| [2021] FWCFB 1286 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.158 – Application to vary or revoke a modern award
Alpine Resorts Award 2020
(AM2020/4)
Tourism Industry | |
VICE PRESIDENT HATCHER |
SYDNEY, 10 MARCH 2021 |
Application to vary a modern award – Alpine Resorts Award 2020 – application to vary coverage terms to achieve the modern awards objective – application to dismiss the proceedings – alpine resort operations
Introduction
[1] On 18 February 2020, the Shop, Distributive and Allied Employees’ Association (SDA) lodged an application pursuant to s 158 of the Fair Work Act 2009 (FW Act) to vary the coverage clause of the Alpine Resorts Award 2010 (2010 Award). On 4 May 2020, this award became the Alpine Resorts Award 2020 (2020 Award) as a result of the 4 yearly review of modern awards, and in this decision the award will be referred to in its 2020 manifestation unless specified otherwise. For relevant purposes, the coverage of the 2020 Award is set out in clauses 4.1 and 4.2 as follows:
4.1 This industry award covers employers throughout Australia who operate an alpine resort and their employees employed at, or in direct connection with the operation of, the alpine resort in the classifications within Schedule A—Classification Definitions to the exclusion of any other modern award.
4.2 Alpine resort means a resort which includes, among other things, an alpine lift.
[2] The form of the coverage clause in the 2020 Award reflects the outcome of proceedings conducted before this Full Bench in the course of the 4 yearly review. In the form in which it was first made, clause 4.1 of the 2010 Award provided:
4.1 This industry award covers employers throughout Australia who operate an alpine resort and their employees in the classifications within Schedule B – Classification Definitions to the exclusion of any other modern award.
[3] At that stage, “alpine resort” was defined in clause 3 as follows:
alpine resort means an establishment whose business, among other things, includes alpine lifting.
[4] In 2016, Australian Business Industrial (ABI), the NSW Business Chamber and the Thredbo Chamber of Commerce made an application to vary the coverage provisions of the 2010 Award to replace the expression “alpine resort” with “alpine resort industry” and to include in the definition of the latter expression, in addition to alpine resorts as previously defined, “those establishments which are engaged wholly or principally in the provision of accommodation services, functions/conferences, restaurant/food and beverage services, food retailing and the retail sale and/or hire of snow sports equipment”. It also proposed to add a new requirement that employees covered by the 2010 Award be engaged in an “Alpine Region”, defined by reference to the vicinities of specifically-named alpine resorts. A fundamental feature of the application was that the variations sought were necessary to achieve a “level playing field” in terms of the minimum award conditions of employment between alpine resorts which were covered by the 2010 Award and other businesses operating in alpine regions which were covered by the relevant industry awards, which included the General Retail Industry Award 2010, the Hospitality Industry (General) Award 2010, the Fast Food Industry Award 2010 and the Hair and Beauty Industry Award 2010.
[5] This application was opposed by the Alpine Ski Areas Association (ASAA), the SDA and the Australian Workers’ Union (AWU). The hearing of the application involved extensive witness evidence and submissions, and also the conduct of inspections of a number of alpine resorts. In a decision issued on 27 August 2018, 1 we rejected the application on the basis that it was not necessary to achieve the modern awards objective. It is not necessary to refer to the findings made in that decision on the basis of which the application was rejected, except to refer to the following finding concerning the distinction between businesses operating alpine resorts and other businesses operating in their vicinity (footnote omitted):
“Alpine resorts are a different kind of employer to relevant alpine businesses and other snowsports businesses. They operate large integrated businesses which involve a highly diverse range of functions and permit staff, to some degree, to perform different functions dependent on exigencies such as the weather. The core element of their business is the operation of ski slopes, which requires the performance of functions such as ski patrols, snow-making, lift maintenance and operation, ski instruction and various administrative and safety responsibilities. To the extent that they engage in the provision of food, hospitality, accommodation and retail services, it is ancillary to this core function. Alpine resorts may engage in these functions not in order to establish separate profit sources but to provide an essential or significant service to users of the core business function. It is clear that the establishment of the Alpine Award was made in recognition of the fact that alpine resorts needed to have persons ‘… employed in a wide range of occupational groupings…’. But for this award, alpine resorts would be covered by a wide range of different modern awards which would no doubt be productive of complexity and inefficiency. Relevant alpine businesses do not, on the evidence, have any of these fundamental characteristics.” 2
[6] In the same decision, we also dealt with an application by the Mount Hotham Alpine Resort Management Board to vary the coverage provisions of the 2010 Award to clarify that alpine resort management boards in Victoria were covered by the award. In doing so, we identified a defect in the coverage provisions which had become apparent to us during the course of the proceedings:
“[78] Doing this presents an opportunity to correct one other defect in the coverage provisions of the Alpine Award which became apparent in the proceedings before us. As it currently stands, clause 4.1 provides that an employer which operates an alpine resort, as defined in clause 3, is covered by the Alpine Award in respect of any employee who falls within the award’s classifications, whether they are actually employed at the alpine resort or not. For example, if the operator of an alpine resort purchases a hotel which is located entirely outside of that alpine resort, clause 4.1 would permit the application of the Alpine Award, which contains a large range of classifications covering hospitality functions, to the hotel’s employees merely because of the fact that the employer was the operator of an alpine resort. That is clearly not what was intended by the Full Bench in making the Alpine Award, and would not conform to the modern awards objective. We do not suggest that the evidence before us demonstrates that this has actually occurred, but nonetheless it should not be permitted to occur. The general industry award which would otherwise operate in that situation would be the award providing the appropriate coverage.”
[7] We proposed a variation to the coverage provisions which would accommodate both the problem raised by the Mount Hotham application and the further difficulty we identified. After we received submissions about this, we published a draft determination on 14 May 2019 setting out the variation we provisionally intended to make 3 and invited further submissions. Finally, in a decision issued on 16 October 2019,4 we concluded that “We are satisfied that the variation to the Alpine Award contained in the draft determination issued with the May 2019 decision is appropriate and consistent with the modern awards objective in s 134(1) of the Fair Work Act 2009”.5 The variation took effect on 1 December 2019.
[8] The SDA’s application now seeks that clause 4.1 of the 2020 Award be varied to add the following:
“... The Award does not cover employees covered by the following awards:
The General Retail Industry Award 2010
The Fast Food Industry Award 2010
The Hair and Beauty Industry Award 2010.”
[9] The SDA’s application is supported by the AWU (which did not otherwise provide any submissions in the matter), and is opposed by the ASAA.
SDA’s case
[10] The SDA’s case was advanced entirely by way of written submissions, and was not supported by any evidence. It submitted that the 2020 Award covers persons performing retail sales work ordinarily covered by the General Retail Industry Award 2020 (Retail Award), beauty therapists and spa attendants ordinarily covered by the Hair and Beauty Industry Award 2010 (Hair and Beauty Award), and food service and kitchen staff ordinarily covered by the Fast Food Industry Award 2010 (Fast Food Award). It submitted that the 2020 Award was “manifestly unfair” to such employees because it provided an inferior minimum safety net of terms and conditions of employment, including in respect of base weekly rates of pay and the absence of penalty rates for evenings and weekends, compared to these general industry awards. These inferior employment conditions applied, it was submitted, not because of any difference in the nature of the work performed by these employees but because of the fact that the employer operates an alpine resort and, in that sense, unjustifiably privileges the alpine resort operator. The SDA said that it had voiced concerns about the exposure draft for the 2010 Award during the award modernisation process conducted by the Australian Industrial Relations Commission (AIRC) and, in the proceedings described earlier brought by ABI and others to widen the coverage of the 2010 Award, the SDA had “continued to voice its long held concerns with the coverage term” and had reserved its position with respect to any future application seeking to vary the coverage of the award. It submitted that neither the Commission nor the AIRC had ever heard detailed argument from any party as to why the coverage clause of the award fails to meet the modern awards objective in s 134(1) of the FW Act in respect of retail, fast food and hair and beauty workers covered by it.
[11] The SDA submitted that the 2020 Award was “strikingly unfair” to employees, and in support of that position it calculated the rates of pay for various roster scenarios under the award compared to under the Retail Award, the Fast Food Award and the Hair and Beauty Award. It submitted that there was an insufficient justification to maintain the current coverage term because of the costs associated with operating an alpine resort, or that profits may be impacted by seasonality or the weather (noting that the 2020 Award operates beyond the limited duration of the ski season and throughout the year). It submitted that the variation it sought was necessary to achieve the modern awards objective, having regard in particular to the needs of low paid employees and the need to provide additional remuneration for working unsociable evening hours and on weekends.
ASAA submissions
[12] The ASAA submitted that:
• the SDA’s application should be dismissed pursuant to s 587(1)(c) of the FW Act on the basis that it had no reasonable prospect of success because the SDA has presented no material on which the Commission can be satisfied that the variation is necessary to achieve the modern awards objective;
• the history of the 2020 Award has involved careful consideration of its coverage provisions and the nature of the alpine resorts industry in tailoring the award in its current form; and
• the SDA has presented no cogent reasons which might justify a departure from the previous Full Bench decisions which form part of the history, has not identified a significant change in circumstances which warrants a different outcome, has not provided evidence which demonstrates that the 2020 Award has not operated in practice in a way intended or that a matter critical to the proper operation of the award was not raised before the Full Bench and consequently not considered, or that the Full Bench made a patently demonstrable error.
[13] In support of these propositions, the ASAA submitted that:
• the SDA had not addressed the fact that the 2010 Award containing the current coverage, pay and penalty rates provisions had been considered by the Commission to have met the modern awards objective following the award modernisation process and the subsequent 4 yearly review;
• the issue of the coverage by the 2010 Award of retail, fast food and hair and beauty workers was ventilated in the award modernisation proceedings and in the 4-yearly review;
• the provisions of the 2020 Award have been arrived at as an integration of relevant factors particular to the relevant industry;
• the SDA had not met the task of an applicant in award proceedings to demonstrate that the posited terms of the variation sought meet the modern awards objective;
• because the variation involves a change to coverage provisions, it is necessary to consider s 163 of the FW Act, which prohibits the Commission from varying an award to remove employees from its coverage unless it is satisfied that they will become covered by another modern award other than the miscellaneous modern award that is appropriate for them;
• the 2010 Award was made based on a consideration of the fact that employees covered were engaged in a wide range of occupational groupings, there was considerable fluctuating demand for employee skills and services with peaks during the weekends and on public holidays, and that the industry was marked by a high level of casual and seasonal employment and flexible hours of work, and in respect of the application made by ABI and others in the 4 yearly review, the SDA accepted that the award was tailored for the unique circumstances of alpine lifting companies;
• there would be a reluctance to depart from a settlement of the coverage issue going to the “very core of the award” as first determined in the initial award modernisation proceedings and in the subsequent 4 yearly review;
• the assertion in the SDA submissions that the pay rates in other awards are more beneficial and that impact on employers would be minimal fails to engage with the manner in which the issues of coverage have been carefully considered by the Commission and formed an integrated part of the framework of the whole award; and
• a consideration of the matters required to be taken into account under s 134 does not support the conclusion that the variation sought is necessary to achieve the modern awards objective.
Consideration
[14] The application advanced by the SDA is nominally concerned with changing the coverage of the 2020 Award, but it is apparent from its submissions that its case is not in substance about award coverage at all, but rather about the rates of pay and lack of evening and weekend penalty rates in the award as it applies to retail, hair and beauty and fast food workers employed by alpine resorts. 6
[15] An examination of the process by which the 2010 Award was established in the course of the award modernisation process conducted by the AIRC pursuant to Pt 10A of the Workplace Relations Act 1996 is instructive as to the rationale for its coverage, rates of pay and conditions. When the AIRC gave consideration to the establishment of modern awards for the tourism industry, the ASAA with the support of the AWU called for the establishment of a “stand-alone” award for alpine resorts. On 22 May 2009, the AIRC published an exposure draft for an Alpine Resorts Award. In a Statement issued on the same day, 7 the AIRC award modernisation Full Bench relevantly said:
“[219] The draft Alpine Resorts Award 2010 covers the seasonal snowsports industry in particular, though it will also have application to alpine resorts that operate over the summer season. Employees of alpine resorts are employed in a wide range of occupational groupings and experience considerable fluctuating demand for their skills and services with peaks during weekends and public holidays. Accordingly, the industry is marked by a high level of casual and seasonal employment and flexible hours of work. There are, however, a range of differences between the conditions of employment in the New South Wales alpine resorts as compared to those in Victoria. It has been necessary to take into account the various pre-reform awards and NAPSAs applicable to the industry.
[220] New South Wales alpine resorts have a casual loading of 15%, as opposed to 25% in Victoria. While we intend to maintain the federal standard of 25%, this increase in costs will need to be considered in the context of the impact of the modern award on costs overall. This is best done when the transitional provisions are being dealt with.
[221] It has been necessary to establish a number of accommodations between the conditions in the two states in relation to such matters as the days in the week on which ordinary hours may be worked (irrespective of the season), overtime rates, maximum daily hours, meal breaks, apprenticeship rates, some allowances (including relocation reimbursement) dual role employment, minimum hours for ski instructors, and the definition of seasonal employment.”
[16] In response to this exposure draft, the SDA filed written submissions on 12 June 2009 in which it stated:
“The SDA does not complain about the breadth of coverage of the Alpine Resorts Award. The concerns of the SDA relate, however, to the wage rates allocated to the skill levels of employees employed under the proposed Alpine Resorts Award.”
[17] The SDA went on to submit that the classifications and rates of pay in the exposure draft should be adjusted to ensure an alignment of rates of pay for retail employees, beauty therapists and fast food employees with the Retail Award, the Hair and Beauty Award, the Fast Food Award and the Pharmacy Industry Award, as relevant, and made detailed proposals in this respect.
[18] At a hearing before the AIRC Award Modernisation Full Bench on 30 June 2009, the SDA reiterated this position. Its representative stated:
“…The LHMU submission appears to have hospitality workers and childcare workers removed from the award. The SDA didn't go down the same approach in terms of our written submission, however, the SDA would be quite comfortable in accepting the removal of the service workers from the award. Our prime submission was based upon the premise that retail workers, hair and beauty workers or fast food workers who are employed under the terms of the exposure draft award should have not less than the same relative classification structure as defined industry awards. That was the details of our written submission as filed.” 8
[19] The 2010 Award was made by a decision of the AIRC award modernisation Full Bench published on 4 September 2009. 9 The Full Bench relevantly stated in that decision:
“[263] We have made a number of alterations to the exposure draft. The provisions represent an amalgam of the disparate conditions found in the pre-reform awards or NAPSAs which apply to the alpine resorts industry. The seasonal nature of the operations covered by the award has been taken into account in relation to the types of employment permitted and the conditions which apply to them, including the pay arrangements. The resulting provisions are intended to accommodate the summer as well as the winter seasons. A number of the changes which were sought involved alterations in standard provisions in modern awards. Generally we have not altered standard provisions.
[264] The minimum wages applying at various levels have been altered in some respects so as to be better aligned with other relevant awards, particularly those applying in the hospitality industry. We have also altered the levels of a limited number of hospitality classifications. There have been some alterations to the allowances relating to clothing and travel which are largely agreed but in other respects bring the provisions into line with the award arrangements which already apply. There are a number of other minor changes….”
[20] It is therefore apparent from the above history that:
(1) The coverage, rates of pay and conditions in the 2010 Award were determined by the AIRC award modernisation Full Bench having regard to the seasonality of the snowsports industry, the fact that some alpine resorts operate over the summer season, the wide range of occupational groupings utilised in alpine resorts, the fluctuating demands for the skills and services of employees with peaks during weekends and public holidays, the existing high level of casual and seasonal employment and flexible hours of work, and existing conditions of the employment in the industry in New South Wales and Victoria.
(2) The fact that the exposure draft for the 2010 Award had pay rates and conditions for retail, hair and beauty and fast food employees working in alpine resorts that were less beneficial than under the general industry awards for workers in these categories was specifically raised by the SDA before the AIRC award modernisation Full Bench and considered by that Full Bench, and the 2010 Award as made reflects the outcome of that consideration.
(3) The SDA expressly stated that it did not object to the proposed coverage in the exposure draft for the 2010 Award, which arose from a proposal made by the ASAA and supported by the AWU, and the 2010 Award was made with that scope of coverage.
[21] The 2010 Award, as made, presumptively achieved the modern awards objective. The SDA does not contend that there has been any relevant change in circumstances since the 2010 Award was made. Nor does it contend that the AIRC award modernisation Full Bench made some error in its consideration of the coverage of the award, which the SDA did not oppose, nor that it overlooked the differential in rates and conditions compared to the relevant general industry awards, which the SDA brought to its attention.
[22] The 2010 Award was, like all other modern awards, reviewed as part of the Commission’s conduct of the 4 yearly review of modern awards previously mandated by the FW Act. The SDA did not at any stage in the course of that review make a submission that the 2010 Award did not meet the modern awards objective because of its coverage, rates of pay or penalty rates provisions. As we have earlier detailed, the coverage provisions of that award were the subject of intensive review by us as a result of the applications made by ABI and others and by Mount Hotham. In our 27 August 2018 decision 10 we affirmed the rationale for the existence of a separate award covering alpine resorts, and in our 16 October 2019 decision,11 we adjusted the drafting of the coverage provisions to ensure that the modern awards objective was met.
[23] In the face of that history, we do not consider that the SDA has advanced any persuasive reason why there should now be a change in the coverage provisions of the 2020 Award to remove retail, hair and beauty and fast food workers from the award’s coverage and to place them under general industry awards. Its submissions simply do not address why the rationale for the existing coverage of the 2020 Award, including the fact that alpine resorts are run as large integrated businesses, have a highly diverse range of employee functions and, at least to some degree, move employees between functional roles based on business and weather conditions, should no longer be treated as of significance. It is certainly not suggested that the circumstances giving rise to this rationale, which the SDA accepted or at least acquiesced to in 2009, have in any way changed.
[24] That some employees under a particular award might have a higher rate of pay if they were covered by another award is not of itself a reason why the coverage of the first award should be changed. Pay rates in particular awards are set taking into account the circumstances of the industry or occupations which they cover. It is necessary for relativities in key classifications to be maintained across awards, but in that respect it appears to us that, with the possible exception of a Level 6 employee, the rates of pay for the Alpine Resort Worker classifications in the 2020 Award are properly aligned with the benchmark classifications in the Manufacturing and Associated Industries and Occupations Award 2020. If a relevant union considers that minimum rates of pay in a modern award should be increased, then the proper course is to make an application to do that in direct terms. It would be necessary, in respect of such an application, for the applicant to demonstrate that the variation is justified by work value reasons and that making the variation outside the system of annual wage reviews is necessary to achieve the modern awards objective, as required by s 157(2). Seeking to achieve an increase in wages by moving employees from the coverage of one award to another seems to us to be a sleight of hand to avoid the proper operation of s 157(2).
[25] Likewise, if any adjustment is sought to penalty rates, this should be sought directly rather than through the indirect means of a change in coverage. In this case, the SDA has not demonstrated that the rationale for the hours of work provisions in the award identified by the AIRC award modernisation Full Bench has been vitiated by any change of circumstances. Nor, beyond identifying that employees would become entitled to penalty rates for evening and weekend work if they were covered by different awards, has the SDA attempted to make out any positive case as to why the circumstances of their employment render it necessary for retail, hair and beauty or fast food workers to receive such penalty rates. Because no evidence has been adduced in support of the SDA’s application, there is no evidence before us as to the pattern of working hours of such employees or the disabilities that may be involved in them working on evenings or weekends in the context of employment in an alpine resort. In respect of the latter consideration, it could not simply be assumed, for example, that the level of disability in working on a weekend for a person sequestered in an alpine resort is the same as that of a person working in a location where they have access to the usual level of social and family activities.
[26] We are not persuaded that the variation sought by the SDA is necessary to achieve the modern awards objective in s 134(1) of the FW Act. It has not been demonstrated that the coverage of the 2020 Award has ceased to be fair and relevant, having regard to the rationale for the establishment of an Alpine Resorts Award in the first place. The lack of any evidence does not permit us to be positively satisfied that any of the matters required to be taken into account under s 134(1) weigh in favour of the grant of the application. In respect of s 134(1)(a), while it appears likely that the grant of the application would, all things being equal, improve the pay of employees who may be characterised as low paid, this does not take into account the possibility that alpine resorts may adjust their hours of operation or contract out work if faced with penalty rate impositions and thus detrimentally affect the low paid. In relation to s 134(1)(da), no affirmative conclusion may be stated for the reasons already discussed. The considerations in s 134(1)(d), (f) and (g) would likely weigh against the grant of the application because alpine resorts would be faced with the instability, complexity and higher regulatory burden of dealing with multiple awards, which would inhibit their flexibility to move employees between different functions and thus their productivity. They would also be faced with higher employment costs which might cause them to make changes to their hours of operation and affect their capacity to employ persons in the same number as currently. The other considerations are likely to be neutral.
[27] We emphasise that these conclusions have been reached in circumstances where no evidence has been placed before us in support of the application. We do not exclude the possibility that a proper evidentiary case might lead to different conclusions being reached in respect of s 134(1).
[28] Because we are not persuaded that the grant of the SDA’s application is necessary to achieve the modern awards objective, as required by s 157 of the FW Act, the application must be dismissed.
VICE PRESIDENT
Determined on the basis of written submissions.
Printed by authority of the Commonwealth Government Printer
<PR727638>
2 Ibid at [64]
5 Ibid at [12]
6 Cf. Registered and Licensed Clubs Award 2010 - application by Clubs Australia Industrial [2019] FWCFB 349 at [115]
8 Transcript, 30 June 2009, PN 3653