[2019] FWCFB 6138

FAIR WORK COMMISSION

DECISION

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

4 yearly review of modern awards—Architects Award 2010
(AM2018/16)

Technical services
DEPUTY PRESIDENT GOSTENCNIK DEPUTY PRESIDENT MASSON COMMISSIONER CIRKOVIC	MELBOURNE, 12 SEPTEMBER 2019

4 yearly review of modern awards – Architects Award 2010 – Award Stage – substantive issues.

Introduction

[1] Section 156 of the Fair Work Act 2009 (Cth) (the FW Act) provides that the Fair Work Commission (the Commission) must conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014 (the Review). The Review has consisted of an Initial stage (dealing with jurisdictional issues), a Common issues stage and an Award Stage (which involves a review of all awards in four groups). 1 The Architects Award 20102 (the Architects Award) has been dealt with in the Group 4 of the Award Stage and an Exposure Draft was published by the Commission on 22 March 2019.3

[2] Although s.156 was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 with effect from 1 January 2018, clause 26 of Schedule 1 to the FW Act provides s.156 (and the other provisions of Division 4 of Part 2-3) continues to apply to the current review as if it had not been repealed. This decision deals with the substantive issues raised by the parties in relation to the Architects Award.

Background

[3] On 1 October 2018, the Commission issued a Statement 4 in relation to outstanding substantive claims in a number of Group 4 awards including the Architects Award. Attachment A to that Statement details the claims parties sought to pursue. Parties were invited to comment whether there were any variations or additions to those substantive claims by 15 October 2018. No submissions were received by that date.

[4] On 1 April 2019, we issued amended Directions calling for interested parties to file any written submissions they wished to make on the substantive claims by 3 May 2019. The Association of Consulting Architects Australia (ACAA) 5 and Professionals Australia (APESMA)6 each filed submissions in support of their respective claims.

[5] ACAA seeks to vary the Architects Award by:

• amending the Overtime clause to clarify that time off instead of payment (TOIL) will be granted on an “hour for hour” basis;

• introducing a definition for an employee who has “a Completed Bachelor Degree with a pathway to a Master of Architecture” and associated minimum wage rates;

• amending the Equipment and special clothing allowance clause by replacing the list of equipment and clothing with the words “relevant technical equipment or special clothing”;

• amending the Superannuation fund clause; and

• amending the Termination of employment clause by specifying particular notice requirements.

[6] APESMA seeks to vary the Architects Award by:

• introducing an additional level in the Graduate of Architecture classification, being “Graduate of Architecture (Part 1)” classification and associated minimum wage rates; and

• amending the Progression from Graduate of Architecture to Registered Architect clause to replace and update prescribed competencies which, in some instances, no longer exist.

[7] The matter was heard on 13 May 2019.

Legislative context

[8] The legislative context for the Review was canvassed in detail in the 4 yearly Review of Modern Awards: Preliminary Jurisdictional Issues decision (the Preliminary Jurisdictional Issues Decision). 7 We adopt and apply that decision.

[9] Subsection 156(2) of the FW Act provides that the Commission must review all modern awards and may, amongst other things, make one or more determinations varying modern awards.

[10] The ‘scope’ of the Review was considered in the Preliminary Jurisdictional Issues Decision. 8 In that decision, the Full Bench said that during the Review, the Commission will proceed on the basis that prima facie, the modern award being reviewed achieved the modern award objective at the time it was made.9 Variations to modern awards should be founded on merit based arguments that address the relevant legislative provisions, accompanied by probative evidence directed to what are said to be the facts in support of a particular claim. The extent of the argument and material required will depend on the circumstances.10

[11] A number of provisions in the FW Act that are relevant to the Review operate to constrain the breadth of the discretion in s.156(2). It is important to note that the modern awards objective (in s.134) applies to the performance or exercise of the Commission’s ‘modern awards powers’, which include the Commission’s functions or powers under Part 2-3 of the FW Act. The modern awards objective therefore applies to the Review. The modern awards objective is set out in s.134(1) of the FW Act, 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

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.”

[12] Section 138 of the FW Act is also relevant to the Review:

“A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.”

[13] Terms that are included in modern awards must be ‘necessary to achieve the modern awards objective’. That which is ‘necessary’ in a particular case involves a value judgment taking into account the s.134 considerations, to the extent that these are relevant, having regard to the submissions and evidence directed to those considerations. Before varying a modern award in the Review, the Commission must be satisfied that the variation is necessary to achieve the modern awards objective.

[14] Section 136 deals with the content of modern awards:

“136 What can be included in modern awards

Terms that may or must be included

(1) A modern award must only include terms that are permitted or required by:

(a) Subdivision B (which deals with terms that may be included in modern awards); or

(b) Subdivision C (which deals with terms that must be included in modern awards); or

(c) section 55 (which deals with interaction between the National Employment Standards and a modern award or enterprise agreement); or

(d) Part 2-2 (which deals with the National Employment Standards).

Note 1: Subsection 55(4) permits inclusion of terms that are ancillary or incidental to, or that supplement, the National Employment Standards.

Note 2: Part 2-2 includes a number of provisions permitting inclusion of terms about particular matters.

Terms that must not be included

(2) A modern award must not include terms that contravene:

(a) Subdivision D (which deals with terms that must not be included in modern awards); or

(b) section 55 (which deals with the interaction between the National Employment Standards and a modern award or enterprise agreement).

Note: The provisions referred to in subsection (2) limit the terms that can be included in modern awards under the provisions referred to in subsection (1).”

The Claims

Graduate of Architecture

[15] APESMA and ACAA propose agreed variations to the Architects Award by inserting a new definition and associated pay rates for persons holding a “Completed Bachelor Degree with a pathway to a Master of Architecture”. The Architects Award currently provides definitions and rates of pay for student of architecture and Graduate of Architecture. The current definitions are set out at clause 3 of the Architects Award which relevantly provides:

“3. Definitions and interpretation

…

Graduate of Architecture means an employee who holds an Approved Qualification under the eligibility requirements for admission to the Architectural Practice Examination (APE) for registration as an Architect under Australian legislation.

…

student of architecture is an employee who is normally enrolled full-time in a course of architecture and who is employed to gain experience in the practice of architecture.

…”

[16] The parties submit there is an anomaly in the Architects Award because of the absence of any recognition for a completed design-related Bachelor level qualification. The parties’ consent position is that the following definition should be inserted:

“A Completed Bachelor Degree with a pathway to a Master of Architecture, means an employee who holds a design based Bachelor Degree which would allow them to apply for enrolment in an approved Master of Architecture program qualifying them for admission to the Architectural Practice Examination (APE) for registration as an Architect under Australian legislation.”

[17] The parties also seek that the following table be inserted at the Minimum Wages clause:

Clause 14.7 The minimum rates payable for Employees who possess a Completed Bachelor Degree with a pathway to a Master of Architecture must be:

Service	Minimum rate or % of Level 1 – Entry Rate of $978.00 per week
Service	Per annum $	Per week $	Per hour $
1^st year of experience (85%)	$43,227.60	$831.30	$21.90
2^nd year of experience (90%)	$45,770.40	$880.20	$23.20
3^rd year of experience (95%)	$48,313.20	$929.10	$24.50

[18] APESMA submits that for an employee to fall under the current definition of Graduate of Architecture, the employee must hold a Master’s degree. According to APESMA, a Master’s Degree is typically comprised of a three year Bachelor’s Degree followed by a two year Master of Architecture. While studying for either the Bachelor’s Degree or the Master of Architecture qualification, an architectural student may be employed under the ‘student of architecture’ classification as defined at clause 3 of the Architects Award.

[19] APESMA contrasted the current qualification requirements with the historical position, where holding a Bachelor’s Degree was sufficient to satisfy the entry requirements for admission to the Architectural Practice Examination and hence be classified as a Graduate Architecture. However, more recently the requirements had been altered so as to require completion of the Master of Architecture in addition to a Bachelor’s Degree.

[20] APESMA submits that as a consequence of these changes there is a deficiency in the Architects Award classifications in that it does not recognise completion of a Bachelor’s Degree. The particular issue manifests when an employee engaged under the Architects Award as a ‘student of architecture’ ceases study temporarily or permanently following completion of a Bachelor’s Degree. Such an employee may, according to APESMA, cease to fall within the definition of ‘student of architecture’ as the employee may not be regarded as ‘normally enrolled full time in a course’. Therefore, the employee may not be covered by the Architects Award.

[21] APESMA submits that as a consequence of the described anomaly it is the practice of employers to pay such an employee in accordance with classification C5 of the Manufacturing and Associated Industries and Occupations Award 2010 because the pay rates are similar. APESMA says that this uncertainty as to the Architects Award coverage should be clarified by including a relevant definition and pay rates that recognises the possession of the Bachelor’s Degree.

[22] APESMA submits that the proposed variation is not of significance and is simply a ‘tidying up’ exercise. It refers to the following observation made by the Full Bench in the Preliminary Jurisdictional Issues Decision and submits this claim falls into such a category:

“The need for a “stable” modern award system suggests that a party seeking to vary a modern award in the context of the Review must advance a merit argument in support of the proposed variation … some proposed changes may be self-evident and can be determined with little formality.”11

[23] APESMA contends that the rates proposed for a person holding a Bachelor’s Degree would commence at the current rate for the 4^th year student of architecture, and progress incrementally through the 5^th and 6^thyear student of architecture, ending just below the existing Graduate of Architecture. This progression would not disturb existing pay rate progression relativities nor would relativity issues arise with respect to other awards. Further, this claim would fall under s.160 of the FW Act which allows the Commission to vary a modern award to remove ambiguity, uncertainty or correct error.

[24] ACAA supports the proposed variation and in doing so provided a detailed analysis of the qualification requirements necessary to progress to the Graduate of Architecture. 12 The table of qualifications in ACAA’s submission confirms that the contemporary qualification requirement for that of Graduate of Architecture is a Master of Architecture. The previous qualification requirement had been a Bachelor’s Degree.

[25] ACAA submits that while the Master of Architecture is now the accredited qualification required for classification as Graduate of Architecture, the change in qualification requirements has created an anomaly in the classification structure. ACAA states that it now receives approximately 15-20 phone calls each year in which clarification is sought as to which classification in the Architects Award covers an employee who holds a Bachelor’s Degree and who wishes to take a temporary period away from study or does not want to complete any more study. Currently, the Manufacturing and Associated Industries and Occupations Award 2010 classification C5 is applied.

[26] ACAA submits that progression to a Registered Architect under the Architects Award is currently a three step process and misses the fundamental step of completion of the Bachelor’s Degree. Including that step would result in a classification structure with 4 levels:

1. Student of Architecture (currently enrolled in a university or recognised course);

2. Bachelor’s Degree which allows the person to apply for enrolment in an approved Master of Architecture course (currently not enrolled in a university or recognised course);

3. Graduate of Architecture (Bachelor’s Degree and Master of Architecture); and

4. Registered Architect (Bachelor’s Degree, Master of Architecture and the Architectural Practice Examination).

Consideration

[27] The Architects Award classification structure defines both a Graduate of Architecture and a ‘student of architecture’. A ‘Graduate of Architecture’ is an employee ‘who holds an Approved Qualification under the eligibility requirements for admission to the Architectural Practice Examination (APE) for registration as an Architect under Australian legislation.’ It is evident from the material before us that the ‘Approved Qualification’ is that of a Master of Architecture. Previously, the Approved Qualification was that of a Bachelor’s Degree qualification which is now a preliminary qualification requirement necessary for enrolment in a Master of Architecture course.

[28] A ‘student of architecture’ is as an ‘employee who is normally enrolled full-time in a course of architecture and who is employed to gain experience in the practice of architecture.’ Significantly, the definition of ‘student of architecture’ does not distinguish between whether the employee is ‘normally enrolled’ in a Bachelor’s Degree or in a Master of Architecture course. There is also a lack of clarity in the definition as to what ‘normally enrolled’ means. Both ACAA and APESMA submit that this creates an anomalous situation with respect to employees who hold a relevant Bachelor’s Degree but who have taken a break from study or have chosen to not proceed to enrol in a Master of Architecture course. This they say has led to these employees being classified in accordance with Manufacturing and Associated Industries and Occupations Award 2010 rather than the Architects Award.

[29] We agree there is a lack of clarity in the current definition of ‘student of architecture’ in the Architects Award in that it does not recognise a Bachelor’s Degree. This is particularly relevant in circumstances described in the parties’ submissions and noted above.

[30] This results in uncertainty in award coverage when an employee possessing a relevant Bachelor’s Degree is not enrolled in a Master of Architecture. An employee possessing a relevant Bachelor’s Degree who is enrolled in a Master of Architecture course is clearly covered by the Architects Award. We agree that it is not logical that the Architects Award may cease to apply to the first mentioned employee where the employee continues to be employed in the practice of architecture.

[31] The lack of clarity described above can, according to the parties, be remedied by the insertion of an additional classification, that of ‘A Completed Bachelor Degree with a pathway to a Master of Architecture.’ The parties further contend that insertion of the additional classification and accompanying wage rates would not do violence to existing relativities in the wage rate structure as the rates proposed would be set to the existing 4^th year of experience rate of 85% (of the Graduate of Architecture rate) and would progress to 95% in 1 year 5% increments as is currently the case.

[32] We are satisfied in the circumstances that including a new definition akin to that would address the classification uncertainty identified and will provide for a more logical progression through the classification structure. The inclusion of the word ‘completed’ in the proposed definition is superfluous and will not be included. We propose the following classification description – ‘Bachelor’s Degree with a pathway to a Master of Architecture’.

[33] At the hearing we also proposed that in addition to including the proposed new classification definition, resolution of the classification uncertainty could be further assisted by amending the definition of ‘student of architecture’ to state ‘enrolled full time in a design-based Bachelor’s degree’. 13 The parties were requested to consider that suggestion and advise the Full Bench in due course. At this stage, neither the ACAA nor APESMA have responded to the Full Bench’s invitation to consider and respond on that proposal.

[34] We consider the introduction of a new classification of ‘Bachelor’s Degree with a pathway to a Master of Architecture’, without clarifying the definition of ‘student of architecture,’ is likely to result in residual uncertainty. Specifically, there would be uncertainty as to the classification that would apply to an employee who holds a relevant Bachelor’s Degree and is enrolled in a Master of Architecture course. If the current ‘student of architecture’ definition were not amended it may lead to confusion whether such an employee is to be classified as a ‘student of architecture’ or as an employee with a ‘Bachelor’s Degree with a pathway to a Master of Architecture’. It is therefore our preliminary view that the following definitions should be included at clause 3 of the Architects Award:

“3. Definitions and interpretation

3.1 In this award, unless the contrary intention appears:

…

Bachelor’s Degree with a pathway to a Master of Architecture means an employee who holds a design based Bachelor’s Degree which would allow them to apply for enrolment in an approved Master of Architecture program qualifying them for admission to the Architectural Practice Examination (APE) for registration as an Architect under Australian legislation.

…

Student of Architecture is an employee who is normally enrolled full-time in a design based Bachelor’s Degree course of architecture and who is employed to gain experience in the practice of architecture.

…”

[35] These definitions would have the consequence that an employee who has completed a Bachelor’s Degree would be classified at the level of ‘Bachelor’s Degree with a pathway to a Master of Architecture’ regardless of whether the employee was enrolled in a Master of Architecture course. This would result in a 4 step classification structure as sought by ACAA and can be summarised as follows:

1. Student of Architecture (currently enrolled in a design-based Bachelor’s Degree course);

2. Bachelor’s Degree which allows the person to apply for enrolment in an approved Master of Architecture course;

3. Graduate of Architecture (Bachelor’s Degree and Master of Architecture); and

4. Registered Architect (Bachelor’s Degree, Master of Architecture and the Architectural Practice Examination).

[36] We turn now to consider the wage rate structure proposed by the parties which, if accepted, would involve the insertion of a new wage rate table as outlined in [17] above. As previously stated, the rates proposed on completion of a Bachelor’s Degree would start at 85% of the Graduate of Architecture rate which aligns with the current rate for ‘student of architecture’ ‘4^th year of experience’. The rate would increase by 5% yearly experience increments to a maximum of 95% of the Graduate of Architecture rate in the 3^rd year of experience. This proposed maximum rate is aligned with the current ‘student of architecture’ ‘6^th year of experience’.

[37] We accept that the rates proposed by the parties for the Bachelor’s Degree level are sound and align with the existing ‘student of architecture’ rates commencing at the equivalent of the 4^th year of experience level of 85%. While we accept the proposed rates and experience based annual increments, it is our preliminary view that it is unnecessary to depart from the current format of simply expressing the rates as a ‘% of Level 1 – Entry rate’ rather than in annual, weekly and hourly rates as proposed by the parties. The reasons for seeking to depart from the current format of expressing the ‘student of architecture’ rates are not clear to us and there would seem to be merit in preserving a consistent format. The parties will be afforded an opportunity to comment on this issue following release of a draft determination of the changes to the Architects Award.

[38] Based on our preliminary view, we propose to insert the following table of rates at clause 15.4(c) with consequent re-numbering of the current sub-clauses 15.4(c)-(g). Our reasons for proposing this clause structure rather than as proposed by the parties is that a number of the other sub-clauses in clause 15 also appear relevant to the proposed new clause 15.4(c) which would be as follows:

(c) Employees holding a Bachelor’s Degree with a pathway to a Master of Architecture will be paid the following minimum rate or percentage of the first year Graduate or Architecture rate of payment:

Service	Minimum rate or % of Level 1—Entry rate
1^st year of experience	85%
2^nd year of experience	90%
3^rd year of experience	95%

[39] The final point we would raise in relation to the classification structure is that of the logic of preserving the current 4^th, 5^th and 6^th year of experience rates for the ‘student of architecture’ classification in circumstances where we have proposed a revised definition of ‘student of architecture’ that clarifies that it applies only to employees enrolled in a Bachelor’s Degree course and not to those who may be enrolled in a Master of Architecture course. It appears to us that to preserve the existing progression levels of the 4^th, 5^th and 6^th year of experience rates for ‘student of architecture’ would create anomalies with the 1^st, 2^nd and 3^rd years rates of experience proposed for ‘Employees holding a Bachelor’s Degree with a pathway to a Master of Architecture’.

[40] By way of example, if an employee is studying for a Bachelor’s Degree on a part-time basis over a 5 year or longer period, they would, if no change were made to the current years of experience progression levels for ‘student of architecture’, be able to progress to 95% of the Level 1 – Entry Rate without having completed a Bachelor’s Degree. That would place them at an equivalent pay rate level to an employee who has completed a Bachelor’s Degree and is in the 3^rd year of experience following completion.

[41] This leads us to a preliminary view that it would be appropriate to reduce the number of annual experience increments for ‘student of architecture’ to three annual increments, ending at the 3^rd year of experience (75% of Graduate of Architecture) under the revised ‘student of architecture’ definition. Such a change would in our view provide for a more logical progression of rates linked to qualifications. The parties will be invited to comment on this aspect of the draft determination that we intend to issue.

[42] Turning now to the considerations in s.134(1), we are satisfied that the classification structure changes proposed would address a classification anomaly. It would clarify that the Architects Award applies to an employee who has completed a relevant Bachelor’s Degree and are employed in the practice of architecture irrespective of whether the employed is enrolled in a Master of Architecture course. Furthermore, it would remove any doubt as to potential coverage conflicts between the Architects Award and the Manufacturing and Associated Industries and Occupations Award 2010.

[43] Based upon the material before us, the s.134 considerations are largely neutral considerations in relation to this particular claim. However, the ‘need to ensure a simple, easy to understand, stable and sustainable modern award system…that avoids unnecessary overlap of modern awards’ (s.134(1)(g)) is a factor weighing in favour of the proposed change.

[44] We have concluded that varying the Architects Award in the manner proposed would provide ‘a fair and relevant minimum safety net of terms and conditions’ and the variation is necessary to achieve the modern awards objective.

Progression from Graduate of Architecture to Registered Architect

[45] APESMA and ACAA propose variations to clause 15.2 of the Architects Award, which provides for progression from the classification of Graduate of Architecture to Registered Architect. Clause 15.2 provides:

“15.2 Progression from Graduate of Architecture to Registered Architect

(a) In furtherance of the Graduate of Architectures’ progress towards the obtaining of the mandatory experience based on the Prescribed Competencies for registration, there must be an annual review process. As a part of this review process, progress for the previous 12 months must be reviewed and objectives for the next 12 month period should be mutually agreed, and set out in writing. This will also include any necessary training which the employee will be expected to undertake in order to fulfil the requirements of their position. The cost of such approved training will be borne by the employer.

(b) If the employee has reasonably met the objectives arising out of the annual review this must be confirmed in writing by the employer to the employee and the employee must progress to the next pay point within the Level 1 wage range.

(c) The Prescribed Competencies against which the experience is to be documented are as follows:

(i) Element 2.2.2—Prepare architectural drawings with regard to the location, extent of building elements, components, finishes, fittings and systems.

(ii) Element 2.2.4—Co-ordinate the documentation of the project.

(iii) Element 3.1.2—Establish site conditions, site related requirements and limitations and existing facilities.

(iv) Element 3.1.4—Assess applicable codes, regulations and legislation.

(v) Element 3.2.3—Prepare preliminary project evaluations, programs and feasibility studies.

(vi) Element 3.2.5—Establish and co-ordinate specialist consultants, contractors and suppliers.

(vii) Element 3.3.1—Administer the project contract.”

[46] At hearing, the parties advised they had reached an agreed position in relation to this claim, namely that the competencies specified in clause 15.2(c) above be deleted and replaced with the following:

“(i) Design: Project Briefing

• Establishment, analysis and evaluation of client project requirements and objectives.

• Identification of factors that may impact on client project requirements and objectives.

(ii) Design: Pre-Design

• Identification, analysis and integration of information relevant to siting of project.

• Application of principles controlling planning, development and design for the project site.

(iii) Design: Conceptual Design

• Design response incorporates assessment of relevant legislation, codes and industry standards.

• Application of principles controlling planning, development and design for the project site.

• Ability to prepare drawings which communicate a scheme design.

• Consideration of material characteristics with regard to the design, durability and aesthetic qualities and environmental considerations.

(iv) Design: Conceptual Design

• Design response incorporates assessment of relevant legislation, codes and industry standards.

(v) Documentation: Detailed Design

• Evaluation and integration of regulatory environments.

• Exploration of and explanation of construction techniques and details suitable to a design.

(vi) Documentation: Documentation

• Identification and adoption of a strategy, program and process of documentation integrated through all project stages to enable project delivery.

• Continuing coordination and integration of information and project material from relevant consultants, specialists and suppliers.

• Incorporation of the project requirements and objectives in accordance with Project Brief and approved Detailed Design.

• Timely completion and communication of accurate and comprehensible documents that will include, as required, drawings, models, specifications, schedules and other relevant modes of information.

• Project documentation is in accordance with, and appropriate to, the project contract and project procurement procedure.

• Engagement with manufacturer’s material systems instructions and guidelines.

• Preparation of drawings to explain how a project should be assembled.

(vii) Project Delivery: Procurement

• Identification of available procurement methods and assessment of relevance and application to the project.

(viii) Project Delivery: Construction Stage

• Identification and application of the process and administration systems needed to fulfil all obligations under project contract.

• Construction progress and quality is systematically reviewed and monitored as required under the contract provisions.

• Identification and application of all relevant processes required for certification of monetary claims, project variations, and extensions of time, project instructions or other administrative responsibilities under the contract provisions.”

[47] APESMA submits that the competencies set out at sub clause 15.2(c) of the Architects Award have been superseded and are no longer relevant. APESMA says that the Architects Accreditation Council of Australia (AAC) as the relevant accreditation body, has provided updated competencies which are reflected in the proposed amendments to clause 15.2(c). The ACAA support the proposed amendments and confirm that the National Standard of Competency for Architects has been updated and therefore sub clause 15.2(c) should be varied to reflect this in the terms sought.

Consideration

[48] We are satisfied that variation of the Architects Award in the manner agreed by the parties would ensure that the competency requirements necessary for progression from Graduate of Architecture to Registered Architect reflect the contemporary competency requirements established by the AAC.

[49] We consider, based upon the material before us, the amendments to be consistent with the need to ‘promote flexible modern work practices and the efficient and productive performance of work’ (s.134(1)(d)). Moreover, a variation to the Architects Award in the manner proposed would provide ‘a fair and relevant minimum safety net of terms and conditions’ and the variation is necessary to achieve the modern awards objective.

Equipment and special clothing

[50] ACAA seek to vary clause 16.3 of the Architects Award to reflect modern practices in respect of the required provision of equipment by employees for their work. Clause 16.3 provides:

“16.3 Equipment and special clothing allowance

(a) Where the employer requires an employee to provide and use a drawing board, paraline or drafting machine, paper, pencils, leads, colours, inks and wearable parts of pen and pencils, the employer must reimburse the employee for the costs of purchasing such equipment. On occasion when required for on-site use, the employer must pay an allowance equivalent to the cost of necessary protective clothing.

(b) The provisions of clause 16.3(a) must not apply where the employer supplies such equipment and special clothing without cost to the employee.”

[51] ACAA seeks to replace clause 16.3 with the following:

“16.3 Equipment and special clothing allowance

(a) Where the employer requires an employee to provide relevant technical equipment or special clothing, the employer must reimburse the employee for the costs of purchasing such equipment.

(b) On occasion when required for on-site use, the employer must pay an allowance equivalent to the cost of necessary protective clothing.

(c) The provisions of clause 16.4(a) and (b) 14 (sic) do not apply where the employer supplies such equipment and special clothing without cost to the employee.”

[52] ACAA submits that clause 16.3 should be varied because it is outdated and that all the items currently listed at sub clause (a) (except paper) are not used or required in practice. ACAA further submits that as technology has progressed, it is more common for employers to provide technical equipment. It is ACAA’s submission that the variation proposed would modernise the Architects Award, provide a safety net for employees and ensure employers are aware of their obligations.

[53] APESMA submits that the proposed variation is ‘not significant’ and would result in the clause being more reflective of contemporary architectural practice, in particular with respect to the use of information technology. APESMA confirmed its agreement to the proposed variation at the hearing. 15

Consideration

[54] It is apparent to us that the existing provisions at clause 16.3 of the Architects Award do not reflect contemporary practices in terms of the reference to the required provision of particular equipment and materials and is, on the submissions of the parties, no longer appropriate due to advances in technology. While employers may still require employees to obtain special clothing, we accept that the reference to ‘drawing board, paraline or drafting machine, paper, pencils…’ etc. is no longer appropriate as the specified equipment is no longer required or used. A variation to the Architects Award by replacing existing clause 16.3 with the clause proposed would reflect contemporary technological practices and clarify employer obligations to the reimbursement of employees for the purchase of equipment and special clothing required by them for the performance of their work.

[55] The parties submit that the proposed variation is necessary to ensure that the Architects Award provides a ‘fair and relevant safety net’. We agree. Furthermore, while no evidence was led in relation to the claim we accept that the change is appropriate and is of the kind referred to by the Full Bench in the Preliminary Jurisdictional Issues Decision 16 where it observed:

“[23] The Commission is obliged to ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net taking into account, among other things, the need to ensure a ‘stable’ modern award system (s.134(1)(g)). The need for a ‘stable’ modern award system suggests that a party seeking to vary a modern award in the context of the Review must advance a merit argument in support of the proposed variation. 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.” (Emphasis added)

[56] We consider, based upon the material before us, that the proposed amendment to clause 16.3 is consistent with the need to ‘promote flexible modern work practices and the efficient and productive performance of work’ (s.134(1)(d)). Varying the Architects Award in the manner proposed would provide ‘a fair and relevant minimum safety net of terms and conditions’ and the variation is necessary to achieve the modern awards objective.

Superannuation

[57] ACAA seeks to vary clause 18.4 of the Architects Award in respect of the list of nominated default funds, by inserting an additional fund. Clause 18.4 currently provides:

“18.4 Superannuation fund

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 18.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 18.2 and pay the amount authorised under clauses 18.3(a) or (b) or to one of the following superannuation funds or its successor:

(a) Prime Super;

(b) Tasplan;

(c) Statewide Superannuation Pty Ltd;

(d) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund and is a fund that offers a MySuper product or is an exempt public sector scheme; or

(e) a superannuation fund or scheme which the employee is a defined benefit member of.”

[58] ACAA seeks to insert ‘Construction and Building Industry Super (Cbus)’ into the list of default superannuation funds at clause 18.4.

[59] ACAA submits that some architects work is in the construction industry and therefore the proposed additional fund should have been included in the list when the Architects Award was made. It also submits that architectural firms are part of the construction industry and routinely work with people covered by construction awards, that architectural design is a precursor to construction, and that a number of awards connected to the construction industry contain Cbus as an identified fund. 17

[60] APESMA does not oppose the proposed insertion of Cbus as an identified superannuation fund and confirmed its agreement at the hearing. 18

Consideration

[61] The power to vary a default superannuation fund term as sought by the ACAA was raised by the Commission in correspondence to the ACAA on 26 July 2017 as follows:

“New default superannuation fund

As outlined above, the ACCA advised the Commission of a substantive change it was seeking to introduce a new default superannuation fund in the Architects Award 2010.

The 4 yearly review of modern awards, of which AM2014/257 is a part, is being conducted in accordance with s.156 of the Fair Work Act 2009 (the FW Act). Section 156(2)(c) relevantly states:

(2) In a 4 yearly review of modern awards, the FWC:…

(c) must not review, or make a determination to vary, a default fund term of a modern award.

Therefore, it appears that the Commission has no power to vary default superannuation fund terms under s.156 of the FW Act. The Commission must review and may vary a term under s.156A – 4 yearly reviews of default fund terms (see also ss.156B–156U). The review of default funds is separate to the review of modern awards.

It should be noted that while the Commission is under a legislative obligation to conduct 4 yearly reviews of default fund terms under s.156A, it has not been able to do so because there are not enough Expert Panel Members available to constitute an Expert Panel (see [2014] FWC 3840). The Commission is unable to advise when an Expert Panel will be reconstituted.

Varying default superannuation fund terms outside a 4 yearly review

Outside a 4 yearly review of default fund terms, modern award default fund terms may only be varied pursuant to s.159A – Variation of default fund term of modern award or under the more general provisions of s.160 – Variation of modern award to remove ambiguity or uncertainty or correct error. An application could also be attempted under s. 158 – Applications to vary, revoke or make modern award.

It is not clear whether s.159A may be applied to an award that has not previously been subject to a 4 yearly review of default fund terms. However, even if it may be applied, s.159A does not provide for variation of a default fund term to add an additional superannuation fund as proposed by the ACAA. The FW Act only permits the Commission to rename or omit a fund in certain circumstances.

Given the uncertainty as to the application of s.159A and the inability of the Commission to vary a default superannuation fund term as part of the current 4 yearly review of modern awards, the ACAA may seek to make an application under a different section of the FW Act. Alternatively, if the ACAA forms the view that Commission (sic) lacks the jurisdiction to consider its claim, it could await the reconstitution of the Expert Panel to recommence the process of conducting 4 yearly reviews of default funds.

If the ACAA continues to press the amendments we invite submissions about how it is said the Commission has the power to make the amendments. Any submission must be filed by 4.00 pm on Monday 14 August 2017.”

[62] In correspondence to the Commission on 19 April 2018, the ACAA advised that it nonetheless wished to press its claim in relation to insertion of Cbus as a default fund into the Architects Award. 19 The ACAA repeated that position in further correspondence to the Commission on 20 August 2018.20

[63] Section 156(2) of the Act relevantly states as follows:

“(2) In a 4 yearly review of modern awards, the FWC:

(a) Must review all awards; and

(b) May make:

(i) One or more determinations varying modern awards; and

(ii) One or more modern awards; and

(iii) One or more determinations revoking modern awards; and

[64] Section 156(2) is clear. The Commission must not review or make a determination to vary a default superannuation fund term of the Architects Award as part of the Review. The claimed variation is rejected.

Time Off In Lieu of Payment for Overtime

[65] ACAA seeks to vary the existing time off in lieu (TOIL) provisions in the Architect’s Award so that TOIL is taken off on an hour for hour worked basis rather than at the overtime rate as currently provided. APESMA oppose the variation sought. The variation proposed is in the following terms:

“19.3 Time off instead of payment for overtime

(a) An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

(b) The period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made.

EXAMPLE: By making an agreement under clause 19.3 an employee who worked 2 overtime hours at the rate of time and a half is entitled to 2 hours’ time off.

…” (Emphasis added)

[66] Before turning to consider the submissions of ACAA and APESMA it is necessary first to detail the chronology of events in relation to TOIL provisions in the Architects Award as well as detailing the positions taken by ACAA and APESMA in respect of the TOIL provisions during the Review.

[67] The Architects Award was made on 4 September 2009 21 (the September 2009 Order) further to a Full Bench decision22 (the September 2009 Decision) of that same date. Clause 19.1 of the Architects Award made on that date relevantly provided as follows:

“19.1 Overtime

An employer must compensate an employee for all time worked in excess of normal hours of duty by:

(a) granting time off instead or by payment for such excess time within six months of it accruing. Payment for such excess time must be in accordance with clause 19.2(b);

(b) payment for such excess hours at the rate of time and a half; or

(c) by such other arrangements as may be agreed so long as the arrangement is not entered into for the purpose of avoiding award obligations, does not result in unfairness to the employee and is recorded in accordance with clause 19.3.”

[68] In July 2015, as part of the Common issues stage of the Review, the Full Bench dealing with the Common issue of Award Flexibility (the Award Flexibility Full Bench) issued a decision 23 (the July 2015 Decision) provisionally determining to insert a model TOIL term into all modern awards that provided for overtime. Having expressed that provisional view the Full Bench went on to state as follows:

“[281] We express a provisional view only at this stage, because we are conscious that the scope and content of the variations we propose were not fully canvassed during the proceedings. We propose to provide interested parties with an opportunity to make further submissions – directed at both the model term and the proposition that all modern awards which provide for overtime be varied to insert the model term, subject to some exceptions to which we refer to later. A list of such awards is set out at Attachment F. The process for filing further submissions is dealt with in Chapter 6 of this decision. We will only reach a concluded view in respect of these issues after considering all of the further submissions filed.” 24

[69] Attachment F to the July 2015 Decision listed all modern awards that provided for overtime and indicated whether each of those awards provided for TOIL at ordinary time or overtime rates. Attachment F notes that the Architects Award is silent on whether TOIL was provided for at the ‘ordinary rate’ or at the ‘overtime rate’. Interested parties were provided an opportunity to make submissions regarding the list of awards. It does not appear that ACAA took the opportunity of making submissions in response to the invitation by the Award Flexibility Full Bench.

[70] Modern awards that were the subject of the July 2015 Decision (i.e. those that provided for overtime) were then divided into 3 categories:

1. Those that provided for overtime but did not give employees the option of taking time off instead of payment;

2. Those that provided the option of TOIL at ordinary rates; and

3. Those that provided the option of taking TOIL at overtime rates.

[71] A number of decisions were issued throughout 2016 by the Award Flexibility Full Bench setting out different variations of the model terms that would be inserted into awards based on the three broad categories above. A decision of 11 July 2016 25 (the July 2016 Decision) varied awards which provided for overtime (but did not give employees the option of taking time off instead of payment for overtime); and also varied awards that provided the option of taking time off at ‘ordinary rates’ (i.e. an hour off for an hour of overtime worked). The Architects Award was not subject to this decision.

[72] On 13 May 2016 an Exposure Draft of the Architects Award (the May 2016 Exposure Draft) was issued by the Commission as part of the Award phase of the Review. Interested parties were asked in response to confirm whether TOIL provisions should reflect time off or an hour off for an hour worked basis or in accordance with penalty rates being 1.5 hours off for each hour worked.

[73] On 30 June 2016 ACAA responded to the May 2016 Exposure Draft. In relation to the TOIL question posed in the May 2016 Exposure Draft, it said:

“Clause 13.1 (a) time off in lieu has always been at hour for hour. We would seek clause 13.1(a) to read granting time off instead of payment at hour for hour or by making payment for such excess time within six months of it accruing. Payment for such excess time must be in accordance with clause 13.1(b).”

[74] On 2 August 2016 APESMA also responded to the May 2016 Exposure Draft and relevantly stated:

“In respect of whether time off in lieu is on “an hour off for an hour basis” or in accordance with penalty rates being 1.5 hours off for each hour worked” APESMA submits that the model clause as set out in Attachment A to the Decision in the Award flexibility case [2016] FWCFB 4579 should be inserted into the Architects Award.”

[75] It is noted that in the July 2016 Decision to which APESMA referred to in its 2 August 2016 submission, the ‘Final model term and template agreement’ at Attachment A provided for TOIL on an hour for hour basis for overtime worked 26 in the following terms:

“…

(d) The period of time off that an employee is entitled to take is the same as the number of overtime hours worked.

...”

[76] On 5 September 2016 a Statement 27 (the September 2016 Statement) was issued by the Award Flexibility Full Bench outlining how it would deal with the remaining awards that provided for TOIL at overtime rates and which had not been dealt with in its July 2016 Decision. The Architects Award was listed at Attachment A to this Statement as an award that contained TOIL at overtime rates although it was again noted that the Architects Award was silent on the quantum of overtime allowed. Draft determinations were published following the September 2016 Statement and parties were provided an opportunity to make submissions relating to the draft determinations. It does not appear that ACAA took the opportunity of making submissions relating to the draft determination as invited by the Award Flexibility Full Bench.

[77] On 30 November 2016 a ‘Summary of submissions – technical and drafting’ (the November 2016 Summary of Submissions) in respect of the Architects Award was issued by the Commission as part of the Award stage of the Review. The November 2016 Summary of Submissions recorded both ACAA’s position that TOIL should be ‘hour for hour’ and APESMA’s position that Attachment A to the July 2016 Decision should be inserted into the Architects Award.

[78] On 13 December 2016 a further decision 28 (the December 2016 Decision) was issued by the Award Flexibility Full Bench dealing with the awards that were the subject of the September 2016 Statement. Attachment A to the December 2016 Decision set out that the Architects Award provided for TOIL at overtime rates. Unlike the September 2016 Statement no reference was made to the Architects Award being silent on how TOIL was taken. A determination was then issued on 14 December 201629 (the December 2016 Determination) which inserted the version of the model TOIL term into the Architects Award allowing for TOIL at overtime rates. The amended clause 19.3 of the Architects Award stated as follows:

“19.3 Time off instead of payment for overtime

(a) An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

(b) The period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made.

EXAMPLE: By making an agreement under clause 19.3 an employee who worked 2 overtime hours at the rate of time and a half is entitled to 3 hours’ time off.

…”

[79] On 5 January 2017 a ‘Revised summary of submissions – technical and drafting’ (the January 2017 Summary of Submissions) for the Architects Award was issued which restated the positions of ACAA and APESMA on TOIL previously reflected in the November 2016 Summary of Submissions. A further Exposure Draft of the Architects Award issued on 6 January 2017 (the January 2017 Exposure Draft) again posed the question to the parties as to whether TOIL is granted on an hour off for an hour worked basis or in accordance with penalty rates being 1.5 hours off for each hour worked.

[80] On 20 November 2017 a further ‘Revised summary of submissions – technical and drafting’ (the November 2017 Summary of Submissions) was issued and noted the same position of the parties on TOIL as reflected in both the November 2016 Summary of Submissions and January 2017 Summary of Submissions. The November 2017 Summary of Submissions further noted that the issue of TOIL was now a ‘substantive issue’.

[81] On 19 April 2018 the ACAA confirmed its position on TOIL in correspondence to the Commission and that it was pursuing the substantive variation. 30 That position was reaffirmed in subsequent correspondence from ACAA to the Commission on 20 August 2018.31

[82] It is against the above background that ACAA submit that:

(1) In handing down the December 2016 Decision the Full Bench wrongly ‘bracketed’ the Architects Award with other awards that provided for TOIL to be taken at overtime rates;

(2) It has consistently supported a position during the Review that the provisions in the Architects Award should provide for the taking of TOIL on an hour for hour worked basis;

(3) TOIL has historically been interpreted as to be taken on an hour for hour worked basis in respect of awards applying to architects and refer to the Tasmanian Architects Private Sector Award NAPSA; and

(4) A range of other professional modern awards provide for TOIL to be taken on an hour for hour worked basis.³²

[83] APESMA opposes ACAA’s claim. It submits that the correct interpretation is that all TOIL taken for time worked in excess of normal hours of duty should be taken at the rate of time and a half. It submits that the provision set out above at paragraph [67] was first inserted in substantially similar terms in the first federal award for Architects. 33 APESMA further submits that ACAA made a similar claim for ‘hour for hour’ TOIL during the Award Modernisation process which commenced in March 2008 and led to the making of the Architects Award and significantly, ACAA’s claim was not adopted by the Full Bench at that time.

[84] APESMA submits that the Award Flexibility Full Bench dealt extensively with the issue in AM2014/300, particularly in the July 2015 Decision and July 2016 Decision and was ‘unequivocal in its view as to the method of calculation to be applied to taking time off instead of payment for overtime.’ 34 APESMA submits that the Full Bench has settled this issue and ACAA carry a heavy onus to show why the Architects Award should be varied as proposed by the ACAA.

Consideration

[85] We turn firstly to consider ACAA’s submission that when inserting model TOIL provisions into various awards the Award Flexibility Full Bench wrongly ‘bracketed’ the Architects Award with that group of awards that provided for TOIL at overtime rates rather than with those awards that provided for TOIL on an hour for hour worked basis.

[86] It is clear that the Award Flexibility Full Bench dealt comprehensively with the ‘common issue’ of TOIL in those awards that provided for payment of overtime through a number of decisions issued in 2015 and 2016. Contrary to APESMA’s submission, the Full Bench was not unequivocal in terms of how TOIL was to be taken. The Award Flexibility Full Bench progressively developed model TOIL terms that would apply in three broad circumstances and that depending on the circumstances different model terms would be inserted into awards. The Award Flexibility Full Bench identified three broad circumstances, those being earlier noted.

[87] It is apparent that the Architects Award was considered by the Award Flexibility Full Bench as part of that process and was included in the 3^rd group of awards identified above and which were the subject of the December 2016 Decision. While included in the 3^rd group of awards, the Award Flexibility Full Bench identified in both its July 2015 Decision at Attachment F and in its September 2016 Statement at Attachment A that the Architects Award was silent on the rate at which TOIL was to be taken. Critically, interested parties were progressively invited by the Award Flexibility Full Bench to make submissions in relation to the proposed model TOIL terms and also on draft determinations issued for each of the affected awards.

[88] It does not appear that ACAA took the opportunity of commenting on or responding to the July 2015 Decision in which the Award Flexibility Full Bench detailed its provisional view on the model TOIL provision. Nor does it appear that ACAA commented on or responded to the draft determination issued by the Award Flexibility Full Bench following the September 2016 Statement in which the Full Bench outlined how it proposed to deal with those remaining awards that provided for TOIL at overtime rates and which included the Architects Award.

[89] It is our view that ACAA had ample opportunity to make submissions to the Award Flexibility Full Bench on the model TOIL terms, on the inclusion of the Architects Award in the 3^rd group of awards that provided for TOIL at overtime rates and on the draft determination released following the September 2016 Statement.

[90] The Award Flexibility Full Bench’s description of the Architects Award as being silent on the rate at which TOIL was taken, in both the July 2015 Decision and September 2016 Statement, has given rise to a concern on ACAA’s part that the Architects Award was wrongly ‘bracketed’ in the 3^rd group of awards. However, we do not consider that ACAA were denied an opportunity to raise any concerns it held in the various proceedings before the Award Flexibility Full Bench prior to the December 2016 Determination.

[91] In any case, if ACAA remain of the view that the Award Flexibility Full Bench fell into error by wrongly ‘bracketing’ the Architects Award with awards that provided for TOIL at overtime rates, it remains open to the ACAA to make an appropriate application to that Full Bench for correction of the error.

[92] We now turn to ACAA’s submission that it has continued to support the position during the Review that TOIL should be expressed in the Architects Award as on an hour for hour worked basis. ACAA’s position can be traced back to submissions it made prior to the making of the Architects Award in 2009. It is also clear that they have maintained that position throughout the Review as evidenced by their 30 June 2016 response to the May 2016 Exposure Draft and subsequent confirmation of their substantive TOIL claim in correspondence to the Commission dated 19 April and 20 August 2018.

[93] While we accept that ACAA has maintained a consistent position throughout the Review in relation to TOIL, more is required than simply continuing to restate a claim. The Full Bench made it clear in the Preliminary Jurisdictional Issues Decision that there is an evidentiary onus on a party proposing a significant change to an award as part of the Review when it stated as follows:

[94] Simply put, merely persisting with a position on a substantive claim is not probative evidence as to the merit of the claim. The mere fact that ACAA have maintained their position that TOIL should be on an hour for hour worked basis does not persuade us that the variation proposed has merit.

[95] ACAA also contend that TOIL has historically been interpreted as to be taken on a time for time basis with respect to awards applying to architects. While conceding that the Federal Award that preceded the making of the Architects Award was similarly silent on the basis on which TOIL was to be taken, ACAA point to the Tasmanian Architects Private Sector Award NAPSA. That award included TOIL provisions that relevantly stated as follows:

“…

(ii) Overtime taken as time off during ordinary hours shall be taken at the ordinary time rate, that is an hour for each hour worked (unless otherwise provided elsewhere in the award)

…” (Emphasis added)

[96] While it may be accepted that the above-referred NAPSA included TOIL provisions on an hour for hour basis, we were not taken by ACAA to any other evidence in relation to historical practices in respect of TOIL that would assist us. There was insufficient evidence adduced that would satisfy us that prior to the December 2016 Decision the industry practice in respect of the application of the Architects Award was to apply TOIL on an hour for hour worked basis.

[97] We turn now to ACAA’s further submission that there are a range of other professional awards that contain provisions providing for TOIL on an hour for hour worked basis. ACAA refer to the following awards:

• Pharmaceutical Industry Award 2010;

• Banking, Finance & Insurance Award 2010;

• Business Equipment Award 2010;

• Commercial Sales Award 2010;

• Educational Services (Post-Secondary Education) Award 2010;

• Funeral Industry Award 2010;

• Health Professionals and Support Services Award 2010;

• Legal Services Award 2010; and

• Market and Social Research Award 2010.

[98] True it is that the each of the awards identified in the above list provide for TOIL to be taken on an hour for hour worked basis and that those awards straddle a range of industries and occupations that might be described as ‘professional’. This lends some weight to ACAA’s submission that the approach of applying TOIL on an hour for hour worked basis is generally found in ‘professional awards’. That however needs to be considered against the background of the making of those particular awards.

[99] While not taken by ACAA to the history of the making of the above awards or the TOIL provisions in each of those awards, it is evident from our own review of the making of those awards that with the exception of the Pharmaceutical Industry Award 2010 36 and the Business Equipment Award 201037 which did not include TOIL provisions when made in 2009, each of the other awards identified above at [97] included provisions explicitly providing for TOIL on an hour for hour worked basis when the awards were made in 2009.38 When those awards were subsequently considered by the Award Flexibility Full Bench during the Common issues phase of the Review they were included in that group of awards that were subject of the July 2016 Decision on the basis that they provided for TOIL on an hour for hour worked basis. That is to be contrasted with the Architects Award which did not provide for TOIL to be taken at ‘ordinary time’ when it was made in 2009.39

[100] Furthermore, it is also of some relevance that prior to the making of the Architects Award in 2009, the ACAA made submissions 40 to the Commission in respect of AM2009/57 (the Architects Award). Attached to ACAA’s submissions was a ‘Draft Award – ACAA 3^rd April 2009’ which proposed TOIL provisions in the following terms:

“20. Overtime and penalty rates

20.1 An employer shall compensate an employee for all authorised time worked in excess of normal hours of duty by:

(a) granting time off in lieu (to be taken at a time agreed between the employer and the employee subject to reasonable consideration by both parties of the workflow needs of the employer and the personal needs of the employee) which is time for time e.g. 4 hours over time worked 4 hours granted for time off or by payment for such excess time within six months of it accruing. Payment for such excess time shall be in accord with 20.1(b); or

(b) payment for such excess hours at the rate of time and a half; or

(c) By such other arrangements as may be agreed so long as the arrangement is not entered into for the purpose of avoiding award obligations, does not result in unfairness to the employee and is recorded in accordance with clause 20.2.

20.2 Agreements under this clause must be recorded in writing and kept as part of the time and wages records kept pursuant to Division 2 of Part 19 of the Workplace Relations Regulations.” (Emphasis added)

[101] The submissions made by the ACAA in respect of the TOIL provisions were not adopted by the Full Bench in making the Architects Award in 2009. While the reasons for the Full Bench not adopting the ACAA’s submission are unclear it is in our view significant that the Full Bench was not persuaded to include provisions explicitly providing for TOIL to be taken on an hour for hour basis. This was in circumstances where a number of other awards made at the same time, and referred to at [97]-[99] above, included provisions explicitly providing for TOIL on an hour for hour worked basis. This tells against the ACAA submission that the incidence of TOIL provisions on an hour for hour worked basis in other ‘professional awards’ weighs in favour of inclusion of such provisions in the Architects Award.

[102] There is a paucity of probative evidence before us that goes to the merit of the ACAA’s claim. There was for example no evidence adduced as to the incidence of TOIL taken by employees of members of the ACAA. Nor was any evidence adduced as to the costs and other impacts associated with TOIL taken at overtime rates and what impacts and/or benefits would flow were the claim granted to provide for TOIL to be taken on an hour for hour worked basis. Furthermore, aside from its reference to the Tasmanian Architects Private Sector Award NAPSA provisions and its general submission, ACAA failed to adduce probative evidence in relation to the TOIL arrangements that applied to architects prior to the December 2016 Decision to support its claim of historical practice.

[103] It follows from the above that we are not persuaded to vary clause 19.3 in the terms sought by ACAA. We are not satisfied on the material before us that ACAA have advanced a merit argument supported by submissions addressing the relevant legislative provisions (s.134(1)). Nor was there sufficient probative evidence adduced supporting the proposed variation.

Notice of Termination of Employment

[104] ACAA seeks to vary the termination of employment clause so that it would provide for the NES notice requirement to operate in circumstances of the termination of an employee with up to 6 months continuous service or up to 12 months in the case of a small business employer. ACAA propose the following clause be inserted in place of the existing sub-clause 12.1:

“12.1 Notice of termination is provided for in the NES.

Instead of s.117(3) of the Act, in order to terminate the employment of an employee the employer must give the employee one month’s notice except where the NES provides a longer period of notice.

Provided that the period of notice to be given to or by an employee with up to 6 months continuous service (or 12 months continuous service if the employer is a small business employer as defined in s.23 of the Act) with a particular employer shall not be less than 1 week or the amount of payment to be made by either party shall be an amount equal to 1 weeks salary.”

[105] Clause 12 of the Architects Award currently provides:

“12.1 Notice of termination or payment instead of notice by the employer

(a) Clause 12.1 applies to all employees except those identified in sections 123(1) and 123(3) of the Act.

(b) The employer must give an employee notice of termination of employment or payment instead of notice as required under sections 117(1) and 117(2) of the Act, except that the minimum period of notice is:

(i) one month; or

(ii) 5 weeks, if the employee is over 45 years old and has completed more than 5 years of continuous service with the employer at the end of the day the notice is given.

(c) In paragraph (b) continuous service has the same meaning as in section 117 of the Act.

12.2 Notice of termination by an employee

(a) Clause 12.2 applies to all employees except those identified in sections 123(1) and 123(3) of the Act.

(b) An employee must give the employer at least one month’s notice of termination of employment.

(c) If an employee who is at least 18 years old does not give the period of notice required under paragraph (b), then the employer may deduct from wages due to the employee under this award an amount that is no more than one week’s wages for the employee.

(d) If the employer has agreed to a shorter period of notice than that required under paragraph (b), then no deduction can be made under paragraph (c).

(e) Any deduction made under paragraph (c) must not be unreasonable in the circumstances.

12.3 Job search entitlement

Where an employer has given notice of termination to an employee, the employee must be allowed time off without loss of pay of up to one day for the purpose of seeking other employment.

12.4 The time off under clause 12.3 is to be taken at times that are convenient to the employee after consultation with the employer.”

[106] The ACAA submits that clause 12.1 currently requires a period of notice that is 3 weeks and 2 days more than s.117 of the FW Act and 2 weeks more than a number of previous awards. 41 Section 117 of the FW Act, requires the following periods of notice, based on length of service:

Employee’s period of continuous service with the employer at the end of the day the notice is given	Period of notice required
Not more than 1 year	1 week
More than 1 year but not more than 3 years	2 weeks
More than 3 years but not more than 5 years	3 weeks
More than 5 years	4 weeks

[107] ACAA submits that the current provision imposes a significant cost on architectural firms. To illustrate its submission, ACAA raised the example of a small business with 14 employees with a turnover of 18% (2.52 employees in a 12 month period). If that business were to terminate the employment of a 1^st year Graduate of Architecture, the notice period (if paid out) would cost $978.10 under the NES and by comparison $4,252.00 under the current Architects Award provisions. Multiplied by the 2.52 employee turnover rate, the current provisions would leave the small business having to pay an extra $8,250.20 per year compared to the obligation that would arise if the NES applied. Further, a large business with 75 employees with a turnover of 18% (13.5 employees in a 12 month period) would, on the same basis of calculation, pay an additional $44,189.00 per year under the current provisions versus the NES. ACAA submit that the savings from making its proposed variation could be used to create more jobs.

[108] ACAA also refers to a variation to the redundancy provisions which took effect on 3 May 2019. Clause 13 of the Architects Award now provides:

“13. Redundancy

…

13.2 Employee leaving during redundancy notice period

(a) An employee given notice of termination in circumstances of redundancy may terminate their employment during the minimum period of notice prescribed by s.117(3) of the Act.

(b) The employee is entitled to receive the benefits and payments they would have received under clause 13 or under ss.119–123 of the Act had they remained in employment until the expiry of the notice.

(c) However, the employee is not entitled to be paid for any part of the period of notice remaining after the employee ceased to be employed.

…”

[109] ACAA submits the clause could be read as providing that the notice period required for redundancy is to be calculated under the NES and the notice period required for termination of employment is one month notice under clause 12.1.

[110] At the hearing ACAA stated that the changes it seeks would reduce the notice period required when an employee is on probation or within the period prior to being eligible to file an unfair dismissal application (i.e. ‘minimum employment period’); in the first 12 months of employment for a small business and the first six months for all other employers. ACAA acknowledged that the previous awards, which required two weeks’ notice in the first six months of employment, operated when the NES did not exist. It also stated that reducing the notice period to two weeks would ‘not be an issue’ for this Full Bench because doing so would be based on previous awards.

[111] APESMA ‘strongly opposes’ the proposed variation and submits that the one month notice period in the Architects Award is a common feature of modern awards that cover professional employees. APESMA submits that the Technical Services - Architects Award 2000 42 referred to by ACAA in its submissions contained the following provision at clause 15.1.1:

“Employment shall be terminated by one month’s notice by either party, or by the payment by either party of an amount equal to a month’s salary, as the case may be. Provided that the period of notice to be given to or by an employee with up to 6 months continuous service with a particular employer shall not be less than 2 weeks or the amount of payment to be made by either party shall be an amount equal to 2 weeks salary.”

[112] APESMA further submits that the issue of the termination of employment notice period was addressed in the 2008 Award Modernisation process. 43 In that matter the Full Bench in a decision44 dated 4 September 2009 decided to include a one month notice period, noting ‘…it is a feature of this area of employment and contained in awards superseded by this modern award.’45 It submits that it is implicit that the modern awards made as an outcome of the Award Modernisation process were deemed to be modern awards under the FW Act and were accepted as being consistent with the modern awards objective. Therefore, if this is to be changed, the onus is on the ACAA to put forward a merits based case, including probative evidence.

[113] ACAA disagrees with APESMA’s argument that professional employees are covered by common notice provisions requiring one month’s notice of termination. It acknowledges that the Professional Employees Award 2010 contains the same provision as the Architects Award, but notes that the Pharmacy Industry Award 2010 applies the NES. For this reason, the proposed variation could be made without disturbing ‘standard’ provisions across professional awards. ACAA further submits that if its claim for the proposed NES minimum notice periods was not accepted then two weeks may be ‘more amenable’ as that notice period was provided for in previous awards applying to architects. 46

Consideration

[114] As stated at [10] above the starting point in our consideration of the ACAA’s substantive claims is that prima facie the Architects Award when made in 2009 met the modern awards objective. This assumption also applies with respect to the notice provisions which were clearly considered by the Full Bench at the time of the making of the award when they stated as follows:

“[251] In relation to termination of employment, APESMA sought the notice period for termination to be one month on either side. We will include such a provision as it is a feature of this area of employment and contained in awards which will be superseded by this modern award. We have not included a provision in relation to professional development as, in our view it was aspirational rather than imposing any obligations. However we have altered the provisions in relation to annual leave but not public holidays.” 47 (Emphasis added)

[115] ACAA consequently bears the onus of advancing a merit based case that addresses the legislative provisions accompanied by probative evidence in support of the substantive claim. We make the observation before turning to the ACAA’s submission that no probative evidence has been adduced that goes to the impact of the current provisions and/or the implications of the proposed change. ACAA’s case appears founded on the existence of particular notice provisions in various pre-reform awards and on the contended cost impact of the greater notice periods in the Architects Award as compared to the NES. We turn first to consider the cost of the notice periods.

[116] ACAA have submitted a hypothetical cost analysis based on an industry turnover figure of 18% derived from a survey conducted by the Australian Human Resources Institute (AHRI). For the sake of the example ACAA submit that an 18% turnover figure translates to actual turnover of 2.52 employees per annum in a business employing fourteen employees. The net difference in the notice period cost of $8,250.20 per annum for the 2.52 employees in that small business is calculated on the assumption that the employees that are subject to termination and pay-out of the notice period are only those employees who have not yet met the minimum employment period of 12 months. The same logic is applied by the ACAA to the example of a larger employer with 75 employees suffering turnover of 13.5 employees per annum, resulting in a net notice period cost difference of $44,189.00.

[117] While we were not taken to the AHRI report to verify the industry turnover figure quoted, we do make the following comments in relation to the costing analysis. It appears to be based on the following assumptions. Firstly, the analysis assumes that the turnover only involves employees with less than 6 months or less than 12 months service in the case of a small business. Secondly, it also assumes that when an employee is terminated, be that at the employer or employee’s initiative, then the employer will pay out the full notice period. The prospect that an employer might allow or require the notice period to be worked out is not considered in the costing analysis.

[118] The assumptions that underpin the ACAA’s costing analysis appear to be designed to present a worst case scenario rather than a realistic cost analysis. It seems utterly implausible to us that a business employing architects would only suffer turnover involving employees in the first 6 or 12 months of their service. Acceptance of the ACAA analysis would require us to accept that there are no resignations, retirements, dismissals or forced redundancies that involve employees with greater than the minimum employment period. In the 18% turnover examples used it seems far more likely, and credible, that the turnover would involve employees with varying lengths of service and that employees with less than the minimum employment period would make up a proportion of that overall turnover. Furthermore, we do not accept the assumption in the costing analysis that the pay-out of notice periods is inevitable in circumstances of termination of employment. It seems to us likely that in many cases of termination of employment; particularly where it is a resignation, the employer is comfortable with and requires the notice period to be worked out. In any event, an employer is not required to make payment in lieu of notice to an employee who resigns. Moreover, in the case of an employer initiated dismissal (save in the case of conduct justifying summary dismissal where notice is not required) the employer will choose whether to require the employee to leave immediately and so pay in lieu of notice or simply require the employee to work the notice period, therefore benefitting from the productive labour in return for wages during the notice period.

[119] If more realistic assumptions were made then it follows in our view that the cost impact of the award notice provisions compared to the NES would be significantly reduced from those submitted by the ACAA. We consequently do not accept that ACAA’s costing analysis provides a robust basis on which to make findings on the impact of the current award notice provisions. No other probative evidence was filed or adduced that would assist us to identify the costs and implications of changing the award notice provisions in the manner sought.

[120] As to ACAA’s reliance on notice provisions contained in various pre-reform awards we simply observe that when making the Architects Award in 2009 the Full Bench had the benefit of considering the pre-reform awards that existed at the time when it determined that a months’ notice was a feature of architects’ employment and that the superseded awards contained such provisions. More is required than to merely point to a range of superseded awards that were considered at the time of the making of the Architects Award.

[121] It follows from the above that we are not persuaded to vary clause 12 in the terms sought by ACAA. We are not satisfied on the material before us that ACAA have advanced a merit argument supported by submissions addressing the relevant legislative provisions (s.134(1)). Nor was there sufficient probative evidence adduced supporting the proposed variation.

Next Steps

[122] The variations we propose to make are set out in the draft variation determination attached to this decision (see Attachment A). We propose to provide interested parties with a final opportunity to comment on the draft variation determination and, in particular, the variations referred to at [34] and [38] above. Any comments are to be made, in writing to [email protected] by no later than 30 September 2019. Any outstanding issues will be determined based on the written material filed unless a request for an oral hearing is received by 30 September 2019.

DEPUTY PRESIDENT

Appearances:

M Butler for the Association of Professional Engineers, Scientists and Managers, Australia.

M Corrigan on behalf of Association of Consulting Architects Australia.

Hearing details:

2019.

Melbourne:

May 13.

Printed by authority of the Commonwealth Government Printer

Attachment A

fwc_logo

PRXXXXXX

DRAFT DETERMINATION

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

4 yearly review of modern awards—Architects Award 2010
(AM2018/16)

DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT MASSON
COMMISSIONER CIRKOVIC

MELBOURNE, 12 SEPTEMBER 2019

4 yearly review of modern awards – Architects Award 2010 – Award Stage – substantive issues.

A. Further to the decision ([2019] FWCFB 6138) issued by the Full Bench of the Fair Work Commission on 12 September 2019, the Architects Award 2010 is varied as follows:

1. By inserting the following definition in clause 3.1 in alphabetical order:

2. By deleting the definition of “student of architecture” in clause 3.1 and inserting the following:

student of architecture is an employee who is normally enrolled full-time in a design based Bachelor’s Degree course of architecture and who is employed to gain experience in the practice of architecture

3. By deleting clause 15.2(c) and inserting the following:

(c) The Prescribed Competencies against which the experience is to be documented are as follows:

(i) Design: Project Briefing

• Establishment, analysis and evaluation of client project requirements and objectives.

• Identification of factors that may impact on client project requirements and objectives.

(ii) Design: Pre-Design

• Identification, analysis and integration of information relevant to siting of project.

• Application of principles controlling planning, development and design for the project site.

(iii) Design: Conceptual Design

• Design response incorporates assessment of relevant legislation, codes and industry standards.

• Application of principles controlling planning, development and design for the project site.

• Ability to prepare drawings which communicate a scheme design.

• Consideration of material characteristics with regard to the design, durability and aesthetic qualities and environmental considerations.

(iv) Design: Conceptual Design

• Design response incorporates assessment of relevant legislation, codes and industry standards.

(v) Documentation: Detailed Design

• Evaluation and integration of regulatory environments.

• Exploration of and explanation of construction techniques and details suitable to a design.

(vi) Documentation: Documentation

• Identification and adoption of a strategy, program and process of documentation integrated through all project stages to enable project delivery.

• Continuing coordination and integration of information and project material from relevant consultants, specialists and suppliers.

• Incorporation of the project requirements and objectives in accordance with Project Brief and approved Detailed Design.

• Timely completion and communication of accurate and comprehensible documents that will include, as required, drawings, models, specifications, schedules and other relevant modes of information.

• Project documentation is in accordance with, and appropriate to, the project contract and project procurement procedure.

• Engagement with manufacturer’s material systems instructions and guidelines.

• Preparation of drawings to explain how a project should be assembled.

(vii) Project Delivery: Procurement

• Identification of available procurement methods and assessment of relevance and application to the project.

(viii) Project Delivery: Construction Stage

• Identification and application of the process and administration systems needed to fulfil all obligations under project contract.

• Construction progress and quality is systematically reviewed and monitored as required under the contract provisions.

4. By deleting the table appearing in clause 15.4(a) and inserting the following:

Service	% of Level 1—Entry rate
First 13 weeks of employment	35
Next 13 weeks of employment	50
Next 26 weeks of employment	65
2nd year of experience	70
3rd year of experience	75

5. By deleting the table appearing in clause 15.4(b) and inserting the following:

Service	Minimum rate or % of Level 1—Entry rate
Less than 3 years of experience	$740.80
3rd year of experience	75%

6. By renumbering clauses 15.4(c) to (g) as clauses 15.4(d) to (h).

7. By inserting a new clause 15.4(c) as follows:

Service	Minimum rate or % of Level 1—Entry rate
1^st year of experience	85%
2^nd year of experience	90%
3^rd year of experience	95%

8. By deleting clause 16.3 and inserting the following:

16.3 Equipment and special clothing allowance

(a) Where the employer requires an employee to provide relevant technical equipment or special clothing, the employer must reimburse the employee for the costs of purchasing such equipment.

(b) On occasion when required for on-site use, the employer must pay an allowance equivalent to the cost of necessary protective clothing.

(c) The provisions of clause 16.3(a) and (b) do not apply where the employer supplies such equipment and special clothing without cost to the employee.

9. By updating the table of contents and cross-references accordingly.

B. This determination comes into operation from XX Month 2019. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect until the start of the first full pay period that starts on or after XX Month 2019.

DEPUTY PRESIDENT

1 [2014] FWCFB 916

2 MA000079

3 Exposure Draft – Architects Award 2010

4 [2018] FWC 6107

5 Association of Consulting Architects Australia, Submission, 6 May 2019

6 The Association of Professional Engineers, Scientists and Managers, Australia, Submission, 3 May 2019

7 [2014] FWCFB 1788

8 Ibid

9 Ibid at [24]

10 Ibid at [23]

11 Ibid at [23]

12 ACAA Written Submissions on substantive claims, dated 6 May 2019, paragraph 5

13 Transcript, 13 May 2019 at PN86–PN98

14 This is a typographical error that should read ‘clause 16.3(a) and (b)’

15 Transcript, 13 May 2019 at PN154-PN163

16 [2014] FWCFB 1788

17 Building Construction and General On-site Award 2010, Concrete Products Award 2010, Electrical, Electronic and Communications Contracting Award 2010, Joinery and Building Trades Award 2010, Manufacturing and Associated Industries and Occupations Award 2010

18 Transcript, 13 May 2019 at PN141-PN152

19 ACAA Correspondence on Substantive Claims, dated 19 April 2018

20 ACAA Correspondence on Substantive Claims, dated 20 August 2018

21 PR988939

22 [2009] AIRCFB 826

23 [2015] FWCFB 4466

24 Ibid at [281]

25 [2016] FWCFB 4579

26 Ibid at Attachment A

27 [2016] FWCFB 6333

28 [2016] FWCFB 7737

29 PR585791

30 ACAA Correspondence on Substantive Claims, dated 19 April 2018

31 ACAA Correspondence on Substantive Claims, dated 20 August 2018

32 Pharmaceutical Industry Award 2010, Banking, Finance & Insurance Award 2010, Business Equipment Award 2010, Commercial Sales Award 2010, Educational Services (Post-Secondary Education) Award 2010, Funeral Industry Award 2010, Health Professionals and Support Services Award 2010, Legal Services Award 2010, Market and Social Research Award 2010

33 Architects (Interim) Award – Victoria – 1994 (A1144 A V Print L6816)

34 APESMA Submissions, 3 May 2019 at pg.8

35 [2014] FWCFB 1788 at [23]

36 PR988781

37 PR986362

38 PR9863600, PR9888943, PR988935, PR991071, PR,986368, PR991083, PR986371

39 PR988939

40 ACAA Submissions in AM2009/57, dated 7 April 2009

41 Architects Interim Award Victoria 1994, Technical Services Architects Award 2000, Architects Private Sector Award (Tasmania)

42 AP801194CAV

43 AM2008/25-63

44 [2009] AIRCFB 826

45 Ibid at [251]

46 Architects Interim Award 1994, Technical Services Architects Award 2000, Architects Private Sector Award (Tasmania)

47 [2009] AIRCFB 826 at [251]