| [2018] FWCFB 4 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Public Holidays
(AM2014/301)
VICE PRESIDENT HATCHER |
MELBOURNE, 2 MARCH 2018 |
4 yearly review of modern awards – common issue – public holidays.
[1] Pursuant to s 156(1) of the Fair Work Act 2009 (the FW Act), the Fair Work Commission (the Commission) is required to conduct 4 yearly reviews of modern awards. This Full Bench was convened to hear and determine a number of claims advanced by different parties involving public holiday provisions in various modern awards.
[2] The relevant claims being considered by this Full Bench are set out below.
Clubs Australia Industrial (CAI) – vary the Restaurants and Licenced Clubs Award 2010 (Clubs Award) to:
• Provide revised additional payment arrangements when Christmas Day falls on a weekend and is “transferred” to another day;
• Revise the rules applicable when substitute public holidays occur; and
• Remove the existing provisions that entitle a full-time employee to be paid for a public holiday that falls on rostered days off (collectively the CAI claim).
Shop, Distributive and Allied Employees Association (SDA) – vary six retail modern awards to rectify an “anomaly” relating to public holidays for workers with non-standard work arrangements (SDA claim).
Australian Manufacturing Workers’ Union (AMWU) – vary four modern awards to provide that where Christmas Day is substituted for another day, an employee working on 25 December each year will receive payment as if that day was a public holiday (AMWU claim).
Health Services Union of Australia (HSU) – vary six community services and health related modern awards to provide that where a public holiday falls on a weekend and a substituted day occurs, the public holiday loading will also be payable for the hours worked on the (original) public holiday (HSU claim).
The Australian Hotels Association (AHA) – vary the Hospitality Industry General Award 2010 (Hospitality Award) to move the part-day public holiday schedule into the body of the award (AHA claim).
[3] We note that certain other proposals related to public holidays have already been considered and dealt with by the Full Bench in a decision concerning penalty rates and related matters, namely the 4 Yearly Review of Modern Awards – Penalty Rates 1 (the FWC Penalty Rates decision). Those matters included a review of the penalty rates payable for work on public holidays in certain retail and hospitality awards and a proposal to introduce a two-tier system of public holiday payments. The latter proposal would provide one level of penalty payment for work on major national holidays with a lower payment on public holidays declared or prescribed by the State and Territory Governments. This was rejected by the Full Bench.2
[4] In relation to the CAI claim, we indicated during the course of the hearing that the Full Bench was aware that a potential outcome of some related proceedings arising from the FWC Penalty Rates decision was that the coverage of the Clubs Award might be subsumed into the Hospitality Award. 3 We also understood that the employers were considering their position and that United Voice had advised that if pursued, it would oppose that approach on a number of grounds. Having heard from interested parties about that circumstance, we determined that it would not be appropriate to determine the CAI claim in this matter if the outcome of the related proceedings was that the separate Clubs Award was, in effect, to be abolished. In that light, we indicated that we would not issue a decision determining the CAI claim in this matter until at least after the outcome of the related proceedings was known.4
[5] We also foreshadowed that the only circumstances in which a decision on the CAI claim in the present matter would be made was where the coverage of the Clubs Award was not subsumed into the Hospitality Award. 5
[6] We have adopted that course of action as we do not consider that it is appropriate to determine the provisions in the Clubs Award when the continuation of the award itself is under review. In the event that the coverage of the Hospitality Award is extended as sought, any consideration of the public holiday arrangements for those employers and employees presently covered by the Clubs Award would need be assessed in the context of the Hospitality Award and the totality of its provisions.
[7] Having advised the parties of our intentions, CAI subsequently elected to proceed with its substantive claim in this matter and we have heard evidence and submissions both in support of, and in opposition to, that claim. After the hearings were conducted in this matter CAI confirmed that it would proceed with an application to have coverage of the Clubs Award subsumed into the Hospitality Award.
[8] This more recent application by CAI has now been referred by the President to the Full Bench as presently constituted. It has been listed to be heard in July this year and accordingly, will not be determined in this decision.
[9] In relation to the AHA claim, we note that the issue of part-day public holidays arises in the context of many modern awards beyond the Hospitality Award. In brief, most of the Commission’s modern awards were varied to include an additional schedule dealing with part-day public holidays, originally in 2012, and again in each subsequent year. There are a number of different versions of the schedule but each is directed at confirming appropriate arrangements for certain part-day public holidays. On each occasion, the various schedules were specified to operate on an interim basis for the relevant year. 6
[10] The final status and terms of the part-day public holiday provisions have not as yet been considered by this Full Bench, pending the finalisation of the review of public holiday provisions more generally. We also note that the various part-day public holiday schedules were varied to include coverage of the 2017 year. 7
[11] The general approach to the review of modern awards was set out by the Full Bench in the 4 Yearly Review of Modern Award – Preliminary Jurisdictional Issues Decision (the Preliminary Jurisdictional Decision). 8 Section 156 of the FW Act requires the Commission to review all modern awards every four years. The review is at large and is to ensure that the modern awards objective set out in s 134 is being met and that the relevant award, together with the National Employment Standards (NES), provides a fair and relevant minimum safety net of terms and conditions.
[12] The modern awards objective in s 134 of the FW Act is as follows:
134 The modern awards objective
What is the modern awards objective?
(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:
(a) the FWC’s functions or powers under this Part; and
(b) the FWC’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.
Note: The FWC must also take into account the objects of this Act and any other applicable provisions. For example, if the FWC is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).
[13] The Commission’s power with respect to achieving the modern awards objective is set out in s 138 of the FW Act:
138 Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.
[14] In CFMEU v Anglo American Metallurgical Coal Pty Ltd (Anglo American)9 the Federal Court considered the expression “necessary to achieve the modern awards objective” in s 138:
“The words “only to the extent necessary” in s 138 emphasise the fact that it is the minimum safety net and minimum wages objective to which the modern awards are directed. Other terms and conditions beyond a minimum are to be the product of enterprise bargaining, and enterprise agreements under Pt 2-4.”10
[15] In Anglo American, the Court also discussed the nature of the Commission’s task in conducting the 4 yearly review:
“The terms of s 156(2)(a) require the Commission to review all modern awards every four years. That is the task upon which the Commission was engaged. The statutory task is, in this context, not limited to focusing upon any posited variation as necessary to achieve the modern awards objective, as it is under s 157(1)(a). Rather, it is a review of the modern award as a whole. The review is at large, to ensure that the modern awards objective is being met: that the award, together with the National Employment Standards, provides a fair and relevant minimum safety net of terms and conditions. This is to be achieved by s 138 – terms may and must be included only to the extent necessary to achieve such an objective.
Viewing the statutory task in this way reveals that it is not necessary for the Commission to conclude that the award, or a term of it as it currently stands, does not meet the modern award objective. Rather, it is necessary for the Commission to review the award and, by reference to the matters in s 134(1) 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.”11
[16] Accordingly, the modern awards objective is to “ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions”, taking into account the particular considerations identified in s 134(1)(a) to (h) (the s 134 considerations). 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.12 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.
[17] In the National Retail Association Case 13 the Court said the following about s 134(1):
“[109] It is apparent from the terms of s 134(1) that the factors listed in (a) to (h) are broad considerations which the FWC must take into account in considering whether a modern award meets the objective set by s 134(1), that is to say, whether it provides a fair and relevant minimum safety net of terms and conditions. The listed factors do not, in themselves, however, pose any questions or set any standard against which a modern award could be evaluated. Many of them are broad social objectives. What, for example, was the finding called for in relation to the first factor (“relative living standards and the needs of the low paid”)? Furthermore, it was common ground that some of the factors were inapplicable to the SDA’s claim.
[110] The relevant finding the FWC is called upon to make is that the modern award either achieves or does not achieve the modern awards objective. The NRA’s contention that it was necessary for the FWC to have made a finding that the Retail Award failed to satisfy at least one of the s 134(1) factors must be rejected.” 14
[18] The modern awards objective is very broadly expressed15 and the matters which may be taken into account are not confined to the s 134 considerations. As the Federal Court observed in Shop, Distributive and Allied Employees Association v The Australian Industry Group16:
“What must be recognised, however, is that the duty of ensuring that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions itself involves an evaluative exercise. While the considerations in s 134(a)-(h) inform the evaluation of what might constitute a “fair and relevant minimum safety net of terms and conditions”, they do not necessarily exhaust the matters which the FWC might properly consider to be relevant to that standard, of a fair and relevant minimum safety net of terms and conditions, in the particular circumstances of a review. The range of such matters “must be determined by implication from the subject matter, scope and purpose of the” Fair Work Act (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40).”17
[19] The extent of the evidence which might be required to support any proposed variation to a modern award was discussed in the Preliminary Jurisdictional Decision as follows:
“The extent of such an argument will depend on the circumstances. We agree with ABI’s submission that some proposed changes may be self evident and can be determined with little formality. However, where a significant change is proposed it must be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation.” 18
[20] We commence with the present statutory context for the public holiday provisions in modern awards.
[21] As would be clear, part of the safety net of the FW Act is provided by the NES and it is important to understand the relationship between the NES and the modern awards. This relationship is established in part by s 55 and s 56 of the FW Act, which provide:
55 Interaction between the National Employment Standards and a modern award or enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or
(b) by regulations made for the purposes of section 127.
Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Note: See also the note to section 63 (which deals with the effect of averaging arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).
56 Terms of a modern award or enterprise agreement contravening section 55 have no effect
A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.
[22] It is evident from s 55(5) that the terms of a modern award (or an enterprise agreement) may duplicate the terms of the NES, and such terms will then operate in parallel with the NES. In addition, modern awards may under s 55(4) also include terms that are ancillary or incidental to the operation of an entitlement of an employee under the NES or which supplement the NES, provided that the effect of those terms is not detrimental to an employee in any respect when compared to the NES. 19 Further, s 55(1) provides that the terms of a modern award must not exclude any provision of the NES, and under s 56 any such term is of no effect.
[23] The NES provisions directly relevant to public holidays are as follows:
114 Entitlement to be absent from employment on public holiday
Employee entitled to be absent on public holiday
(1) An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
Reasonable requests to work on public holidays
(2) However, an employer may request an employee to work on a public holiday if the request is reasonable.
(3) If an employer requests an employee to work on a public holiday, the employee may refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.
(4) In determining whether a request, or a refusal of a request, to work on a public holiday is reasonable, the following must be taken into account:
(a) the nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;
(b) the employee’s personal circumstances, including family responsibilities;
(c) whether the employee could reasonably expect that the employer might request work on the public holiday;
(d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;
(e) the type of employment of the employee (for example, whether full-time, part-time, casual or shiftwork);
(f) the amount of notice in advance of the public holiday given by the employer when making the request;
(g) in relation to the refusal of a request—the amount of notice in advance of the public holiday given by the employee when refusing the request;
(h) any other relevant matter.
115 Meaning of public holiday
The public holidays
(1) The following are public holidays:
(a) each of these days:
(i) 1 January (New Year’s Day);
(ii) 26 January (Australia Day);
(iii) Good Friday;
(iv) Easter Monday;
(v) 25 April (Anzac Day);
(vi) the Queen’s birthday holiday (on the day on which it is celebrated in a State or Territory or a region of a State or Territory);
(vii) 25 December (Christmas Day);
(viii) 26 December (Boxing Day);
(b) any other day, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, other than a day or part-day, or a kind of day or part-day, that is excluded by the regulations from counting as a public holiday.
Substituted public holidays under State or Territory laws
(2) If, under (or in accordance with a procedure under) a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday because of subsection (1), then the substituted day or part-day is the public holiday.
Substituted public holidays under modern awards and enterprise agreements
(3) A modern award or enterprise agreement may include terms providing for an employer and employee to agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday because of subsection (1) or (2).
Substituted public holidays for award/agreement free employees
(4) An employer and an award/agreement free employee may agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday because of subsection (1) or (2).
Note: This Act does not exclude State and Territory laws that deal with the declaration, prescription or substitution of public holidays, but it does exclude State and Territory laws that relate to the rights and obligations of an employee or employer in relation to public holidays (see paragraph 27(2)(j)).
116 Payment for absence on public holiday
If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.
Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.
[24] Section 115(1)(a) specifies eight particular days as public holidays throughout Australia. Section 115(1)(b) provides that other days or part-days declared or prescribed by or under a law of a State or Territory to be observed generally, or within a region of that State or Territory, are also considered public holidays. Regulations may exclude a day or part-day (or a kind of day or part-day) from the definition of a public holiday. 20
[25] Accordingly, the number and timing of State and Territory declared public holidays vary depending on the particular State and Territory. Further, there are different substitution and additional day provisions that vary from one jurisdiction to the next and individual days may be subject to specific proclamations. 21 A modern award or enterprise agreement may, under s 115(3), also provide for a term enabling agreed substitution arrangements to operate.
[26] In relation to the history of the modern award provisions we note that most of the existing provisions were established by the Australian Industrial Relations Commission (AIRC) and later this Commission, then known as Fair Work Australia (FWA), as part of the award modernisation process commenced under Part 10A of the Workplace Relations Act 1996 (Cth) (the WR Act). The Part 10A award modernisation process has been described in the following terms:
“[30] The award modernisation process took place in the period from April 2008 to December 2009 and was conducted in accordance with a written request (the award modernisation request) made by the Minister for Employment and Workplace Relations to the President of the Australian Industrial Relations Commission (AIRC). The process was completed in four stages, each stage focussing on different industries and occupations. All stakeholders and interested parties were invited to make submissions on what should be included in modern awards for a particular industry or occupation. Separate processes, including variously, the provision of submissions, hearings and release of draft awards, were undertaken in respect of the creation of each modern award to ensure parties were able to make submissions and raise matters of concern relevant to particular awards. By the end of 2009 the AIRC had reviewed more than 1500 federal awards and notional agreements preserving State awards (NAPSAs) and created 122 industry and occupation based modern awards.
[31] The award modernisation process was governed by Part 10A of the Workplace Relations Act 1996 (Cth) (the WR Act). Section 576C of Part 10A required award modernisation to be conducted in accordance with an award modernisation request. The process involved the AIRC inviting submission from any interested person, conducting consultations with interested parties, publishing exposure drafts, accepting further written or oral submissions and then publishing a modern award. The modern awards now before us (with the exception of the Food Manufacturing award) were examined in the priority phase of the process.
[32] In making modern awards the AIRC could not, save in limited circumstances, differentiate between States and had the task of balancing interests of employees and employers throughout Australia after examining both federal awards and NAPSAs. In relation to penalty rates for Saturdays and Sundays and other conditions, the AIRC adopted a ‘swings and roundabouts’ approach where the most common provisions were seen as the most influential and were often adopted.” 22
[27] Some of the pre-existing awards considered by the AIRC as part of the Part 10A process contained provisions that were based to some degree upon the principles established in the series of four Full Bench decisions23 of the AIRC with respect to public holidays. These decisions have collectively been regarded as a test case relating to public holiday entitlements under awards of the AIRC at that time (the AIRC Public Holiday Test Case).
[28] Both the Part 10A award modernisation process and the AIRC Public Holiday Test Case were also later considered in 2013 by the Commission in the context of a review (the Transitional Review) conducted under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Provisions Act). The Transitional Review was limited in nature 24 but involved the Commission dealing with, amongst many other matters, various proposals to amend the public holiday provisions of many modern awards based in large part upon the AIRC Public Holiday Test Case. In the Modern Awards Review 2012 - Public Holidays25 (the 2012 Public Holidays review) the Full Bench decided against adopting most of the proposed variations, at least as part of the Transitional Review.
[29] The SDA seeks to vary the following modern awards:
• General Retail Industry Award 2010;
• Hair and Beauty Industry Award 2010;
• Fast Food Industry Award 2010;
• Pharmacy Industry Award 2010;
• Mannequins and Models Award 2010;
• Storage Services and Wholesale Award 2010; and
• Vehicle Manufacturing, Repair, Services and Retail Award 2010 (collectively the retail awards).
[30] Although the detail of the variations sought differ between the awards, the basis of the SDA claim is that full-time and five day a week part-time employees who work Monday to Friday receive the benefit of most public holidays except Easter Saturday (and in NSW Easter Sunday). States and Territories have legislated to provide that, in respect of most “moveable” public holidays, whenever they fall on a weekend there will be an additional public holiday or a substitute day on the following Monday and/or Tuesday as appropriate. This means that generally Monday to Friday workers do not miss out on public holidays.
[31] The SDA contends that workers with non-standard work arrangements are disadvantaged compared to Monday to Friday workers when a public holiday falls on their non-working day. That is, they lose the benefit of the public holiday.
[32] Although the detail of the proposed clauses was modified and differs between awards, the SDA proposes to vary the provisions regarding public holidays so that workers with non-standard work arrangements, in effect, are treated the same in this respect as Monday to Friday workers.
[33] As originally conceived, the SDA proposal involved inserting clauses into the relevant modern award with the following effect:
“This subclause applies to full time employees, and to part time employees who work an average of five days per week.
If a public holiday or a part-day public holiday falls on a day an employee is not rostered to work they shall be entitled to receive by mutual agreement:
a) Another day or part-day off in lieu; or
b) An equivalent day or part-day’s pay; or
c) One extra day or part-day added to his or her annual leave.
This subclause shall not apply to public holidays falling on a Saturday or a Sunday (except where they are substituted to another day) nor to part-day public holidays of less than eleven hours.” 26
[34] During the course of proceedings some additional changes were proposed to deal with some criticisms made by the employer groups.
[35] The final form of clause proposed by the SDA (in relation to the General Retail Industry Award 2010) was as follows:
“This subclause applies to all full time employees, and to those part time employees who having regard to their regular pattern of work, work an average of five days per week over a four week roster cycle.
If a public holiday or a part-day public holiday falls on a day an employee is not rostered to work they shall be entitled to receive either:
a) Another day or part-day off in lieu of an equivalent day or part-day’s pay at the employee’s base rate of pay; or
b) An equivalent day or part-day off in lieu of an equivalent day or part-day’s pay at the employee’s base rate of pay; or
c) One extra day or part-day added to his or her annual leave.
The employer must consult with the employee to seek agreement about which of the above benefits will be provided to the employee. In the absence of agreement, the employer may determine which benefit will be provided to the employee.
This subclause shall not apply to public holidays falling on a Saturday or a Sunday (except where they are substituted to another day) nor to part-day public holidays of less than eleven hours.
In this clause, in respect of full time employees “day” means 7.6 hours. In respect of part time employees “day” means the average number of the employee’s hours rostered per day prior to the public holiday in the four week cycle.” 27
[36] The above version was applicable to four of the retail awards, with a similar proposal applicable to the remaining two awards being agitated by the SDA. In those two awards, a modified version of the proposal was advanced in recognition of the fact that they already had certain provisions dealing with public holidays and rostered days off (RDOs).
[37] The SDA contends that its claim is supported by, and consistent with, the AIRC Public Holiday Test Case. In that regard it contends that these decisions sought to establish general principles and that these remain appropriate in the present context. It also contends that the AIRC and FWA did not consider the AIRC Public Holiday Test Case to any significant degree in relation to the retail awards in the Part 10A award modernisation process. Further, the SDA claim was advanced on the basis that similar provisions to those claimed were present in 47 modern awards and in many predecessor awards to the modern awards, including six such Federal awards in which it had a significant interest.
[38] The SDA contends that as a matter of fairness all workers, including part-time employees, should have the benefit of all of the proclaimed public holidays.
[39] In relation to part-time employment, the SDA contends that there had been a very significant increase in the use of such employees in the 22 years since the AIRC Public Holiday Test Case and that their interests should be recognised and accommodated. Further, the SDA contends that the significant extent of weekend work in the retail sector was confirmed in the FWC Penalty Rates decision.
[40] The SDA relied upon the evidence of 11 retail employees. These were drawn from workplaces in the general retail industry (eight witnesses), with two from the hairdressing and beauty industry, and one from the pharmacy sector.
[41] The SDA contends that this evidence supports the following propositions:
• a variety of non-standard work arrangements exist in the industries covered by the relevant awards;
• a significant number of public holidays fall on days employees are not rostered to work;
• some employers provide compensation to employees on merit or pursuant to an enterprise agreement, but some employees lose the benefit of public holidays and receive no compensation for the loss;
• sometimes the loss may be significant – even in excess of half the number of public holidays in a year;
• such employees suffer a serious disadvantage compared to Monday to Friday workers; and
• it is a disadvantage in the real world and not a theoretical disadvantage.
[42] The SDA also relied upon a statement of facts agreed with the ARA. 28 Amongst other matters, that statement confirmed that between five and seven public holidays occurred on Mondays per annum.
[43] The SDA contends that the revised proposal met the concerns advanced by the employers, including by clarifying its intended operation and permitting the employers to determine the appropriate method of compensation for the public holiday concerned. It also contrasted both the evidence presented and the nature of the claim in this matter with the ACTU claim made as part of the 2012 Public Holidays review. The SDA claim was supported by the AMWU in relation to the Vehicle Manufacturing, Repair, Services and Retail Award 2010. 29
[44] The SDA claim was opposed by the Australian Retailers Association (ARA), the Australian Industry Group (Ai Group), Australian Business Industrial (ABI), the NSW Business Chamber Limited (NSWBC) , the Pharmacy Guild of Australia (PGA) and the Hair and Beauty Australia Industry Association (HBIA).
[45] The ARA contends that the SDA claim would cost business between $177 million and $267 million depending upon the rate of pay involved.
[46] The Ai Group contends that the Commission was now operating in a different legislative framework, which included different objectives, constraints on the type of matters to be included in modern awards and a different and more prescriptive framework for public holidays arising from the NES. In particular, the Ai Group contends that modern awards are intended to be a safety net to operate in conjunction with the NES and that issues of fairness between employees no longer has the same force that it did. Further, the modern awards objective requires the Commission to also consider the impact upon employers, and the Commission should not be satisfied on the material before it that the proposed provisions constitute a fair and relevant part of the safety net. In particular, there is little or no evidence concerning the extent of non–standard working arrangements in these industries.
[47] The Ai Group submitted that the SDA claim is more expansive than the AIRC Public Holidays Test Case and no cogent reasons were established for departing from the approach taken by the AIRC under the Part 10A award modernisation process, which did not include the relevant provisions within the relevant modern awards. Further, it contends that the claim did not represent a common entitlement under the existing modern awards.
[48] The Ai Group further contends that the SDA proposal is unworkable. That is, the clause would apply to all full-time employees and this could have the effect that all full-time employees would benefit from all public holidays that fall Monday to Friday no matter what days they worked or how many hours they worked on particular days. In addition, there was no clarification as to how the average for part-time employees was to be calculated including over what period and whether the average would contemplate overtime hours in addition to any ordinary hours. Further, there is no indication in the clause as to what the relevant rate of pay would be for present purposes. In addition, the Ai Group contends that the evidence did not support the proposition that employees who do not work Monday to Friday suffer a disadvantage relative to those that do, and that in the context of the retail industry it can no longer be considered that working days other than five days a week Monday to Friday is a “non-standard” working arrangement. In that context, the Ai Group contends, based upon the limited evidence that is before the Commission, that some of the circumstances relied on by the SDA lead to the view that some of the “non-standard” employees will have the benefit of at least as many if not more public holidays than an employee who works Monday to Friday. Further, the proposed clause is not limited to circumstances in which an employee works in accordance with a “non-standard” arrangement and the NES already affords them an entitlement where an employee is not rostered to work on a public holiday.
[49] The Ai Group submits that the revised proposal advanced by the SDA does not deal with these criticisms and suffers from many of the same deficiencies.
[50] ABI and the NSWBC contend that the SDA claim, along with that advanced by the AMWU and HSU, are in reality not about public holidays. Each involves claimed entitlements about days which are not public holidays relevant to the employees in question. That is, if an employee is not rostered to work on one of these particular days, they are free to enjoy the public holiday and they have not lost any entitlement as a result. Further, the SDA claim relied on the AIRC Public Holiday Test Case, but that test case took place in a different legislative context and was of limited relevance to these matters. In any event, the SDA claim is based on the proposition that employees have an entitlement to a specific number of days per annum and this is not consistent with the scheme or terms of the FW Act.
[51] The PGA and the ARA contend that the SDA claim would represent a significant change and that probative evidence of the kind required by the Preliminary Jurisdictional Decision has not been provided. The ARA also contends that the AIRC and then FWA made a conscious decision to exclude the AIRC Public Holiday Test Case from the General Retail Industry Award 2010.
[52] In relation to the Pharmacy Industry Award, the PGA also contends that the SDA has failed to account for the additional remuneration already paid for weekend work, and their claim would result in employees who regularly work weekends receiving higher wages in addition to paid public holidays not worked. This is despite the fact that the employee concerned ultimately performs the same type of work as an employee in the same position who is regularly rostered to perform work Monday to Friday. The PGA submits this is an inappropriate outcome and one that has not been justified by any probative evidence adduced by the SDA.
[53] The PGA also contends that the SDA is merely ventilating a claim which has previously been rejected by the Commission, and that the SDA has made no new arguments nor adduced the required standard of evidence to support the proposed change in relation to the Pharmacy Industry Award. Further, it argues that the SDA submission that the failure to include a term in the Pharmacy Industry Award in the form sought is an “anomaly” could not be accepted in light of the Full Bench’s views in the context of the ACTU claim made in the 2012 Public Holiday review.
[54] CAI contends that provisions of the nature sought by the SDA are not consistent with the FW Act and would negate or exclude the statutory effect of the NES in a manner proscribed by s 116 of the FW Act, in that s 116 provides that an employee does not obtain a public holiday benefit unless the employee works on the day in question. CAI also contends that even if not excluded by the NES and s 116, such provisions were not in line with the legislative scheme nor consistent with the outcome of the Part 10A modern award process in relation to the Retail Award, and should not be made here.
[55] In relation to the Part 10A award modernisation process, CAI contends that the AIRC took the view that the NES should not generally be supplemented by higher standards and, in relation to those modern awards that contain such provisions, these were not the subject of objections or specific decisions at the time.
[56] The AMWU seek to vary the following modern awards:
• Manufacturing and Associated Industries and Occupations Award 2010;
• Food, Beverage and Tobacco Manufacturing Award 2010;
• Graphic Arts, Printing and Publishing Award 2010; and
• Vehicle Manufacturing, Repair, Services and Retail Award 2010.
[57] The effect of the proposed variations would be to provide that where Christmas Day is substituted for another day, an employee working on 25 December each year will receive payment as if that day was a public holiday.
[58] The AMWU contends that the claim is justified on the basis of the following propositions:
• The AIRC Public Holiday Test Case recognised Christmas Day as a special public holiday;
• Christmas Day warrants differential treatment. This remains the case despite changes in religious affiliation with Census data 30 indicating that a majority of Australians describe themselves as Christians and research31 has indicated that 87% of those who are not religious still celebrate Christmas to some extent;
• The “unsociable” hours of work involved on Christmas Day should be recognised and compensated for even where a substitute day is established; and
• It is necessary to supplement the NES in this respect so as to provide a fair and relevant safety net.
[59] In relation to the Part 10A award modernisation process and the Transitional Review of modern awards, the AMWU contends that neither process involved a complete or binding determination on the issue. However, a consideration of other modern awards demonstrated that the claim was not novel and that the expectations in the community as distilled in the AIRC Public Holiday Test Case is reflected in some modern awards.
[60] The Australian Catholic Council for Employment Relations and the Catholic Commission for Employment Relations supported the applications for modern awards to provide for payment of the public holiday penalty for employees working on Christmas Day irrespective of whether a substitute or additional public holiday is declared.
[61] The employer parties opposed the AMWU claim and generally relied upon the submissions that we have set out in relation to the SDA claim.
[62] Ai Group also contends that the circumstances contemplated in the AMWU claim arise on rare occasions and will not arise again until 2021. Further, based on the experience in 2016, 25 December was a public holiday in every State and Territory. On that basis, the Full Bench should not be satisfied that the proposed provision is necessary as contemplated in s 138 of the FW Act.
[63] Ai Group contends that there is no evidence that families celebrate Christmas only on 25 December each year but in any event the status of Christmas Day in terms of public holidays is a product of decisions made by State and Territory governments. Further, if the AMWU contention about the significance of 25 December is accepted, the more appropriate remedy would be to vary modern awards so that the penalty rate is payable on that day and not the substitute or additional public holidays.
[64] The HSU claim involves the following modern awards:
• Aboriginal Community Controlled Health Services Award 2010;
• Aged Care Award 2010;
• Ambulance and Patient Transport Industry Award 2010;
• Health Professionals and Support Services Award 2010;
• Nurses Award 2010; and
• Social, Community, Home Care and Disability Services Industry Award 2010.
[65] The claim as finally advanced 32 seeks the insertion of public holiday entitlements in the circumstances where a (weekend) public holiday is substituted by a public holiday occurring during the week. This is similar to the circumstance sought to be addressed in the AMWU claim, albeit in that case only in relation to Christmas Day. The intent of the HSU claim is to provide that where a public holiday falls on a weekend but is then substituted for another weekday, an employee who is required to work on the actual weekend day but does not also work on the substitute public holiday shall receive payment for the work on the actual day as if it were a public holiday. Further, the claim would entitle an employee who works on the substitute day or both the substitute day and the actual day only to the relevant public holiday penalty rate on the substituted day.33
[66] A draft determination provided by the HSU to reflect this approach as would be applied to the Aboriginal Community Controlled Health Services Award 2010 was in the following terms:
“29.4 Where a public holiday falls on a weekend
a. Where any public holiday falls on a Saturday or Sunday and the public holiday is substituted for another day, an employee required to work on the actual public holiday day and who does not also work on the substituted day, shall receive payment for that work on the actual day as if it were a public holiday.
b. An employee who works on the substituted day or both the substituted day and the actual day will only receive the relevant public holiday rate on the substituted day.”
[67] The HSU claim in relation to the substitute days is based upon the following contentions:
• For employees in the health industry, which operates every day of the year, the NES provisions for a substituted public holiday, together with State and Territory public holiday legislation, create an anomaly. When a weekend public holiday has a substitute day, an employee who works on the actual day itself is not paid any penalty. Only an employee who works on the substitute day receives the public holiday penalty rate.
• Because of the varying definitions of public holidays under State legislation, this anomaly is experienced only in States and Territories where public holiday legislation provides a substitute day rather than an additional day on the particular public holiday.
• The AIRC Public Holiday Test Case recognised that the circumstances of employees who did not regularly work a five day Monday to Friday week should be taken into account so that they did not miss out on public holiday benefits, and that those employees working on Christmas Day, where it was not a public holiday, should receive an additional loading and be entitled to the benefit of the substitute day.
• The nature of the health services and related industries is such that there are many employees engaged on non-standard working hours or days and these include night-shift workers undertaking 10 hour shifts over four days.
• The Nurses Award 2010 (Nurses Award) already contains a provision dealing with the Christmas Day arrangements and this was also the case in a number of other modern awards.
• Many pre-modernisation awards also provided for similar arrangements.
• The proposed variations are consistent with the modern awards objective, and will have the effect of clarifying the NES entitlement for all employees to a day of leave without loss on a public holiday.
[68] The employer parties appearing in this matter opposed the HSU claim on grounds broadly consistent with their position in relation to the other two union claims.
[69] Ai Group contend that the HSU claim would have the effect of circumventing the role that State and Territories play in specifying public holiday arrangements and that a case has not been made out to supplement the existing safety net provided by the NES. In addition, they contend that the instance of public holidays falling on a weekend and being substituted for another day by State and Territory legislation is low. The AIRC Public Holiday Test Case decision should be given little weight and in any event the HSU claim is far more expansive than those principles. Ai Group also contend that the entitlement sought was uncommon in pre-reform awards underpinning the making of the modern awards subject to the HSU claim, and the HSU has not established that employees who work non-standard hours are in fact disadvantaged. Ai Group also contend that the proposed clause is unfair to employers, the absence of the proposed clause will likely encourage the HSU and its members to engage in collective bargaining, the clause may undermine flexible work practices and the efficient production of work, and will increase employment costs.
[70] Aged and Community Services Australia and Leading Aged Care Service Australia Limited (the Aged Care Employers) also opposed the HSU claim. The Aged Care Employers contend that the issue had been previously argued, considered and rejected by the Commission in 2010 and 2013, the HSU had advanced no evidence to support its variations, and that the HSU had not identified that the claim flows from any relevant prevailing standard. In addition, the Aged Care Employers contend that the HSU had not justified its claim by reference to the modern awards objective and that the proposal would increase cost to employers, had no relationship to productivity, and would not encourage collective bargaining.
[71] The Private Hospital Industry Employers’ Association (PHIEA) also opposed the form of variation proposed by the HSU in relation to awards relevant to their sector, being the Health Professionals and Support Service Award 2010 and the Nurses Award. The PHIEA did acknowledge that the Nurses Award had been varied in respect to Christmas Day following an agreed position as part of the transitional review. However, this involved the effective transfer of a 50% loading from the substituted day to 25 December, thus not adding to the costs for the businesses concerned. The PHIEA indicated that it would support a variation to the relevant awards provided it reflected the approach in the current Nurses Award. 34
[72] To the extent that the submissions made by the parties in relation to any of the claims before this Full Bench have broader application to this matter, we have taken them into account more generally.
[73] We have earlier set out the required approach to the 4 yearly review and the application of the modern awards objective taken in other relevant matters. Further, we consider that the changes proposed here are significant and as such need to be supported by appropriate submissions and probative evidence directed to demonstrating the facts supporting the proposed variations.
[74] In addition, before dealing with each of the claims it is appropriate that we comment upon the implications of the AIRC Public Holiday Test Case in the present context. The test case remains relevant in two respects. Firstly, it influenced some of the pre-modern awards taken into account by the AIRC and FWA in the Part 10A award modernisation process. Secondly, the principles determined are matters that should be considered in the present context to the extent that they remain relevant. However, that test case was determined in a different statutory context. In particular, the scheme of the FW Act places reliance upon a relatively comprehensive set of minimum standards provided by the NES and the role of the modern awards is intended to operate in that context. In relation to public holidays, those minimum standards deal in a comprehensive manner with the prescription of public holidays, including the express right to be absent on a public holiday, subject to a reasonable contrary request, and the effective delegation of the actual public holidays to the Parliaments of the States and Territories, including the substitution and additional day arrangements that are to apply.
[75] Further, the modern awards objective was not a consideration when the AIRC Public Holiday Test Case was determined.
[76] The 2012 Public Holiday review and the decisions made by the AIRC and FWA in the context of the Part 10A award modernisation process are also broadly relevant to our consideration. However, as with the AIRC Public Holiday Test Case, the setting and statutory purpose of those matters must be taken into account when considering their import in the present context. 35
[77] In the AIRC Public Holiday Test Case, the AIRC Full Bench in its 20 March 1995 decision 36 stated as follows:
“2 - Full Time Workers
We refer here to full-time workers who do not regularly work a five-day, Monday – Friday week. Such workers include persons who work regularly on Saturday or Sunday, workers with variable rosters, continuous shift workers and employees who work nine days per fortnight or 19 days in each four weeks. This list is not intended to be exhaustive.
It may happen that a prescribed holiday falls upon a day when the employee would not be working in any event. Fairness requires that the worker be not disadvantaged by that fact. The appropriate compensation, we think, is
- an alternative “day off”; or
- an addition of one day to annual leave; or
- an additional day’s wages
We understand that such compensation is already provided in many awards.”
[78] This principle was applied in a number of awards by the AIRC. In total there were six pre-modern Federal Awards with similar provisions in which the SDA had an interest. 37 We also note that the application of this principle to part-time employees was considered by the AIRC, albeit in the form of a recommendation, in SDA and Woolworths Variety Stores Ltd.38
[79] In 2009, the SDA made an application to vary the General Retail Industry Award 2010 to provide a public holidays non-working day provision to include terms that were broadly consistent with the current SDA claim. The matter was ultimately heard and determined by FWA under the terms of the Transitional Provisions Act. In rejecting the SDA’s application, the Full Bench stated:
“In the context of opposition by employers, the NES and limited award supplementation, we do not believe that a case for these variations has been established.” 39
[80] We understand the reference to “limited award supplementation” to denote the view adopted by the AIRC that caution was required when considering the supplementation of the NES. 40 FWA also took the view that whilst “there are cases in which supplementation is appropriate, the NES are the primary guide to the safety net in relation to the conditions of employment with which they deal.”41 Further, although there was no mention made of the AIRC Public Holiday Test Case in the 2009 decision, the SDA application and the earlier proposals42 concerning public holiday provisions advanced by the SDA in relation to what became the 2010 modern award were based in large part upon that case.
[81] In the 2012 Public Holiday review, the Full Bench was dealing with a similar proposal by the ACTU to that now advanced by the SDA. However, we note that the ACTU’s claim was for a general provision, rather than an industry specific arrangement, and involved a different basis for the selection of the relevant compensation options than evident in this matter. The Full Bench considered the principles arising from the AIRC Public Holiday Test Case and observed:
“[59] The ACTU argued that these principles should be applied to the relevant modern awards consistent with s 134(1) of the FW Act with three additions to the model provision which it submitted improve upon, but were consistent with, the Public Holiday Test Case principles, namely:
(a) the model provision applies to “part-time (non-casual) employees who work 5 days or more per week averaged over a four week cycle” in addition to full-time employees who do not regularly work a five day, Monday to Friday week;
(b) where an employee elects to take an alternative day off, there is a requirement that this day be taken within 28 days of the prescribed public holiday; and
(c) employees are entitled to elect the form of compensation they will receive.”
[59] The employers opposed the proposed provision and contended that the ACTU’s model provision would be inconsistent with s 116 of the FW Act and various part-time and other provisions contained in numerous modern awards. Further, the employers contended that, if implemented, the proposal would operate very unfairly for employers and would be expensive and unproductive.
[60] The ACCI contended that whilst the NES may be supplemented in limited circumstances, this proposed provision was akin to prescribing an additional public holiday, in circumstances where the employee would not, under the NES or modern award, be entitled to the public holiday. This was said to be different to allowing a modern award to include terms providing for an employer and employee to agree on a substitution of public holidays.
[61] Ports Australia submitted that the model clause was contrary to s 116 of the FW Act in that it seeks to provide public holiday entitlements to employees who are not ordinarily rostered to work on public holidays. That is, this is not merely “ancillary or incidental” to the operation or entitlement of an employee to public holidays under the NES or intended to “supplement” the NES. To make such a variation would, it suggested, be inconsistent with s 116 and hence contrary to s 55 of the FW Act.
[62] The AIRC Public Holiday Test Case remains a relevant consideration for present purposes, but there is considerable force in Ai Group’s submission that it was determined in a different statutory context. In particular, the scheme of the present Act places reliance upon a relatively comprehensive set of minimum standards provided by the NES and the role of the modern awards is intended to operate in that context.
[63] Whether or not this particular element of the ACTU model provision is ancillary or incidental to the public holidays entitlements in the NES, in our view it could be considered to supplement the NES within the meaning of s 55(4)(b) of the FW Act. We also note that s 139(1)(c) of the FW Act contemplates modern awards having provisions concerning “arrangements for when work is performed, including hours of work, rostering, notice periods, rest breaks and variations to working hours.” Provided that the provision is not detrimental to an employee in any respect of any NES entitlement, the adoption of the model provision is a matter of discretion having regard to the nature of this Transitional Review and the merit of the proposal.
[64] The AIRC and FWA Full Benches did not apply all elements of the AIRC Public Holiday Test Case decisions to many of the modern awards during the award modernisation process. However, certain elements were included having regard to the former awards and NAPSAs applying in each industry and to the legislative framework at the time of the award modernisation process.
[65] The FWC Penalty Rates decision comprehensively considered the award modernisation process and its consequences for the Transitional Review. This included the “swings and roundabouts” approach having regard to the terms of awards and NAPSAs applying in the relevant industries and the need for parties seeking to change the modern awards to demonstrate cogent reasons for such. Those observations are apposite to the matters presently before us.
[66] While this aspect of the ACTU’s claim is not without merit it does constitute a substantial variation of the award safety net and in our view is more appropriately dealt with in the 4 yearly review of modern awards provided for in s 56 of the FW Act. The Transitional Review is quite separate from, and narrower in scope than, the 4 yearly reviews. As the June 2012 Full Bench observed:
“[91] It is important to recognise that we are dealing with a system in transition. Item 6 of Schedule 5 forms part of transitional legislation which is intended to facilitate the movement from the WR Act to the FW Act. The Review is a “one off” process required by the transitional provisions and is being conducted a relatively short time after the completion of the award modernisation process. The transitional arrangements in modern awards continue to operate until 1 July 2014. The fact that the transition to modern awards is still occurring militates against the adoption of broad changes to modern awards as part of the Review. Such changes are more appropriately dealt with in the 4 year review, after the transition process has completed. In this context it is particularly relevant to note that s 134(1)(g) of the modern awards objective requires the Tribunal to take into account:
“the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia . . .”
[67] On the material before us there is insufficient information to adequately assess the impact of the proposed change. The same may be said of the ACTU’s proposed model clause as a concept. Further, we consider that the practical operation of the proposed model provision to different patterns of employment as provided in some of the modern awards is uncertain and may well create unintended consequences.
[68] We have concluded that this element should not be adopted as a model provision or included in the named awards as part of this Transitional Review.” 43
[82] We have already dealt with the status of the AIRC Public Holiday Test Case in the present statutory context. Further, consistent with the views of the Full Bench in 2012 Public Holiday Review, we consider that a clause of the nature now proposed would be a supplementary provision to the NES as contemplated by s 55(4)(b) of the FW Act.
[83] The witness evidence and other materials provided by the SDA provide some insight into the impact of the current award provisions on the employees involved. However, that evidence does not enable us to determine with any confidence the range of non-typical working arrangements under the various modern awards or to ascertain the likely practical impact of the claim. We would also observe that the ARA’s cost estimate suffers from the same deficiencies and is not in our view a reliable indication.
[84] There are 18 modern awards that have a provision of the kind contemplated in the SDA claim but such does not represent a universal standard. There are also 47 modern awards which contain a provision dealing with non-standard workers and public holidays, with most of these operating in the context of RDO arrangements.
[85] We turn to the various considerations established by the modern awards objective in s 134(1) of the FW Act.
[86] We accept that a substantial proportion of the employees covered by the retail awards are low paid for present purposes. 44 The SDA claim if granted is unlikely to have any meaningful impact upon relative living standards. To the extent that the claim would increase the entitlements of the low paid employees, this consideration is supportive of the claim.
[87] We do not consider that the granting of the claim will encourage collective bargaining. It would remove an incentive, albeit a small one, for employees to bargain and whilst it could lead to some additional complexity for employers who might seek to bargain for a simpler approach, we do not consider that this is a likely scenario.
[88] This consideration is not supportive of the claim.
[89] There is no evidence before us that would enable any significant conclusions to be drawn in this regard. However, it is unlikely that a variation of this nature would lead to measurable changes in workforce participation.
[90] This is a neutral consideration.
[91] We do not consider that the claim will impact upon the factors referenced in this consideration.
[92] The employees concerned with this claim are not working on declared public holidays. The circumstances potentially relevant are employees working unsociable hours or on weekends.
[93] The Full Bench in the FWC Penalty Rates decision stated as follows:
“[1673] Section 134(1)(da) requires that we take into account the ‘need to provide additional remuneration’ for, relevantly, ‘employees working on weekends’. As mentioned earlier, an assessment of ‘the need to provide additional remuneration’ to employees working in the circumstances identified in paragraphs 134(1)(da)(i) to (iv) requires a consideration of a range of matters, including:
(i) the impact of working at such times or on such days on the employees concerned (i.e. the extent of the disutility);
(ii) the terms of the relevant modern award, in particular whether it already compensates employees for working at such times or on such days (e.g. through ‘loaded’ minimum rates or the payment of an industry allowance which is intended to compensate employees for the requirement to work at such times or on such days); and
(iii) the extent to which working at such times or on such days is a feature of the industry regulated by the particular modern award.”
[94] It was common ground between the parties that this was a neutral consideration in the present context. 45 Having regard to the approach outlined above, we agree. We note in particular that an employee working on a weekend day which, but for a substitution effected by or under State or Territory legislation, would be a public holiday, would nonetheless still receive the relevant weekend penalty rate prescribed by the applicable retail award. Those weekend penalty rates were exhaustively reviewed in the FWC Penalty Rates decision and may be regarded as consistent with the modern awards objective.
[95] This consideration was described by the Full Bench in the FWC Penalty Rates decision in the following terms:
“[204] Section 134(1)(e) requires that we take into account ‘the principle of equal remuneration for work of equal or comparable value’.
[205] The ‘Dictionary’ in s 12 of the FW Act states, relevantly:
‘In this Act:
equal remuneration for work of equal of comparable value: see subsection 302(2).’
[206] The expression ‘equal remuneration for work of equal or comparable value’ is defined in s 302(2) to mean ‘equal remuneration for men and women workers for work of equal or comparable value’.
[207] The appropriate approach to the construction of s 134(1)(e) is to read the words of the definition into the substantive provision such that in giving effect to the modern awards objective the Commission must take into account the principle of ‘equal remuneration for men and women workers for work of equal or comparable value’.” 46 (endnotes omitted)
[96] It was common ground between the parties that this was not a relevant consideration in the present context. 47 We agree.
[97] Section 134(1)(f) is not confined to a consideration of the impact of the exercise of modern award powers on ‘productivity, employment costs and the regulatory burden’. It is concerned with the impact of the exercise of those powers ‘on business’.
[98] It is self-evident that if the claim was granted then employment costs would increase to some limited degree. Given the nature of the proposed provision and the need to ascertain whether and how the entitlement would operate in a variety of circumstances, the claim would also increase the regulatory burden upon employers to that extent.
[99] This consideration is not supportive of the claim.
[100] Despite the attempts by the SDA to address the various drafting concerns raised by the employers and this Full Bench during the course of the proceedings, we consider that the revised claim remains uncertain in many respects.
[101] These include the basis upon which a part-time employee would be eligible for the additional entitlements and the calculation of days and hours in working hours’ arrangements operating outside of more typical roster arrangements.
[102] This element of the consideration is not supportive of granting the claim.
[103] The retail awards concerned are industry awards and broadly speaking they do not generally operate in conjunction with other modern awards.
[104] There is no evidence that the claim would have any meaningful impact upon the relevant factors. This is a neutral consideration.
[105] The modern awards objective is to “ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions”, taking into account the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into account those considerations insofar as they are relevant to the matter before us.
[106] Despite the improved drafting and narrowing of the scope of the proposed provisions in the revised SDA claim, we do not consider that the retail awards should be varied as sought. In this sector, the AIRC and FWA considered the provisions from the pre-modernisation awards, including those reflecting an approach found in the AIRC Public Holiday Test Case. That approach was not followed and in the context of the scheme of the FW Act, we are not persuaded that a different approach should be taken now in relation to these awards.
[107] Depending upon the working arrangements involved, it is also possible under the SDA claim for the “non-standard employees” to receive more public holidays than the “Monday to Friday” employees and this is problematic given the stated purpose of the proposal. It appears to us impossible to craft a variation which would ensure that in all circumstances “non-standard employees” would receive the same number of paid public holidays annually as “Monday to Friday” employees. The SDA’s inclusion of part-time employees working an average of five days per week in its claim, to the exclusion of all other part-time employees, also lends itself to arbitrary results likely to be inconsistent with the objective of equalising the number of public holidays for all employees. Further, there is complexity in the potential application of the provisions, and we are unable to determine the real impact of the claim given that factor and the status of the evidence about the nature and extent of non-standard working arrangements under these modern awards.
[108] For these reasons we are not satisfied that the proposed variations are necessary to ensure the relevant awards achieve the modern awards objective. The SDA’s claim must therefore be rejected.
[109] It is convenient to deal with the AMWU and HSU claims together.
[110] We have outlined earlier the operation of the NES. This includes the capacity for State or Territory governments to establish both additional and substitute public holidays for that purpose. Under s 115(2), where a substitute day is created, it is that day and not the original day (such as 25 December) that is the public holiday for the purposes of the NES.
[111] The practice across the various jurisdictions is not consistent. For instance, where Christmas Day falls on a weekend in Victoria, the relevant legislation substitutes another day for 25 December. 48 In South Australia, except where a Sunday is involved, the same result occurs.49 In other States and Territories, either as a result of legislative arrangement or proclamation,50 in recent years an additional public holiday has been established. In those jurisdictions, both the original and additional days are public holidays for the purposes of the NES (s 115(1)(b)).
[112] Various substitute and additional day arrangements also apply to some other public holidays when they fall on a weekend. Substitute days may, depending on the jurisdiction involved, also involve ANZAC day and New Year’s Day where they fall on a weekend.
[113] Section 115(3) of the FW Act also provides that by an agreement made under a term of an award or enterprise agreement a public holiday may be substituted. All of this means that under the relevant award employees who work on 25 December where it falls on a weekend may in some very limited circumstances not receive the public holiday penalty rate or any additional payment for that day beyond the normal payment for the weekend day in question. For reasons set out earlier, this has not been common in more recent years.
[114] As part of the AIRC Public Holiday Test Case, the AIRC Full Bench relevantly said:
“[W]e propose in this decision to consider various types of non-standard arrangements and to articulate principles which we see as being generally appropriate. Members of the Commission dealing with particular awards will be expected to apply these principles wherever possible, but may need to adapt them to specific circumstances...
The ACTU contends that Christmas Day should be regarded differently from other days which are subject to substitution. A non-standard full-time worker required to work on the actual day should receive the public holiday rate for that day, rather than the Saturday or Sunday rate. This, the ACTU argues, is a proper recognition of the significance of Christmas Day in the lives of many members of the community. We agree with the underlying contention of the ACTU but favour a more straightforward prescription. In our opinion, the employee should receive the Saturday or Sunday payment (as appropriate) plus a loading of one-half of a normal day’s wages for a full day’s work. Thus if the ordinary Sunday rate is double time, the employee who works on Christmas Day when it is a Sunday will be paid 2.5 times the normal daily rate and be entitled to the benefit of the substitute day...
In summary, we commend the following principles: ...
. . .
(3) that a full-time worker who ordinarily works on a Saturday or Sunday should be paid at the Saturday or Sunday rate for work performed on the ‘actual’ day when substitution is prescribed, save that when the ‘actual’ day is Christmas Day the employee should receive a loading of one-half of an ordinary day's wages ...
... These principles are more fully elaborated above. Although we expect that they will generally be implemented in the application of safety-net standards, we acknowledge the diversity of practices that have been in place and anticipate that the principles pertaining to non-standard working arrangements will be applied sensitively and flexibly, with due regard to special circumstances.” 51
[115] In 2010, FWA considered an application by the AMWU and other unions to introduce a Christmas Day loading into modern awards. That application was made under s 158 and/or s 160 of the FW Act and involved an application to vary the modern awards outside of the 4 yearly review process provided by the FW Act. In Australian Nursing Federation and others 52, the Bench had regard to the AIRC Public Holiday Test Case decision but declined the variations on the following grounds:
“[44] It is apparent the Public Holiday Test Case decision of 1995 commended the additional penalty rate in respect of Christmas Day as a principle that may need adaption to specific circumstances. Further, while the Full Bench expected the principle would generally be implemented, the Full Bench acknowledged there were pre-existing diverse practices and anticipated the principle would be applied sensitively and flexibly with due regard to special circumstances.
[45] The additional penalty rate in respect of Christmas Day is not a prevailing standard in the underlying award-based transitional instruments that previously covered the employers and employees now covered by the modern Manufacturing Award, modern Cleaning Award, modern Security Award or modern Nurses’ Award.
[46] In respect of the modern Finance Award, the additional penalty rate where Christmas Day both falls on a weekend and is not a “public holiday” was specifically raised during the course of the AIRC proceedings concerning the making of the modern Finance Award. However, the AIRC did not include it in the modern Finance Award.
[47] Fair Work Australia’s ability to vary modern awards outside the four yearly reviews of modern awards is constrained by the Fair Work Act. We do not think the non-inclusion of the additional penalty rate in respect of Christmas Day in the modern awards before us can be regarded as an error in the sense intended by s 160 of the Fair Work Act. We have come to this conclusion having regard to the caution expressed by the Full Bench in the Public Holidays Test Case decision of 1995 and the other factors to which we have just referred concerning the absence of a prevailing standard in respect of the additional penalty rate in the relevant underlying instruments and the additional penalty rate having been specifically raised previously but not included. These factors also prevent us from concluding the variations sought by the unions are necessary to achieve the modern awards objective.”
[116] We note that a provision applying additional payments on a non-public holiday Christmas Day is currently present in nine modern awards, 53 and in five modern enterprise awards.54 This is a relatively small proportion of the modern awards made by the Commission and, as observed above, is not a prevailing standard.
[117] In the 2012 Public Holidays review, the Full Bench considered an application from the ACTU to introduce, as part of certain model award provisions, a term to the effect that an employee working on Christmas Day, in circumstances where that day falls on a Saturday or Sunday and is not a public holiday within the meaning of the NES, will be paid an additional loading of 50% of their ordinary time rate for the hours worked on that day and be entitled to the benefit of the substitute day. The Full Bench took account of the relatively limited nature of that review and the incidence of the relevant circumstances not occurring until 2016, and declined to express a concluded view on the matter. 55 As referenced earlier, a variation to the Nurses Award providing for an additional payment was subsequently made with the consent of all interested parties.56
[118] The Nurses Award provision is in the following terms:
“Businesses that operate seven days a week shall recognise work performed on 25 December which falls on a Saturday or Sunday and, where because of substitution, is not a public holiday within the meaning of the NES with the Saturday or Sunday payment (as appropriate) plus an additional loading of 50% of the employee’s ordinary time rate for the hours worked on that day. All work performed on the substitute day by an employee will receive an additional loading of 50% of the ordinary time rate for the hours worked on that day instead of the rate referred to in clause 32.1.” 57
[119] In the FWC Penalty Rates decision, the Full Bench dealt with the employers’ proposal to establish a two-tier system of public holiday payments. In rejecting that proposal, the Commission stated:
“[1958] Further, we have concluded that the two-tiered approach advanced by the Hospitality Employers lacks merit. We have considered the arguments advanced in support of the proposal, but find them unpersuasive. The distinction sought to be drawn between those public holidays expressly mentioned in s 115(1)(a) and the other days declared or prescribed by or under a law of a State or Territory as a public holiday (s 115(1)(b)), is illusory.
[1959] It is relevant to observe that during the Transitional Review, various employer interests sought to vary the Hospitality, Retail, Fast Food and Hair and Beauty Awards to provide that where a public holiday falls on a weekend and an additional public holiday is declared or gazetted, the public loading will only apply to the actual public holiday. In the Modern Awards Review 2012 – Public Holidays decision, the Full Bench rejected these applications, in the following terms:
‘Although the incidence and level of the public holiday penalties is a matter for the Commission, the issue of additional public holidays arises directly from the scheme of the FW Act and in particular, the NES reliance upon the State and Territory laws to establish the actual days.
In its Award Modernisation decision concerning the making of the priority modern awards, the Full Bench of the AIRC said in respect of public holidays that:
A number of requests were made that we supplement the public holiday entitlements in the NES by including in awards some days that are observed as public holidays but not gazetted as such. We have decided against that course as it is apparent that the NES governs the question of the number of public holidays to which employees should be entitled.”
The conclusions of that Full Bench remain apposite.’
[1960] Further, as noted in the 1994 Public Holidays Test Case decision, ‘the declaration of public holidays, by whatever legal instrument, is the prerogative of the various Governments’.
[1961] We concur with the views expressed in the 1994 and 2012 decisions. This does not mean that the number and standardisation of public holidays across Australia is not a legitimate issue. Rather, it is one primarily for the Commonwealth, State and Territory legislatures. In this context, we note that s 115(1)(b) provides, in effect, that particular State or Territory declared public holidays can be excluded by regulation from counting as a public holiday for the purpose of the FW Act. No such regulations have been made.” (endnotes omitted)
[120] The AMWU and HSU did not lead witness evidence in support of their claims. Although based primarily upon the AIRC Public Holiday Test Case and the terms of some other instruments, we consider that the changes proposed to the relevant modern awards are significant and not such as to be self-evidently meritorious.
[121] The survey and related evidence provided by the AMWU does however provide some justification for the view that 25 December in each year is a very significant day for religious, social and/or family reasons for many Australians. The evidence before the Commission is also however that the circumstances contemplated by the AMWU claim in particular are not a regular occurrence and that in recent times State and Territory governments have generally provided, either by legislation or by declaratory means, an additional day rather than a substitute day when 25 December falls on the weekend.
[122] We turn to the various considerations established by the modern awards objective.
[123] We accept that a substantial proportion of the employees covered by these modern awards are low paid for present purposes. The AMWU and HSU claims, if granted, are unlikely to have any meaningful impact upon relative living standards. To the extent that the claims would increase the entitlements of the low paid employees, this consideration is supportive of the claim.
[124] We do not consider that the granting of these claims will encourage collective bargaining. It would remove an incentive, albeit a small one, for employees to bargain and whilst it could lead to some additional complexity for employers who might seek to bargain for a simpler approach, we do not consider that this is a likely scenario.
[125] This consideration is not supportive of the claim.
[126] There is no evidence before us that would enable any significant conclusions to be drawn in this regard. However, it is unlikely that variations of this nature would lead to measurable changes in workforce participation.
[127] This is a neutral consideration.
[128] We do not consider that the claim will impact upon the factors referenced in this consideration.
[129] The employees concerned with this claim are not working on public holidays. The circumstances potentially relevant are employees working unsociable hours or on weekends.
[130] Employees working under these modern awards already receive additional payments for work on weekends. We do however accept that Christmas Day, where it is substituted for another day and is no longer a public holiday, has more significance than other such days. Accordingly, to the extent that these claims involve additional remuneration for work on 25 December when the public holiday is substituted, this consideration is supportive of those variations.
[131] It was common ground between the parties that this was a neutral consideration in the present context. 58 We agree.
[132] It is self-evident that if the claims were granted then employment costs would increase to some limited degree.
[133] This consideration is not supportive of the claim.
[134] The awards relevant to the HSU claim are a combination of both industry and occupational awards. To the extent that the claims provide for greater consistency between awards that might apply to a single enterprise, this consideration is supportive of those matters.
[135] Both of the proposals are relatively simple in concept and likely to be able to be readily applied if granted.
[136] There is no evidence that the claim would have any meaningful impact upon the relevant factors. This is a neutral consideration.
[137] The modern awards objective is to “ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions”, taking into account the particular considerations identified in paragraphs 134(1)(a) to (h). We have taken into account those considerations insofar as they are relevant to the matter before us.
[138] Consistent with the approach taken by the Commission and its predecessors in relation to the modern awards, whilst it is permissible for the Commission to supplement the NES as is the case in those modern awards containing a clause of the nature sought here, we consider that fundamentally the scheme of the FW Act is to leave the prescription of public holidays, including the various additional and substitute days, to the State and Territory Governments. The entitlements that flow from those arrangements under the relevant modern awards are well established. We do not consider that a general provision dealing with substitute public holidays of the nature sought is appropriate or necessary in these modern awards in order for those instruments to meet the modern awards objective.
[139] In the case of Christmas Day, we recognise that this is a special day for many Australians. However, given the scheme of the FW Act, whether the arrangements applying in cases where it falls on a weekend involve additional or substitute days is fundamentally a matter for the respective Parliaments. Further, as previously found, in recent times, this has involved additional rather than substitute days and should this approach significantly change in the future, the issue might be reconsidered.
[140] In the case of the HSU claim in relation to Christmas Day, we acknowledge that the Nurses Award, which applies to a significant group of employees in these sectors, already contains a provision dealing with the issue, albeit operating on a different basis. There may be some merit in having some consistency of terms in those sectors where the Nurses Award presently operates given our views about the matter. To that end, Commissioner Hampton will conduct a conference with the relevant parties to further explore this issue. We will finally consider this aspect in light of any report arising from that conference.
[141] In the case of the AMWU claim, these are industry awards and we are not satisfied that the variations should be made.
[142] Subject to the matters below, we are not persuaded that the modern awards before us should be varied as claimed.
[143] We leave open the possibility that some modern awards operating in the health and related sectors, where the Nurses Award presently applies, may be varied in relation to Christmas Day arrangements. That issue will be further considered in light of the process set out above.
[144] The Commission will also shortly convene a directions conference with relevant parties to program the AHA claim relating part-day public holidays. We note in that regard that this issue is likely to impact upon many of the other modern awards, and as a result, a general review of those provisions is likely.
[145] The CAI claim will be considered depending upon the outcome of the proceedings associated with the application to have the coverage of the Clubs Award subsumed into the Hospitality Award.
VICE PRESIDENT
Appearances:
T McDonald with L Pike on behalf of Clubs Australia Industrial.
S Bull on behalf of United Voice.
P Cooper on behalf of the Club Managers Association Australia.
B Ferguson with R Bhatt on behalf of the Australian Industry Group and the Hair and Beauty Australia Industry Association.
J Arndt on behalf of the Australian Business Industrial, New South Wales Business Chamber, Aged and Community Services Australia and Leading Aged Care Service Australia Limited.
M Nguyen on behalf of the Australian Manufacturing Workers’ Union.
S Moore SC (of counsel) with Y Bakri, on behalf of the Shop, Distributive and Allied Employees Association.
S Wellard on behalf of the Pharmacy Guild of Australia.
L Svendsen on behalf of the Health Services Union of Australia.
N Tindley on behalf of The Australian Retailers Association.
Hearing details:
2017
Sydney, with video link to Melbourne
24, 25 and 26 July.
Final written submissions:
Shop, Distributive and Allied Employees Association – 11 and 13 August 2017.
The Australian Retailers Association – 15 August 2017.
1 4 Yearly review of Modern Awards – Penalty Rates [2017] FWCFB 1001. See also 4 Yearly review of Modern Awards – Penalty Rates – Transitional Arrangements [2017] FWCFB 3001.
2 [2017] FWCFB 1001 at [1958] to [1961].
3 Ibid at [994] to [1009].
4 Transcript of proceedings 24 to 26 July 2017 at PN146-147.
5 Ibid at PN148.
6 See [2014] FWCFB 7830.
9 [2017] FCAFC 123.
10 Ibid at [23].
11 Ibid at [28] – [29].
12 Friends of Hinchinbrook Society Inc v Minister for Environment (No 3) (1997) 77 FCR 153; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121; Edwards v Giudice [1999] FCA 1836; National Retail Association v Fair Work Commission (2014) 225 FCR 154.
13 National Retail Association v Fair Work Commission (2014) 225 FCR 154.
14 at 174-175 [109]-[110].
15 See Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35] per Tracey J.
16 [2017] FCAFC 161.
17 Ibid at [48].
18 4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues [2014] FWCFB 1788 at [23].
19 See also 4 yearly review of modern awards—Annual leave [2015] FWCFB 3406.
20 No regulations excluding public holidays have been issued.
21 See FWC Penalty Rates decision at [1897] to [1900].
22 Modern Awards Review 2012 - Penalty Rates [2013] FWCFB 1635 at [30] to [32].
23 Dec 1352 /94 (Print L4534); Dec 2538/94 (Print L7799); Dec 2593/94 (Print L7971); and Dec 251/95 (Print L9178).
24 See the discussion of the scope of the 2012 Review in Modern Awards Review 2012 - Penalty Rates [2013] FWCFB 1635.
26 SDA outline of submissions 13 February 2015.
27 SDA Further Amended Proposed Variations 25 July 2017.
28 Exhibit SDA21.
29 Transcript PN1212.
30 Dataset: Census 2016: Religious Affiliation.
31 McCrindle Research Australian Christmas Attitudes November 2015.
32 The HSU had various earlier versions of its claim – see [2017] FWCFB 856.
33 Modified clause provided 25 July 2017.
34 PHIEA submission dated 22 March 2017.
35 See the role played by modern awards in the present statutory context in FWC Penalty Rates decision at [121] to [132].
36 Print L9178.
37 Shop, Distributive and Allied Employees Association – Victorian Shops Interim Award 2000, Hairdressing and Beauty Services – Victoria Award 2001, National Fast Food Award 2000, Shop, Distributive and Allied Employees Association-Victorian Pharmacy Assistants Award 2000, Vehicle Industry Repair, Services and Retail Award 2002 and Mannequins and Models Award 2000.
38 Print P5603 [1997] AIRC 911.
39 [2010] FWAFB 305 at [22].
40 See [2008] AIRCFB 550 at [172]. See also the discussion of the impact of changing Ministerial Award Modernisation Requests in relation to the issue as it impacted upon annual leave provisions during the Part 10A process in 4 yearly review of modern awards [2015] FWCFB 4658 at [24] to [33].
41 [2010] FWAFB 2026 at [44].
42 SDA submissions to the AIRC as part of the Part10A award modernisation process provided in July and August 2008.
44 See FWC Penalty Rates decision at [1656]. Although expressed in relation to the Retail Industry (General) Award 2010, the findings were based upon retail sector data more generally.
45 SDA reply submission 30 June 2017.
46 FWC Penalty Rates decision at [204]-[207].
47 SDA reply submission 30 June 2017.
48 Public Holidays Act 1993 (Vic) s.6.
49 Holidays Act 1910 (SA) s 3.
50 For example the Northern Territory Government declared 25 December 2016 to be a public holiday.
51 Print L9178.
53 Airport Employees Award 2010 cl. 28.3(a)(i); Animal and Veterinary Services Award 2010 cl. 29.2(h); Hospitality General Award 2010 cl. 32.2(c); Mannequins and Models Award 2010 cl. 27.3; Registered and Licensed Clubs Award 2010 cl. 29.3(c); Restaurant Industry Award 2010 cl. 34.4(d); Road Transport and Distribution Award 2010 cl. 28.2(a); Textile, Clothing, Footwear and Associated Industries Award 2010 cl. 43.2(b); Timber Industry Award 2010 cl. 36.5(d); Waste Management Award 2010 cl. 32.1.
54 Australian Capital Territory Public Service Enterprise Award 2010 cl. 23.6; Australia Post Enterprise Award 2015 cl. 32.12; Australian Public Service Enterprise Agreement 2015 cl. 21.2; Nurses and Midwives (Victoria) State Reference Public Sector Award 2014 cl. 31.4(a); Victoria State Government Agencies Award 2010 cl. 36.3.
55 [2013] FWCFB 2168 at [93]. A variation to the Nurses Award 2010 providing for an additional payment was subsequently made with the consent of all interested parties – [2013] FWC 5369.
56 Ibid and Determination PR539905 issued in October 2013.
57 Nurses Award 2010 clause 32.1(b).
58 AMWU written submissions 20 October 2016.
Printed by authority of the Commonwealth Government Printer
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