[2019] FWCFB 6953

FAIR WORK COMMISSION

DECISION

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

4 yearly review of modern awards – Overtime for casuals
(AM2017/51)

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT KOVACIC
DEPUTY PRESIDENT BULL

SYDNEY, 8 OCTOBER 2019

Introduction

[1] As part of the conduct of the continuing 4 yearly review of modern awards, on 4 December 2017 we issued a statement 1 concerning overtime provisions in a number of modern awards as they related to casual employees. Attachment A to that statement contained a list of modern awards in relation to which the Commission’s awards research team had identified a potential ambiguity as to the nature of casual employees’ entitlement to overtime penalty rates. Interested parties were invited to file submissions commenting on the accuracy of the list at Attachment A, and any parties seeking a variation to any of these modern awards in respect of overtime entitlements for casual employees were invited to lodge a draft determination setting out the variations sought. This decision concerns submissions and applications relating to 13 awards which were the subject of hearings before us on 29, 30 and 31 July 2019. We deal with the 13 awards below.

Hospitality Industry (General) Award 2010

Registered and Licensed Clubs Award 2010

Restaurant Industry Award 2010

[2] United Voice sought variations to the Hospitality Industry (General) Award 2010 (Hospitality Award), the Registered and Licensed Clubs Award 2010 (Clubs Award) and Restaurant Industry Award 2010 (Restaurant Award) to establish an entitlement for casual employees to receive the 25% casual loading in addition to overtime penalty rates when working overtime. In respect of the Hospitality Award, the variation sought was to modify clause 13.1 to read as follows (with the new words underlined):

13.1 A casual employee is an employee engaged as such and must be paid a casual loading of 25%. The casual loading is paid as compensation for annual leave, unpaid personal/carer’s leave, notice of termination, redundancy benefits and the other entitlements of full-time or part-time employment. Where a casual employee is entitled to overtime, the overtime rate of pay is paid in addition to the casual loading.

[3] United Voice similarly sought the variation of clause 10.5(b) of the Clubs Award and clause 13.1 of the Restaurant Award to add words to the same effect.

[4] The background to United Voice’s application requires brief explanation. At an earlier stage of the conduct of the 4 yearly review, as part of the Commission’s consideration of the common issue of award provisions concerning casual and part-time employees, the Commission considered an application by United Voice to vary these three awards to establish an entitlement for casuals to be paid overtime penalty rates when working overtime. That application was made in circumstances where these awards had not previously provided for such an entitlement. In 4 yearly review of modern awards – Casual employment and Part-time employment, 2 a decision issued on 5 July 2017, a differently constituted Full Bench determined that it was necessary to grant United Voice’s application in order to achieve the modern awards objective in s 134(1) of the Fair Work Act 2009 (FW Act). The Full Bench concluded:

“[548] We are satisfied, having regard to the matters we are required to take into account under s 134(1), that a fair and relevant minimum safety net for casual employees covered by the 3 awards in question requires that casual employees receive the benefit of overtime penalty rates. On the basis of the factual conclusion we have set out, it is apparent that casual employees who work long hours in the course of a day or a week are subject to significant disabilities. Those disabilities are essentially the same as those applying to permanent employees who work lengthy hours and receive overtime penalty rates for doing so. We see no good reason for the different treatment of casual employees, nor was any convincing rationale for this advanced by any interested employer party…”

[5] United Voice was directed to file draft determinations for each award to give effect to the Full Bench’s decision. 3

[6] There was subsequently a disagreement between the parties as to the form of the variations to be made to give effect to the Full Bench’s decision. This disagreement was described and resolved in a subsequent decision of the Full Bench issued on 24 November 2017 4 as follows:

“[3] …The main issue in contention concerned whether the overtime penalty rates to be introduced for casual employees in each award should be payable in addition to the casual loading. United Voice, in its draft determination, sought that the casual loading should be payable in addition, but the various employer interests took the position that United Voice had initially applied, and run its case on the basis that, overtime penalty rates would be inclusive of the casual loading. We accept, as ultimately did United Voice, that our decision had proceeded on the basis of the application and case advanced by United Voice. Accordingly, the variation to be made to the awards to extend overtime penalty rates to casual employees will provide that those penalty rates will be payable inclusive of the casual loading. We emphasise that this does not represent any decision of principle about this issue, which may be revisited at a future time upon application.”

[7] The variations took effect from 1 January 2018.

[8] United Voice has seized upon the current phase of the 4 yearly review as an opportunity to revisit the issue dealt with in the 24 November 2017 decision and to seek that overtime penalty rates for casual employees be payable exclusive, and not inclusive, of the casual loading. In a hearing before us conducted on 29 July 2019, United Voice essentially advanced a very truncated version of the same case it ran before the Full Bench dealing with part-time and casual employment. This included adducing the same evidence from Professor Olav Muurlink concerning the health effects of working overtime that had been given in the earlier proceedings (summarised at paragraph [488] of the 5 July 2017 decision), and relying on other material which was for the most part before the earlier Full Bench or in existence prior to the earlier decision including the February 2017 report of the Productivity Commission into the workplace relations system. United Voice did not advance its case on the basis of any general principle that the casual loading should always be payable in addition to applicable penalty rates, but submitted that it was appropriate in respect of the Hospitality Award, the Clubs Award and the Restaurant Award because employees were low paid and there were high rates of casualisation. 5

[9] United Voice’s application was opposed by Australian Business Industrial and the NSW Business Chamber (ABI), the Australian Industry Group (Ai Group), the Australian Hospitality Association and Clubs Australia Industrial.

[10] We consider that United Voice’s application is misconceived and must be rejected. The earlier Full Bench dealing with part-time and casual employment common issues as part of the 4 yearly review has already reviewed the overtime provisions of the Hospitality Award, the Clubs Award and the Restaurant Award, and has varied those provisions in the terms sought by United Voice in order that the awards meet the modern awards objective in s 134(1). Now, as part of the same 4 yearly review, United Voice seeks that the already-reviewed provisions be reviewed for a second time. United Voice has not explained how this is jurisdictionally possible. Nor has United Voice explained how it is that the award variations which it previously sought and which took effect only last year no longer meet the modern awards objectives. No change in circumstances has been identified, and no matter has been raised which was not before the Full Bench when the 5 July 2017 decision was made.

[11] While the 24 November 2017 Full Bench decision stated that the determination made in regard to casuals and overtime may be revisited upon application, the submissions of United Voice now before this Full Bench do not contend that the 5 July 2017 decision was erroneous in some respect (which is not surprising since the decision was, relevantly, to grant United Voice’s application) or requires review in light of any different circumstances. No proper basis has been demonstrated to depart from the 5 July 2017 and 24 November 2017 decisions.

Cleaning Services Award 2010

[12] United Voice has proposed that a new clause 28.7 be added to the Cleaning Services Award 2010 (Cleaning Award) as follows: “28.7 All time worked in excess of 7.6 hours per day, five days per week and or in excess of 38 hours in any week by a casual employee is overtime.” Existing clauses 28.7, 28.8 and 28.9 would be renumbered as clauses 28.8, 28.9 and 28.10 respectively. United Voice submitted that this variation would make it clearer that casual employees are entitled to overtime, and that the casual loading is payable in addition to the applicable overtime penalty rate.

[13] The Ai Group submitted that the variations sought by United Voice were not necessary, because clause 24.2(a) already established the ordinary hours of casual employees consistent with United Voice’s proposed variation, and by definition any work performed outside of ordinary hours would be classified as overtime. The Ai Group also submitted that it was already clear that the casual loading was cumulatively payable in addition to overtime penalty rates.

[14] We do not consider that the proposed variation is necessary to establish that casual employees are entitled to receive the casual loading in addition to overtime penalty rates. This is made clear by clause 12.5(a) of the Cleaning Award, which provides: “Casual employees will be paid, in addition to the ordinary hourly rates and rates payable for shift, weekend and overtime work that apply to full-time employees, an additional loading of 25% of the ordinary hourly rate for the classification under which they are employed.” However we accept that, unlike for full-time and part-time employees, it is not entirely clear in which circumstances casual employees are entitled to be paid overtime. In this respect, we consider there is merit in the point raised by United Voice, and we consider an appropriate variation to clarify this would be consistent with achieving the modern awards objective in s 134(1), having regard in particular to s 134(1)(g).

[15] The outcome sought by United Voice could be achieved by the simpler course of varying the current clause to read: “28.6 All time worked in excess of 7.6 hours per day, five days per week or 38 hours in any week by a part-time employee or casual employee is overtime” (new words underlined). A draft determination to this effect will be published in due course and interested parties will be given an opportunity to comment upon it.

Corrections and Detention (Private Sector) Award 2010

[16] United Voice has proposed that the following variations be made to the Corrections and Detention (Private Sector) Award 2010 (Corrections Award):

1. By inserting a new clause 10.5(d) as follows:

10.5(d) A casual employee may be engaged to work:

i. for a maximum of 10 ordinary hours per day if the employee is not a shiftworker;

ii. for a maximum of 12 ordinary hours per shift if the employee is a shiftworker; and

for a maximum of 38 ordinary hours per week.

2. By inserting a new clause 22.2(c) as follows

22.2(c) A casual employee is paid overtime rates for any work done in excess of the hours prescribed in clause 10.5(d).

3. By renumbering clauses 22.2(c) and 22.2(d) as 22.2(d) and 22.2(e).

[17] United Voice submitted that the variations should be made because, although the existing clause 10.5(c) assumes the existence of an entitlement to overtime, no provision of the Corrections Award actually specifies the circumstances in which the entitlement applies. Clause 10.5(c) provides: “Penalties (including public holiday penalties) and overtime for casual employees will be calculated on the ordinary hourly rate for the classification in which they are employed exclusive of the casual loading.”

[18] ABI submitted that, currently, casual employees under the Corrections Award did not have an entitlement to overtime of the nature proposed by United Voice, but it did not support or oppose United Voice’s proposed amendment. The Ai Group opposed the proposal, and submitted that there was currently no entitlement for casual employees to overtime for work in excess of 38 hours per week.

[19] We accept the United Voice submission that there is currently an entitlement of casual employees to overtime penalty rates in the Corrections Award, but that the circumstances in which it applies is unclear. Clause 20.1 makes it clear that 10 daily ordinary hours may be worked by casual employees who are not shift workers, and clause 20.4(a) states that the maximum shiftwork length for casual employees is 12 hours per day. There appears to be no dispute that there is an entitlement to overtime penalty rates if work is performed in excess of these daily limits, but there is no explicit provision to this effect beyond the reference to an overtime entitlement in clause 10.5(c). The position is even less clear with respect to weekly overtime, with there being no provision which expressly states that casual employees have any separate weekly number of ordinary hours. If no such entitlement currently exists (which is arguable, but far from certain), it should exist consistent with the principles stated in the Casual employment and Part-time employment decision of 5 July 2017 6 at paragraph [548].

[20] An appropriate variation to clarify the position, and to establish an entitlement to a weekly entitlement if none currently exists, would be consistent with achieving the modern awards objective in s 134(1), having regard in particular to s 134(1) (da) and (g). However we do not consider that it is necessary to vary the Corrections Award to the extent proposed by United Voice and, consistent with the position under clause 20.2 for full-time day workers, weekly ordinary hours may be averaged for casual employees. We consider that it is appropriate and sufficient to vary clause 22.2 to add a new paragraph (c) as follows (with the existing paragraphs (c) and (d) being redesignated as (d) and (e) respectively):

(i) in excess of 10 hours per day if the employee is not a shiftworker;

(ii) in excess of 12 hours per day if the employee is a shiftworker; or

(iii) in excess of 38 hours per week averaged over 28 days.

[21] There was a consensus that, by virtue of clauses 10.5(b) and (c), casual employees are not currently entitled to the casual loading when being paid overtime penalty rates. The above variation is not intended to alter this position. A draft determination to give effect to the variation will be published in due course and interested parties will be given an opportunity to comment upon it.

Ambulance and Patient Transport Industry Award 2010

[22] United Voice proposes that the Ambulance and Patient Transport Industry Award 2010 (Ambulance Award) be varied by adding the following new provision:

10.5(f) Overtime will be paid to a casual employee in the following circumstances:

i. For work performed in excess of rostered hours per shift and;

ii. For work performed in excess of 38 hours per week.

[23] United Voice submitted that clause 24.1 of the Ambulance Award contains an entitlement to overtime for casual employees but lacks clarity as to when the entitlement applies. Clause 24.1 provides:

24.1 Overtime penalty rates

Subject to the on call provisions in this award, the following overtime rates will be paid for all work done:

(a) time and a half for the first two hours and double time thereafter, for any work exceeding the number of hours fixed as a day’s, week’s, or fortnight’s work;

(b) double time for overtime work on Saturdays and Sundays;

(c) all time in excess of a rostered day on a public holiday, will be paid at double time and a half; and

(d) double time for work outside a spread of 12 hours from the commencement of the last previous rostered period of duty, provided that the overtime is not continuous with the next succeeding rostered period of duty.

[24] Other than written submissions of United Voice and the Health Services Union (HSU), no party at the hearing asserted any interest in the Ambulance Award.

[25] We agree with United Voice that the Ambulance Award is unclear as to the circumstances in which overtime is payable to casual employees on a daily or weekly basis. Clause 24.1(a) operates by reference to the “number of hours fixed as a day’s, week’s, or fortnight’s work”, but these are not specified for casual employees anywhere in the Ambulance Award. Clause 20.1, which specifies ordinary hours, is only applicable to full-time employees. We consider that a modified version of the amendment proposed by United Voice should be made, in order to achieve the modern awards objective in s 134(1), having regard in particular to s 134(1)(g), as follows:

10.5(f) The overtime penalty rates prescribed in clause 24.1 will be paid to a casual employee in the following circumstances:

(i) for work performed in excess of rostered hours per shift and;

(ii) for work performed in excess of 38 hours per week.

[26] A draft determination to give effect to the variation will be published in due course and interested parties will be given an opportunity to comment upon it.

[27] In a written submission filed on 23 January 2019, the HSU submitted that clause 10.5(d) of the Ambulance Award excluded weekend and public holiday penalty rates from attracting casual loading, but not overtime, and therefore the casual loading of 25% should apply in addition to overtime rate. The HSU proposed the casual entitlement to overtime could be clearly expressed by amending the table in clause 14.1 of the Exposure Draft, by adding a column to the right titled ‘Overtime rate for casual employees’, as follows:

[28] The HSU did not appear in the hearing before us, but we assume that it continued to press the above submission.

[29] We do not accept the premise of the above submission that it is clear that there is currently an entitlement to a 25% casual loading in addition to overtime penalty rates. Clause 10.5(c) and (d) of the Ambulance Award provide:

(c) A casual employee will be paid an hourly rate calculated on the basis of 1/38th of the minimum weekly wage prescribed in clause 14—Minimum weekly wages for the relevant classification level, plus:

(i) 25% for all work on weekdays;

(ii) 75% for all work on Saturdays and Sundays; and

(iii) 100% for all work on public holidays.

(d) The casual loadings in clause 10.5(c) are paid instead of any weekend or public holiday penalty rate that would otherwise apply under this award.

[30] Clause 10.5(c) does not provide for a single 25% casual loading payable in all circumstances, but different casual loadings payable on different days which (for Saturdays, Sundays and public holidays) are in substitution for weekend and public holiday loadings, as clause 10.5(d) makes clear. We do not consider that clause 10.5(c) is to be read as applicable to overtime as well as ordinary hours, since that would lead to weekend overtime attracting a casual loading of 75% in addition to an overtime penalty of 100% (see clause 24.1(b)). It is more likely that clause 10.5(c) is to be read as applicable to ordinary hours only, with clause 24.1 setting the overtime penalties and making no provision for the additional payment of the casual loading. However, given that this issue has not been the subject of any debate before us, we will not express any definitive view about it. If the HSU or any other party wishes to pursue the matter further, they may file submissions addressing the position described above within 21 days.

Dry Cleaning and Laundry Industry Award 2010

[31] United Voice proposed the following amendments to the Dry Cleaning and Laundry Industry Award 2010 (Dry Cleaning Award):

1. By deleting clause 10.5(a) and inserting the following:

10.5(a) Subject to clause 10.4 a casual employee is an employee who is engaged and paid as such.

2. By inserting a new clause 10.5(b):

10.5(b) Overtime will be paid to a casual employee in the following circumstances:

i. for work performed in excess of their ordinary hours of work in clause 21 and;

ii. for work performed in excess of 38 hours per week;

iii. for work performed in excess of 7.6 hours per day at laundry workplaces; and

iv. for work performed in excess of 10 hours per day other than at a laundry workplace.

3. By renumbering clauses 10.5(b), (c), (d) and (e) as 10.5(c), (d), (e) and (f).

[32] United Voice advanced the proposal primarily on the basis that it would clarify, or perhaps establish, the entitlement of casual employees to overtime on a daily as well as weekly basis. The proposal was supported by the Construction, Forestry, Maritime, Mining, and Energy Union (CFMMEU).

[33] ABI opposed the United Voice proposal on the basis that it established a new entitlement to daily overtime which does not currently exist.

[34] It is clear that employees under the Dry Cleaning Award are entitled to overtime when they work in excess of 38 hours per week. This is expressly stated in the current clause 10.5(a). Clause 21 also sets daily limits of ordinary hours for all employees (with clause 21.1 applying to dry cleaning workplaces and clauses 21.2 and 21.3 applying to laundry workplaces), including, we consider, casual employees. Clause 22.1 provides that all work performed by employees outside or in excess of their ordinary hours will be paid at the specified overtime penalty rates. Therefore we do not accept ABI’s contention that there is no current entitlement for daily overtime for casual employees. Clause 10.5(c) provides that the casual loading is payable for all hours worked, implying that this includes overtime hours.

[35] We do not consider that the variations proposed by United Voice are necessary. Further, in the form proposed, they are more restrictive than the current provisions concerning the working of ordinary hours. We therefore reject the proposed variations.

Educational Services (Schools) General Staff Award 2010

[36] United Voice’s proposal, in the form advanced at the hearing, 7 was that the Educational Services (Schools) General Staff Award 2010 (General Staff Award) should be varied as follows:

1. By deleting the current clause 22.1 and inserting a new clause 22.1 as follows:

22.1 Subject to this clause, a full-time employee’s ordinary hours of work will be 38 per week. The ordinary hours of work for a part-time employee will be in accordance with clause 10—Types of employment.

2. By inserting a new clause 22.2 as follows:

22.2 Subject to this clause, a casual employee’s ordinary hours of work will be a maximum of a maximum of 38 hours per week.

3. By renumbering clauses 22.2, 22.3, 22.4 and 22.5 as 22.3, 22.4, 22.5 and 22.6.

[37] United Voice submitted that the variation was necessary to clarify the circumstances in which casual employees are entitled to overtime, particularly as the General Staff Award did not specify 38 hours per week as ordinary hours. Its proposal was supported by the Independent Education Union (IEU). An identical variation was proposed by the Associations of Independent Schools in New South Wales, Victoria, Tasmania, Western Australia and Queensland (AIS). ABI did not oppose the variation.

[38] We consider that it is necessary for the variation to be made in order to achieve the modern awards objective in s 134(1), having regard in particular to s 134(1)(g). Clause 27.1(a) of the General Staff Award provides that employees are to be paid overtime for authorised work performed outside of or in excess of ordinary or rostered hours. Clause 22.1 provides, in respect of casual employees, that their ordinary hours will be in accordance with clause 10. However clause 10, Types of employment, which deals with casual employment in clause 10.5, does not specify any ordinary hours of employment for casual employees. Thus although the General Staff Award clearly intends for casual employees to have an overtime entitlement, it is unclear when that entitlement arises. We are satisfied that the proposed amendment would resolve this difficulty.

[39] There was a separate disagreement between the parties as to whether the casual loading is payable in addition to the overtime penalty rates. Further submissions about this were filed after the hearing concerning the General Staff Award on 30 July 2019. That issue will need to be resolved at a further hearing. We will not publish a draft determination in respect of the agreed variation to clause 22.2 until we have dealt with this further issue.

Educational Services (Teachers) Award 2010

[40] United Voice has proposed that Schedule B of the Educational Services (Teachers) Award 2010 (Teachers Award) be varied to add a new clause B.1.3 as follows (with the existing clause B.1.3 renumbered as B.1.4): “B.1.3 A casual employee’s maximum ordinary hours of work will be 38 hours per week”. Schedule B applies to teachers employed in early childhood services operating for at least 48 weeks per year, and United Voice submitted that although such teachers when casually employed had an entitlement to overtime penalty rates under clause B.4.1 for work in excess of ordinary or rostered hours, the Teachers Award did not make clear what the weekly ordinary hours for such casual teachers were. The IEU supported United Voice’s proposal. ABI did not express a view about this issue. It submitted that the casual loading is not payable in addition to overtime penalty rates under the Teachers Award, but this does not appear to bear upon United Voice’s proposal.

[41] We consider that it is necessary for the proposed variation to be made in order to achieve the modern awards objective in s 134(1), having regard in particular to s 134(1)(g), for the reasons advanced by United Voice. A draft determination to give effect to the variation will be published in due course and interested parties will be given an opportunity to comment upon it.

Miscellaneous Award 2010

[42] United Voice proposed the following variations to the Miscellaneous Award 2010:

1. By renumbering clause 10.4 as 10.4(a).

2. By inserting a new clause 10.4(b) as follows:

10.4(b) A casual employee may be engaged to work:

i. For a maximum of 10 ordinary hours per day or shift; except by agreement in which case the maximum number of ordinary hours is 12.

ii. For a maximum of 38 ordinary hours per week.

3. By inserting a new clause 10.4(c) as follows:

10.4(c) All time worked in excess of the hours prescribed in clause 10.4(b) will be overtime and paid for at the rates prescribed in clause 22—Overtime.

4. By deleting clause 22.1 and inserting a new clause 22.1 as follows:

22.1 All time worked in excess of an average of 38 hours per week by a full-time employee or in excess of the agreed number of hours per week by a part-time employee is overtime and must be paid at the rate of 150% of the relevant minimum wage for the first three hours and 200% of the relevant minimum wage thereafter. In the case of part-time employees, the agreed number of hours means the number of hours agreed in writing either at the commencement of employment or subsequently. In the case of casual employees, all time worked in excess of the hours prescribed in clause 10.4(b) will be overtime and must be paid at the rate of 150% of the relevant minimum wage for the first three hours and 200% of the relevant minimum wage thereafter.

[43] United Voice submitted that it was unclear whether the Miscellaneous Award provided for overtime for casual employees, and that a number of the relevant provisions made little sense. The Community and Public Sector Union supported the United Voice proposal. It submitted that the award did not contain any express entitlement for casuals to receive overtime, and that the award was also inconsistent and unclear with its treatment of casuals.

[44] The Ai Group opposed the United Voice proposal. It submitted that the Miscellaneous Award was unambiguous in that it clearly did not establish an entitlement for casual employees to receive overtime penalty rates. The inclusion of an overtime penalty rate entitlement for casuals was not necessary to achieve the modern awards objective. The AIRC Award Modernisation Full Bench which established the award had, the Ai Group submitted, made it clear that the Miscellaneous Award was to provide basic conditions only and was not intended to constitute a comprehensive safety net.

[45] We consider that the provisions of the Miscellaneous Award are confusing and ambiguous. On the one hand, clause 22.1 provides:

22.1 Overtime

All time worked in excess of an average of 38 hours per week by a full-time employee or in excess of the agreed number of hours per week by a part-time employee is overtime and must be paid at the rate of 150% of the relevant minimum wage for the first three hours and 200% of the relevant minimum wage thereafter. In the case of part-time employees, the agreed number of hours means the number of hours agreed in writing either at the commencement of employment or subsequently.

[46] Clause 22.1 is stated to apply only to full-time and part-time employees, and there is no provision in clause 22, Overtime and penalty rates which is referable to casual employees. This taken by itself is indicative of there not being an overtime entitlement for casual employees. However there are two contra-indicators. First, clause 20.2 provides that ordinary hours per day or shift are not to exceed 10, except they may be extended to 12 by agreement. This provision must be interpreted as applicable to casual as well full-time and part-time employees because, in contradistinction to clause 20.1, it is not expressed as being applicable to “employees other than casuals”. It is not clear what function is served by setting daily ordinary hours for casual employees if there is no entitlement to overtime for work in excess of those hours. It may also be noted that clause 22.1 also does not interact with the daily ordinary hours requirements in clause 20.2 in respect of full-time and part-time employees either.

[47] Second, clause 22.3(c) and (d) provide:

(c) All work performed by a casual employee outside the hours of 7.00 am and 7.00 pm Monday to Friday and on Saturday which is not overtime must be paid at the rate of 145% of the relevant minimum wage.

(d) All work performed by a casual employee on Sunday which is not overtime must be paid at the rate of 175% of the relevant minimum wage.

[48] These provisions appear to assume the existence of a separate overtime entitlement for casual employees during weekday nightwork and on Saturdays and Sundays. If that were not the case, it would lead to the absurd situation whereby, for example, if a casual employee worked a given number of ordinary hours on a Sunday and then worked overtime hours, the employee’s rate would drop from 175% to the ordinary time rate (plus the casual loading) when the employee moved from ordinary hours to overtime hours. That cannot have been an intended outcome. It may also be noted that clauses 22.3(a) and (b) provide:

(a) All work performed by an employee, other than a casual, outside the hours of 7.00 am and 7.00 pm Monday to Friday and on Saturday which is not overtime must be paid at the rate of 120% of the relevant minimum wage.

(b) All work performed by an employee, other than a casual, on Sunday which is not overtime must be paid at the rate of 150% of the relevant minimum wage.

[49] These provisions correspond with (c) and (d), except that the rates are 25% less because the employees concerned are not casuals and do not receive the casual loading. Such employees would of course move to overtime penalty rates for any overtime worked during weekday nightwork and on Saturdays and Sundays. This tends to support the proposition that all of the provisions in clause 22.3(a)-(d), in referring to work that is not overtime, presuppose the separate existence of an overtime entitlement.

[50] There is no indication that, in making the Miscellaneous Award, the AIRC Award Modernisation Full Bench intended to exclude casual employees from overtime entitlements. Indeed, in its Statement of 4 December 2009, 8 the Full Bench said: “We do not think it is appropriate to exempt casual employees from weekend and other penalties applicable to full-time employees.”9 If the reference to “other penalties” was intended to not encompass overtime penalties, it is difficult to imagine that the Full Bench would not have said so.

[51] The above matters lead us to conclude that the Miscellaneous Award is defectively drafted with respect to its provisions for overtime. That this issue has not arisen earlier speaks to the very limited practical coverage of the award. To the extent that the award does not contain a clear entitlement for overtime for casual employees, and also is uncertain as to the relationship between maximum ordinary daily hours and overtime in respect of categories of employees, we consider that the award does not meet the modern awards objective in s 134(1) having regard in particular to s 134(1)(da). We consider, on the basis of the principles stated in the Casual employment and Part-time employment decision of 5 July 2017 10 at paragraph [548], that a clearly expressed entitlement to overtime for casuals is necessary to meet the modern awards objective.

[52] Our provisional view is that clause 22.1 should be varied to provide as follows:

22.1 Overtime

All time worked in excess of:

(a) an average of 38 hours per week, or the daily hours prescribed in clause 20.2, by a full-time employee or casual employee; or

(b) in excess of the agreed number of hours per week pursuant to clause 10.3(b), or the daily hours prescribed in clause 20.2, by a part-time employee;

is overtime and must be paid at the rate of 150% of the relevant minimum wage for the first three hours and 200% of the relevant minimum wage thereafter.

[53] A draft determination to give effect to the variation will be published in due course and interested parties will be given an opportunity to comment upon it.

Security Services Industry Award 2010

[54] United Voice has sought that the Security Services Industry Award 2010 (Security Award) be varied in the following manner:

1. By inserting a new clause 10.5(c) as follows:

10.5(c) An employer must pay a casual employee at the overtime rate for any time worked in excess of 10 hours per shift, or if there is an agreement under clause 21.2(b) 12 hours per shift, and for any time worked in excess of 38 hours per week.

2. By varying clause 21.11 to read as follows (with deleted words in strikeout):

21.11 Notice of rosters

Employees (other than relieving officers and casual employees) must work their ordinary hours of work in accordance with a roster for which advance notice has been given. A relieving officer ~~or casual employee~~ may also, at the employer’s discretion, work their ordinary hours of work in accordance with a roster for which advance notice has been given.

[55] The first variation was advanced by United Voice on the basis that the Security Award did not make clear the circumstances in which overtime was payable to casual employees. The second proposed variation was advanced apparently in connection with the decision by a Full Court of the Federal Court in United Voice v Wilson Security Pty Ltd 11, in which it was held that under the flexible rostering provisions of the Security Award, overtime to be worked in a 4-week roster could be allocated to Sundays (before ordinary hours had been used up) in order to avoid the payment of the Sunday penalty rate on ordinary time. That decision did not specifically concern a casual employee. United Voice has foreshadowed making an application to vary the Security Award to surmount the outcome of the Wilson Security decision. The variation it sought here was explained in the following way:

MR BULL: Well it's a general point where we say there's problems inserting a casual, particularly when there's a history of what I've termed sort of roster manipulation into this sector, and it does tend to be - permanent work tends to be more the norm, but it's a contracting area; it's highly cost-sensitive. Those who do comply, there are significant incentives to achieve the most desirable outcome in relation to labour costs, and the way that that historically has occurred has been through manipulation of rosters and the timing of overtime hours and so forth with weekend penalties. Because it tends to be - it's shift work, their manning facilities - they're the people in the sort of box in large buildings and so forth, so there's a contract to perform that work; it's cost-sensitive, and there is, we say, inappropriate manipulation of rostering. We don't have any particular evidence that the casuals the subject of roster manipulation, but we say it's an appropriate thing to have a provision so that the next big thing doesn't become a sort of abuse of casuals in this particular sector. 12

[56] ABI did not express any specific view concerning the first proposed variation. It submitted that the second variation was outside the scope of the current proceedings, and the issue raised by United Voice should be considered in the context of the application foreshadowed in response to the Wilson Security decision.

[57] The Ai Group opposed the first proposed variation because it did not permit averaging of weekly hours over the course of a roster cycle of up to 8 weeks. It also opposed the second proposed variation because it would impose restrictions on the use of casuals in rostering arrangements and there was no evidence of “roster manipulation” involving casuals as alleged by United Voice.

[58] The Australian Security Industry Association Limited (ASIAL) submitted that the proposed new clause 10.5(c) was unnecessary because weekly and daily ordinary hours (including for casuals) are specified in clause 21, and it is implicit that work outside of ordinary hours is to be paid at the overtime penalty rates specified in clause 23.3. The ASIAL opposed the second proposed variation on the same grounds as ABI and the Ai Group.

[59] We consider that Security Award does lack clarity in respect of overtime entitlements for casual employees. In relation to weekly ordinary hours, clause 21.1(a) provides:

(a) The ordinary hours of work are 38 hours per week or, where the employer chooses to operate a roster, an average of 38 hours per week to be worked on one of the following bases at the discretion of the employer:

(i) 76 hours within a roster cycle not exceeding two weeks;

(ii) 114 hours within a roster cycle not exceeding three weeks;

(iii) 152 hours within a roster cycle not exceeding four weeks; or

(iv) 304 hours within a roster cycle not exceeding eight weeks.

[60] This provision was said by the ASIAL to be equally applicable to full-time and casual employees, but the way in which it relates to the overtime provision in clause 23.3 is unclear. This is particularly the case where a casual is assigned to perform shifts on a roster. The following exchange with the ASIAL in the hearing is illuminating in this respect:

VICE PRESIDENT HATCHER: So Mr Delaney, in terms of United Voice's first variation, I understand you say it is unnecessary, but I understand from what you are saying that it doesn't represent any change to the status quo? That's the first variation, not the second one.

MR DELANEY: Well, I think what it does is it confuses the issue with respect to working a roster. And it doesn't stand alone. It needs 21.1(1) to be successful. And that's why 21.1(1) has been changed. So we oppose both on the basis that they are unnecessary, in order to determine when a casual is entitled to overtime.

If for instance, your Honour, the casual worked a roster to cover somebody on a four-week roster cycle, they may work 12 hours a day, four on, four off for a period of that roster cycle. Now, if they worked four days in the first week of 48 hours, according to this application by the union, then 10 hours would be overtime. But without it, 21.1(b) allows them to work that roster and aggregate it over the four-week period. Now, if they work more than - - -

VICE PRESIDENT HATCHER: So what happens if they are rostered just for the week in which you work the four 12s?

MR DELANEY: Sorry, what happens if?

VICE PRESIDENT HATCHER: What if the permanent is away just on the week where you do you the four 12s, doesn't like the long week, and you call in a casual - - -

MR DELANEY: Well, I think if that were the case and they only worked one week, they didn't work the full cycle, then there would be overtime involved. We are talking about periods of more than one week in a roster cycle. If the casual was brought in for one week which was part of a roster cycle and they worked more than 38 hours, I would expect that they would get paid overtime. But if they worked the entire roster cycle, then remember the award talks about the cycle in terms of 76, 114, 152, 304. It would have to be the cycle that the employee worked to entitle the employer to average over that cycle.

So if they only worked one week of the cycle and they worked 48 hours, I'd give them 10 hours overtime.

VICE PRESIDENT HATCHER: I'm sure you would. It's the others I'm concerned about.

MR DELANEY: Well, I would expect our members to give them 10 hours overtime and that's the advice that I would give them. 13

[61] Although the advice that the ASIAL would give in the above circumstance seems to us to be fair and reasonable, it is clear that the circumstances in which there may be averaging of ordinary hours and overtime for casual employees are simply not dealt with in the Security Award. For this reason at least, we consider that a variation to clarify the position as to when overtime is payable for casual employees would assist in achieving the modern awards objective in s 134(9), having regard in particular to s 134(1)(g). However United Voice’s proposed variation is not appropriate because it would not permit averaging in any circumstance, proceeding apparently from a philosophical objection to casual employees working on a roster.

[62] Our provisional view is that the Security Award should be varied to add the following new paragraph to clause 10.5:

(c) An employer must pay a casual employee at the overtime rate specified in clause 23.3 for any time worked in excess of:

(i) 10 hours per shift or, if there is an agreement under clause 21.2(b), 12 hours per shift; or

(ii) any time worked in excess of 38 hours per week or, where the casual employee works in accordance with a roster established pursuant to clause 21.1(a), in excess of an average of 38 hours per week across the period of the roster cycle.

[63] It is not in dispute that casual employees are not currently entitled to receive the casual loading when being paid overtime penalty rates, and the above variation is not intended to disturb that position. A draft determination to give effect to the variation will be published in due course and interested parties will be given an opportunity to comment upon it.

[64] We reject United Voice’s second proposed variation. It appears to us to deal with a separate subject matter beyond the scope of the current proceedings.

Alpine Resorts Award 2010

[65] The Australian Workers’ Union (AWU) has raised an issue concerning the rates of casual employees when working overtime under the Alpine Resorts Award 2010 (Alpine Award), although it does not actually seek any variation to the award. The relevant background is as follows. In a decision issued as part of the 4 yearly review on 23 December 2014, 14 a Full Bench found that the 8.33% loading then payable to seasonal employees in lieu of annual leave under clause 11.5 of the Alpine Award was inconsistent with s 87(1) of the FW Act and therefore contravened s 55(1).15 In a subsequent decision issued on 10 October 2016,16 the Full Bench noted that the Australian Ski Areas Association (ASAA) and the AWU had agreed on a package of variations to deal with this issue (footnotes omitted, underlining added):

“[13] In respect of the first issue, the ASAA and the AWU have reached agreement on a package of changes which include a number of variations which are technical in nature but also involve the following substantive variations:

• removal of the 8.33% loading for seasonal employees;

• the inclusion of an annual leave loading for non-casual employees;

• the application of overtime penalty rate provisions to casual employees, except snow-sports instructors, on the basis that the penalty rates will be inclusive of the casual loading and will be applicable only for work in excess of 10 hours per day or 38 hours per week over a maximum work cycle of 4 weeks.

[14] The AWU has particularly emphasised that it has agreed to these changes on the basis that they are a package, and that non-approval of any change in the package might affect its consent to other parts of it. The Ai Group, being the other interested party in the Award as it currently stands, is not opposed to the package.”

[66] The Full Bench determined that the proposed package of variations would be referred to a different Full Bench that was to deal with an issue of the coverage of the Alpine Award for consideration. 17 This other Full Bench eventually made a determination varying the Alpine Award in the terms agreed to by the ASAA and the AWU, and the variations took effect from 1 January 2018.18 The variations included the deletion of the exclusion of casual employees from the overtime provision in clause 25.2. Clause 25.2, together with clause 25.3, now provide:

25.2 Overtime

An employee, other than a Snowsports Instructor, must be paid overtime rates for:

(a) any hours in excess of the ordinary hours per week that the employee is engaged to work;

(b) any hours in excess of 10 per day, excluding meal breaks; or

(c) any hours in excess of an average of 38 per week over the length of the cycle.

25.3 The overtime rates are as follows:

(a) time and a half for the first two hours; and

(b) double time thereafter.

[67] The AWU submitted that clauses 25.2 and 25.3, when read with clause 10.5(a) which provides for the casual loading of 25%, now actually provides for casual employees to receive the casual loading on top of the overtime penalty rates when working overtime, notwithstanding what had been agreed between the AWU and the ASAA.

[68] It was clearly intended by the Full Bench earlier dealing with the Alpine Award to give effect to the package of changes agreed to between the AWU and the ASAA in order to achieve the modern awards objective. There is no dispute that the agreed package included that casual employees would be afforded the benefit of overtime penalty rates, but inclusive of the casual loading. It is unsatisfactory that there is now doubt that the Alpine Award as drafted reflects that common intention. This should be rectified for the purpose of achieving the modern awards objective in s 134(1), having regard in particular to s 134(1)(g). Accordingly, we propose to vary clause 25.3 to add the following new sentence to the end: “In the case of casual employees, the above penalty rates include the casual loading of 25 per cent.” A draft determination to that effect will be issued in due course.

Rail Industry Award 2010

[69] The Rail, Tram and Bus Union (RTBU) has identified an ambiguity in the provisions concerning the entitlement of casual employees to overtime penalty rates in the Rail Industry Award 2010 (Rail Award). Clause 23.5(c) currently provides that “For a casual employee, overtime is any time worked in excess of the employee's ordinary hours (see clause 10.3(b))”. Clause 10.3(b) provides that “A casual employee’s ordinary hours of work are the lesser of 38 hours per week or the hours required to be worked by the employer.” The RTBU has submitted that clause 13.5(c) leaves unclear whether overtime is payable if daily ordinary hours are exceeded. In this respect clauses 20.4-20.6 provide:

20.4 The ordinary hours of work for a day worker in a Clerical, Administration and Professional classification may be worked between 6.00 am and 6.30 pm. The ordinary hours of work for a day worker in a Technical and Civil Infrastructure classification may be worked between 6.00 am and 6.30 pm.

20.5 An employer and the majority of affected employees may agree to alter the spread of hours in clause 20.4.

20.6 Employees may be required to work up to 10 ordinary hours per day. If the employer and majority of affected employees agree, up to 12 ordinary hours per day may be worked.

[70] The RTBU proposes that, to remedy this uncertainty, clause 23.5(c) should be amended to read: “For a casual employee, overtime is any time worked in excess of the employee's ordinary hours (see clause 10.3(b) and clause 20)”. The Rail Employers 19 do not oppose the proposed amendment, which they consider to be consistent with the commonly understood position.

[71] We consider that a variation to the Rail Award to clarify and render unambiguous the meaning and operation of clause 23.5(c) would be consistent with achieving the modern awards objective in s 134(1), having regard in particular to s 134(1)(g). We are not satisfied that the amendment proposed by the RTBU makes the position as clear as it might be. In particular the cross-reference simply to clause 20 is less than pellucid. We propose that clause 23.5(c) be amended to read: “For a casual employee, overtime is any time worked in excess of the employee's weekly ordinary hours (see clause 10.3(b)) or daily ordinary hours (see clauses 20.4-20.6)”. A draft determination to this effect will be published in due course and interested parties will be given an opportunity to comment upon it.

al of the Fair Work Commission with the memeber's signature.

VICE PRESIDENT

Appearances:

K Barlow for the Community and Public Sector Union

S Bull for United Voice

B Ferguson and H Harrington for the Australian Industry Group

L Izzo and H Hamberger for Australian Business industrial and the New South Wales Business Chamber

S Crawford for the Australian Workers’ Union

S Maxwell, V Wiles and E Sarlos for the Construction, Forestry, Maritime, Mining and Energy Union

A Odgers for the Independent Education Union

A Ambihaipahar for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

P Ryan for the Australian Hotels Association

G Miller for the Australian Manufacturing Workers’ Union

M Nguyen for the Flight Attendants’ Association of Australia

R Moore for Clubs Australia Industrial

C Bailey for Independent Schools New South Wales, Victoria, Tasmania, Queensland and the Association of Independent Schools Victoria and Western Australia

C Delaney for Australian Security Industry Association Ltd

G Pill for the G8 Universities

W Cupido for the National Tertiary Education Industry Union

C Pugsley for the Australian Higher Education Industrial Association

L Regan for the Housing Industry Association

E Rogers for the Australasian Meat Industry Employees Union

R Sostarko for the Master Builders Association

M Harmer and C Nowland for the Australian Ski Areas Association

M Davis for the Rail, Tram & Bus Union

A Battagello for the Rail Employers

Hearing details:

2019.