| [2018] FWCFB 6755 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Plain language re-drafting – Security Services Industry Award 2010
(AM2016/15)
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 8 NOVEMBER 2018 |
4 yearly review of modern awards – plain language re-drafting – Security Services Industry Award 2010.
[1] This decision deals with the plain language re-drafting of the Security Services Industry Award (the Security Award).
[2] Conferences were held on 8 November 2017, 22 June 2018 and 16 August 2018 to discuss items raised by parties in relation to the plain language exposure draft of the Security Award (the PLED). Statements regarding the outcomes of the conferences were issued on 9 November 2017 1, 21 February 20182 and 29 June 2018.3 A revised PLED was published on 16 July 2018 and a draft list of outstanding items was published on 23 July 2018. Interested parties were invited to review the revised PLED and the list of outstanding items and advise the Commission whether there were any further issues that require determination. At the conference on 16 August 2018 the outstanding items were discussed. After the conference interested parties were invited4 to make submissions on ASIAL’s application to vary clause 24.10 of the Security Award. We return to that application shortly.
[3] We now turn to deal with the outstanding issues set out in the document published on 13 August 2018. It is common ground that these issues are to be determined on the submissions previously lodged and those made at and following the August 2018 conference. A summary of the parties’ submissions is set out at Attachment A to the revised list of outstanding issues published on 13 August 2018.
[4] As indicated at the August 2018 conference, the definition of ‘relieving officer’ in clause 2 of the revised PLED will be amended, as follows:
‘relieving officer means an employee who, by agreement between the employer and employee, is appointed by the employer for the purpose of relieving another security officer at short notice’. 5
[5] There will be no further amendment to clause 19.6.
[6] Clause 21.6(a) of the current award provides as follows:
‘(a) Meal breaks
Except where it is operationally impracticable, an employee will be granted an unpaid meal break of not less than 30 minutes where a shift exceeds five hours duration. For the purpose of this subclause it will be operationally impractical to grant an unpaid meal break unless the employee is permitted to leave the client’s premises or be unavailable for work during the period of the meal break.’
[7] Clause 14.4 of the PLED provides as follows:
‘14.4 However, the meal break must be a paid meal break if the employee is not permitted to leave the workplace, or to be unavailable for work, during the break.’
[8] ABI submits that there is no equivalent to clause 14.4 of the PLED in the current award and on that basis clause 14.4 should be deleted. In reply, United Voice submits that clause 14.4 retains the meaning of clause 21.6(a) of the current award. 6
[9] No further submissions were received in relation to this matter.
[10] We agree with ABI. The current award makes no provision for a paid meal break in circumstances where it is operationally impracticable for the employee to be granted an unpaid meal break. Separate provision is made for paid meal breaks, in clause 21.6(b) of the current award. We will delete clause 14.4 of the PLED.
[11] If United Voice wishes to pursue a substantive variation to clause 21.6(a) of the current award it should file an application to vary by 4pm on Friday 30 November 2018.
[12] Item 32 relates to breaks between work periods.
[13] Section 21.3 of the current award provides as follows:
‘21.3 Break between successive shifts
Each ordinary time shift must be separated from any subsequent ordinary time shift by a minimum break of not less than eight hours.’
[14] Clause 14.5(a) of the PLED reads as follows:
‘14.5 Breaks between work periods
(a) An employee must have a minimum break of 8 hours between finishing work on one shift of ordinary hours (including any overtime worked immediately after it) and starting work on the next shift of ordinary hours (including any overtime worked immediately before it).’
[15] ASIAL submits that clause 21.3 of the current award is preferable to the wording in clause 14.5 of the PLED. 7 In its reply submission of 20 October 2017 United Voice indicated a preference for the plain language draft. At the 8 November 2017 conference United Voice clarified that it did not ‘have a particularly strong position’ on the matter.8
[16] We are not persuaded to vary clause 14.5(a) of the PLED in the manner proposed by ASIAL. Clause 14.5 of the PLED deals with the matters currently dealt with in clauses 21.3 and 23.5 of the award. Clause 14.5(a) is consistent with the minimum break requirements in clauses 21.3 and 23.5(a) of the current award.
[17] Clause 15.1 of the current award provides as follows:
‘15.1 Allowance rates
Employers must pay to an employee such allowances as the employee is entitled to under this clause at the following rates (which are expressed as a percentage of the standard rate being the minimum weekly wage for the Security Officer Level 3 classification):’
[18] The equivalent provision in the PLED, clause 19.1, provides as follows:
“Clause 19 gives employees an entitlement to monetary allowances of specified kinds in specified circumstances.”
[19] UV submits that the PLED alters the language regarding the payment of allowances 9 and that clause 15.1 of the current Security Award is clearer and should be retained. In particular, United Voice submits that the phrase ‘employers must pay to an employee such allowances’ clearly identifies that there is an obligation on the employer to pay.10
[20] The terms of clause 19.1 of the PLED are consistent with the language used in all plain language exposure drafts. We have decided to retain clause 19.1 of the revised PLED. It is clear that clause 19 provides employees with an entitlement to the specified allowances in specified circumstances. An obligation upon the employer to make such a payment is a concomitant of such an entitlement.
[21] In the June 2018 Statement the Commission indicated this issue would be referred to the Plain Language Expert (the Expert) for comment. 11 The Expert proposed 2 options to resolve the issue raised by United Voice.12
[22] At the August 2018 conference the parties expressed a preference for Option 1, with a minor amendment (in red below):
(e) An employee must be taken not to be on leave on any public holiday that falls during a temporary close down period. The employer is to pay the employee for the public holiday as the Award requires.
Example An employer has arranged a temporary close down period that includes New Year’s Day. For each employee who would normally have worked on the day that is New Year’s Day, the employee must pay them their normal rate of pay for that day as though: ● it were not a public holiday; and ● they had worked that day. So if on the day that is New Year’s Day the employee would have worked 8 hours at their ordinary hourly rate and 2 hours at 150% of their ordinary hourly rate, then they are to be paid for that same number of hours and at those same rates. |
[23] We will adopt Option 1, with the proposed amendment, and vary the PLED accordingly.
[24] We now turn to ASIAL’s application to vary clause 24.10.
[25] Clause 24.10 of the Security Award provides as follows:
‘24.10 Payment of accrued annual leave on termination
Where an employee is entitled to a payment on termination of employment as provided in s.90(2) of the Act, the employer must also pay to the employee an amount calculated in accordance with clause 24.6(a). The employer must also pay to the employee a loading of 17.5% in accordance with clause 24.6(b) unless the employee has been dismissed for misconduct.’
[26] Clause 24.6 of the current award provides:
‘24.6 Payment for annual leave
Before the start of the employee’s annual leave the employer must pay the employee in respect of the period of such leave the greater of:
(a) the amount the employee would have earned during the period of leave for working their normal hours, exclusive of overtime, had they not been on leave; and
(b) the employee’s ordinary time rate specified in clause 14.1, together with, where applicable, the leading hand allowance, relieving officer’s allowance and first aid allowance prescribed in clause 15.1(a) respectively, plus a loading of 17.5%.’
[27] ASIAL’s proposes to replace clause 24.10 with the following: 13
‘24.10 Payment of accrued annual leave on termination
Where an employee is entitled to a payment on termination of employment the employer must pay to the employee an amount calculated in accordance with clause 24.6.’
[28] ASIAL submits that clause 24.10 confers a greater benefit upon employees on termination of employment than if they had taken leave during the course of their employment. Clause 24.10 currently requires an employer to pay a 17.5% loading upon termination in addition to what the employee would have received had they taken annual leave during their employment.
[29] ASIAL asserts that clause 24.10 amounts to a ‘drafting error’ as it provides for the payment of two loadings upon termination of employment, that it fails to meet the Modern Awards objective, and referred to various pre-reform awards in support of their position. 14
[30] ABI supported ASIAL’s application submitting that ‘there is force to ASIAL’s contention that the inclusion of the additional payment under clause 24.10 is a drafting error’ and, further, even if it cannot be established that there is a drafting error in clause 24.10 there are other strong merit bases for granting the ASIAL application. 15 ABI submits that ASIAL’s application meets the modern awards objective by:
‘(a) removing an incentive for employees to not take any time off in order to receive more money when their employment ceases with that employer;
(b) simplifying the way in which an employer is required to calculate annual Leave payments, whether it be during the course of employment or upon termination; and
(c) removing an unnecessary regulatory burden on employers by having a two-tier payment system for annual leave.’ 16
[31] In its reply submission filed on 7 September 2018, United Voice opposed the ASIAL application. In short, United Voice rejected the characterisation by ASIAL that clause 24.10 contains a drafting error, and asserts that the clause provides a specific entitlement in respect of annual leave for employees who have not been dismissed for misconduct.
[32] We turn first to the relevant award history.
[33] The AIRC published an exposure draft for the Security Award on 12 September 2018. Clause 23.7 of that Exposure Draft was in similar terms to the Award that was ultimately made by the AIRC (now clause 24.10). Clause 23.7 of the 2008 Exposure Draft provided as follows:
‘23.7 Payment of accrued annual leave on termination
Where an employee is entitled to a payment on termination of employment pursuant to s.35(2) of the NES, the employer must also pay to the employee an amount calculated in accordance with clause 23.4(a). The employer must also pay to the employee a loading of 17.5% in accordance with clause 23.4(b) unless the employee has been dismissed for misconduct.’ 17
[34] The Statement 18 handed down by the AIRC at the time of publishing the Exposure Draft stated that the wages had been taken from the Security Industry (New South Wales) Award 1998, the Statement did not make it clear where the other terms and conditions had derived from. Clause 23.7 was not the subject of any explicit consideration by the AIRC in any of the decisions or statements made in the course of making the Security Award.19
[35] In a decision 20 issued on 22 December 2009 the AIRC granted an ASIAL application to vary the Security Award to insert what is now subclause 24.6 (set out above at [26]). The previous subclause had provided that a 17.5% annual leave loading be paid to all employees on ‘the amount the employee would have earned for working their normal hours, exclusive of overtime, had they not been on leave’. In granting the variation the Full Bench said:
‘We accept ASIAL’s submission that this does not reflect the standard prevailing in most of the industry. Relevant instruments generally provide that for a period of annual leave an employee should receive either the pay they would have earned for working ordinary hours or the ordinary time rate plus certain specified allowances and a loading of 17.5%, whichever is the greater.’ 21
[36] As noted in ASIAL's application, one of the pre-reform awards, Security Industry (New South Wales) Award 1998 states that in relation to payment in lieu of annual leave on termination; ‘where the employment of a permanent employee is terminated for any reason by either party ...’ 22 is to be calculated in accordance with clause 25.3 of that Award. Clause 25.3 of the pre-reform Award sets out the entitlement now included in clause 24.6 of the Security Award. Clauses 25.3 and 25.4 of the pre-reform Award mirror the way in which the Security Award would operate if ASIAL’s application was implemented.
[37] No party has drawn our attention to any clause in similar terms to clause 24.10 in any of the relevant pre-reform instruments. A review of the most relevant pre-reform awards does not reveal any term which is similar to clause 24.10 of the Security Award. The relevant pre-reform awards are:
• Security Employees (A.C.T.) Award, 1998 (clause 8.1.3(a))
• Security Employees (Victoria) Award 1998 (clause 27.4.3)
• Security Industry (Contractors) Award – State 2004 (QLD) (clause 7.1.3)
• Security Industry (New South Wales) Award 1999 (clause 25.4)
• Security Industry (Northern Territory) Award 2002 (clause 27.12.3)
• Security Industry (State) Award (clause 25.4)
• Security Industry Award (TAS) (clause 9(e))
• Security Officers (Western Australia) Award 2002 (clause 19.3.1)
• Security Officers’ Award (SA) (clause 7.1.10)
[38] The extent of the arbitral consideration of annual leave payments is limited and was recently canvassed in the 4 yearly review of modern awards – Payment of Wages decision 23 (the Payment of Wages decision). In that decision the Full Bench noted that the ‘norm’ in respect of annual leave payments did not involve the payment of both the 17.5% leave loading and the applicable shift rate.24 The Full Bench went on to vary three modern awards to ensure that employees do not receive both a shift loading and an annual leave loading during a period of annual leave, rather, they will receive whichever is the greater.25 The Payment of Wages decision is consistent with the outcome sought by ASIAL in the matter before us.
[39] The operation of clause 24.10 of the Security Award has an unusual result: an employee is entitled to receive a greater payment on termination in respect of accrued annual leave than they would have been entitled to had they taken the accrued annual leave during their period of employment. As ABI submits, this ‘two-tier’ rate of payment for annual leave creates a disincentive for employees to take annual leave whilst employed as they can save their leave until termination knowing that it will be paid out at a higher rate. Our attention was not drawn to any other modern award which contained a provision to similar effect.
[40] We are satisfied that the existing term (clause 24.10) lacks merit and is not ‘fair’ within the meaning of the modern awards objective. In arriving at that conclusion we have taken into account the matters set out at s.134(1)(a) to (h), insofar as they are relevant. We accept that employees covered by the Security Award are likely to be ‘low paid’ within the meaning of s.134(1)(a) and that the variation proposed by ASIAL will diminish the capacity of those employees to meet their needs, though the impact will be limited as it will only arise when the employees receive an annual leave payment upon the termination of their employment. The variation proposed will also reduce employment costs (s.134(1)(f)). We are satisfied that the variation of the award in the manner proposed by ASIAL is necessary to ensure that the award achieves the modern awards objective. We will vary the award and the PLED in the manner proposed by ASIAL.
[41] A further revised exposure draft reflecting this decision and recent variations to the Security Award will be published shortly.
[42] This decision finalises the plain language redrafting of the Security Award subject to the determination of any substantive claims to vary the award and the finalisation of a number of common issues affecting all, or most, modern awards.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR701967>
4 Revised Security Award PLED, 16 July 2018.
5 Transcript, 16 August 2018, PN 45.
6 UV reply submission, 20 October 2017 at para 30.
7 ASIAL submission, 6 October 2018 at para 18.
8 Transcript 8 November 2017 at paragraphs [380] to [385].
9 UV submission, 6 October 2017 at paras 29-32.
10 UV submission, 6 October 2017 at para 31.
11 [2018] FWCFB 3820 at [13].
12 Revised list of outstanding items, 13 August 2018.
13 ASIAL submission, 25 June 2018 at pp. 4-7.
14 See p3 and Attachments E-F of ASIAL submission 25 June 2018, pp.14-15.
15 ABI submission, 18 September 2018 at para 3.8.
16 ABI submission, 18 September 2018 at para 4.4.
17 Security Services Industry Award 2010 – exposure draft, 12 September 2008.
19 See [2008] AIRCFB 717; [2008] AIRC 1000; [2009] AIRCFB 800.
21 Ibid at [19].
22 Security Industry (New South Wales) Award 1998, clause 25.4.
24 Ibid at [191]-[192].
25 Ibid at [195]-[197].