| [2020] FWCFB 5275 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Payment of Wages
(AM2016/8)
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 6 OCTOBER 2020 |
4 yearly review of modern awards – common issue – payment of wages – Business Equipment Award 2020 – Electrical, Electronic and Communications Contracting Award 2010; Timber Industry Award 2010; Building and Construction Onsite Award 2010.
[1] The ‘payment of wages’ terms in modern awards are being dealt with as a common issue in the 4 yearly review of modern awards. In the December 2016 decision,1 we confirmed our provisional view that each modern award should provide for the payment of wages and other amounts owing to an employee on termination of employment and that such a term should prescribe the timeframe within which such termination payments are to be made.2
[2] In a decision issued on 17 July 2018 (the July 2018 decision) we finalised the payment of wages on termination of employment model term.3 The model term provides as follows:
X (a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:
(i) The employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination: and
(ii) All other amounts that are due to the employee under the award and the NES.
(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.4
[3] The model term was subsequently inserted (in some cases with minor modifications) in the 86 modern awards which were silent in respect of the time period within which termination payments are to be made.5
[4] The remaining 36 modern awards contained terms which provided for the payment of wages and other amounts on the termination of employment. Thirty modern awards have been varied to include the model term (or a variant of it) and of the remaining 6 modern awards, two applications to vary have been rejected 6 and four have outstanding award specific issues.
[5] This decision deals with the four modern awards with outstanding award specific issues in relation to their payment of wages terms; namely:
• Business Equipment Award 2020 (the Business Equipment Award);
• Electrical, Electronic and Communications Contracting Award 2010 (the Electrical Contracting Award);
• Building and Construction On-site Award 2010 (Building On-site Award); and
• Timber Industry Award 2010 (Timber Award).
[6] It is convenient to deal first with the Business Equipment and Electrical Contracting Awards.
[7] The termination payment provisions in these two awards are similar.
[8] The relevant term in the Business Equipment Award provides as follows:
‘15. Payment of wages
NOTE: Regulations 3.33(3) and 3.46(1)(g) of Fair Work Regulations 2009 set out the requirements for pay records and the content of payslips including the requirement to separately identify any allowance paid.
15.1 Wages must be paid:
(a) weekly, fortnightly, 4-weekly, half-monthly, monthly or in accordance with existing practices; and
(b) by cash or by cheque or to the credit of the employee’s account in a bank or other recognised financial institution, or in any agreed combination of these methods.
15.2 Wages must be paid, either:
(a) according to the average number of ordinary hours worked per pay period; or
(b) by agreement with either the majority of employees or with an individual employee according to the actual ordinary hours worked each pay period.
15.3 Where wages are paid in cash, such payment must be made during normal working hours.
15.4 Upon termination of employment, the wages due to an employee must be paid on the day of such termination or forwarded by post on the next working day.’ (emphasis added)
[9] The relevant term in the Electrical Contracting Award provides as follows:
‘22.2 Method of payment
(a) Wages must be paid by cash, cheque or electronic funds transfer into the employee’s bank or other recognised financial institution account.
(b) In the case of an employee paid by cheque, if the employee requires it, the employer is to have a facility available during ordinary hours for the employee to cash the cheque.
22.3 Payment of wages on termination of employment
(a) On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day. (emphasis added)
(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.’
[10] In earlier proceedings, ABI and Ai Group unsuccessfully sought to delete clauses 15.4 and 22.3 respectively from the Business Equipment Award and the Electrical Contracting Award and insert the model term instead. In a Decision issued on 20 May 2020 7 (the May 2020 Decision) we addressed these claims, as follows:
‘ABI and Ai Group seek to delete clause 15.4 from the Business Equipment Award and clause 22.3 from the Electrical Contracting Award and insert the model term instead. ABI relies on its general submissions. Ai Group advances the following submission in respect of these awards:
(a) Deals only with wages. Arguably it does not create an obligation to pay other amounts prescribed by the award but does create an obligation to pay over-award amounts. Further, it does not deal with NES entitlements. To this extent, the current clause is potentially unclear, unfair and does not fill the “regulatory gap” identified by the Commission.
(b) Requires payment on the day of termination, regardless of the means by which payment is made. In the alternate it permits payment by post to be forwarded on the next working day. For the reasons articulated above this is unfair to employers and it does not reflect or enable modern work practices. Further, the clause creates additional employment costs and a regulatory burden.
(c) The clause would apply even where the employee’s employment is terminated without notice by the employee or employer. This compounds the unfairness and adverse impact on business.
The CEPU opposes the applications to vary these awards and submits that no evidence is provided in support of the proposed variations and the Commission cannot be satisfied there is merit to the applications. In particular, the CEPU notes that the employer groups have not provided any evidence of employers not being able to make the payment of wages within the timeframe in the relevant industries.
In relation to Ai Group’s concern about the limitation on the amount of cash that can be made via post the CEPU notes that the relevant modern awards all contemplate other methods such as providing a cheque or bank transfer. On this basis the CEPU contends that any amounts exceeding $200 can be paid via an alternate method.
As mentioned earlier, there has been an overall increase in the reliance on EFT transactions as a means of processing wage payments by employers and a marked decrease in the use of cheques and cash to make such payments. In these circumstances it seems to us that the termination payment clauses in these awards require amendment to add the following:
‘Provided that where payment is normally made by electronic funds transfer all monies due to an employee may be transferred into the employee’s account on the next working day’.
A conference of interested parties will be convened shortly to discuss this issue.’ 8
[11] A conference was held on 8 July 2020 9 attended by Ai Group, ABI, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the National Electrical and Communications Association (NECA). On 10 July 2020 a Report10 (the July Report) was published. The July Report invited interested parties to comment on the proposal to insert the following term into the Business Equipment Award and the Electrical Contracting Award:
‘(a) Provided that where payment is normally made by electronic funds transfer all monies due to an employee may be transferred to the employee’s account on the next working day.
(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.’
[12] Submissions were received from:
• Ai Group, in respect of the Business Equipment Award and the Electrical Contracting Award;
• NECA, in respect of the Electrical Contracting Award;
• ABI, in respect of the Business Equipment Award; and
• CEPU in respect of the Business Equipment Award and the Electrical Contracting Award.
[13] Ai Group supported including a provision such as paragraph (b) as set out in the July Report (see [11] above) but submits that if the Commission is minded to vary the Electrical Contracting Award to introduce an obligation to pay amounts due under the NES following termination of employment within a specified timeframe, that obligation should not extend to requiring such amounts be paid either upon termination or on the next working day. In respect of this submission, Ai Group says:
‘we are not seeking to remove an existing beneficial element of the awards’ extant provisions. Rather, we are proposing that a more cautious and flexible approach be adopted in relation to the imposition of new obligations.’ 11
[14] Ai Group submits that greater flexibility should be given in relation to the payment of NES entitlements for the following reasons:
• it should not be assumed that all employers will have the capacity to make the relevant transfer on the next working day;
• it is not reasonable for an award to impose a new requirement upon employers to make resources available to calculate and process a relevant termination payment within a day;
• the convenience of electronic transfer payments arguably negates the need for awards to provide for particularly tight timeframes in relation to payment on termination;
• it is likely, or at least possible, that some employers may not be able to calculate the relevant termination payments beyond wages, either immediately upon termination of employment or within 24 hours;
• an award obligation that requires redundancy pay made within a very tight timeframe may serve to undermine the capacity of an employer to utilise s.120 to seek relief from the obligation to pay the full amount of redundancy pay that may otherwise be applicable under the NES; and
• the provision of some latitude in relation to the provision of termination payments other than wages does not impose any administrative burden on an employer, even though it will involve the processing of two payments.
[15] Ai Group proposes deleting the current term in the Electrical Contracting Award and replacing it with the following term:
‘22.3 Payment of wages on termination of employment
(a) Upon termination of employment, the wages due to an employee must be paid on the day of termination, or, on the next working day, either forwarded by post to the employee or transferred their account by means of electronic funds transfer.
(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.
(c) All amounts due to an employee under this award or the NES when employment ends, other than those specified under clause 22.3(a), must be paid by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under paragraphs (a) and (b) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph (d) allows the Commission to make an order delaying the requirement to make a payment under clause (c). For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.’
[16] Similarly, Ai Group submitted the current provision in the Business Equipment Award should be deleted and replaced with the following:
‘15.4 Upon termination of employment, the wages due to an employee must be paid on the day of termination, or, on the next working day either forwarded by post to the employee or transferred their account by means of electronic funds transfer.
15.5 All amounts due to an employee under this award or the NES when employment ends, other than those specified un clause 15.4, must be paid by no later than 7 days after the day on which the employee’s employment terminates.
15.6 The requirement to pay wages and other amounts under paragraphs 15.4 and 15.5 is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph 15.6 allows the Commission to make an order delaying the requirement to make a payment under clause 15.5. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.’
[17] NECA submitted that paragraph (a) of the current payment of wages clause in the Electrical Contracting Award is deficient because it only deals with wages but not other monies owed to an employee on the termination of employment. It contends the clause proposed in the July Report should be merged with the model term. NECA’s proposed clause is as follows:
22.3 Payment on termination of employment
(a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) Provided that where payment is normally made by electronic funds transfer all monies due to an employee may be transferred to the employee’s account on the next working day.
(c) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
[18] ABI relied on the submissions it had earlier filed and did not have any further comments in response to the July Report.
[19] The CEPU opposed including the clauses proposed by NECA and Ai Group and supports the clause proposed in the July Report.
[20] The CEPU opposes Ai Group’s proposal for the reasons set out at [11] – [20] of its submission of 21 July 2020. In short, it contends that the proposed variation extends the existing time period for termination payments ‘in essence providing employers with an additional day to make payment when payments [are] normally made by EFT’ and that such a change is unnecessary and unsupported by probative evidence.
[21] Our consideration of the contested issues in respect of these two awards is guided by the observations we made in the May 2020 Decision. In particular, the May 2020 Decision sets out three general propositions, based on the evidence and submissions:
‘1. Where the time period within which termination payments are to be made is vague and uncertain (such as for example, payments are to be made ‘as soon as possible’ or ‘forthwith’) the award should be varied to provide that payments are to be made ‘no later than 7 days after the day on which the employee’s employment terminates’, consistent with the model term.
2. Existing terms that require termination payments to be made ‘immediately’ or on the day of termination, with no alternative means available are impracticable and invite scrutiny.
3. In contested applications to replace an existing term which provides that termination payments are to be made within a shorter timeframe than that specified in the model term (but not ‘immediately’) should be supported by probative evidence that the existing term is impractical or operates unfairly to the employers and employees covered by the relevant award. Different considerations apply to uncontested applications. While the Commission must still be satisfied that the variation is necessary to achieve the modern awards objective, it will more readily accept any uncontested assertions made in support of the application.’ 12
[22] We also observed that ‘if an existing term provides for the payment of ‘all wages and other monies owing to an employee,’ or a similar expression which is more beneficial than the model term, then in the event that the term is varied to insert the model term the more beneficial provision will be retained’. 13
[23] Further, in circumstances where the scope of a current termination payment term is extended – for example, to cover NES entitlements, then the 7 day period in the model term should apply to the areas to which the clause is extended. 14
[24] Applying these observations to the present matter we accept that the extension of the current terms in these awards to cover NES entitlements and amounts due under the awards (other than wages) should be subject to the 7-day period in the model term. To that extent we agree with Ai Group’s proposed term. However, we do not agree with the form of the other modification proposed by Ai Group.
[25] Ai Group proposes (at clause 22.3(a), see [15] above) a subclause in the following terms:
(a) Upon termination of employment, the wages due to an employee must be paid on the day of termination, or, on the next working day, either forwarded by post to the employee or transferred their account by means of electronic funds transfer.
[26] We accept the CEPU’s characterisation of Ai Group’s proposal as an attempt to extend the existing time period for termination payments, but that is not a complete answer to the proposal advanced by Ai Group. The current award term (at clause 22.3(a)) is poorly drafted, it provides:
22.3 Payment of wages on termination of employment
(a) On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day. (emphasis added)
[27] The current term in each of these awards provides two alternate time periods for the payment of the ‘wages due to an employee’ on termination of employment. Such payment is to be made either on the ‘day of termination’ or ‘forwarded to the employee by post on the next working day’.
[28] The existing term may lead to illogical outcomes. An employee paid by electronic funds transfer is to be paid wages due on the day of termination; but an employee paid by cheque is to be sent their termination payment by post on the next working day. We see no good reason for such differential treatment. In our view, the same time period should be prescribed, irrespective of the method of payment. That said, we are not attracted to the formulation proposed by Ai Group. It seems to us that a simpler solution would be to simply provide that the wages due to an employee must be paid no later than the end of next working day after the termination of the employee’s employment.
[29] As to NECA’s proposal, we consider that it is an unwarranted extension of the time periods in the existing award term. In effect, NECA’s proposal provides that wages due are to be paid within 7 days, unless the employee is usually paid by electronic funds transfer, in which case the payments are to be made on the next working day. The merit of such a proposal is far from clear and no evidence has been advanced in support of it.
[30] We have decided to vary each of these awards to delete clauses 15.4 and 22.3 respectively and insert:
‘X Payment of wages on termination of employment
(a) Upon termination of employment, the employer must pay an employee the wages due to the employee for any complete or incomplete pay period up to the end of the day of termination, no later than the end of the next business day after the day on which the employee’s employment terminates.
(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.
(c) All other amounts due to an employee under this award or under the NES, other than those specified under clause X(a), must be paid by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under paragraphs (a) and (c) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
Note 2: Paragraph (d) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlement under section 113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.’
[31] We accept that the variation of the award in the manner proposed may result in low paid employees receiving termination payments later than they would under the current award. This is a consideration that weighs against the variation proposed. However, the variation will ensure that such employees receive their NES entitlements in a timely manner.
[32] The variation proposed would not discourage or undermine collective bargaining; but s 134(1)(b) speaks of the need to ‘encourage collective bargaining’. The proposed variation may be said to decrease the incentive for employers to bargain; but it is also likely that employee and employer decision making about whether or not to bargain is influenced by a complex mix of factors. We are not satisfied that the proposed variation would ‘encourage collective bargaining’ and it follows that this consideration also weighs against the variation proposed.
[33] We are satisfied that the variation proposed is consistent with the need to promote flexible modern work practices and is likely to have a positive impact on business. Further, the variation proposed is consistent with the need to ensure a simple easy to understand modern award system (s.134(1)(d), (f) and (g)). The considerations in s.134(1)(c), (da), (e) and (h) are not relevant in the present context.
[34] We are satisfied that the variations proposed are necessary to ensure that these two awards achieve the modern awards objective. In reaching that conclusion we have had regard to the considerations in s.134(1)(a)-(h) insofar as they are relevant.
[35] Variation determinations will be published with this decision.
[36] The relevant provision in the Building On-site Award provides as follows:
31.4 When notice is given, all monies due to the employee must be paid at the time of termination of employment. Where this is not practicable, the employer will have two working days to send monies due to the employee by registered post (or where paid by EFT the monies are transferred into the employee’s account).
[37] In the May 2020 decision we noted that clause 31.4 does not make provision for the payment of monies due where employment is terminated without notice, or by the abandonment of employment or by payment in lieu of notice. In those proceedings we rejected an application by Ai Group to delete clause 31.4 and replace it with the model term. In the same proceeding the CFMMEU (C&G) proposed to vary clause 31.4 as set out below:
31.4 Payment on termination of employment
(a) If the employment of an employee terminates, Tthe employer must pay an employee the following amounts in accordance with this clause no later than 7 days after the day on which the employee’s employment terminates:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) The amounts described at clause 31.4(a) must be paid to the employee at the time of termination of employment, provided that where this is not practicable, the employer will have two working days to send monies due to an employee by registered post or, where the employee is paid by EFT, transfer the monies into the employee’s account.
(c) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.
Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
[38] We rejected the variation proposed by the CFMMEU, in the following terms:
‘We do not propose to make the variation proposed. The proposed amendment appears to seek to expand both the class of termination payments to be subject to the clause (to include all other amounts due to the employee under the award and the NES) and the circumstances to which the clause applies. As to the latter point, the current term only applies to termination by notice and the CFMMEU (C & G) proposed variation would extend the term to termination without notice.
In our view where the scope of a current termination payment term is extended in the manner proposed the 7-day period in the model term should apply to the areas to which the clause is extended. Hence, in this instance, in circumstances of summary dismissal a 7-day payment period would apply. Similarly, a 7-day payment period would apply to NES payments and ‘other amounts due’ under the award. 15
[39] We noted that the issues raised by the respective applications required further examination and that a conference would be convened for that purpose.
[40] A conference was held on 10 July 2020 in respect of the Building Award. 16 Arising out of the conference on 10 July 2020, Ai Group and the CFMMEU (C&G) agreed to confer in an effort to reach a resolution in relation to the two draft proposals. The outcome of those discussions was set out at Attachment B to the Report. Interested parties were invited to comment on the draft proposal at Attachment B to the Report. A Report and two draft determinations were published on 17 July 2020.17 Interested parties were invited to file submissions. Submissions were received from:
• CEPU;
• CFMMEU (C&G);
• MBA; and
• HIA.
[41] The joint draft proposal which was the subject of these submissions is in the following terms:
31.4 Payment on termination of employment
(a) If the employment of an employee terminates, the employer must pay the employee the following amounts in accordance with clause 31.4:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) Where notice of termination is given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 31.4(a)(i) must be paid to the employee:
(i) on the day of termination; or
(ii) where this is not practicable the employer will have two working days to send monies due to an employee by registered post or, where the employee is paid by EFT, transfer the monies into the employee’s account.
(c) The amounts described at clause 31.4(a)(ii), and where notice is not given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 31.4(a)(i), must be paid to the employee:
(i) on the day of termination; or
(ii) forwarded by electronic funds transfer by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under clause 31.4(a) is subject to the employer making deductions authorised by this award or the Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.
Note 2: State and Territory long service leave laws or long service leave entitlements under section 113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
[42] We note at the outset that the MBA submitted that the outcome of some unresolved matters before another Full Bench (AM2016/8), including an application seeking to vary the frequency of payments under clause 31.3, ‘may be relevant to any amendments to the payment on termination provision’ and on that basis submitted that:
‘… the settlement of any proposed amendments to clause 31.4 be deferred until all outstanding matters with respect to clause 31 of the On-site Award have been resolved.’
[43] It is not clear to us how the outcome of the proceedings in AM2016/8 will have any bearing on the matter before us. We do not propose to defer our consideration of clause 31.
[44] The CFMMEU and CEPU supported the joint draft proposal submitted on behalf of Ai Group and the CFMMEU (see [41] above).
[45] The MBA and HIA seek to amend the joint draft proposal in two substantive respects.
[46] First, it is submitted that clause 31.4(b) of the draft determination be amended as follows:
(a) Where notice of termination is given by an employer or employee in accordance with clause 16 the terms of this award or the NES the amounts described at clause 31.4(a)(i) must be paid to the employee:
[47] In its reply submission the CFMMEU (C&G) points out that clause 16 only deals with notice of termination by a weekly hire employee and that notice of termination by a daily hire employee is covered in clause 11 and notice of termination by an employer is set out in the NES. For those reasons, the CFMMEU (C&G) supported the retention of the proposed words in clause 31.4(b).
[48] We agree with the CFMMEU (C&G) and do not propose to make the change suggested by the MBA and HIA.
[49] Second, it is proposed that clause 31.4(c)(i) be deleted on the basis that it is inconsistent with the May 2020 Decision.
[50] As mentioned earlier, in the May 2020 Decision we decided that in circumstances where the scope of a current termination payment term is extended – for example, to cover NES entitlements, then the 7 day period in the model term should apply to the areas to which the clause is extended. 18 The MBA and HIA submit that proposed clause 31.4(c)(i) is inconsistent with this general principle.
[51] It will be recalled that the current payments on termination term in the Building On-site Award only applies where notice of termination is given. The CFMMEU (C&G)/Ai Group proposal seeks to extend the scope of the current clause. Proposed clause 31.4(c)(i) provides:
(c) The amounts described at clause 31.4(a)(ii), and where notice is not given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 31.4(a)(i), must be paid to the employee:
(i) on the day of termination; or
(ii) forwarded by electronic funds transfer by no later than 7 days after the day on which the employee’s employment terminates.
(Emphasis added)
[52] We note that clause 31(c)(i) is not in the same terms as the CFMMEU (C&G) proposal which we rejected in the the May 2020 Decision. In particular, the joint draft proposal provides that the termination payments may be made ‘on the day of termination’ or forwarded by electronic funds transfer no later than 7 days after the date of termination. In effect the employer can elect to make these termination payments 7 days after termination, by electronic funds transfer. We also note that the joint draft proposal is in essentially the same terms as the relevant term in the Mobile Crane Hiring Award (see PR719897). We see some utility in consistent standard terms in the various construction awards. Accordingly, we do not intend to vary the joint draft proposal in the manner proposed by the MBA and HIA.
[53] We propose to vary the award in the manner proposed by Ai Group and the CFMMEU (C&G).
[54] The variation of the award in the manner proposed will ensure that the employees covered by the award will receive their termination payments in a timely manner, irrespective of the means by which their employment is terminated.
[55] The proposed variation would not necessarily ‘encourage collective bargaining’ and it follows that this consideration also weighs against the variation proposed.
[56] We are satisfied that the variation proposed is unlikely to have any significant impact on business. The other s.134 considerations are not relevant in the present context.
[57] We are satisfied that the variation proposed is necessary to ensure that the award achieves the modern awards objective. In reaching that conclusion we have had regard to the considerations in s.134(1)(a)-(h) insofar as they are relevant.
[58] The payment of wages provision in the Timber Award currently provides:
‘25.3 Payment of wages on termination
(a) Upon termination of the employment after the prescribed period of notice of termination has been given by either the employer, or the employee or where the period of notice is dispensed with in accordance with the provisions of clause 15—Redundancy all monies which are legally due must be paid to the employee at the usual place of payment within 15 minutes of the ceasing time on the day of termination of the employment. Provided that if the usual place of payment be at the work in the bush, then such payment must be made within 30 minutes of the usual ceasing time on the day of the termination of employment at the usual place of payment.
(b) Should the employment be otherwise terminated the employer may retain any monies legally due to the employee no later than the expiration of the pay period.’
[59] In the May 2020 Decision we directed parties to engage in discussions in order to narrow the issues in dispute in respect of the Timber Award. 19 The parties’ discussions have been fruitful and on 30 September 2020, Ai Group advised that the CFMMEU, AMWU, Ai Group and ABI have agreed that the award be varied by deleting clause 25.3 and insert the following term:
25.3 Payment on termination of employment
(a) If the employment of an employee terminates, the employer must pay the employee the following amounts in accordance with this clause:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are payable to the employee under this award and the NES.
(b) Where notice of termination is given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 25.3(a) must be paid to the employee within 30 minutes of the employee ceasing work where the employee is paid by cash or cheque; or on the day of termination where the employee is paid by electronic funds transfer (EFT).
(c) In all other circumstances, the amounts described at clause 25.3(a)(i) and (ii) must be:
(i) paid to the employee on the day of termination; or
(ii) transferred to the employee’s account by no later than 7 days after the day on which the employee’s employment terminates, if the employee is ordinarily paid by EFT; or
(iii) sent to the employee by registered post by no later than 7 days after the day on which the employee’s employment terminated if the employee is ordinarily paid by cash or cheque.
(d) The requirement to pay wages and other amounts under clauses 25.3 (a), (b) and (c) is subject to further order of the Commission and the employer making any deductions authorised by this award or the Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.
Note 2: Paragraph (d) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
[60] It is our provisional view that the substance of the agreed variation is consistent with the general propositions which may be derived from the May 2020 Decision (see [21] – [22] above); but it seems to us that the form of the proposed variation is unnecessarily complex. It is our provisional view that the existing clause 25.3 be deleted and be replaced with the following terms:
25.3. Payment on termination of employment
(a) Upon termination of employment the employer must pay the employee at the prescribed time for payment:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) For the purpose of clause 25.3(a) the prescribed time for payment is given by the following table:
| How the employee’s employment is terminated |
Method of payment |
Prescribed time for payment |
| By the employer giving notice or payment instead of notice, or by the employee giving the required minimum period of notice under clause 14.2. |
If paid by cash or cheque |
No later than 30 minutes after the employee finishes work on the day of termination of the employment |
| If paid by electronic funds transfer |
On the day of termination of the employment | |
| By the employer or employee other than as above |
If paid by cash or cheque |
Sent by registered post no later than 7 days after the day of termination of the employment |
| If paid by electronic funds transfer |
No later than 7 days after the day of termination of the employment |
(c) The requirement to pay wages and other amounts under clause 25.3(a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.
NOTE 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.
NOTE 2: Clause 25.3(c) allows the Commission to make an order delaying the requirement to make a payment under clause 25.3. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
NOTE 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
[61] We will invite submissions in respect of our provisional view.
1. Business Equipment Award and the Electrical Contracting Award: we will issue variation determinations deleting clauses 15.4 and 22.3 respectively and inserting the term set out at [30] above (see Attachments 1 and 2).
2. Building On-Site Award: we will issue a variation determination in the terms proposed by Ai Group and the CFMMEU (C&G) (see [41] above) (see Attachment 3).
3. Timber Award: we have expressed a provisional view on the terms of a clause to replace existing clause 25.3 (see [60] above. Interested parties are invited to comment on our provisional view by no later than 4pm on Thursday 15 October 2020. Submissions should be sent to [email protected]. If no submissions are received opposing our provisional view, we will issue a final variation determination in the terms set out at [60] above.
PRESIDENT
Final written submissions:
NECA, 17 July 2020
Ai Group, 20 July 2020 and 30 September 2020
ABI, 20 July 2020
CEPU, 21 July 2020
Printed by authority of the Commonwealth Government Printer
<PR723255>
MA000021 PR723315
Fair Work Act 2009
s.156—4 yearly review of modern awards
(AM2016/8)
[MA000021]
Business equipment industry | |
JUSTICE ROSS, PRESIDENT |
|
4 yearly review of modern awards – common issue – payment of wages – variation determination – Business Equipment Award 2020.
A. Further to the Full Bench decision issued by the Fair Work Commission on 6 October 2020 ([2020] FWCFB 5275) the above award is varied as follows:
1. By deleting clause 15.4 and inserting the following:
15.4 Payment of wages on termination of employment
(a) Upon termination of employment, the employer must pay an employee the wages due to the employee for any complete or incomplete pay period up to the end of the day of termination, by the end of the next business day after the day on which the employee’s employment was terminated.
(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.
(c) All other amounts due to an employee under this award or under the NES, other than those specified under clause 15.4(a), must be paid by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under clauses 15.4(a) and 15.4(c) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
NOTE 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
NOTE 2: Clause 15.4(d) allows the Commission to make an order delaying the requirement to make a payment under clause 15.4. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
NOTE 3: State and Territory long service leave laws or long service leave entitlements under section 113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
2. By updating and cross-references accordingly.
B. This determination comes into operation from 13 October 2020. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 13 October 2020.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
MA000025 PR723314
Fair Work Act 2009
s.156—4 yearly review of modern awards
(AM2016/8)
[MA000025]
Electrical contracting industry | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 6 OCTOBER 2020 |
4 yearly review of modern awards – common issue – payment of wages – variation determination – Electrical, Electronic and Communications Contracting Award 2010.
A. Further to the Full Bench decision issued by the Fair Work Commission on 6 October 2020 ([2020] FWCFB 5275) the above award is varied as follows:
1. By deleting clause 22.3 and inserting the following:
22.3 Payment of wages on termination of employment
(a) Upon termination of employment, the employer must pay an employee the wages due to the employee for any complete or incomplete pay period up to the end of the day of termination, by the end of the next business day after the day on which the employee’s employment was terminated.
(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.
(c) All other amounts due to an employee under this award or under the NES, other than those specified under clause 22.3(a), must be paid by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under clauses 22.3(a) and 22.3(c) is subject to further order of the Commission and the employer making deductions authorised by this award or Act.
NOTE 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving them notice.
NOTE 2: Clause 22.3(d) allows the Commission to make an order delaying the requirement to make a payment under clause 22.3. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.
NOTE 3: State and Territory long service leave laws or long service leave entitlements under section 113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
2. By updating cross-references accordingly.
B. This determination comes into operation from 13 October 2020. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 13 October 2020.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
MA000020 PR723313
Fair Work Act 2009
s.156—4 yearly review of modern awards
(AM2016/8)
[MA000020]
Building, metal and civil construction industries | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 6 OCTOBER 2020 |
4 yearly review of modern awards – common issue – payment of wages – variation determination – Building and Construction General On-site Award 2010.
A. Further to the Full Bench decision issued by the Fair Work Commission on 6 October 2020 ([2020] FWCFB 5275) the above award is varied as follows:
1. By deleting clause 31.4 and inserting the following:
31.4 Payment on termination of employment
(a) If the employment of an employee terminates, the employer must pay the employee the following amounts in accordance with clause 31.4:
(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) Where notice of termination is given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 31.4(a)(i) must be paid to the employee:
(i) on the day of termination; or
(ii) where this is not practicable the employer will have two working days to send monies due to an employee by registered post or, where the employee is paid by EFT, transfer the monies into the employee’s account.
(c) The amounts described at clause 31.4(a)(ii), and where notice is not given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 31.4(a)(i), must be paid to the employee:
(i) on the day of termination; or
(ii) forwarded by electronic funds transfer by no later than 7 days after the day on which the employee’s employment terminates.
(d) The requirement to pay wages and other amounts under clause 31.4(a) is subject to the employer making deductions authorised by this award or the Act.
Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.
Note 2: State and Territory long service leave laws or long service leave entitlements under section 113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.
2. By updating and cross-references accordingly.
B. This determination comes into operation from 13 October 2020. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 13 October 2020.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
2 Ibid at [86]
4 Ibid at [119]
5 See [2018] FCFB 3566, [2018] FWCFB 4735
6 Dry Cleaning and Laundry Industry Award 2020 and the Supported Employment Services Award 2020 - see [2020] FWCFB 1311 at [252] – [261] and [373] – [383]
8 [2020] FWCFB 1311 at [246] – [251].
11 Ai Group submission 20 July 2020 at [17]
12 [2020] FWCFB 1131 at [192]
13 [2020] FWCFB 1131 at [193]
14 Ibid at [241]
15 [2020] FWCFB 1131 at [240]-[241]
17 Report and draft determination, Building Award, 17 July 2020
18 Ibid at [241]
19 [2020] FWCFB 1311 at [423]