon of 1 July 2016.
PRESIDENT
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ATTACHMENT A—LIST OF SUBMISSIONS
Organisation |
Document |
Date |
Australian Industry Group |
3 June 2016 | |
Aurizon and others |
3 June 2016 | |
Textile, Clothing and Footwear Union of Australia |
3 June 2016 | |
Australian Manufacturing Workers' Union |
3 June 2016 | |
CFMEU - Mining and Energy Division |
3 June 2016 |
ATTACHMENT B – COMPARATIVE DOCUMENT (extract from May 2016 decision)
The model term—15 September 2015 decision |
May 2016 plain language model terms |
Excessive Annual Leave Accruals (extract from paragraph [172])
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Excessive Annual Leave Accruals The plain language draft sets out the excessive leave accrual provisions under the following subclause headings:
Note: the plain language drafting guidelines do not allow for paragraph headings. |
The model term—Excessive Annual Leave Accruals
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This note does not appear in most recent plain language draft. (Earlier versions included the following: NOTE: A dispute under clause 29.6 may be dealt with in accordance with [insert clause number]—Dispute resolution.) |
1. Excessive Annual Leave Accruals
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29.6 Excessive leave accruals: general provision NOTE: Clauses 29.6 to 29.8, contain provisions, additional to the National Employment Standards, about the taking of paid annual leave as a way of dealing with the accrual of excessive paid annual leave. See Part 2.2, Division 6 of the Fair Work Act. |
1.1 Definitions Shiftworker means [insert definition] |
Definition not replicated – definition of shiftworker moved to clause 29.2 in plain language version. |
An employee has an excessive leave accrual if:
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(a) An employee has an excessive leave accrual if the employee has accrued more than 8 weeks’ paid annual leave (or 10 weeks’ paid annual leave for a shiftworker, as defined by clause 29.2). |
1.2 Eliminating excessive leave accruals (a) Dealing with excessive leave accruals by agreement
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(b) If an employee has an excessive leave accrual, the employer or the employee may seek to confer with the other and genuinely try to reach agreement on how to reduce or eliminate the excessive leave accrual. See further paragraphs 29.7(a) and 29.8(a) below. The plain language version has some additional introductory paragraphs: (c) Clause 29.7 sets out how an employer may direct an employee who has an excessive leave accrual to take paid annual leave. (d) Clause 29.8 sets out how an employee who has an excessive leave accrual may require an employer to grant paid annual leave requested by the employee. |
(b) Employer may direct that leave be taken (i) This subclause applies if an employee has an excessive leave accrual (ii) If agreement is not reached under subclause 1.2(a), the employer may give a written direction to the employee to take a period or periods of paid annual leave. Such a direction must not: |
29.7 Excessive leave accruals: direction by employer that leave be taken (a) If an employer has genuinely tried to reach agreement with an employee under clause 29.6(b) but agreement is not reached (including because the employee refuses to confer), the employer may direct the employee in writing to take one or more periods of paid annual leave. (b) However, a direction by the employer under paragraph (a): |
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(i) is of no effect if it would result at any time in the employee’s remaining accrued entitlement to paid annual leave being less than 6 weeks when any other paid leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; and |
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(ii) must not require the employee to take any period of paid annual leave of less than one week; and |
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(iii) must not require the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the direction is given; and |
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(iv) must not be inconsistent with any leave arrangement agreed by the employer and employee. |
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Paragraph 29.7(c) is shifted to the next page for comparative purposes. (a) An employee to whom a direction has been given under paragraph (a) may request to take a period of paid annual leave as if the direction had not been given. |
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Notes for clause 29.7 appear below 29.7(d): NOTE 1: Paid annual leave arising from a request mentioned in paragraph (d) may result in the direction ceasing to have effect. See clause 29.7(b)(i). NOTE 2: Under section 88(2) of the Fair Work Act, the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave. |
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This is already addressed under Clause 29.7(b)(i) above, which is replicated here for comparative purposes: (v) is of no effect if it would result at any time in the employee’s remaining accrued entitlement to paid annual leave being less than 6 weeks when any other paid leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; |
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(b) The employee must take paid annual leave in accordance with a direction under paragraph (a) that is in effect. |
(i) This subclause applies if an employee has had an excessive leave accrual for more than six months and the employer has not given a direction under subclause 1.2(b) that will eliminate the employee’s excessive leave accrual. (ii) If agreement is not reached under subclause 1.2(a), the employee may give a written notice to the employer that the employee wishes to take a period or periods of paid annual leave. Such a notice must not: |
29.8 Excessive leave accruals: request by employee for leave (a) If an employee has genuinely tried to reach agreement with an employer under clause 29.6(b) but agreement is not reached (including because the employer refuses to confer), the employee may give a written notice to the employer requesting to take one or more periods of paid annual leave. (b) However, an employee may only give a notice to the employer under paragraph (a) if: (i) the employee has had an excessive leave accrual for more than 6 months at the time of giving the notice; and (ii) the employee has not been given a direction under clause 29.7(a) that, when any other paid leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account, would eliminate the employee’s excessive leave accrual. (c) A notice given by an employee under paragraph (a) must not: |
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(i) if granted, result in the employee’s remaining accrued entitlement to paid annual leave being at any time less than 6 weeks when any other paid leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; or |
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(ii) provide for the employee to take any period of paid annual leave of less than one week; or |
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(iii) provide for the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the notice is given; or |
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(iv) be inconsistent with any leave arrangement agreed by the employer and employee. |
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(d) An employee is not entitled to request by a notice under paragraph (a) more than 4 weeks’ paid annual leave (or 5 weeks’ paid annual leave for a shiftworker, as defined by clause 29.2) in any period of 12 months. |
(iv) The employer must grant the employee paid annual leave in accordance with a notice complying with this subclause. |
(e) The employer must grant paid annual leave requested by a notice under paragraph (a). |
Annual leave in advance Extract from paragraph [23] |
Annual leave in advance |
1.
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29.4 Annual leave in advance (a) An employee and employer may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave. (b) An agreement must: |
(a) it is in writing and signed by the employee and employer; |
(ii) be signed by the employee and employer. |
(b) it states the amount of leave to be taken in advance and the date on which the leave is to commence; and |
(i) state the amount of leave to be taken and when it is to be taken; and |
(c) it is retained as an employee record. |
(c) The employer must keep a copy of any agreement under clause 29.4 as an employee record. |
1.2 This subclause applies if an employee takes a period of paid annual leave in advance pursuant to an agreement made in accordance with clause 1.1. If the employee’s employment is terminated before they have accrued all of the entitlement to paid annual leave which they have taken then the employer may deduct an amount equal to the difference between the employee’s accrued annual leave entitlement and the leave taken in advance, from any monies due to the employee on termination. |
(d) If, on the termination of the employee’s employment, the employee has not accrued an entitlement to a period of paid annual leave already taken in accordance with an agreement under clause 29.4, the employer may deduct from any money due to the employee on the termination an amount equal to the amount already paid to the employee in respect of that annual leave taken. |
Cashing Out of Annual Leave Extract from paragraph [16] |
Cashing out of annual leave |
1.
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29.9 Cashing out of annual leave (a) Paid annual leave must not be cashed out except in accordance with an agreement under clause 29.9. |
1.2 An employer and an employee may agree to the employee cashing out a particular amount of the employee’s accrued paid annual leave provided that the following requirements are met: (a) each cashing out of a particular amount of accrued paid annual leave must be by a separate agreement between the employer and the employee which must: |
(c) Each cashing out of a particular amount of paid annual leave must be the subject of a separate agreement under clause 29.9. (c) An employer and an employee may agree in writing to the cashing out of a particular amount of accrued paid annual leave by the employee. (d) An agreement under clause 29.9 must state: |
(i) be in writing and retained as an employee record; |
Paragraph (i) is replicated here for comparative purposes: (i) The employer must keep a copy of any agreement under clause 29.9 as an employee record. |
(ii) state the amount of accrued leave to be cashed out and the payment to be made to the employee; |
(i) the amount of leave to be cashed out and the payment to be made to the employee for it; and |
(iii) state the date on which the payment is to be made, and |
(ii) when the payment is to be made. |
(iv) be signed by the employer and employee and, if the employee is under 18 years of age, the employee’s parent or guardian; |
(e) An agreement under clause 29.9 must be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian. |
(b) the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave at the time that it is cashed out; |
(f) The payment must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made. |
(c) paid annual leave must not be cashed out if the cashing out would result in the employee’s remaining accrued entitlement to paid annual leave being less than four weeks; and |
(g) An agreement must not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks. |
(d) employees may not cash out more than two weeks’ accrued annual leave in any 12 month period. |
(h) The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks. |
Note 1: Under s.344 of the Fair Work Act 2009, an employer must not exert undue influence or undue pressure on an employee to make an agreement to cash out paid annual leave under this award clause. |
NOTE 1: Under section 344 of the Fair Work Act, an employer must not exert undue influence or undue pressure on an employee to make, or not make, an agreement under clause 29.9. |
Note 2: Under s.345 of the Fair Work Act 2009, a person must not knowingly or recklessly make a false or misleading representation about an employee’s workplace rights under this award clause. |
NOTE 2: Under section 345(1) of the Fair Work Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause 29.9. |
ATTACHMENT C— MARKED UP FINAL VERSION OF THE ANNUAL LEAVE MODEL TERMS
1.1 Annual leave in advance
(a) An employer and employee may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave.
(b) An agreement must:
(i) state the amount of leave to be taken in advance and the date on which the leave is to commence when it is to be taken; and
(ii) be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.
Note: An example of the type of agreement required by clause 1.1 is set out at Schedule [ ]. There is no requirement to use the form of agreement set out at Schedule [ ].
(c) The employer must keep a copy of any agreement under clause 1.1 as an employee record.
(d) If, on the termination of the employee’s employment, the employee has not accrued an entitlement to all of a period of paid annual leave already taken in accordance with an agreement under clause 1.1, the employer may deduct from any money due to the employee on termination an amount equal to the amount already that was paid to the employee in respect of any part of the period of that annual leave taken in advance to which an entitlement has not been accrued.
1.2 Cashing out of annual leave
(a) Paid annual leave must not be cashed out except in accordance with an agreement under clause 1.2.
(b) Each cashing out of a particular amount of paid annual leave must be the subject of a separate agreement under clause 1.2.
(c) An employer and an employee may agree in writing to the cashing out of a particular amount of accrued paid annual leave by the employee.
(d) An agreement under clause 1.2 must state:
(i) the amount of leave to be cashed out and the payment to be made to the employee for it; and
(ii) when the date on which the payment is to be made.
(e) An agreement under clause 1.2 must be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.
(f) The payment must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made.
(g) An agreement must not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.
(h) The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks.
(i) The employer must keep a copy of any agreement under clause 1.2 as an employee record.
Note 1: Under section 344 of the Act, an employer must not exert undue influence or undue pressure on an employee to make, or not make, an agreement under clause 1.2.
Note 2: Under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause 1.2.
Note 3: An example of the type of agreement required by clause 1.2 is set out at Schedule [ ]. There is no requirement to use the form of agreement set out at Schedule [ ].
1.3 Excessive leave accruals: general provision
NOTE: Clauses 1.3 to 1.5 contain provisions, additional to the National Employment Standards, about the taking of paid annual leave as a way of dealing with the accrual of excessive paid annual leave. See Part 2.2, Division 6 of the Fair Work Act.
(a) An employee has an excessive leave accrual if the employee has accrued more than 8 weeks’ paid annual leave (or 10 weeks’ paid annual leave for a shiftworker, as defined by clause 1.x).
(b) If an employee has an excessive leave accrual, the employer or the employee may seek to confer with the other and genuinely try to reach agreement on how to reduce or eliminate the excessive leave accrual.
(c) Clause 1.4 sets out how an employer may direct an employee who has an excessive leave accrual to take paid annual leave.
(d) Clause 1.5 sets out how an employee who has an excessive leave accrual may require an employer to grant paid annual leave requested by the employee.
1.4 Excessive leave accruals: direction by employer that leave be taken
(a) If an employer has genuinely tried to reach agreement with an employee under clause 1.3(b) but agreement is not reached (including because the employee refuses to confer), the employer may direct the employee in writing to take one or more periods of paid annual leave.
(b) However, a direction by the employer under paragraph (a):
(i) is of no effect if it would result at any time in the employee’s remaining accrued entitlement to paid annual leave being less than 6 weeks when any other paid annual leave arrangements (whether made under clause 1.3, 1.4 or 1.5 or otherwise agreed by the employer and employee) are taken into account; and
(ii) must not require the employee to take any period of paid annual leave of less than one week; and
(iii) must not require the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the direction is given; and
(iv) must not be inconsistent with any leave arrangement agreed by the employer and employee.
(c) The employee must take paid annual leave in accordance with a direction under paragraph (a) that is in effect.
(d) An employee to whom a direction has been given under paragraph (a) may request to take a period of paid annual leave as if the direction had not been given.
NOTE 1: Paid annual leave arising from a request mentioned in paragraph (d) may result in the direction ceasing to have effect. See clause 1.4(b)(i).
NOTE 2: Under section 88(2) of the Fair Work Act, the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
1.5 Excessive leave accruals: request by employee for leave
(a) If an employee has genuinely tried to reach agreement with an employer under clause 1.3(b) but agreement is not reached (including because the employer refuses to confer), the employee may give a written notice to the employer requesting to take one or more periods of paid annual leave.
(b) However, an employee may only give a notice to the employer under paragraph (a) if:
(i) the employee has had an excessive leave accrual for more than 6 months at the time of giving the notice; and
(ii) the employee has not been given a direction under clause 1.4(a) that, when any other paid annual leave arrangements (whether made under clause 1.3, 1.4 or 1.5 or otherwise agreed by the employer and employee) are taken into account, would eliminate the employee’s excessive leave accrual.
(c) A notice given by an employee under paragraph (a) must not:
(i) if granted, result in the employee’s remaining accrued entitlement to paid annual leave being at any time less than 6 weeks when any other paid annual leave arrangements (whether made under clause 1.3, 1.4 or 1.5 or otherwise agreed by the employer and employee) are taken into account; or
(ii) provide for the employee to take any period of paid annual leave of less than one week; or
(iii) provide for the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the notice is given; or
(iv) be inconsistent with any leave arrangement agreed by the employer and employee.
(d) An employee is not entitled to request by a notice under paragraph (a) more than 4 weeks’ paid annual leave (or 5 weeks’ paid annual leave for a shiftworker, as defined by clause 1.x) in any period of 12 months.
(e) The employer must grant paid annual leave requested by a notice under paragraph (a).
AGREEMENT TO CASH OUT ANNUAL LEAVE
Name of employee: _____________________________________________
Name of employer: _____________________________________________
The employer and employee agree to the employee cashing out a particular amount of the employee’s accrued paid annual leave:
The amount of leave to be cashed out is: ____ hours/days
The payment to be made to the employee for the leave is: $_______ subject to deduction of income tax/after deduction of income tax (strike out where not applicable)
The payment will be made to the employee on: ___/___/20___
Signature of employee: ________________________________________
Date signed: ___/___/20___
Name of employer
representative: ________________________________________
Signature of employer
representative: ________________________________________
Date signed: ___/___/20___
Include if the employee is under 18 years of age: Name of parent/guardian: ________________________________________ Signature of parent/guardian: ________________________________________ Date signed: ___/___/20___ |
AGREEMENT TO ANNUAL LEAVE IN ADVANCE
Name of employee: _____________________________________________
Name of employer: _____________________________________________
The employer and employee agree that the employee will take a period of paid annual leave before the employee has accrued an entitlement to the leave:
The amount of leave to be taken in advance is: ____ hours/days
The leave in advance will commence on: ___/___/20___
Signature of employee: ________________________________________
Date signed: ___/___/20___
Name of employer
representative: ________________________________________
Signature of employer
representative: ________________________________________
Date signed: ___/___/20___
[If the employee is under 18 years of age - include:] I agree that: if, on termination of the employee’s employment, the employee has not accrued an entitlement to all of a period of paid annual leave already taken under this agreement, then the employer may deduct from any money due to the employee on termination an amount equal to the amount Name of parent/guardian: ________________________________________ Signature of parent/guardian: ________________________________________ Date signed: ___/___/20___ |
ATTACHMENT D—
DRAFT DETERMINATIONFair Work Act 2009
s.156 - 4 yearly review of modern awards
PHARMACY INDUSTRY AWARD 2010
[MA000012]
Pharmacy operations | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, XX JULY 2016 |
4 yearly review of modern awards - annual leave common issue.
A. Further to the Full Bench decision issued by the Fair Work Commission on 24 June 2016 6 the above award is varied as follows:
1. By deleting clause 29.4—Paid leave in advance of accrued entitlement and inserting the following:
29.4 Annual leave in advance
(a) An employer and employee may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave.
(b) An agreement must:
(i) state the amount of leave to be taken in advance and when it is to be taken; and
(ii) be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.
Note: An example of the type of agreement required by clause 29.4 is set out at Schedule F. There is no requirement to use the form of agreement set out at Schedule F.
(c) The employer must keep a copy of any agreement under clause 29.4 as an employee record.
(d) If, on the termination of the employee’s employment, the employee has not accrued an entitlement to a period of paid annual leave already taken in accordance with an agreement under clause 29.4, the employer may deduct from any money due to the employee on termination an amount equal to the amount already paid to the employee in respect of that annual leave taken.
2. By inserting clause 29.5 as follows:
29.5 Cashing out of annual leave
(a) Paid annual leave must not be cashed out except in accordance with an agreement under clause 29.5.
(b) Each cashing out of a particular amount of paid annual leave must be the subject of a separate agreement under clause 29.5.
(c) An employer and an employee may agree in writing to the cashing out of a particular amount of accrued paid annual leave by the employee.
(d) An agreement under clause 29.5 must state:
(i) the amount of leave to be cashed out and the payment to be made to the employee for it; and
(ii) when the payment is to be made.
(e) An agreement under clause 29.5 must be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.
(f) The payment must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made.
(g) An agreement must not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.
(h) The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks.
(i) The employer must keep a copy of any agreement under clause 29.5 as an employee record.
Note 1: Under section 344 of the Fair Work Act, an employer must not exert undue influence or undue pressure on an employee to make, or not make, an agreement under clause 29.5.
Note 2: Under section 345(1) of the Fair Work Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause 29.5.
Note 3: An example of the type of agreement required by clause 29.5 is set out at Schedule G. There is no requirement to use the form of agreement set out at Schedule G.
3. By inserting clause 29.6:
29.6 Excessive leave accruals: general provision
NOTE: Clauses 29.6 to 29.8 contain provisions, additional to the National Employment Standards, about the taking of paid annual leave as a way of dealing with the accrual of excessive paid annual leave. See Part 2.2, Division 6 of the Fair Work Act.
(a) An employee has an excessive leave accrual if the employee has accrued more than 8 weeks’ paid annual leave (or 10 weeks’ paid annual leave for a shiftworker, as defined by clause 29.2).
(b) If an employee has an excessive leave accrual, the employer or the employee may seek to confer with the other and genuinely try to reach agreement on how to reduce or eliminate the excessive leave accrual.
(c) Clause 29.7 sets out how an employer may direct an employee who has an excessive leave accrual to take paid annual leave.
(d) Clause 29.8 sets out how an employee who has an excessive leave accrual may require an employer to grant paid annual leave requested by the employee.
4. By inserting a new clause 29.7 as follows:
29.7 Excessive leave accruals: direction by employer that leave be taken
(a) If an employer has genuinely tried to reach agreement with an employee under clause 29.6(b) but agreement is not reached (including because the employee refuses to confer), the employer may direct the employee in writing to take one or more periods of paid annual leave.
(b) However, a direction by the employer under paragraph (a):
(i) is of no effect if it would result at any time in the employee’s remaining accrued entitlement to paid annual leave being less than 6 weeks when any other paid leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; and
(ii) must not require the employee to take any period of paid annual leave of less than one week; and
(iii) must not require the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the direction is given; and
(iv) must not be inconsistent with any leave arrangement agreed by the employer and employee.
(c) The employee must take paid annual leave in accordance with a direction under paragraph (a) that is in effect.
(d) An employee to whom a direction has been given under paragraph (a) may request to take a period of paid annual leave as if the direction had not been given.
NOTE 1: Paid annual leave arising from a request mentioned in paragraph (d) may result in the direction ceasing to have effect. See clause 29.7(b)(i).
NOTE 2: Under section 88(2) of the Fair Work Act, the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
5. By inserting a new clause 29.8 as follows:
29.8 Excessive leave accruals: request by employee for leave
(d) Clause 29.8 comes into operation from XX July 2017.
(b) If an employee has genuinely tried to reach agreement with an employer under clause 29.6(b) but agreement is not reached (including because the employer refuses to confer), the employee may give a written notice to the employer requesting to take one or more periods of paid annual leave.
(c) However, an employee may only give a notice to the employer under paragraph (b) if:
(i) the employee has had an excessive leave accrual for more than 6 months at the time of giving the notice; and
(ii) the employee has not been given a direction under clause 29.7(a) that, when any other paid annual leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account, would eliminate the employee’s excessive leave accrual.
(c) A notice given by an employee under paragraph (b) must not:
(i) if granted, result in the employee’s remaining accrued entitlement to paid annual leave being at any time less than 6 weeks when any other paid annual leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; or
(ii) provide for the employee to take any period of paid annual leave of less than one week; or
(iii) provide for the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the notice is given; or
(iv) be inconsistent with any leave arrangement agreed by the employer and employee.
(d) An employee is not entitled to request by a notice under paragraph (b) more than 4 weeks’ paid annual leave (or 5 weeks’ paid annual leave for a shiftworker, as defined by clause 29.2) in any period of 12 months.
(e) The employer must grant paid annual leave requested by a notice under paragraph (b).
6. By inserting Schedule F—Agreement to Annual Leave in Advance as follows:
AGREEMENT TO ANNUAL LEAVE IN ADVANCE
Name of employee: _____________________________________________
Name of employer: _____________________________________________
The employer and employee agree that the employee will take a period of paid annual leave before the employee has accrued an entitlement to the leave:
The amount of leave to be taken in advance is: ____ hours/days
The leave in advance will commence on: ___/___/20___
Signature of employee: ________________________________________
Date signed: ___/___/20___
Name of employer
representative: ________________________________________
Signature of employer
representative: ________________________________________
Date signed: ___/___/20___
[If the employee is under 18 years of age - include:] I agree that: if, on termination of the employee’s employment, the employee has not accrued an entitlement to all of a period of paid annual leave already taken under this agreement, then the employer may deduct from any money due to the employee on termination an amount equal to the amount that was paid to the employee in respect of any part of the period of Name of parent/guardian: ________________________________________ Signature of parent/guardian: ________________________________________ Date signed: ___/___/20___ |
7. By inserting Schedule F—Agreement to Cash Out Annual Leave as follows:
AGREEMENT TO CASH OUT ANNUAL LEAVE
Name of employee: _____________________________________________
Name of employer: _____________________________________________
The employer and employee agree to the employee cashing out a particular amount of the employee’s accrued paid annual leave:
The amount of leave to be cashed out is: ____ hours/days
The payment to be made to the employee for the leave is: $_______ subject to deduction of income tax/after deduction of income tax (strike out where not applicable)
The payment will be made to the employee on: ___/___/20___
Signature of employee: ________________________________________
Date signed: ___/___/20___
Name of employer
representative: ________________________________________
Signature of employer
representative: ________________________________________
Date signed: ___/___/20___
Include if the employee is under 18 years of age: Name of parent/guardian: ________________________________________ Signature of parent/guardian: ________________________________________ Date signed: ___/___/20___ |
8. By updating the Table of contents and cross-references accordingly.
9. By deleting clause 29.8 and inserting the following:
29.8 Excessive leave accruals: request by employee for leave
(a) If an employee has genuinely tried to reach agreement with an employer under clause 29.6(b) but agreement is not reached (including because the employer refuses to confer), the employee may give a written notice to the employer requesting to take one or more periods of paid annual leave.
(b) However, an employee may only give a notice to the employer under paragraph (a) if:
(i) the employee has had an excessive leave accrual for more than 6 months at the time of giving the notice; and
(ii) the employee has not been given a direction under clause 29.7(a) that, when any other paid annual leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account, would eliminate the employee’s excessive leave accrual.
(c) A notice given by an employee under paragraph (a) must not:
(i) if granted, result in the employee’s remaining accrued entitlement to paid annual leave being at any time less than 6 weeks when any other paid annual leave arrangements (whether made under clause 29.6, 29.7 or 29.8 or otherwise agreed by the employer and employee) are taken into account; or
(ii) provide for the employee to take any period of paid annual leave of less than one week; or
(iii) provide for the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the notice is given; or
(iv) be inconsistent with any leave arrangement agreed by the employer and employee.
(d) An employee is not entitled to request by a notice under paragraph (a) more than 4 weeks’ paid annual leave (or 5 weeks’ paid annual leave for a shiftworker, as defined by clause 29.2) in any period of 12 months.
(e) The employer must grant paid annual leave requested by a notice under paragraph (a).
B. Items 1 to 8 of this determination come into operation from xx July 2016. In accordance with s.165(3) of the Fair Work Act 2009 these items do not take effect until the start of the first full pay period that starts on or after xx July 2016.
C. Item 9 of this determination comes into operation from xx July 2017. In accordance with s.165(3) of the Fair Work Act 2009 this item does not take effect until the start of the first full pay period that starts on or after xx July 2017.
PRESIDENT
2 Ibid at paragraphs [125]-[126]
3 Ibid at paragraphs [166]-[179]
4 Ibid at paragraphs [55]-[56]
5 Transcript 8 December 2015 at paragraphs 694-703
6 [2016] FWCFB 3953; see also [2015] FWCFB 3406, [2015] FWCFB 5771 and [2016] FWCFB 3177