DECISION

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

4 Yearly Review of Modern Awards: Amusement, Events and Recreation Award 2010
(AM2019/7)

Amusement, Events and Recreation Award 2010 - substantive claims – annual leave loading – golf industry-related coverage and trainee classifications – changes meet the modern awards objective – Determination made – Award varied.

[1] As noted in our recent Statement, 1 this Full Bench has before it, for consideration and determination under the award modernisation processes, two substantive issues in respect to the Amusement, Events and Recreation Award 2010 (“the Award”). Those issues are:

•  an application by The Australian Workers’ Union (“the AWU”) to include a 17.5 per cent annual leave loading in the Award (the “annual leave loading issue”); and

•  an application by the Professional Golfers Association of Australia Ltd (“the PGA”) in respect to coverage and trainee classifications (the “coverage issue”).

Legislation and principles to be applied

[2] We note the very recent decision 2 of another Full Bench of the Commission in relation to the Air Pilots Award 2010 (“the Pilots Award Decision”) as it concerns the distillation and description of the generally applicable principles, including reference to the relevant statutory provisions. That decision reads as follows (references not reproduced):

“[8] Section 156(2) of the Act deals with what must be done in the Review:

“156 4 yearly reviews of award to be conducted

…

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

(a) must review all modern 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.

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

[9] In the Review, the Commission will proceed on the basis that the modern award being reviewed presumptively achieved the modern awards objective at the time it was made. 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] The modern awards objective set out in s.134 of the Act, among other provisions, conditions the Commission’s modern award powers, which are defined to include the Commission’s functions or powers under Part 2-3 and, so far as they relate to modern award minimum wages, Part 2-6 of the Act. The Review function in s.156 is contained in Part 2-3 of the Act and so will involve the performance or exercise of the Commission’s “modern award powers”. The modern awards objective therefore applies to the Review.

[11] The modern awards objective is set out in s.134(1). It reads:

“134 The modern awards objective

What is the modern awards objective?

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

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

(da) the need to provide additional remuneration for:

(i) employees working overtime; or

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(iv) employees working shifts; and

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

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

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

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

This is the modern awards objective.”

[12] The modern awards objective is very broadly expressed, requiring that modern awards, together with the National Employment Standards, provide “a fair and relevant minimum safety net of terms and conditions”, taking into account the matters in ss.134(1)(a)–(h) of the Act. Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question. The obligation to take into account the s.134 considerations means that each of these matters, in so far as they are relevant, must be treated as a matter of significance in the decision-making process. No particular primacy is attached to any of the s.134 considerations, and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award. It is not necessary to make a finding that the award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award. The s.134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.

[13] In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in ss.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria concerning fairness and relevance. What is necessary is for the Commission to review a particular modern award and, by reference to the s.134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net. In that task, the matters which may be taken into account are not confined to the s.134 considerations.

[14] Section 138 of the Act is also relevant. It emphasises the importance of the modern awards objective, in these terms:

“138 Achieving the modern awards objective

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

[15] Section 138 provides that terms may be included in a modern award only to the extent necessary to achieve the modern awards objective. That which is “necessary” to achieve the modern awards objective is a value judgment to be made taking into account the s.134 considerations, to the extent that they are relevant, having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence. Where an interested party applies for a variation to a modern award as part of the 4 yearly review, the task is not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation meet the objective.”

[3] We respectfully adopt the approach described in the preceding extract from the Pilots Award Decision in the consideration that follows concerning the two issues before us. In such respects, we also note that in a decision published on 25 March 2020 in Australian Hotels Association and United Workers’ Union 3 - even more recently than the Pilots Award Decision – another Full Bench expressed the relevant considerations in terms broadly very similar to the approach in the Pilots Award Decision.

The coverage issue

[4] Our decision deals, first, with the uncontentious application by the PGA concerning the coverage issue.

[5] The PGA has had a long-standing application seeking certain variations to the Award relevant to the golf industry (being an application which pre-dated the constitution of this Full Bench is relation to AM2019/7), albeit the actual terms of the proposed variation have evolved over time. In support of its application to vary the Award as it concerns the golf industry, the PGA submitted: 4

“3. The PGA represents over 2,800 Golf Professionals, encompassing 2,500 Vocational Members working in and servicing the industry.

4. Golf Professionals have traditionally not been covered by a specific Modern Award and there is no ‘golf industry’ award per se in the modernised award system. Due to the complexity of finding the ‘best fit’ award, many Golf Professionals remain award free.

5. Data from a PGA salary survey conducted in March 2018 of 726 Golf Professionals found that 47.68% are covered by the Amusement, Events and Recreation Award and the Registered and Licensed Clubs Award and that 40.87% were ‘not sure’ or ‘not covered by and award’.

6. As such, many remain greatly disadvantaged by underpayments or not receiving penalty rates or other award entitlements.”

[6] In our 20 March 2020 Statement, 5 interested parties were given a short opportunity to raise any issues concerning the latest iteration of the PGA’s proposed variation of the Award in respect to golf-related coverage. Similarly to the situation concerning directions issued by the presiding member of this Full Bench on 5 December 2019 related to coverage and an earlier iteration of the PGA’s then-proposed variation of the Award, no party filed any submission on the PGA’s proposed variation by the date specified in our 20 March 2020 Statement, namely 27 March 2020. It is relevant also to note that in the 23 March 2020 TRANCHE 3 BACKGROUND PAPER,6 a differently-constituted Full Bench noted as follows:

“[32] The PGA has filed a submission in support of its substantive claim which seeks to extend the coverage of the award to encompass ‘golf facilities including but not limited to golf clubs, on-course and off course golf shops and during ranges.’

[33] The PGA’s claim was referred to another Full Bench (AM2019/7)) in February 2019 and the presiding Member of that Full Bench (Deputy President Sams) has issued directions for the filing of submissions in relation to the claim.

[34] The PGA’s submissions will be referred to the AM2019/7 Full Bench.”

[7] Although no interested party raised any issue with the latest iteration of the PGA’s proposed variation, the PGA filed additional information to the chambers of the presiding member of this Full Bench in further support of the variation. That read, in part (formal parts omitted):

“1. This submission is filed in accordance with the Directions in the Statement in [[2020] FWCFB 1530 at [7]] issued on 20 March 2020. The PGA is an interested party in the Amusements, Events and Recreation Award 2010.

2. The PGA filed an expanded submission with the Commission on 20 February 2020.

3. The PGA apologies to the Commission for expanding this submission without providing any relevance as to the reasons for the additional inclusions.

4. The expanded inclusions in the submission were:

4.1 Definitions and Interpretation

4.1.1 golf trainee

4.2 Schedule B Classification Structure

4.2.1 Grade 1 Golf Trainee Year 1

4.2.2 Grade 2 Golf Trainee Years 2 and 3

5. The reason for these inclusions was due to recent structural changes to the PGA Trainee Program to improve student outcomes and the ongoing employability of PGA Professionals within the Australian golf industry. One of these changes centered on the removal of the delivery of the Certificate III in Sport (Career Oriented Participation) as upon review, it was deemed that the qualification did not align with the objectives of the PGA Trainee Program.

6. The Certificate III in Sport (Career Oriented Participation) was previously delivered in Year One of the three-year program, thereby making Year One PGA Trainees eligible for Training Wage via the Miscellaneous Award. The new and improved Trainee Program no longer provides eligibility for the Training Wage and therefore all Trainees (Years One, Two and Three) would fall under the Amusement, Events and Recreation Award.

7. Based on the Trainees roles and responsibilities, it has been deemed applicable for Year One PGA Trainees to fall under Grade 1 and Year Two and Three PGA Trainees to fall under Grade 2.”

[8] We have considered the various written submissions made, over time, by the PGA in the context of the principles enunciated in the Pilots Award Decision. We note also that no party has availed itself of the opportunity to make a submission concerning the variation to the Award proposed by the PGA, let alone oppose the PGA’s proposals. Based on what is before us in the PGA’s submissions, there is somewhat of an industrial lacuna concerning aspects of the golf industry. We are satisfied that it is appropriate to determine this matter on the papers (as the PGA had proposed) and make a determination varying the Award effectively in the terms proposed on 20 February 2020 by the PGA, so as to provide an award-specific fair and relevant minimum safety net of terms and conditions.

[9] Our conclusion that it is appropriate to vary the Award in the terms proposed by the PGA is reinforced by the fact that the variation addresses trainee-related classifications within the golf industry. We consider that is a significant matter for potentially younger and/or vulnerable workers as opposed to the presumptively older golf professionals to whom the proposed variation also refers. Borrowing from what was said by a Full Bench concerning classifications in the swim industry in 4 Yearly Review of Modern Award: Fitness Industry Award 2010, 7 we similarly consider here that given the practical and sensible effect of these variations, we are satisfied the variations proposed by the PGA are necessary to achieve the modern awards objective; we also accept the variations are appropriate having regard to that objective and the circumstances of the Award more generally.

The annual leave loading issue

[10] Unlike what was described by the AWU as the “overwhelming majority” of modern awards, the Award does not contain a provision concerning annual leave loading. By way of background, the AWU unsuccessfully sought inclusion of annual leave loading provisions in the Award (among other awards) during the 2012 Transitional Review. The Full Bench in Modern Awards Review 2012 – Annual Leave 8 dealt with matters in the following way (by majority, per Acton SDP and Gooley DP):

“[105] In support of these variations, the AWU submitted that annual leave loading was inadvertently omitted from these modern awards. They pointed out that annual leave loading is provided for in 112 of the 122 modern awards. The Maritime Union of Australia (MUA) supported the AWU application in respect of the Dredging Industry Award 2010.

[106] The proposed variation to the Amusement, Events and Recreation Award 2010 is opposed by the AFEI and Business SA on the basis that the AWU has failed to establish grounds for the variation as required by Item 6, Schedule 5 of the Transitional Provisions Act.

[107] We are not persuaded we should make the variations sought by the AWU. They have not established that without the variations the modern awards are not achieving the modern awards objective. Further, the mere absence of a provision for annual leave loading in these modern awards in question and its inclusion in the vast majority of other modern awards is not sufficient to establish the modern awards are not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process. Nor are the references in the Dredging Industry Award 2010 to annual leave loading in its award flexibility clause and in respect of the content of the 25% loading for casual employees sufficient to establish that that modern award is not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process because of the absence of a specific provision for annual leave loading in that modern award. We decline to make the variations sought by the AWU.

[108] The variations sought are perhaps more appropriate for consideration in the four year review.” (our emphasis)

[11] In his dissenting minority decision in Modern Awards Review 2012 – Annual Leave, Watson VP gave a detailed exposition concerning a history of relevant developments. In favouring the inclusion of annual leave loading in the Award (among other awards), the Vice-President wrote as follows:

“[220] The absence of an entitlement to annual leave loading in these awards is unexplained and in my view unfair and unwarranted. The AWU could be criticised for not raising the matter more specifically during the award modernisation process. It has faced up to this and provided an explanation. But any failure on its part should not be a reason to deny its case now when merit is demonstrated. I consider that the AWU has established that the modern awards objective is furthered by the inclusion of an entitlement to annual leave loading in these awards and has made out a case on the merits for its inclusion into the three awards. Turning a blind eye to the intrinsic merit of the applications is not consistent with the obligation to conduct a review of the awards.”

[12] The decision of the Vice President concluded:

“[233] It is clear from the above that:

•  The approach adopted by the AIRC in making modern awards during the award modernisation process was necessarily a limited one. It did not involve a comprehensive review of the merits of each of the terms of the awards consolidated during that process.

•  The task of reviewing modern awards in the two year review involves a consideration of whether the awards achieve the modern awards objective and are operating effectively. Authorities dealing with the variation and review of awards make it clear that this involves a broad judgement concerning the fairness and relevance of the minimum safety net of terms and conditions and the specific factors in the modern awards objective. The Commission is required to conduct its review in such a manner.

•  A review of the annual leave provisions of various modern awards reveals that some provisions are not achieving the modern awards objective or operating effectively because they are not providing a fair and relevant minimum safety net of terms and conditions taking into account the factors in the modern awards objective. To a large extent, awards and legislation contain provisions of a type sought in this review, but the awards subject to the applications do not.

•  The proper application of this approach should lead to award variations concerning the right of an employer to direct employees to take accumulated annual leave, the incorporation of annual leave loading into awards, the payment of annual leave loading on termination of employment, the ability to make an award flexibility agreement with an employee regarding the operation of the annual leave provisions and cashing out of annual leave, and the timing of annual leave payments for employees paid by electronic funds transfer. …”

[13] It may be seen from the foregoing sets of extracts that the majority in Modern Awards Review 2012 – Annual Leave concluded that the annual leave loading variations sought by the AWU were “perhaps more appropriate for consideration in the four year review”, whereas the Vice President would have, for the reasons described in his minority decision, effected the proposed annual leave loading variations to the Award (among other awards) as being “justified on their merits”.

[14] Metaphorically “fast-forwarding”, as it were, to 2019 (for there were various developments and submissions directly or indirectly related to the question of annual leave loading the Award in the period following Modern Awards Review 2012 – Annual Leave and the hearing before us - as may been seen by an examination of documents on the Commission’s website 9) the presiding member of this Full Bench issued directions on 13 June 2019 specifying certain matters concerning the timing of submissions from any interested party wishing to make further changes to the Award.

[15] Relevantly, as to annual leave loading, the AWU made a written submission 10 (or, more accurately, a submission additional to submissions already made on 10 August 2017 (which were also relied upon in the subsequent 12 July 2019 submission)) in which the union indicated it continued to press its claim for the insertion of an annual leave loading clause in the Award. Australian Business Industrial (“ABI”) and the NSW Business Chamber (“the NSWBC”) filed submissions in reply11 opposing the AWU’s claim. As a consequence of discussions between representatives of the AWU, ABI and the NSWBC, those parties requested a hearing in relation to the annual leave loading issue. In the ensuing hearing on 19 November 2019, the following appearances were noted:

•  Mr S Crawford for the AWU;

•  Mr L Izzo (with Ms H Hamberger by videolink from Brisbane) for ABI and the NSWBC; and

•  Mr D Hamilton for the Australian Entertainment Industry Association (trading as Live Performance Australia) (“Live Performance Australia”).

[16] The AWU submits that the Award should be varied in the terms proposed in its draft determination, 12 relevantly as follows:

“[1] …

Clause 24 Annual leave

[2] Delete the words in clause 24.1 and insert the following:

24.1 Annual leave is provided for in the NES.

When an employee takes a period of paid annual leave or is paid for accrued leave on termination, the employee will be paid an annual leave loading of 17.5% of the base rate of pay for the period in addition to the payment required to be made under Division 6 of the NES.

[3] This determination will operate on and from …”

[17] The AWU notes that it unsuccessfully sought the insertion of annual leave loading into the Dredging Industry Award 2010 (“Dredging Award”) during the current award review process. That is, in the 30 October 2017 decision of a four-member Full Bench in 4 yearly review of modern awards – Award stage – Group 3 13 (which we shall refer to as “the Dredging Award Decision”, albeit the decision addresses multiple awards and multiple issues not confined to the dredging industry) determined as follows in relation to the Dredging Award (references not reproduced):

“[62] The AWU indicated that it would seek the insertion of an annual leave loading provision in clause 14 of the exposure draft [of the Dredging Award].  The AWU submitted that 17.5% is a national standard in Australia and the Dredging Award is one of only three modern awards that do not include annual leave loading. The AWU made similar submissions about the Book Industry Award 2010 and Alpine Resorts Award 2010.

[63] The AWU unsuccessfully sought an identical variation to the Dredging Award as part of the transitional review of modern awards in 2012. The AWU made a number of submissions in support of that claim.

[64] At the Conference on 4 August 2017, the AWU indicated that it would rely on the material already submitted in support of the proposed variation.

[65] In the transitional review of modern awards, the majority of the Annual Leave Full Bench decided not to make the variation sought by the AWU. The majority decision noted that the claim may be “more appropriate for consideration in the four year review”. 

[66] The minority decision held that annual leave loading should be inserted into the modern awards that were the subject of the AWU’s claim:

‘The absence of an entitlement to annual leave loading in these awards is unexplained and in my view unfair and unwarranted. The AWU could be criticised for not raising the matter more specifically during the award modernisation process. It has faced up to this and provided an explanation. But any failure on its part should not be a reason to deny its case now when merit is demonstrated. I consider that the AWU has established that the modern awards objective is furthered by the inclusion of an entitlement to annual leave loading in these awards and has made out a case on the merits for its inclusion into the three awards. Turning a blind eye to the intrinsic merit of the applications is not consistent with the obligation to conduct a review of the awards.’

[67] On that basis, we have considered the provisions of the three pre-reform awards mentioned previously in this decision as well as any consideration given to this issue during the award modernisation proceedings.

[68] The three pre-reform awards are silent on annual leave and annual leave loading. During award modernisation, the parties’ draft award and the Commission’s exposure draft were based on the provisions contained in the three pre-reform awards, which are more or less identical. Annual leave was included in the modern award as per the NES but annual leave loading was not adopted.

[69] The AWU previously submitted that the omission of annul [sic] leave loading was an inadvertent error because most other modern awards contained annual leave loading provisions.  We do not agree. The inclusion of annual leave loading provisions in other modern awards does not create an automatic basis for introducing the entitlement in the Dredging Award. Any such claim must be merit based. As noted previously, a relevant consideration is what the industry standard was prior to 2010.

[70] The AWU submissions previously noted that modern awards covering related industries include provisions about annual leave loading or provide a more generous leave accrual rate. These include the Port Authorities Award 2010; the Seagoing Industry Award 2010; and the Maritime Offshore Oil and Gas Award 2010.

[71] Clause 22 of the Port Authorities Award provides annual leave loading of 20% for shiftworkers and 17.5% for other workers. Clause 19 of the Maritime Offshore Oil and Gas Award and clause 20 of the Seagoing Award provide unique leave accrual calculations to compensate for the hours of work and requirement to be away from home for long periods of time.

[72] We understand that the nature of work and the disabilities associated with the Dredging Award are comparable to the other maritime sectors. The unique element of the Dredging industry is that it tends to be project work. There is no evidence before us about whether these types of employment arrangements mean employees are more or less likely to take annual leave or be paid out any accrued entitlements once the project is completed. These industry practices need to be considered properly when developing an annual leave loading provision or a unique annual leave accrual provision.

[73] The introduction of an annual leave loading provision would be a substantive variation to the Dredging Award and would introduce an entitlement that does not appear to have been a feature of past awards in respect of this sector.

[74] In terms of the modern awards objective, there is no evidence before us that the annual leave provisions in the Dredging Award are not meeting the modern awards objective. It could be argued that the loading would be additional remuneration for employees who work unsociable hours and shiftwork as per s. 134(da) of the Act. However it could equally be said that the introduction of annual leave loading would be an increased cost to employers which is a relevant consideration under s. 134(f) of the Act.

[75] We are not persuaded that there is sufficient material before us to determine the issue, and accordingly do not propose to make the change sought, at this time. If a party wishes to pursue the variation they can make a separate application to that effect. For now, we will not vary clause 14 of the exposure draft to include annual leave loading.” (our emphasis)

[18] The AWU submits that the following aspects of the Dredging Award Decision appear relevant to the consideration of the application before this Full Bench concerning the Award:

•  the omission of annual leave loading in the Dredging Award was not an error given none of three relevant pre-modern awards contained annual leave loading;

•  the inclusion of annual leave loading conditions in other modern awards does not create an automatic basis for introducing the entitlement (and any claim must be merit-based); and

•  a relevant consideration is what the industry standard was prior to 2010.

[19] The AWU draws attention to the primary pre-modern award upon which the Award was framed, namely the AWU Theme Park and Amusement Award 2001 (“the 2001 Award”). In such respects, the AWU submissions note that the Australian Industrial Relations Commission’s Award Modernisation Full Bench (the “AIRC Award Modernisation Full Bench”) expressly identified that the then-exposure draft of the Award was based to a large extent on the 2001 Award - in both a statement 14 published on 22 May 2009 and in the ultimate decision15 dated 4 September 2009. The relevant quote from the AIRC statement read:

“[75] The exposure draft of the Amusement, Events and Recreation Award 2010 is based to a large extent on the terms of the AWU Theme Park and Amusement Award 2001 [AP817364] but also incorporates many proposals advanced by the Media Entertainment and Arts Alliance (MEAA). …”

And to similar effect, the AIRC dealt with the (entire) matter of the Award in the following terms (references not reproduced); and the AWU referred in its submission to the bolded text in the quote below to reinforce that the 2001 Award was “expressly identified” by the AIRC as the primary pre-modern award for this industry:

“Amusement, Events and Recreation Award 2010

[91] We have not included any provisions concerning the interaction of this award with local government or State bodies. These are matters that will be dealt with at a later stage.

[92] A number of employers raised concerns about the penalty rates applicable under the exposure draft. These have been altered to a degree to better reflect the provisions of the AWU Theme Park and Amusement Award 2001 upon which the modern award is largely based. A number of the employers who raised concerns about the penalty rates are currently party to enterprise awards. These issues can be revisited at the time those awards are modernised.

[93] We have decided not to include the coverage of the Theatrical Employees (Showmen’s Guild) Award 2002 in the modern award. The current conditions under that award are sufficiently different to warrant a separate award. A modern award, which we shall tentatively title the Travelling Shows Award 2010, will be considered as part of Stage 4.” (our emphasis)

[20] The AWU notes that:

•  the 2001 Award prescribed an annual leave loading of 17.5 per cent;

•  the draft awards filed by the Media, Entertainment and Arts Alliance (“MEAA”) and two large employers in the industry included an annual leave loading of 17.5 per cent; and

•  the AIRC Award Modernisation Full Bench did not give any indication in either its statement or decision why an annual leave loading of 17.5 per cent was not included in the exposure draft of the Award it published in May 2009 or the final version of the Award it made on 4 September 2009 (i.e. in terms of annual leave entitlements, both instruments simply read: “Annual leave is provided for in the NES”).

[21] In these circumstances, the AWU submits, “it is apparent that the situation with the Amusement Award can be distinguished from that which arose with the Dredging Award” because:

•  the main pre-modern instrument (namely the 2001 Award), which was the only instrument referred to as a reference point for the Award by the AIRC Award Modernisation Full Bench, did contain annual leave loading provisions; and

•  the main industrial parties who had input into the making of the Award included annual leave loading in their draft awards.

[22] The AWU’s concluding submissions on these points is that “Given this industrial history and the lack of any explanation about why an important condition like leave loading was omitted from the Amusement Award, it does appear the omission was an error” and that “An error such as this is naturally the type of issue that should be addressed in the award review process”. The submissions of the AWU otherwise address matters under broad headings dealing with matters including the purpose of annual leave loading, and the way that such loading had been acknowledged in a range of decisions, for example, dating back to 1975, 16 as well as in terms of the specific matters that must be taken into account in relation to s.134 of the Fair Work Act 2009 (“the Act”) as to the modern awards objective.

[23] In the hearing, the AWU tendered a folder of materials. That folder contains, within the first tab, information about annual leave loading provisions in 27 pre-modern instruments that applied before the Award – commencing alphabetically with the Agricultural, Pastoral or Horticultural Society’s Show (State) Award 17 and concluding with the Tour Guides Award – State 2003.18 More than half of the itemised pre-modern instruments, from different Australian jurisdictions, contained 17.5 per cent annual leave loading provisions. We note that of the 16 listed pre-modern instruments that actually contain provisions concerning annual leave entitlements, each one of those also contained 17.5 per cent annual leave loading provisions (with separate arrangements in one other instrument, whereby annual leave was compensated for in pay rates).

[24] Within the second tab of the AWU’s folder of material, are examples of former enterprise-specific awards concerning enterprises such as Warner Bros Movie World, Adventure World, Sea World, Dreamworld and Village Nine Leisure. Each of those exampled instruments contained 17.5 per cent annual leave loading provisions.

[25] Within the third tab of the AWU’s folder are excerpts from draft awards that parties filed during the award modernisation process, namely, a draft proposed by Macquarie Leisure Operations (Dreamworld) and a draft proposed by AEG Ogden Group & Moreton Hire Pty Ltd. Each of these employer proposals contained 17.5 per cent annual leave loading provisions, as did the proposal of MEAA, being a proposal which, the AWU’s submissions indicated, was then (contemporaneously) supported by the AWU.

[26] The opposition of ABI and the NSWBC to the AWU’s application for inclusion of annual leave loading in the Award is predicated on matters which are identified as being: (a) that the variation sought by the AWU “offends” s.138 of the Act, as the variation “goes beyond what is necessary to achieve the modern awards objective”; and (b) the AWU’s merits arguments are “misconceived and/or do not weigh in favour of granting the variation”. As to the AWU’s merits arguments, ABI and the NSWBC advance four principal points which, while more elaborately developed in the written submissions (as well as in oral submissions), are compendiously described in their joint written submission in reply as being:

•  there is no evidence before this Full Bench to support a conclusion there was some “error” on the part of the AIRC when making the Award and not including an entitlement to annual leave loading;

•  there is no proper basis to depart from the AIRC Award Modernisation Full Bench decision in making the Award or the subsequent Modern Awards Review 2012 – Annual Leave decision during the two yearly review of the Award;

•  the AWU’s submissions in respect of the award modernisation process and the events leading-up to the making of the Award are incomplete, and do not properly represent what occurred during that process;

•  the AWU has misrepresented the historical development of annual leave loading as an employee entitlement.

[27] In oral submissions in the hearing, ABI and the NSWBC drew particular attention to aspects of what the Full Bench said in its summary of general observations in 4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues, 19 namely, that previous Full Bench decisions should generally be followed, in the absence of cogent reasons for not doing so. The Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made. The submissions also referred to a further comment in that decision whereby, if 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.

[28] The ABI and the NSWBC submissions also referred particularly to paragraph [107] of the majority decision in Modern Awards Review 2012 – Annual Leave 20 and paragraph [69]21 of the Dredging Award Decision. Their joint oral submissions also contended, in summary form drawing from the authorities to which reference was made, that there was an insufficiency of evidence before this Full Bench to support an evidence-based conclusion (such as in relation to the prevalence of overtime and shift arrangements in the industry in the context of, for example, the typical “rationale” for annual leave loading provisions) and/or merit-based conclusion in favour of the AWU’s application; and, moreover, a “consistent theme” was that variations ought not be made because of what was occurring elsewhere in other awards.

[29] The oral submissions for ABI and the NSWBC included the following submission: 22

“… but the reality is we don’t just have an interest in this award.  We have an interest in the stability of the safety net as a whole.  It shouldn’t be the case that parties can simply float a claim with nothing more and have the award varied.  There really should be a merit-based argument with evidence behind it and all that the AWU is saying is, ‘Well, we had it in the past.  We lost it in 2010, therefore, we should have it again.’  They haven’t turned their attention to why they should have it.  So in the absence of a merit-based argument, in the absence of evidence supporting it, we say that it shouldn’t succeed.”

[30] Live Performance Australia, which has as its members the majority of exhibition companies in the exhibition industry, made a short oral submission indicating that the organisation was not appearing in the hearing to argue against other sections of the industry covered by the Award. It was noted in those submissions the organisation’s exhibition industry members currently pay their employees annual leave loading, and had done so since circa 1992 pursuant to an exhibition industry award. 23

[31] We have concluded that it is appropriate the vary the Award to include annual leave loading provision in the terms proposed by the AWU and so conclude without addressing every single submission advanced by the parties, such as those tracing the history of annual leave loading to authorities which are many decades old; we have before us consideration of a modern award and legislation enacted in 2009.

[32] We note that the Full Bench in Modern Awards Review 2012 – Annual Leave 24 declined, for the reasons set out at paragraph [107], to make the make the annual leave loading variations to the Award proposed by the AWU – but the majority otherwise specifically opined in paragraph [108] that: “The variations sought are perhaps more appropriate for consideration in the four year review.” That is precisely the course that has unfolded given the question of annual leave loading is now before us for consideration as part of the 4 yearly review processes.

[33] We note also that in the time following the decision in Modern Awards Review 2012 – Annual Leave a differently-constituted Full Bench in the Dredging Award Decision declined to vary the Dredging Award for the inclusion of annual leave loading provisions. The circumstances which led the Dredging Award Full Bench to decline to vary the Dredging Award to include annual leave loading are self-evidently distinguishable from what was before us concerning the AIRC-identified provenance of the Award and the then-prevailing annual leave loading arrangements in the industry now collectively falling under the general descriptor of “amusements, events and recreation”. True it is that the introduction of an annual leave loading provision would be a substantive variation to the Award but pertinently, in sharp contrast with the Dredging Award (where annual leave loading, the Dredging Award Full Bench noted, “does not appear to have been a feature of past awards in respect of this sector”), on the materials before us, the Award was largely based on the 2001 Award, being an award which itself contained a 17.5 per annual leave loading. Moreover, other materials before us, such as those referred to earlier in this decision as the first and second tabs of the AWU’s tender bundle, indicate examples of various industrial instruments which actually contained annual leave provisions invariably also included a 17.5 per annual leave loading. Added to that, Live Performance Australia confirmed the organisation’s exhibition industry members pay their employees annual leave loading and have done so since circa 1992 pursuant to an exhibition industry award or awards.

[34] Again on what was before us in the AWU’s tender bundle, the extracts of the proposed versions of the Award prepared by parties principal before AIRC Award Modernisation Full Bench each included a 17.5 per annual leave loading. We note that ABI and the NSWBC submitted the proposed draft of the Award filed by MEAA in connection with the AIRC Award Modernisation Full Bench proceedings did not include annual leave loading provisions. It remains unclear to us which version of a proposed draft award eventually was pressed by MEAA (with, it was submitted, the support of the AWU) given what was before us in respective submissions and in the AWU’s tender bundle. Separately from the parties’ competing submissions, we do note, however, that the matter was squarely addressed in the minority decision of Watson VP in Modern Awards Review 2012 – Annual Leave as follows: “In the case of the Amusement, Events and Recreation Award 2010, all three of the parties’ draft awards contained annual leave loading, as did the overwhelming pattern in pre-existing instruments. For an unexplained reason, leave loading was omitted from the exposure drafts.” (our emphasis). We take the commentary of the Vice President in the Full Bench decision to be the short, authoritative answer to resolving the differing contentions of ABI and the NSWBC, on the one hand, and the AWU on the other hand, about the content of the parties’ draft awards: that is, all three of the parties’ draft awards contained annual leave loading.

[35] Last, we note that the AWU’s 10 August 2017 submission sequentially addressed the considerations specific to s.134(1)(a)-(h) of the Act dealing with the modern awards objective, being submissions which specifically were relied upon in the AWU’s additional submission of 12 July 2019. We reiterate what was set out earlier in the Pilots Award Decision:

“[13] In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in ss.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria concerning fairness and relevance. What is necessary is for the Commission to review a particular modern award and, by reference to the s.134 considerations and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net. In that task, the matters which may be taken into account are not confined to the s.134 considerations.”

[36] Apart from, for example, a general submission for ABI and the NSWBC that the variation proposed by the AWU offends s.138 of the Act as the variation goes beyond what is necessary to achieve the modern awards objective, those parties did not relevantly address what had been put by the AWU concerning the s.134(1)(a)-(h) considerations. Absent any submissions by ABI and the NSWBC seeking to counter or dispute what was specifically put by the AWU as to the equally-specific s.134(1)(a)-(h) matters, we discern no reason not to accept the AWU’s submissions in such respects – subject to the obvious proviso that, due to the effluxion of time since the AWU’s 10 August 2017 submission, certain dollar amounts exampled in the AWU’s submissions may be accepted now to be out-of-date.

Conclusion

[37] We consider the proposed variations meet the modern awards objective and that is it appropriate to make a determination consistent with our decision, in terms of the PGA’s proposed variation of 3 December 2019 and the AWU’s proposed annual leave loading variation, and effect variations to the Award. The variations shall have an operative date of 1 June 2020.

[38] The proceedings before this Full Bench in AM2019/7 concerning the Award are now concluded (given our conclusions and determination concerning the two discrete matters before us), and finalisation of the award review process shall be referred to the Finalisation Full Bench dealing with Tranche 2 Awards.

DEPUTY PRESIDENT

Appearances (on the annual leave loading issue):

Crawford for The Australian Workers’ Union.
L Izzo, with H Hamberger, for Australian Business Industrial and the NSW Business Chamber.
D Hamilton for the Australian Entertainment Industry Association (trading as Live Performance Australia).

Hearing details (on the annual leave loading issue):

2019.
Sydney (and via video-link in Brisbane):
November 19.

Hearing details (on the coverage issue):

On the papers.

Final written submissions (on the coverage issue):

27 March 2020 (Note: No further submissions, pursuant to the opportunity to do so in the direction in our 20 March 2020 Statement, were filed on or before 27 March 2020 by any party other than the PGA. As noted within this decision, the PGA filed a submission on 27 March 2020 elaborating upon certain matters concerning its proposed variation earlier filed on 20 February 2020).

Printed by authority of the Commonwealth Government Printer

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 1   Statement [2020] FWCFB 1530, 20 March 2020.

 2   [2020] FWCFB 817.

 3   Australian Hotels Association and United Workers’ Union [2020] FWCFB 1574 at paragraphs [43]-[49].

 4   PGA submissions, 3 December 2019.

 5   [2020] FWCFB 1530.

 6   TRANCHE 3 BACKGROUND PAPER, AM2019/17 – 23 March 2020.

 7   4 Yearly Review of Modern Award: Fitness Industry Award 2010 [2018] FWCFB 3914 at paragraph [12].

 8   Modern Awards Review 2012 – Annual Leave [2013] FWCFB 6266.

 9   4 yearly review – modern awards document – FWC Website.

 10   AWU submission – 12 July 2019.

 11   Australian Business Industrial and NSW Business Chamber submissions in reply – 13 August 2019.

 12   AWU submission 10 August 2017, Annexure “AWU 1”.

 13   4 yearly review of modern awards – Award stage – Group 3 [re exposure drafts – technical and drafting issues] [2017] FWCFB 5536.

 14   [2009] AIRCFB 450 at [75].

 15   [2009] AIRCFB 826 at [92].

 16   Pastoral Industry Award, 1965 - Print C6842.

 17   AN120013.

 18   AN140302.

 19   4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues [2014] FWCFB 1788; within paragraph [60], subparagraph 3.

 20   Modern Awards Review 2012 – Annual Leave [2013] FWCFB 6266 at [107]. Not reproduced as paragraph [107] is already extracted in this decision within paragraph [10].

 21   4 yearly review of modern awards – Award stage – Group 3 (Dredging Award Decision) [2017] FWCFB 5536. Not reproduced as paragraph [69] is already extracted in this decision within paragraph [17].

 22   Transcript of proceeding, 19 November 2019, at PN57.

 23   See, for example, Exhibition Industry (State) Award AN120204 and Exhibition Industry Award 2001 AP805480. Each contains annual leave loading provisions.

 24   Modern Awards Review 2012 – Annual Leave [2013] FWCFB 6266.