DECISION

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

Alpine Resorts Award 2010
(AM2016/30)

Alpine Resorts Award 2010 - substantive issues concerning coverage

Introduction and background

[1] In the 4 yearly review of the Alpine Resorts Award 2010 (Alpine Award), applications have been made by a number of employers and employer groups to alter the coverage of the award. The primary application has jointly been made by Australian Business Industrial, the NSW Business Chamber and the Thredbo Chamber of Commerce, with the support of the Australian Hospitality Association (primary applicants). This application is opposed by an employer association, the Australian Ski Areas Association (ASAA), and also by the Australian Workers’ Union (AWU), the Shop, Distributive and Allied Employees’ Association (SDAEA) and United Voice. A secondary application has been lodged by the Mount Hotham Alpine Resort Management Board (Mount Hotham Board).

[2] The coverage of the Alpine Award is dealt with in clause 4, Coverage. Only clause 4.1 is relevant to the applications. It provides:

4.1 This industry award covers employers throughout Australia who operate an alpine resort and their employees in the classifications within Schedule B – Classification Definitions to the exclusion of any other modern award.

[3] The expression “alpine resort” used in clause 4.1 is defined in clause 3, Definitions and interpretation as follows:

alpine resort means an establishment whose business, among other things, includes alpine lifting.

[4] The classification structure in the Alpine Award, which is set out in Schedule B, has a training level classification, seven “Resort Worker” classifications, and five classifications for snowsports instructors. The “Resort Worker” classifications encompass a broad range of work functions, including receptionists, bar staff, food service workers, kitchenhands, housekeepers, guest service roles, child care workers, laundry workers, chefs, retail staff, tour guides, lift operators, fitness instructors, plant operators, ski patrollers, beauty therapists, and trade qualified staff in electrical, fitting, mechanical, painting, spray painting, carpentry and building disciplines. 

[5] The application made by the primary applicants, in the final form advanced in a draft determination provided to us at the hearing on 1 November 2017, 1 sought to alter the coverage of the Alpine Award by deleting clause 4.1 and replacing it with the following:

4.1 This industry award covers employers throughout Australia in the Alpine Resorts Industry and their employees who are engaged in an Alpine Region in the classifications within Schedule B – Classification Definitions to the exclusion of any other modern award.

[6] The application sought that the existing definition of “alpine resort” in clause 3 be deleted, and replaced by a new definition of the expression “Alpine Resorts Industry” as follows:

“Alpine Resort Industry” means the industry comprised of the following two kinds of establishments:

(a) those establishments whose business, among other things, includes alpine lifting; and

(b) those establishments which are engaged wholly or principally in the provision of accommodation services, functions/conferences, restaurant/food and beverage services, food retailing and the retail sale and/or hire of snow sports equipment.

[7] It also sought that a new definition, of the expression “Alpine Region”, be added to clause 3 as follows:

“Alpine Region” means:

(a) the area within a 2.5 kilometre radius of :

(I) the Thredbo Village LPO;

(II) the Perisher Valley LPO;

(III) the Charlotte Pass Village;

(IV) the Mount Buller LPO;

(V) the Falls Creek LPO;

(VI) the Mount Hotham Alpine Resort; or

(b) Blue Cow, Smiggin Holes, Guthega, Mount Selwyn, Dinner Plain Alpine Village, Mount Stirling, Mount Baw Baw Village or Ben Lomond.

[8] The purpose of the primary applicants’ application was to bring within the coverage of the Alpine Award (and to remove from the coverage of other modern awards) businesses, primarily accommodation, food, hospitality and retail businesses, and their employees which operate in the vicinity of alpine resorts.

[9] The variation sought by the Mount Hotham Board was contained in a draft determination filed on 30 November 2016. It proposed that clause 4.1 of the Alpine Award be varied to read as follows:

4.1 This industry award covers employers throughout Australia who operate or have statutory responsibility for management and operation of an alpine resort and their employees in the classifications within Schedule A [sic] – Classifications Definitions to the exclusion of any other modern award.

[10] It also proposed that the definition of “alpine resort” in clause 3 be varied to read:

alpine resort means:

(a) Any establishment whose business, among other things, includes alpine lifting; and/or

(b) Any establishment which has statutory responsibility for management and operation of an alpine resort, whether or not that establishment operates an alpine lift.

[11] The purpose of Mount Hotham’s application was to ensure that it and other statutory boards in Victoria which had management or operational responsibility for snow resorts, but which did not themselves necessarily operate an alpine lift, were covered by the Alpine Award.

Evidence of the primary applicants

[12] The primary applicants called evidence from a number of witnesses who operated or managed businesses in the vicinity of alpine resorts.

Nick Cook

[13] Nick Cook 2 was the director of Mount Beauty Supermarket Pty Ltd (MBS), which operates three FoodWorks supermarkets at Falls Creek, Mount Beauty and Yackandandah in Victoria. He was also the director of Nareco Pty Ltd, which operates another FoodWorks supermarket in Myrtleford, Victoria. The Falls Creek FoodWorks is the only grocery store in the village of Falls Creek, where an alpine resort was located. Mr Cook gave evidence that the Falls Creek store is highly seasonal, with the month of January accounting for just three per cent of the store’s annual turnover. He said he had just one staff member employed during the summer months with less operational hours, and in the winter months he employed approximately ten employees full-time, and operated seven days per week. Given the nature of his labour requirements, he employed seasonal staff on a casual basis,. Most of his employees were itinerant workers who worked at the store to cover their living costs while they skied or snowboarded at the resort, and they were provided with heavily subsided accommodation during that period. He stated that it was not uncommon for seasonal employees to request days off mid-week so that they could ski or snowboard when there were smaller crowds on the ski fields.

Jason Moon

[14] Mr Jason Moon 3 owned White Winter Investments Pty Ltd, which operated and owned two businesses in Falls Creek, one being an accommodation business and the other a restaurant. He stated that both of his businesses ran all year round, however most of their revenue was made in the winter months. He estimated that 90% of the revenue for his apartments and 70% of his restaurant revenue was made during the winter months. He gave evidence that during the summer season he had minimal staffing requirements. During the winter season he employed all of his staff on a short term casual basis, which suited his operational needs. It also suited his employees’ needs, as all of his casual staff were on working holidays and worked for him while they skied or snowboarded in their free time. He said that he staffed his employees on the basis of an “open-book” policy, whereby staff requested certain shifts and he allocated them when they were available. He stated that weekends were always the highest requested days to work. He said that he paid all of his casual staff the award rates, plus they also received a number of other benefits including discounted food and drink from his restaurants, season ski passes and accommodation.

Brett Anthony Williams

[15] Brett Anthony Williams 4 was employed by FSCM Pty Ltd in the role of General Manager of Frueauf Village, a large apartment complex in the centre of Falls Creek Village. Mr Williams described the seasonal nature of the work there, and said that all employees were engaged under the Hospitality Industry (General) Award 2010 (Hospitality Award). He gave evidence that throughout the year there was one full time bookings/reservations manager and one casual housekeeper employed, and in the winter months he employed an additional eight casual employees for the increased workload. He said that most of his employees were international workers and that he provided a subsidised rate for their accommodation. Under his rostering arrangements, casual employees were required to work on Friday, Saturday and Sunday, and employees took time off during the week. During cross-examination, Mr Williams stated that he believed that the Alpine Award “probably suits our business better”5 as it had lower base rates on the weekends, which was the busiest time, and would increase profitability. He accepted that there had been an expansion in other businesses outside of the winter season, including cafes and accommodation, due to activities such as mountain biking and hiking, but stated that those activities did not provide profit, just a “little cream”.6 He also stated in cross-examination that under the Hospitality Award he was only allowed to charge employees a maximum amount for their accommodation and he stated he might charge a little bit more if he was covered by the Alpine Award.

Ian Foster

[16] Ian Foster 7 was the owner of Valley Management Pty Ltd, a property management business that managed holiday letting for apartment owners in the Lantern complex at Thredbo. He gave evidence that Lantern’s employees were employed under the Hospitality Award. Lantern employed 7 people all year round, which increased to 10 people in summer and to 17 people in winter. The employees were mainly engaged in cleaning and housekeeping roles working two to four days per week. He stated that half of his seasonal workers were backpackers and the other half were young Australians who wanted to spend time in the ski fields in their down time. He provided subsidised rent to the employees, and most employees who worked for him also worked for other employers in Thredbo on a casual basis. He stated that competitors such as Kosciusko Thredbo Pty Ltd (the operator of the Thredbo alpine resort) owned and operated other businesses within the village. He understood their employees were engaged under the Alpine Award. In cross-examination, Mr Foster stated that he would like his employees to be engaged under the Alpine Award as he believed there were a number of benefits to his business such as a seasonal, part-time classification and a lack of penalty rates for weekend work. He stated that if he was not paying penalty rates he would be able to offer his employees additional benefits for working for him such as lift passes and subsidised accommodation.

Narelle Therese Clark

[17] Narelle Therese Clark 8 was the manager of Cedarwood Apartments, an on-mountain apartment complex located at the top of the Falls Creek Village. She gave evidence that all the apartments in the complex were privately owned. All employees were engaged on a casual basis under the Hospitality Award due to the seasonal nature of the business and the fluctuating cash flow. She stated that because of penalty rates, her employees could make up to $33.00 an hour, and because of these high rates she tried to postpone as many of the Sunday hours to be worked to Mondays instead. She also gave evidence that the high rates of pay on weekends were the biggest issue for her as a business owner. During cross-examination Ms Clark stated that she would like to engage her employees under the Alpine Award so that there was more flexibility for herself and her staff. She understood that her staff would rather work during the weekend and have days off during the week when it was quieter on the ski fields. She also gave evidence that there had been some growth in business during the summer months, and that she had employed an additional casual employee during that period.

Rob Aivatoglou

[18] Rob Aivatoglou 9 was the owner of George’s Ski Hire in the Mount Buller Ski Resort. The business primarily hired out ski and snowboard equipment and accessories, but also had a retail arm where skiing and snowboarding equipment was sold and repaired and which rented out lockers. Mr Aivatoglou stated that his business was only open during the winter season, as it was not commercially viable to be open for the rest of the year. The business employed 12-14 staff on a casual basis under the General Retail Industry Award 2010 (Retail Award), and these employees played a crucial role in his ability to service his customers. He stated that the vast majority of his employees were in Mount Buller to enjoy the winter snow season, and that he subsidised two apartments for their use. He also gave evidence that there was high competition with other companies, and that his business was very heavily impacted by penalty rates on the weekends, as this was when he needed his employees the most. During cross-examination Mr Aivatoglou stated that his competitors did not pay the same rates as he did, which was a significant disadvantage, and he was also only recouping a tiny fraction of the cost of the subsidised housing for his employees. He stated that if he had relief from penalty rates he would make his business more competitive and that he could afford to provide a better service to the client as he could employ more people on Sundays. He did not concede that the summer season was now becoming more popular with summer activities and stated that opening at that time of the year “doesn’t really stack up”.10

Sandra Connor

[19] Sandra Connor 11 was the manager and owner of Black Bear Inn in Thredbo, which was an off-mountain accommodation complex and commercial ski lodge. The business had accommodation facilities, a bar and a restaurant which opens all year round apart from in May and October when there was a lack of visitors and bad weather. She stated that all employees were employed under the Hospitality Award. In summer periods she only had five staff members on the payroll whereas during winter she employed an additional eleven staff members of whom she estimated 75 per cent also skied or snowboarded while at Thredbo. She said that she assisted her employees with discounted lift passes and subsidised accommodation and meals. She gave evidence that Kosciuszko Thredbo Pty Ltd was one of her biggest competitors. It employed staff under the Alpine Award which she considered gave them an advantage. During cross-examination Ms Connor stated that she would like to engage her staff under the Alpine Award as she believed it would reduce operating costs as well as “level the playing field”12 in regards to the employment of staff in the area.

Stephen Gary Pennington

[20] Stephen Gary Pennington 13 was the Director of DPSI General Pty Ltd, which owned and operated a general store in Mount Hotham and a hotel in Dinner Plain. He gave evidence that the general store operated a licensed food and beverage outlet, a post office, a small supermarket, eight accommodation apartments for letting to the general public, staff accommodation and business conference/function facilities. Due to the seasonal nature of activity at Mount Hotham there were, in addition to the two directors, ten employees during the summer period and approximately thirty-eight staff during the peak winter period. The hotel in Dinner Plain which he managed had six staff employed over the non-winter periods and approximately fifteen staff over the winter period. According to Mr Pennington, employees preferred to work evenings and on weekends in order to utilise the weekdays to ski and snowboard when there were no crowds. He also stated that in his experience, a significant number of staff were employed by more than one employer during the winter season. In cross-examination Mr Pennington stated that he applied the Hospitality Award to his employees, but he believed he should be able to apply the Alpine Award to his businesses because they were located in feeder towns to the Mount Hotham alpine resort. He conceded that he had experienced an increase in the number of customers who came to his stores outside of the winter season when going to a music festival or hiking.

Steve Owen

[21] Steve Owen 14 was one of three directors of Thredbo Burger Bar Pty Ltd, a food outlet in Thredbo Village. He gave evidence that the business was highly seasonal. During the summer months it was operated by the directors without any additional staff; however, in the winter months, he employed a further eight or nine casual employees. He stated that the majority of their workforce consisted of young, transient workers who were looking to spend a season in the ski fields, for whom they provided a discounted ski pass, or people from overseas on working holiday visas. He said that there was a lot of competition for staff in the area.

Keith Evanson Archibald

[22] Keith Evanson Archibald 15 was the owner of the Summit Ridge Alpine Lodge in Falls Creek, which consisted of both accommodation facilities and a restaurant. Mr Archibald gave evidence that the industry was very unique and competitive. He engaged all employees under the Restaurant Industry Award 2010 (Restaurant Award). His business was entirely dependent on the winter season, and until 2016 it was only open during the winter season. The business had just started opening over Easter and Christmas, but at Christmas there was only a twenty per cent occupancy rate. He gave evidence that during the winter months he employed nine people on a casual basis and that the winter period was the only time he employed staff. He said that half of his employees were here to work a ski season, while the housekeepers were from Taiwan because, as he stated, “Australian workers don’t work hard enough”. He stated that he was frustrated by Sunday penalty rates as it did not feel like a Sunday in Falls Creek Resort village, and it was more administratively burdensome to pay penalty rates.

Greg Quinn

[23] Mr Gregg Quinn 16 was the director of Chalets Thredbo Pty Ltd, which operated three accommodation businesses in Thredbo. All employees were engaged under the Hospitality Award. He gave evidence that the profitability of the businesses was dependent on the winter snow season. In addition to the eight full-time employees working in the businesses, he employed an extra five casual employees in the summer months an additional 25 casual employees in the winter months. He stated that the employees worked there mainly to enjoy the ski season or were Taiwanese travellers. Guests had to stay either two nights if they arrived on a Friday or five or seven nights if they arrived on a Sunday. He said that guests who would like to book in for two nights on a Monday and Tuesday would currently be refused because of staffing requirements, as the individual owners of the accommodation facilities would only pay his business a fixed fee and refused to pay additional fees for weekend cleaning work. Mr Quinn gave evidence that he faced significant commercial competition from business operated by Kosciuszko Thredbo Pty Ltd, which held the lease of the land until 2057. During cross-examination Mr Quinn stated that he would like to engage his employees under the Alpine Award because of the flexibility that would be provided to him to employ more people for more hours, and because he could potentially change his business model. Currently he only employed people on Fridays and Sundays for those guests who arrived and departed on those days. If the guests would prefer more flexibility, he stated that he could accommodate this under the Alpine Award by not paying penalty rates, which meant he could engage more employees.

John Leggett

[24] Mr John Leggett 17 was the Managing Director of Candlelight Lodge at Thredbo Village, which provided accommodation, a restaurant and a bar to visitors to Thredbo. He gave evidence that although Candlelight Lodge was open year round, the business was highly seasonal with 80 per cent of the revenue being derived in the months July-August. He stated that he engaged additional employees on a casual basis during the peak winter periods, and that those who applied for positions tended to be people who wanted to go skiing or snowboarding during the ski season. He stated that employees liked the flexibility so they could spend as much time up on the mountain when the conditions were good, and he accommodated that as best he could. He gave his employees many other benefits on top of award wages such as accommodation, all meals, and free lift passes or discounted car passes and discounted lift tickets. During cross-examination Mr Leggett stated that he wished to engage his employees under the Alpine Award because he believed it to be simpler, less administratively burdensome in terms of record-keeping with differing rates, and fairer given the special environment in Thredbo. He also stated that his business was profitable.

Emily Slaytor

[25] Ms Emily Slaytor 18 was a lawyer who employed by Australia Business Lawyers & Advisors Pty Ltd, which acted for the primary applicants in the proceedings. She stated that she was instructed to undertake research regarding the number of visitors to different alpine resorts in Australia during 2016. She stated that she contacted the Alpine Resorts Co-ordinating Council (ARCC), the Victorian Alpine Resort Management Boards and the NSW National Parks and Wildlife Service. Her evidence was not cross-examined and showed the seasonality of the seasons in terms of visitors to the parks.

Luis Izzo

[26] Mr Luis Izzo was a lawyer employed by Australia Business Lawyers & Advisors Pty Ltd. He gave evidence that he was required to attend the Perisher Valley Ski Resort for a period of three days for the purpose of taking photographs of lift queues during those days. Mr Izzo’s photos show that the ski lifts were significantly busier, and the queues significantly longer, on the weekend compared to week days.

ASAA Evidence

Gavin Girling

[27] Gavin Girling 19 was employed as the HR Manager of Perisher Blue Pty Ltd. Mr Girling’s statement of evidence gave an overview of the ASAA and its members. Mr Girling said that he had been appointed by the members of the ASAA to be their nominated spokesperson and contact liaison for matters concerning the 4 yearly review. In support of ASAA’s submission regarding the unique nature of the snowsport industry, Mr Girling’s statement dealt with the weather dependent nature of the industry, the short seasonal nature of the industry, the reliance on investment and the changing nature of the climate. Mr Girling’s statement also dealt with the industrial regulation of the snowsport industry in NSW, and set out the history of awards covering the industry.

[28] Mr Girling gave evidence regarding the high cost that alpine lifting businesses bore in order to make ski slopes operable. This was highly dependent on the weather, so that if snow did not fall, alpine lifting businesses depended heavily on snowmaking to stop a loss of revenue, and even snowmaking was reliant on favourable weather conditions. He gave evidence that Perisher’s capital costs in snowmaking totalled approximately $25 million in the last ten years. He also stated that alpine resorts required hundreds of millions of dollars in investment to establish and maintain ski lifts, snowmaking equipment, snow grooming equipment and other necessary infrastructure. Over the last five years alpine lifting businesses had spent an average $13.94 million each on capital investments associated with snowsports operations including ski lifts, snowmaking and building investments.

[29] The alpine lifting companies which were members of the ASAA made 97% of their total revenue in the ski season. He also stated that the alpine resorts had a significant impact on NSW and Victorian economies. It was estimated that in 2014 the alpine resorts had a $1.248 billion positive impact on the state economy of NSW and a $668 million impact on the state economy in Victoria, generating employment for 10,600 employees in NSW in 2015 and 5967 employees in Victoria.

[30] Mr Girling gave a brief history of the Alpine Award, and in particular referred to the 4 September 2009 Award Modernisation Full Bench decision of the AIRC 20 which stated that the seasonal nature of the operations covered by the Alpine Award was “taken into account in relation to the types of employment permitted and the conditions which apply to them, including the pay arrangements”.

[31] During cross-examination Mr Girling gave evidence that employees of alpine resorts need to be versatile so that, for example, employees who were lift operators could also perform cleaning functions. Mr Girling also stated that most employees at the Perisher resort that were engaged in a particular role generally performed work in that role, but at smaller resorts such as Baw Baw, Mount Selwyn and Charlottes Pass the position could be different and employees might need to be more flexible.

Mount Hotham Board’s evidence

Jonathon Hutchins

[32] Jonathon Hutchins 21 was the Chief Executive Officer of the Mount Hotham Board. He gave evidence that the Board was established under s 34(5) of the Alpine Resorts (Management) Act 1997 (Vic) (ARM Act) and acted on behalf of the Crown in carrying out its functions and powers. The ARM Act had the object to make provision for the development, promotion, management and use of alpine resorts on a sustainable basis and in a manner compatible with the alpine environment. The functions of the Mount Hotham Board under the ARM Act included to plan for the development, promotion, management and use of the alpine resort in accordance with the object of the Act, to manage the alpine resort in accordance with the object of the Act, and to provide services in the nature of garbage disposal, water supply, gas, drainage, sewerage, electricity, roads, fire protection and transport for the resort and to charge on a user-pays basis for those services. Pursuant to the ARM Act, the Mount Hotham Board provided water, sewerage, drainage, waste management, snowmaking infrastructure, plant and vehicles and workshops, land management and environmental services, corporate services including emergency management, gas services, and public access and safety including ski patrol, public infrastructure, guest safety, village maintenance, car parks and roads, resort entry and guest information, traffic control, transport, trails and snow play, snow clearing, and cross country trails.

[33] In relation to ski lifts, the Mount Hotham Board entered into a lease with the Mt Hotham Skiing Company Pty Ltd (MHSC) in 1992, under which the company leased land from the Board to operate ski lifts. MHSC operated 13 ski lifts in the resort, and was also responsible for ski instruction by instructors, ski hire and rental and food and beverage and accommodation services to guests. However the Mount Hotham Board retained the responsibility for public safety and ski patrolling, which included the opening, closing and policing of ski slopes and trails, the maintenance of boundaries, and the provision of first aid and transportation to injured patrons and search and rescue of missing persons. MHSC performed snow grooming for the ski areas near the lifts, but the Mount Hotham Board undertook the snow grooming for cross country trails. MHSC operated the snowmaking machines, but the Board provided the water for this. The Mount Hotham Board had recently purchased and operated itself a mechanised indoor ski ramp used for learners.

[34] Mr Hutchins gave evidence that the activities of the Mount Hotham Board were highly dependent on weather conditions and seasonal factors, with the highest number of guests entering the resort during winter in good snow conditions. The variability of winter weather conditions created difficulty in matching employee numbers and rostered employees to meet operational needs. It also had a significant effect on revenue, so that resort entry fees paid would reduce in poor snow conditions. Regardless of visitor numbers, the Mount Hotham Board was still required to expend a consistent amount of money to carry out its functions to operate the resort. The Mount Hotham Board invested heavily in capital works to maintain and upgrade the resort. It employed about 25 full-time staff and 80-100 casual staff during the snow season. The employees included ski patrollers, traffic controllers, bus operators and cleaners, cross-country snow groomers, snow clearers, snow framers, carpark snow cleaners, a snow mobile trainer, a weather and snow reporter, winter tourism information officers, resort entry ticket sellers, car parkers, vehicle accountability officers, roadside assistance, snowplay and toboggan operators, indoor ski/snowboard instructors, a snow events and activities coordinator, a winter community information and activity coordinator, and snow safety community officers. Many of these functions were specialised and required particular qualifications, but some employees were multi-skilled.

[35] Mr Hutchins said he understood that some of the Mount Hotham Board’s workforce fell within classifications under the State Government Agencies Award 2010, but not all fitted within these classifications. The Mount Hotham Resort Management Board Enterprise Agreement 2013 (Mount Hotham Agreement) applied to the employees except those on executive contracts. Clause 1.1(b) of the Mount Hotham Agreement provided that, for the purpose of the better off overall test, it had been matched against the Alpine Award and the State Government Agencies Award. He said that there had been some disputation in enterprise bargaining about which award was the correct reference award, and he hoped the application which the Board had made would clarify the position, but he did not foresee that there would be any saving on labour costs.

Submissions

Primary applicants

[36] The primary applicants submitted that the amended coverage of the Alpine Award which they proposed met the requirements of s 143 of the FW Act, in that it defined the class of employers covered by the award geographically. The proposed geographic boundaries of the award were easy to define because of the extreme topography and climatic conditions associated with alpine resort areas, so that there was little business outside the established boundary of a resort area. The class of employers specified in their draft determination represented a distinct industry, the alpine tourism industry. This industry, as a sub-set of the broader tourism industry, had the following characteristics:

•  it serviced almost exclusively snow sports enthusiasts;

•  it operated at extremely high altitudes;

•  it was subject to extreme weather conditions;

•  it had its own unique accommodation, restaurant and retail characteristics, including ski lockers, flooring suitable for snow and boots, and the stocking of ski-specific sporting equipment; and

•  a defined season of operation, ranging from the long weekend in June to the long weekend in October.

[37] It was submitted that in conducting the award modernisation exercise in 2009, the AIRC had recognised the existence of a “snowsports industry”, but did not give any detailed consideration as to what that encompassed or whether it was an accurate reflection of the alpine tourism industry. The submissions of the ASAA in the award modernisation process of 6 March 2009 contended that a stand-alone award should be made to cover alpine resorts because of the flexibility required due to the seasonal and weather-dependent nature of the industry, the unique nature of the snowsports industry, the consequent high variability in staff number, the degree to which tourism levels were dependent on the quantum of snow falls, and the requirement to perform work in extreme climatic conditions requiring specialised skills. Its submissions of 8 April 2009 also referred to the fact that terms and conditions had been negotiated over a number of years with the AWU, the amount of work depended on the snow conditions on a particular day, weekends were the busiest times at the resorts, and the work was undertaken by snow sports enthusiasts who wished to have the flexibility to work on weekends and ski on weekdays. The ASAA’s further submissions of 7 July 2009 also contended that a stand-alone Alpine Resorts Award should be made because the creation of alpine lifting facilities required major capital investment, flexibility was required to re-allocate work when snow conditions were poor, and staff preferred to work on weekends to maximise skiing experiences outside peak periods. The AIRC Full Bench decisions in the award modernisation process which led to the making of the Alpine Award showed that reliance was placed on the fact that employees were engaged in a wide range of occupational groupings, there was considerable fluctuating demand for employee skills and services with peaks during weekends and public holidays, and that the industry was marked by a high level of casual and seasonal employment and flexible hours of work. The AIRC did not take into account the capital investment of resorts in ski lifting equipment.

[38] The primary applicants submitted that, on the evidence, the alpine tourism businesses it represented had the same characteristics that were identified as specific to alpine resorts:

•  their operations were seasonal in nature, in that visitor numbers in the areas in which they operated had a very large peak in July and August and a smaller peak in September, and occupancy rates in alpine accommodation and revenue patterns in all alpine businesses reflected this;

•  there was fluctuating demand for employees’ skills and services depending on snow conditions, and employees themselves preferred to work on weekends and have days off during the week to ski when it was less busy;

•  alpine tourism businesses had a high level of casual and seasonal employment, with a high proportion of employees engaged over winter when they wished to have a working holiday, and the hours of work offered to these employees fluctuated depending on snow conditions; and

•  employees could be engaged in a wide range of occupational groupings, in that some employees had portability across retail, cleaning and food and beverage roles, and some also worked for other businesses at the same time including alpine resorts.

[39] The ASAA’s opposition to the primary applicants’ claim, it was submitted, was based on commercial considerations. Contrary to its submissions, the scope of the alpine tourism industry was never properly considered in the award modernisation process, and the matters relied upon by the AIRC in making the Alpine Award were equally applicable to other alpine tourism businesses. Although the primary applicants accepted that the flexibilities in the Alpine Award were derived from pre-reform awards which applied to alpine lifting companies, this was not determinative, and the function of the Commission was to ensure that modern awards provided a fair and relevant safety net. That required all matters relevant to the modern awards objective to be considered, including the regulatory burden placed on alpine tourism businesses compared to their much larger alpine resort competitors operating in their immediate vicinity. The “snowsports industry” did not just include alpine resorts, but encompassed businesses trading in alpine villages which were critical to the operation of alpine tourism and had the same unique features. The capital investment made by alpine resorts in snow lifting was not a relevant factor with respect to the determination of modern award coverage.

[40] In relation to the matters required to be taken into account under s 134(1), it was submitted that the conclusions to be reached were as follows (by reference to the paragraph lettering in s 134(1)):

(a) The terms and conditions set by the Alpine Award were fair and relevant having regard to the nature of the work performed and the unique nature of the “snowsports industry”. The extension of the Alpine Award to retail and hospitality employees in alpine tourism businesses would not have any significant detrimental impact on employees.

(b) The coverage variation proposed would not have any negative impact on the incidence of collective bargaining, and might encourage it.

(c) The overwhelming preference of employees within alpine tourism businesses is to work on evenings and weekends, and the coverage variation proposed would be likely to increase the hours offered to employees of weekends. It would also enhance “social harmony” in alpine resort precincts by establishing uniform terms and conditions.

(d) Seasonal variations in demand, climatic conditions and differences in demand between weekdays and weekends require flexibility, and employees wished to work flexibly. The coverage variation proposed would promote flexibility by removing the “existing irrelevant regulations that hinder such flexibility”.

(da) The need to provide additional remuneration did not arise in the alpine tourism industry because employees preferred to work on evenings and weekends.

(e) The current coverage arrangements meant that hospitality and retail employees in resorts were regulated differently than those in other alpine tourism businesses, and the proposed coverage variation would rectify this.

(f) The proposed coverage variation would have a significant positive impact on business by removing the current unfair anti-competitive situation, creating a level playing field, fostering competition, forcing alpine resorts to improve productivity to compete with alpine tourism businesses, provide more hours for employees to work on weekends, and reduce the employment costs and regulatory burden of alpine tourism businesses.

(g) The proposed coverage variation would make the coverage clause of the Alpine Award simpler and easier to understand, remove the complexity of the current situation where ownership of the relevant establishment determined which award applied, and make a single award applicable to all retail and hospitality employees in alpine resort precincts.

(h) The proposed coverage variation would allow alpine tourism businesses to grow and improve their performance, promote employment growth and business sustainability, and improve the performance of the alpine tourism industry.

Mount Hotham Board

[41] The Mount Hotham Board submitted that it was currently covered by the State Government Agencies Award, having previously been covered by the Victorian Alpine Resorts Award 1999. Since the termination of the latter award on 10 August 2011, the Alpine Award was the most appropriate award to cover the Mount Hotham Board because it fully and appropriately covered its employees’ classification and because the Mount Hotham Board operated in the alpine resorts industry. The Mount Hotham Board was not a party to the award modernisation process that took place in 2009 before the AIRC, and as a result the AIRC did not give consideration to its position (or that of similar employers).

[42] It was submitted that the Mount Hotham Board should be covered by the Alpine Award because:

•  it operated in the alpine industry and, as with ski lift operators, it managed alpine resort infrastructure;

•  while it did not operate an alpine lift, it was responsible for and conducted many of the activities directly related to alpine lifting;

•  it was directly impacted by the high variability of snow and weather conditions in the same manner that the snowsports industry was;

•  it undertook significant capital expenditure on capital works that directly benefitted alpine lifting and the alpine resorts industry;

•  its workforce most appropriately fitted within the classifications under the Alpine Award, and the flexible and seasonal nature of its workforce supported it being covered by the Alpine Award;

•  not all of its employees fitted within the classifications in the State Government Agencies Award, in particular mechanics and general construction hand/labourer positions, with the result that they were award free in circumstances where the same employees engaged by MHSC were covered by the Alpine Award.

ASAA

[43] The ASAA opposed both the primary applicants’ application and that of the Mount Hotham Board. It submitted that the snowsports industry was unique in nature, in that it was highly seasonal, the ski season ran only for a short period of time (typically early June-early October), it was weather dependent and highly vulnerable to changing climatic conditions, it experienced a substantial peak in business during weekends, the employees of alpine lifting companies fell within a large range of occupational categories and performed highly specialised work in extreme weather conditions and the work was often undertaken by snowports enthusiasts who wished to have the flexibility to work on weekends and ski on weekdays. Additionally, the ASAA submitted, a key feature that made alpine lifting companies unique was their operation of and reliance upon alpine lifts and snow making facilities, which require the expenditure of significant capital to install, operate and maintain.

[44] The award history, the ASAA submitted, demonstrated that it had historically been recognised that the award applying to the snowsports industry and alpine lifting companies needed to have tailored terms and conditions that ensured a number of flexibilities in the employment arrangements which were in the interests of employers and employees. Pre-modern awards had contained a broad range of classifications, including those that may otherwise have fallen within other occupations and industries such as retail, clerical, mechanical and transport industry employees. The rationale behind the inclusion of this broad range of classifications was to enable alpine lifting companies to utilise their employees across their resorts effectively and commercially, so that during periods of poor snow and bad weather employees could be shifted from alpine lifting and ski slope functions to hospitality and retail functions in order to mitigate the loss in revenue. This rationale was inapplicable, the ASAA submitted, to the alpine tourism businesses represented by the primary applicants.

[45] The ASAA also pointed to a number of difficulties which would flow from the grant of the primary applicants’ application. It identified a range of towns with significant active ski resort service industries whose seasonal and daily levels of tourism varied as a result of the snow season which were outside the primary applicants’ proposed radius of coverage but who could equally claim that they should fall within the coverage of the Alpine Award.

[46] Specifically in relation to the Mount Hotham Board’s application, the ASAA submitted that the Board did not perform the same functions as alpine lifting companies, was not revenue-dependent on alpine lifting facilities, had different total employment and seasonal employment numbers, had a different history of industrial regulation and did not have the primary purpose which the Alpine Award and its limited coverage did.

SDAEA

[47] The SDAEA likewise opposed both applications and supported the submissions of the ASAA. Additionally it submitted that:

•  the primary applicants’ proposed coverage variation would change the Alpine Award from one based on industry coverage to one based on geographic coverage;

•  the current coverage of the Alpine Award was unambiguous and intentional, and the applications to vary it were contrary to the principles upon which the award was made;

•  insofar as the SDAEA’s interests were concerned, the applications adversely affected employees covered by the Retail Award, the Fast Food Industry Award 2010 (Fast Food Award) and the Hair and Beauty Industry Award 2010 (Hair and Beauty Award), which contained terms and conditions of employment that were appropriate for such employees;

•  the Alpine Award, which had inferior rates of pay and penalty rates, was established on the strict basis that it was tailored for the unique circumstances of alpine lifting companies;

•  the primary applicants’ application would extend the coverage of the Alpine Award not only to businesses in locations with significant infrastructure and facilities, but also to alpine areas with very minor infrastructure and facilities including Mount Selwyn, Dinner Plain Alpine Village, Mount Stirling, Mount Baw Baw Village and Ben Lomond;

•  the effect of the Mount Hotham Board’s application would be to include all alpine resort management boards within the coverage of the Alpine Award, of which there were six, although the other five boards had not made any application to be included in the award’s coverage;

•  the Alpine Resorts (Management) Act 1997 made provision for an Alpine Resorts Co-ordinating Board, which represented all alpine resorts under the Act, and it should have been the entity to have made any application to vary the coverage of the Alpine Award;

•  no variation in coverage should be granted in the absence of any submissions from the other alpine resort boards;

•  none of the applicants’ evidence or submissions addressed the possible effect on workers should the coverage of the Alpine Award be expanded, or attempted to compare the current and proposed award terms and conditions and the effect on workers covered by the SDAEA; and

•  in an industry where weekend work is common, a move in coverage to the Alpine Award would result in a complete loss of weekend penalty rates and a consequent reduction in take home pay.

AWU

[48] The AWU opposed the primary applicants’ application. It submitted that the proposed coverage variation was clearly seeking to reduce the award conditions for employees employed by businesses operating in alpine areas. These businesses and their employees were more appropriately covered by their existing industry awards, namely the Retail Award, the Hospitality Award, the Fast Food Award, the Restaurant Award and the Hair and Beauty Award. A detailed comparison of the rates and conditions of these awards with the Alpine Award was undertaken by the AWU, and this showed that the base rates of pay in the Alpine Award were either the same as, or lower than, the other awards. In respect of weekend penalty rates, all the other awards provided for such rates at varying levels whereas the Alpine Award did not. There were also deficiencies in terms of morning and evening penalty rates between the Alpine Award and at least some of the other awards. The AWU submitted that, given that on the evidence the great majority of the work performed by employees of alpine tourism businesses was during penalty hours, this would lead to a drastic reduction in take-home pay for affected employees, which was contrary to the modern awards objective. In its submissions, it modelled the effect of the proposed change in coverage on a Level 3 worker under the Hospitality Award who worked three weekdays and on Saturday and Sunday, and calculated that the reduction in pay would amount to $169.66 per week.

[49] The AWU’s primary submission was that it supported the Mount Hotham Board’s application. It submitted that the award modernisation Full Bench had intended to create a comprehensive award which included alpine resort management boards, but the coverage of the Alpine Award had not reflected this intention. Recent enterprise agreements covering the Mt Baw Baw and Falls Creek Management Boards, in which the AWU was involved, had been made on the basis that they were underpinned by the Alpine Award. The current agreement covering the Mount Hotham Board was underpinned by a range of awards including the Alpine Award, the State Government Agencies Award, the Miscellaneous Award 2010 and the Victorian Alpine Resorts Award 1999 (which had been terminated). The remaining Victorian boards were covered by agreements underpinned, at Lake Mountain, by the Victorian Alpine Resorts Award 1999 and, at Mount Buller and Mount Stirling, by the Victorian State Government Agencies Award 2015. In a decision issued in 2010, a single member of the Commission had determined that, if it was a trading corporation, the Falls Creek Resort Management Board was covered by the Alpine Award. 22 The Mount Hotham Board’s application therefore was supported on the basis that it was consistent with what the AWU understood to be the existing position.

[50] However in a later written submission filed by the AWU on 8 December 2017, the AWU responded to a query from us as to whether its position concerning the Mount Hotham Board’s application would change if we concluded that the Alpine Award did not currently cover resort management boards. The AWU submitted that on that basis it would oppose the application, since it had a general resistance to any practical expansion of the coverage of the Alpine Award. In that scenario, if there was any deficiency in the coverage of the classifications in the State Government Agencies Award, the best recourse would be to vary the classification structure in that award.

United Voice

[51] United Voice opposed the primary applicants’ application, and supported the submissions of the AWU and the SDAEA. It also contended that the making of the Alpine Award was a “mistake”, and that the Commission should in the review “reassess the need for this peculiar modern award rather than seek to broaden its application” and revoke it entirely.

Consideration

General principles

[52] The principles applicable to the conduct of the 4-yearly review have been stated comprehensively in a number of Full Bench decisions, most recently in the 4 yearly review of modern awards – plain language re-drafting – standard clauses decision issued on 18 July 2018. 23 The main propositions may be summarised as follows:

•  section 156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards;

•  “review” has its ordinary and natural meaning of “survey, inspect, re-examine or look back upon”; 24

•  the discretion in s.156(2)(b)(i) to make determinations varying modern awards in a review, is expressed in general, unqualified, terms, but the breadth of the discretion is constrained by other provisions of the FW Act relevant to the conduct of the review;

•  in particular the modern awards objective in s 134 applies to the review;

•  the modern awards objective is very broadly expressed,²⁵ and is a composite expression which requires that modern awards, together with the NES, provide “a fair and relevant minimum safety net of terms and conditions”, taking into account the matters in ss.134(1)(a)–(h);²⁶

•  fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question; 27

•  the obligation to take into account the s.134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process; 28

•  no particular primacy is attached to any of the s 134 considerations and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award; 29

•  it is not necessary to make a finding that the award fails to satisfy one or more of the s 134 considerations as a prerequisite to the variation of a modern award; 30 

•  the s 134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives; 31

•  in giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s 134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance;

•  what is necessary is for the Commission to review a particular modern award and, by reference to the s 134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net; 32 

•  the matters which may be taken into account are not confined to the s 134 considerations; 33

•  section 138, in requiring that 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, emphasises the fact it is the minimum safety net and minimum wages objective to which the modern awards are directed;  34

•  what is necessary to achieve the modern awards objective 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 context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence; 35

•  where an interested party applies for a variation to a modern award as part of the 4 yearly review, the task is not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation meet the objective. 36

[53] Some attention is required as to how these principles apply where it is proposed by an interested party that the coverage of a class of employers and their employees be moved from one modern award to another. Ostensibly, the variation is in respect of the Alpine Award, and the primary applicants advanced their case on the basis that the grant of the variation would be consistent with the achievement of the modern awards objective in s 134(1) in respect of the Alpine Award. However, we consider that approach ignores an important element of the analysis. In substance, the primary applicants seek that alpine tourism businesses that operate in the immediate vicinity of alpine resorts covered by the Alpine Award, and their employees, be removed from the modern awards which currently cover them, and be placed within the coverage of the Alpine Award. The modern awards which currently cover those employers and employees have been identified as the Retail Award, the Hospitality Award, the Restaurant Award, the Fast Food Award and the Hair and Beauty Award. We consider therefore that a relevant and significant element of the analysis is to give consideration to whether the awards which currently apply meet the modern awards objective in respect of the employers and employees who would be affected by the proposed variation and whether the contraction of the coverage of those awards proposed by the primary applicants is necessary to ensure that they include only such terms as are necessary to meet the modern awards objective. 37

[54] It is also necessary to consider s 163(1), which provides:

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.

[55] Section 163(1) constitutes a prohibition upon a variation to a modern award removing employers and their employees from the coverage of a modern award unless the Commission is satisfied that they will instead be covered by another modern award other than the Miscellaneous Award 2010 that is appropriate for those employees and employers. It may be accepted that a simultaneous variation to another modern award to extend its coverage to encompass those employers and employees may satisfy this condition, upon which the prohibition does not operate, provided that the coverage by the other modern award is appropriate for them. This, in effect, establishes an additional criterion of appropriateness to the consideration of an application seeking a transfer of coverage from one award to another.

[56] Different considerations arise in respect of Mount Hotham Board’s application, for reasons which will be explained later.

Application by the primary applicants

[57] We have earlier summarised the evidence given by the witnesses in relation to the primary applicants’ application and the other material of an evidentiary nature contained in the submissions. We make the following findings on the basis of that evidence:

(1) Alpine resorts in New South Wales and Victoria covered by the Alpine Award have (to varying degrees) a range of independent retail, accommodation, food and hospitality businesses operating in their immediate vicinity. These businesses, which we will refer to as the relevant alpine businesses, may be covered by the Retail Award, the Hospitality Award, the Restaurant Award, the Fast Food Award and the Hair and Beauty Award.

(2) Alpine resorts covered by the Alpine Award employ persons across a large range of functions, including a number of specialised on-slope functions, and at least to a limited degree, may require employees to perform different functions at different times. The relevant alpine businesses generally do not employ persons across this wide range of functions, do not employ persons with specialised on-slope functions, and do not require employees to multi-task. The evidence tends to suggest that relevant alpine businesses are generally covered by only one modern award.

(3) Alpine resorts covered by the Alpine Award have highly seasonal businesses which are heavily weather dependent and earn most of their revenue during the winter months. The relevant alpine businesses generally have the same characteristics. However there are also alpine businesses which do not operate in the immediate vicinity of alpine resorts which also share these characteristics. In particular there are accommodation facilities, ski equipment retail outlets and food outlets which operate in feeder towns to alpine resorts, or simply at some distance away from alpine resorts, which are highly dependent on the winter snow season and are affected by weather conditions. We will refer to these as non-affected alpine businesses.

(4) A number of alpine resorts covered by the Alpine Award provide accommodation, hospitality, food and retail services, and to that extent compete with relevant alpine businesses and non-affected alpine businesses. However relevant alpine businesses and non-affected alpine businesses are commercially dependent on the operation of the ski slope and alpine lifting functions of such alpine resorts.

(5) There is no evidence that the profitability of relevant alpine businesses has been affected by the fact that alpine resorts provide competing services whilst operating under a different award.

(6) Alpine resorts employ large numbers of additional casual employees during the winter snow season to meet the peak demand of that period. This is also characteristic of relevant alpine businesses, and is likely to be characteristic of non-affected alpine businesses.

(7) A large proportion of such seasonal casual workers, but not all, are ski or snowboard enthusiasts on a working holiday. This is true of those employed both by alpine resorts covered by the Alpine Award and by relevant alpine businesses, and is also likely to be true of those employed by non-affected alpine businesses.

(8) Many if not most of these seasonal casual employees prefer to work on weekends so that they can ski or snowboard during weekdays when it is quieter on the slopes. This preference is largely accommodated by both alpine resorts and relevant alpine businesses, which have to put on staff to accommodate peak customer demands on weekends. To a small degree, relevant alpine businesses roster work on weekdays rather than weekends to avoid having to pay weekend penalty rates, but the degree to which this is possible is minimal.

(9) The grant of the primary applicants’ coverage application, so that relevant alpine businesses and their employees became covered by the Alpine Award, would result in very significant reductions in take-home pay for such employees, including the relatively small proportion of permanently-engaged employees as well as seasonal casual employees. This is primarily the result of the Alpine Award not providing for any weekend penalty rates although, in some cases, the base rates of pay in the Alpine Award are also lower. There was some evidence that, to a minor degree, some relevant alpine business might be able to roster more employee hours on weekends if they did not have to pay penalty rates, but in part this would only involve moving weekday hours to weekends. There was no evidence that this would operate to ameliorate the significant reduction in take-home pay.

(10) Some of the relevant alpine employers would prefer to be under the Alpine Award. The primary reason for this is that the Alpine Award does not provide for weekend penalty rates or evening penalty rates, so that being under that award would allow labour costs to be reduced and remove the administrative burden of paying differential rates.

[58] We are not satisfied that the modern awards which currently apply to relevant alpine businesses and their employees fail to achieve the modern awards objective with respect to those employers and employees. The evidence adduced before us, in respect of the relevant alpine businesses, focused on employers covered by the Hospitality Award, the Retail Award and the Restaurant Award. These awards cover businesses operating in a wide variety of circumstances, including businesses which service seasonal tourists and engage large numbers of seasonal casual employees. All of these awards are highly flexible instruments which allow for the use of full-time, part-time and (most relevantly) casual employment to the extent determined by the employer, and the working of ordinary hours at any time in the day or week during which relevant alpine businesses operate. The evidence did not support the proposition that relevant alpine businesses were unable, to any discernible degree, to service their highly seasonal and weather-variable customer base because of any provision of those three awards. It was not suggested by the primary applicants that the classifications structure in each of those awards was other than appropriate for the work performed by employees, or that the rates of pay prescribed were not properly fixed rates of pay having regard to the value of the work performed.

[59] It is also important to note that, to the extent that the primary applicants’ case focused on the issue of penalty rates, that the penalty rates in the Hospitality Award, the Retail Award, the Fast Food Award and the Restaurant Award have already been the subject of exhaustive consideration as part of the 4-yearly review in the Penalty Rates Decision. 38 In relation to the Hospitality Award, the Full Bench determined that the existing Saturday penalty rate provided a fair and relevant minimum safety net and accordingly achieved the modern awards objective.39 It found that the existing Sunday penalty rate was neither fair nor relevant, and reduced it (albeit that for casual employees the casual loading was made cumulative upon the reduced penalty rate).40 In a separate decision, the lower Sunday penalty rate was the subject of a phasing-in period, so that it will not become fully applicable until 1 July 2019.41

[60] In respect of the Retail Award, the Full Bench found that the Saturday penalty rates for full-time and part-time employees met the modern awards objective, 42 and in respect of casual employees the Full Bench reserved its position only on the basis that it was arguable that the casual loading should be added to the existing Saturday penalty rate for full-time and part-time employees (which would have the effect of increasing the total rate).43 It was concluded that the existing Sunday penalty rates were not fair and relevant, and taking into account the considerations identified in s 134(a)-(h), they were reduced, except that with casual employees the casual loading was now to be added to the reduced rate.44 The reduced penalty rate was likewise to be phased in so that it did not become fully operable until 1 July 2020 for full-time and part-time employees and until 1 July 2019 for casual employees.45 The Sunday penalty rate was also reduced for Level 1 employees under the Fast Food Award,46 with the full phase-in date being 1 July 2019.47

[61] The history with respect to the Restaurant Award is somewhat more complex. In the course of the 2-yearly transitional review of modern awards, the Sunday penalty rate for casual employees classified at Levels 1 and 2 had been reduced in a Full Bench decision issued in 2014, but otherwise a reduction to the Sunday penalty rate had been refused. 48 The Penalty Rates Decision dealt with a further application by employer interests to reduce the Sunday penalty rate to align it with the Saturday penalty rate (which was not challenged), and the Full Bench determined that it was not satisfied on the material before it that any further change was necessary to achieve the modern awards objective. However it decided to provide employer parties with a further opportunity to establish that the weekend penalty rates in the Restaurant Award did not provide a fair and relevant safety net.49 Ultimately the employer parties chose not to take advantage of that opportunity, and in a subsequent decision a Full Bench determined that no further reduction in the Sunday penalty rate in the Restaurant Award was necessary in order to ensure that it achieved the modern awards objective.50

[62] Accordingly the position may be taken to be that, after extensive review proceedings, the weekend penalty rate provisions in the Hospitality Award, the Retail Award, the Fast Food Award and the Restaurant Award have been determined to constitute a fair and relevant safety net in accordance with the modern awards objective. As it stands, the conclusions reached in respect of those awards are equally applicable to the relevant alpine businesses currently covered by those awards.

[63] The case advanced by the primary applicants simply did not engage with these fundamental findings. They suggested in their submissions that the fact that it suited many seasonal casual employees on working holidays to work on weekends was a point of differentiation in terms of the degree of disutility associated with working weekends, but that submission took no account of those employees – particularly permanent employees – for whom this was not true, nor did it attempt to demonstrate that, for that reason alone, weekend penalty rates should be entirely abolished by way of a shift of coverage to the Alpine Award. That it may suit some casual employees to work on weekends is not unique to the relevant alpine businesses, nor did this pass unnoticed in the decisions concerning penalty rates to which we have referred. For example, in the 2014 Restaurant Award decision the critical factor which caused the Full Bench to conclude that there should be an adjustment to the Sunday penalty rate was that, for many lower-skilled casual employees who were students or women with weekday family responsibilities, working on weekends was often their preference. 51 However, that did not cause the Full Bench to conclude that the Sunday penalty rate should be reduced for all employees covered by the Restaurant Award, nor that for such lower-skilled casual employees the Sunday penalty rate should be reduced to zero.52 Notwithstanding that they made no attempt to contend that the 2014 Restaurant Award decision was wrong or overtaken by changed circumstances, the primary applicants sought, in effect, that the weekend penalty rates for employees working in relevant alpine businesses currently covered by the Restaurant Award be entirely abolished. That is an untenable proposition.

[64] The only substantial proposition advanced by the primary applicants concerning the fairness and relevance of the currently applicable awards as a minimum safety net for relevant alpine businesses and their employees was that there was unfairness for such businesses because they did not enjoy a “level playing field” with alpine resorts covered by the Alpine Award with which they competed. As we have found, relevant alpine businesses compete with some aspects of the businesses of alpine resorts (while at the same time being commercially dependent upon them). However that does render their current coverage by other modern awards other than the Alpine Award unfair, for reasons which include the following:

(1) There is no evidence, as earlier stated, that the differences between the Alpine Award and the other awards, to which reference has been made in respect of penalty rates and other matters, have prevented relevant alpine businesses from competing with alpine resorts and being commercially successful. The businesses the subject of evidence before us were generally profitable and successful businesses. There is likewise no evidence that alpine resorts have used the different conditions in the Alpine Award in a predatory or anti-competitive fashion.

(2) Alpine resorts are a different kind of employer to relevant alpine businesses and other snowsports businesses. They operate large integrated businesses which involve a highly diverse range of functions and permit staff, to some degree, to perform different functions dependent on exigencies such as the weather. The core element of their business is the operation of ski slopes, which requires the performance of functions such as ski patrols, snow-making, lift maintenance and operation, ski instruction and various administrative and safety responsibilities. To the extent that they engage in the provision of food, hospitality, accommodation and retail services, it is ancillary to this core function. Alpine resorts may engage in these functions not in order to establish separate profit sources but to provide an essential or significant service to users of the core business function. 53 It is clear that the establishment of the Alpine Award was made in recognition of the fact that alpine resorts needed to have persons “… employed in a wide range of occupational groupings…”. But for this award, alpine resorts would be covered by a wide range of different modern awards which would no doubt be productive of complexity and inefficiency. Relevant alpine businesses do not, on the evidence, have any of these fundamental characteristics.

(3) Relevant alpine businesses compete with other retail, accommodation, food and hospitality businesses which service the retail, accommodation, food and hospitality needs of snowsports participants but are not located in the immediate vicinity of alpine resorts. There is no distinction of significance to be made between relevant alpine businesses and such other snowsports businesses: they have the same elements of winter seasonality and susceptibility to the effects of weather and snow conditions so that, for example, when the ski slopes are closed because of weather, this will have effects for both businesses actually adjacent to an alpine resort and other businesses catering to snowsports participants which are further away or in a feeder town. There is no suggestion that the latter category of businesses face unfair competition from alpine resorts, and the mere fact that they are not located in the immediate vicinity of alpine resorts provides no objective justification for them to be in a different award than relevant alpine businesses.

[65] We consider that the modern awards which currently cover relevant alpine businesses provide a fair and relevant safety net for them and their employees in accordance with the modern awards objective in s 134(1). In reaching that conclusion, we have taken the following matters in s 134(1) into account in particular (by reference to the paragraphs in that provision):

(a) the terms and conditions in those awards appropriately address relative living standards and the needs of the low paid;

(c) the awards promote social inclusion through workforce participation, in that in the businesses in question they unquestionably facilitate the employment of working holidayers, young persons and other snowsports participants in seasonal employment;

(d) the awards promote flexible work practices and the efficient and productive performance of work, in that they facilitate seasonal employment and weekend and evening work to meet customer demand;

(da) the awards provide additional remuneration for overtime work, unsocial, irregular and unpredictable work, and work on weekends and public holidays by way of a casual loading and appropriate penalty rates; and

(f) they do not adversely affect to any discernible degree productivity, employment costs or the regulatory burden.

[66] The other matters in s 134(1) we consider to be neutral considerations.

[67] We also do not consider that the inclusion of relevant alpine businesses and their employees in the Alpine Award would achieve the modern awards objective in relation to that award, nor do we consider that the Alpine Award would appropriately cover them such as to permit the prohibition in s 163(1) to be avoided. As earlier found, the grant of the primary applicants’ claim would result in the large majority of employees who work on weekends during the winter season in relevant alpine businesses suffering very significant reductions in take-home pay. No countervailing beneficial effect of any significance, including the creation of additional employment or the availability of additional working hours, is identifiable on the basis of the evidence before us. The primary applicants’ case focused almost entirely on the interests of relevant alpine businesses as employers in assessing the fairness of the Alpine Award as a relevant safety net without taking into account the interests of employees, for whom it would clearly be unfair, having regard in particular to s 134(1)(a) (the needs of the low paid) and s 134(1)(da)(iii) (the need to provide additional remuneration for employees working on weekends). We do not consider that the grant of the primary applicants’ claim would bring any discernible benefit in terms of increasing workforce participation (s 134(1)(c)) or promoting flexible modern work practices and the efficient and productive performance of work in businesses which are already able to service highly variable seasonal customer demands, including during weekends, in a profitable fashion (s 134(1)(d)).

[68] Additionally, relevant alpine businesses would be placed into an award which was designed for alpine resorts, which as earlier explained are businesses of a significantly different nature, and which is different to the awards which apply to businesses with which they compete and have most in common, namely businesses servicing snowsports participants which are not located in immediate vicinity of alpine resorts but are nearby or in feeder towns. The safety net so applying would not be fair or relevant because it would create an uneven regulatory burden (see s 134(1)(f)): the remaining s 134(1)(d) considerations we consider to be neutral). Nor would coverage under the Alpine Award be appropriate, for the purpose of s 163(1), for this reason.

[69] We note that there is a possible additional difficulty arising from the primary applicants’ proposed coverage clause for the Alpine Award which, as earlier set out, is expressed by reference employers operating at identified geographic locations in the States of New South Wales, Victoria and Tasmania. Having regard to the recent Full Bench decision in 4 yearly review of modern awards - Proposed Norfolk Island Award, 54 it is arguable that the proposed coverage clause is not consistent with s 154(1)(b), which provides that a modern award must not include terms and conditions of employment that “are expressed to operate in one or more, but not every, State and Territory”. However this issue was not the subject of argument before us, and it is unnecessary for us to express a final view about it.

[70] For the reasons set out above, the primary applicants’ claim for a change in the coverage of the Alpine Award is rejected.

Application by the Mount Hotham Board

[71] Prior to the establishment of the Alpine Award, the Mount Hotham Board and the other alpine resort management boards established by the ARM Act were covered by the Victorian Alpine Resorts Award 1999. That award was expressed (in clause 7) to cover the Falls Creek, Mt Buller, Mt Hotham, Mt Stirling, Lake Mountain and Mt Baw Baw Alpine Resort Management Boards in respect of employees in work done in or in connection with a wide range of identified functions, including construction work, forestry, land maintenance functions, general labouring work such as tickets sellers, carpark attendants and ski patrollers, a variety of trades, and electricity, transport, and plumbing, sanitary and water supply functions. Its coverage excluded persons who might be employed as officers in the Victorian Public Service under the Public Sector Management and Employment Act 1998. It was the subject of a common rule award declaration made in 2004, 55 but it is not clear that this had the practical effect of widening the scope of its operation.

[72] There were other previous awards of relevance to the Victorian alpine resorts. The first was the Alpine Resorts (The Australian Workers’ Union) Award 2001, which was expressed (in clause 6) to cover “alpine resorts”, but in respect of the three respondent employers listed in clause 7: The MHSC Pty Limited, Falls Creek Ski Lifts Pty Limited and Mount Hotham Skiing Company Pty Limited. These were private operators of alpine lifts and ski runs at alpine resorts managed by alpine resort management boards in Victoria. The classification structure included pay rates for employees performing lift operation, skier service, ski hire, ticketing, administration, workshop, retail, racing, snow grooming, snow making and ski instruction functions. The award was the subject of a common rule declaration made in 2005, 56 but again the extent to which this widened the practical scope of the operation of the award is not clear.

[73] The way in which these existing awards were considered in establishing the coverage of the Alpine Award in the award modernisation process was summarised by Commissioner Roe in a decision issued in 2010 57 concerning the relevant award to be applied for the purpose of determining whether the Falls Creek Alpine Resort Management Board Outdoor Workers Enterprise Agreement 2009-2012 passed the better off overall test. This agreement was expressed to cover the “outdoor” workers employed by the board, the “indoor” workers being covered by a separate agreement. The Commissioner said (footnotes omitted):

“[50] In the creation of the Alpine Resorts Award 2010 submissions were received from the AWU and from Australian Ski Areas Association. The AWU in that process argued that the Victorian Alpine Resorts Award 1999 should be seen as a benchmark whereas the Australian Ski Areas Association argued that the Victorian Alpine Resorts Award 1999 should not be within the coverage of the Modern Award because of its linkage to the Victorian Public Sector. The submission of the Australian Ski Areas Association was that at the three main Victorian Ski Resorts there were 118 employees in summer rising to 305 employees in winter of the Alpine Resorts Boards which operated under the 1999 Award whereas there were 198 employees in summer rising to 1602 employees in winter employed at those three resorts by the private companies. The AWU submitted a draft of the Award which included a Part 7 which effectively preserved the conditions for the Victorian Alpine Resorts Management Boards who were covered by the 1999 Award for the next five years.

[51] The exposure draft of the Award was issued by the Full Bench in May 2009. In the statement in respect of this the Full Bench determined “The draft Alpine Resorts Award 2010 covers the seasonal snowsports industry in particular, though it will also have application to alpine resorts that operate over the summer season…. We have also decided not to make any special provision in relation to alpine resorts management boards.”

[52] In my view this is a clear reference to the AWU submission for a separate schedule to the Award to cover the conditions for the Victorian Alpine Resorts Award. I do not read it as a decision to exclude the alpine resorts management boards from the coverage of the Modern Award. The whole approach of the Full Bench was to ensure that the whole of an industry (or in some cases occupations) should be covered by a Modern Award and generally the Full Bench was reluctant to grant exceptions pressed by various parties. In the decision of the Full Bench on the Stage 3 Modernisation of 4 September 2009 there was no further comment concerning the coverage of the Award.”

[74] The Commissioner then considered submissions advanced before him against the proposition that the Alpine Award covered the Falls Creek Alpine Resort Management Board, and in doing so referred to an exchange in transcript during the award modernisation process in 2009 between the legal representative of the ASAA and the then President of the AIRC, Justice Giudice. 58 The Commissioner then said:

“[54] I think that the words of the President make it clear that the term establishment in this Award should not be read so narrowly as to imply that the employer must operate the ski lifts directly itself for the employer to come within the scope of the Award. Rather the term is to describe the nature of the resort and to exclude those where there are not operating ski lifts. In this case there was undisputed evidence that the Falls Creek resort includes many ski lifts and that the ski lifts are operated under a contract controlled by the Applicant. A separate company is contracted to operate the lifts. The Falls Creek Alpine Resort is an establishment whose business amongst other things includes alpine lifting and the employer the Falls Creek Alpine Resort Management Board is clearly an employer who along with others operates the Falls Creek Alpine Resort. It is clear that the Falls Creek Alpine Resort Management Board is the principal employer at the Resort and has by Statute been given the responsibility for the management and operation of the alpine resort which includes alpine lifting.

[55] I am therefore satisfied that if the Applicant is a trading corporation then its outdoor workforce is covered by the Alpine Resorts Award 2010. The reference Award for transitional purposes is the 1999 Award. I did consider the applicability of the State Government Agencies Administration Award 2010. That Award only applies to employees in the classifications defined in that Award. The classifications are restricted to administrative, technical and professional employees. None of the outdoor workers could properly fit these definitions.”

[75] The Commissioner ultimately found it unnecessary to determine whether the Falls Creek Alpine Resort Management Board was a trading corporation.

[76] Having perused the relevant submissions, hearing transcripts, statements and decisions concerning the development of the Alpine Award in the award modernisation process in 2009, we consider that the Commissioner was correct in determining that it was always intended that the Victorian alpine resort management boards be covered by the Alpine Award. However it is less clear that the definition of “alpine resort”, which we have earlier set out, gives effect to that intention and results in the management boards being covered by the Alpine Award. As was explained in the evidence of Mr Hutchins, the Mount Hotham Board is substantially in the same position as that of the Falls Creek Alpine Resort Management Board, in that it has effectively subcontracted the alpine lifting function via its lease to MHSC. We do not understand the position of the other Victorian alpine resort management boards to be any different. The evidence before us does not detail the precise commercial arrangements underpinning the subcontracting or leasing of alpine lifting activities at these alpine resorts, so in those circumstances it cannot readily be concluded that alpine lifting is part of the “business” of any of the alpine resort management boards. The position is ambiguous.

[77] This position is clearly unsatisfactory. A modern award will not constitute a fair and relevant safety net of terms and conditions where there is doubt about the scope of its coverage, having regard, in particular, to the need to ensure a simple, easy to understand modern award system that avoids unnecessary award overlaps (see s 134(1)(g)). The evidence before us does not support the proposition that what was intended by the award modernisation Full Bench in terms of the coverage of the Alpine Award should be disturbed. Certainly the evidence of Mr Hutchins establishes that the Mount Hotham Board carries out a range of functions critical to the operation of the Mount Hotham alpine resort, including functions significant to the operation of the ski slopes, as part of its statutory responsibility to manage that resort. There is no evidence that the other management boards established under the ARM Act are different in any relevant way. Accordingly, we consider that it is necessary in order to achieve the modern awards objective with respect to the Alpine Award to vary its coverage provisions to clarify and confirm that it covers those alpine resort management boards. In doing so, we do not consider that we are changing the existing coverage of any modern award such as to attract the operation of s 163(1), but rather making clear the position which was intended to apply when the Alpine Award was made. In any event, we consider that the coverage of alpine resort management boards and their employees by the Alpine Award would be appropriate.

[78] Doing this presents an opportunity to correct one other defect in the coverage provisions of the Alpine Award which became apparent in the proceedings before us. As it currently stands, clause 4.1 provides that an employer which operates an alpine resort, as defined in clause 3, is covered by the Alpine Award in respect of any employee who falls within the award’s classifications, whether they are actually employed at the alpine resort or not. For example, if the operator of an alpine resort purchases a hotel which is located entirely outside of that alpine resort, clause 4.1 would permit the application of the Alpine Award, which contains a large range of classifications covering hospitality functions, to the hotel’s employees merely because of the fact that the employer was the operator of an alpine resort. That is clearly not what was intended by the Full Bench in making the Alpine Award, and would not conform to the modern awards objective. We do not suggest that the evidence before us demonstrates that this has actually occurred, but nonetheless it should not be permitted to occur. The general industry award which would otherwise operate in that situation would be the award providing the appropriate coverage.

[79] We do not consider that we should vary the Alpine Award in the form proposed by the Mount Hotham Resort, because the paragraph (b) which it proposes be added to the definition of “alpine resort” is itself dependent upon the use of the expression “alpine resort” – that is, it defines the expression by using the same expression without defining it further.

[80] We consider that the existence of an alpine lift is the essential definitional feature of an alpine resort; what needs to be made clear is that the operator of the resort does not itself necessarily have to operate directly the alpine lift in order to be covered by the Alpine Award. Consequently, we have provisionally concluded that, in order to give effect to our conclusions, the coverage provision in clause 4.1 and the definition of “alpine resort” in clause 3 should be varied so that they provided as follows (with alterations emphasised):

4.1 This industry award covers employers throughout Australia who operate an alpine resort and their employees employed at the alpine resort in the classifications within Schedule B – Classification Definitions to the exclusion of any other modern award.

alpine resort means a resort which includes, among other things, an alpine lift.

[81] We have also provisionally concluded that the Alpine Award should be added to the list of awards in clause 4.2 of the State Government Agencies Award 2010 which are excluded from the coverage of the latter award, in order to ensure that there is no overlap in coverage between the two awards.

[82] Interested parties will have a period of 21 days to file any submissions they wish to make concerning the proposed variations to the Alpine Award and the State Government Agencies Award set out above. Such submissions may include any proposals for alternative forms of variation to give effect to our conclusions.

VICE PRESIDENT

Appearances:

K. Scott and L. Izzo, solicitors, on behalf of Australian Business Industrial, New South Wales Business Chamber, the Thredbo Chamber of Commerce and Australian Hotels Association.

D. Bruno of counsel and M. Galbraith on behalf of the Shop, Distributive and Allied Employees’ Association

M. Harmer, solicitor, D. Bates and C. Nowland on behalf of the Australian Ski Areas Association

Z. Duncalfe and A. Crabb on behalf of the Australian Workers’ Union

S. Fitzgerald of counsel on behalf of the Mount Hotham Alpine Resort Management Board

Hearing details:

2017.

Canberra/Melbourne:

30 October – 2 November.

 1   Transcript 1 November 2017 at PN 2310-PN2328

 2   Witness Statement – 21 March 2017, Exhibit Q.

 3   Witness Statement – 20 March 2017, Exhibit P.

 4   Witness Statement – 21 March 2017, Exhibit T; Oral evidence – Transcript 1 November 2017 at PN2120–2195.

 5   Transcript 1 November 2017 at PN2129.

 6   Transcript 1 November 2017 at PN2154.

 7   Witness Statement – 28 March 2017, Exhibit K; Oral evidence - Transcript 31 October 2017 at PN1308-1489.

 8   Witness Statement – 30 March 2017, Exhibit U, Oral evidence - Transcript 1 November 2018 at PN2198-2294.

 9   Witness Statement – 31 March 2017, Exhibit R; Oral evidence - Transcript 1 November at PN1947-2039.

 10   Transcript 1 November 2017 at PN2013.

 11   Witness Statement - 31 March 2017, Exhibit C; Oral evidence - Transcript 30 October 2017 at PN335-461.

 12   Transcript 30 October 2017 at PN377.

 13   Witness Statement - 30 March 2017, Exhibit D; Oral evidence - Transcript 30 October 2017 at PN557-774.

 14   Witness Statement – 24 March 2017, Exhibit O.

 15   Witness Statement – 27 March 2017, Exhibit S; Oral evidence - Transcript 1 November 2017 at PN2042-2115.

 16   Witness Statement – 12 April 2017, Exhibit M; Oral evidence - Transcript 31 October at PN1607-1753.

 17   Witness Statement – 7 April 2017, Exhibit L; Oral evidence - Transcript 31 October 2017 PN1496-1581.

 18   Witness Statement – 13 April 2017, Exhibit B.

 19   Witness Statement –21 December 2016, Exhibit F; Oral evidence - Transcript 30 October 2017 PN789- 1080, Transcript 2 November 2017 PN3400-3483

 20   [2009] AIRCFB 826 at [263]

 21   Witness Statement – 31 March 2017, Exhibit V; Oral evidence - Transcript 2 November 2017 PN3259-3398

 22   Falls Creek Resort Management [2010] FWA 2847

 23   [2018] FWCFB 4177 at [3]-[13]

 24   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [38]

25 Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35]

26 [2017] FWCFB 1001 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [41]–[44]

 27   [2018] FWCFB 3500 at [21]-[24].

 28   Edwards v Giudice (1999) 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [56]

 29   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [33]

 30   National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [105]-[106]

 31   See National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [109]-[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review

 32   Ibid at [28]-[29]

 33   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [48]

 34   CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123 at [23]; cited with approval in Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [45]

 35   See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227

 36   Ibid at [46]

 37   Vehicle Manufacturing, Repair Services and Retail Award 2010 [2016] FWCFB 4418 at [38]-[49]; cf. Horticulture Award 2010 [2017] FWCFB 6037

 38   [2017] FWCFB 1001, 265 IR 1

 39   Ibid at [900]

 40   Ibid at [885]-[898]

 41   [2017] FWCFB 3001, 272 IR 1 at [198]

 42   [2017] FWCFB 1001, 265 IR 1 at [1700]

 43   Ibid at [1716]-[1720]

 44   Ibid at [1701]-[1702], [1715]

 45   [2017] FWCFB 3001 at [208]

 46   [2017] FWCFB 1001, 265 IR 1 at [1394]

 47   [2017] FWCFB 3001 at [177]

 48   [2014] FWCFB 1996, 243 IR 132

 49   [2017] FWCFB 1001, 265 IR 1 at [1155]-[1157]

 50   [2017] FWCFB 6034, 272 IR 81 at [16]

 51   [2014] FWCFB 1996, 243 IR 132 at [132]-[139]

 52   Ibid at [138], [140]-[142]

 53   For example, Kosciusko Thredbo Pty Ltd took over the operation of a non-profitable newsagency in the Thredbo Village in order to provide a service to patrons of its alpine resort.

 54   [2018] FWCFB 4732

 55   PR953330

 56   PR959029

 57   [2010] FWA 2847

 58   Ibid at [53]

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