STATEMENT

Fair Work Act 2009
Clause 48 of Schedule 1

Casual terms award review 2021
(AM2021/54)

Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Act 2021 — casual amendments — review of modern awards.

[1] In our Statement and Directions issued on 23 April 2021, 1 we indicated that we would express provisional views concerning the questions posed in the Discussion Paper published on 19 April 20212 before the scheduled hearing dates. In our further Statement issued on 9 June 20213 we stated that we would defer expressing any provisional views until after the parties had filed any reply submissions (which were due by 4.00pm on 16 June 2021).4

[2] The parties have now filed their reply submissions. Those submissions are summarised in the Submission Summary Document in Attachment A to this Statement.

[3] Our provisional views concerning the questions posed in the Discussion Paper and one other matter, having regard to all the submissions filed to date, are contained in Attachment B to this Statement.

[4] The matter is listed for hearing before us on 24-25 June 2021. Parties intending to participate in the hearing are invited to identify in their oral submissions any of the provisional views they wish to take issue with and to focus their submissions on those matters.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

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Attachment A – Submissions Summary Document

1. Background

[1] On 27 March 2021 the Fair Work Act 2009 (Cth) (Act) was amended by Schedule 1 to the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 (Cth) (Amending Act). The amendments included introducing a definition of ‘casual employee’ in s.15A of the Act and casual conversion arrangements in Division 4A of Part 2-2 of the Act (casual conversion NES).

[2] The Casual Terms Review is being conducted in 2 stages. In the first stage this Full Bench will consider the nature and scope of the Review, and review ‘relevant terms’ (as defined in cl.48 of Schedule 1 of the Act) in an initial group of 6 modern awards (Stage 1 awards). The 6 Stage 1 awards are the:

•  General Retail Industry Award 2020 (Retail Award)

•  Hospitality Industry (General) Award 2020 (Hospitality Award)

•  Manufacturing and Associated Industries and Occupations Award 2020 (Manufacturing Award)

•  Educational Services (Teachers) Award 2020 (Teachers Award)

•  Pastoral Award 2020 (Pastoral Award), and

•  Fire Fighting Industry Award 2020 (Fire Fighting Award).

[3] On 19 April 2021 the Commission published a Discussion Paper prepared by staff of the Commission (Discussion Paper) which sought to identify relevant terms in the initial 6 awards, discussed the interaction of those terms with the Act as amended, and raised questions for interested parties to consider.

[4] On 23 April 2021 we issued a Statement and Directions in relation to the Casual Terms Review. 5 The Directions required any interested party to lodge submissions by 4.00pm on 24 May 2021 responding to the questions in the Discussion Paper and addressing any other issues the parties wished to raise. The Directions also required any interested party proposing a variation of a Stage 1 award to lodge a draft award variation determination.

[5] Twenty-four interested parties lodged submissions in Stage 1 of the Casual Terms Review:

•  Australian Business Industrial and NSW Business Chamber (ABI)

•  Australian Chamber of Commerce and Industry (ACCI)

•  Australian Council of Trade Unions (ACTU)

•  Australian Education Union (AEU)

•  Australian Hotels Association (AHA)

•  Australian Industry Group (Ai Group)

•  Associations of Independent Schools (AIS)

•  Allstaff Australia (Allstaff)

•  Australian Manufacturing Workers’ Union (AMWU)

•  Australian Nursing and Midwifery Federation (ANMF)

•  Australian Workers Union (AWU)

•  Construction, Forestry, Maritime, Mining and Energy Union– Manufacturing Division (CFMMEU – Manufacturing)

•  Construction, Forestry, Maritime, Mining and Energy Union- Mining and Energy Division (CFMMEU – M&E)

•  Birch Carroll and Coyle Limited and Others (Cinema Employers)

•  Community and Public Sector Union (CPSU)

•  Flight Attendants’ Association of Australia (FAAA)

•  Housing Industry Association (HIA)

•  Independent Education Union (IEU)

•  Master Grocers Australia (MGA)

•  National Farmers’ Federation (NFF)

•  National Retail Association (NRA)

•  Shop, Distributive and Allied Employees Association (SDA)

•  United Firefighters Union (UFU)

•  United Workers’ Union (UWU)

[6] These submissions are summarised under each of the 32 questions in the Submission Summary Document published on 9 June 2021.

[7] On 9 June 2021 we issued a Statement 6 (the June Statement) in which we made some observations about the positions put by interested parties in response to the questions posed in the Discussion Paper.

[8] This document summarises the reply submissions and expresses our provisional views in respect of a range of matters.

2. Reply submissions

[9] Submissions in reply were made by the following:

•  ABI

•  ACCI

•  AEU

•  Ai Group

•  AMWU

•  ACTU

•  AHA

•  AWU

•  CFMMEU (Manufacturing) 7

•  CFMMEU (Construction and General Division) (CFMEU C&G) 8

•  Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (CEPU) 9

•  IEU

•  Industrial Relations Victoria (IRV)

•  MGA

•  NRA

•  SDA

[10] In the June Statement we set out several observations about the positions put by interested parties (see [12]-[115]). The reply submissions in respect of these observations are set out below. The summary which follows primarily seeks to record the key positions of interested parties in response to the observations made in the June Statement and does not attempt to summarise their detailed reasoning.

2.1 Meaning of ‘consistent’, ‘uncertainty or difficulty’ and ‘operate effectively’

1. Is it the case that the Commission does not have to address the considerations in s.134(1) of the Act in varying an award under Act Schedule 1 cl.48(3), but an award as varied under cl.48(3) must satisfy s.138 of the Act?

[11] In the June Statement the Full Bench observed that there was general consensus amongst interested parties that:

•  on a strict reading, s.134 of the Act does not apply to the Casual Terms Review as the Commission is not exercising its modern award powers, but

•  any award as varied under Schedule 1 cl.48(3) of the Act must satisfy s.138 of the Act.

[12] In its reply submission ACCI clarified its position as follows:

‘It is uncontroversial that cl.48(2)(b) requires the Casual terms review to consider whether there is ‘any uncertainty or difficulty relating to the interaction’ between an award containing a relevant term and the Act as amended. Where there is such uncertainty or difficulty, cl.48(3) requires that the award be varied to make it ‘operate effectively’ with the Act as amended.

An award, as varied pursuant to cl. 48(3) of Schedule 1, must satisfy s. 138 of the Act, as the requirement imposed by this section is an ongoing one, which at all times means an award must only include terms to the extent necessary to achieve the modern awards objectives. Accordingly, the Commission must give consideration to the modern awards objectives prescribed by s.134(1) of the Act if pursuant to clause 48(3) of the Act the Commission is required to vary an award for the purposes of the Review, in order to ensure that s 138 of the Act is satisfied…

…the Commission decides that it must vary a modern award under the Review, it must also be satisfied that the proposed variation goes no further than what is necessary to achieve the modern awards objectives as set out in s 134(1).

Practically therefore the appropriate point for the Commission to consider the modern awards objectives in s134(1) during the Review is when considering a proposed variation/s, either put forward by a party or at its own initiative.’ 10

[13] In its reply submission ABI submits that the parties are broadly aligned with respect to this question.

[14] In its reply submission, Ai Group agrees with the observation in the June Statement and broadly concurred with the accuracy of the two propositions; but suggest that the relevance of s.134 to the conduct of the Review ‘is somewhat more nuanced’. At [21] – [32] of its reply submission Ai Group submits:

‘… we seek to clarify that it is our view that clause 48 does not expressly require the Commission to ‘address’ the considerations flowing from s.134(1) of the Act in varying an award pursuant to clause 48. However, we similarly say that they are far from irrelevant considerations in the conduct of the Review...

The power to make a determination to vary an award in the manner contemplated by clause 48 flows from clause 48 itself. Consequently, the Commission is not exercising a modern award power as contemplated by s.134(2) when it varies an award and the Commission is therefore not compelled to apply the modern awards objective pursuant to s.134(2).

However, depending upon the nature of the variation contemplated, a consideration of the matters identified at s.134(1) may be necessitated in the Commission’s deliberations. Relevantly, the requirement flowing from clause 48(3) that the Commission ‘make a determination varying the modern award to make the award consistent or operate effectively with the Act as so amended’ will potentially require, at least in some instances, that the Commission ensure that any such variation not result in the inclusion or retention of awards terms that would be contrary to the operation of s.138. This would in turn require a consideration of the matters identified in s.134(1). A determination that would vary an award in a manner that would cause it to be inconsistent with s.138 would not meet the requirements of clause 48(3), as it would not result in the award being consistent or operating effectively with the Act, as amended.

It also appears to us that s.134(1) provides an ongoing obligation upon the Commission to ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions, taking into account the matters identified in that section. That is, we suggest that the provision potentially does more than merely define what constitutes the modern awards objective. If the provision operates in this manner, it creates an ongoing obligation to ensure that the content of awards align with the requirements of s.138. Viewed in this context, s.134(1) should guide the approach to be taken by the Commission in varying awards pursuant to clause 48, even though s.134(2) does not require that the modern awards objective applies to the exercise of a power under clause 48.

Further, the exercise of the Commission’s discretion about the appropriate form that any determination issued under clause 48 should take, should be exercised taking into consideration the broader content and purpose of the legislative scheme, including in particular the modern awards objective and the object in s.3 of the Act to ensure a ‘guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through….modern awards 11...

Regardless of any divergence of approach between the aforementioned peak councils as to the scope or operation of clause 48, we doubt that it would not be common ground that the Commission should seek to ensure that awards, as varied through the current process, comply with s.138. We certainly urge the adoption of this approach.

More broadly, the Commission should seek to approach the Review in a manner that seeks to ensure that awards constitute a fair and relevant minimum safety net of terms and conditions as contemplated by s.134(1). In this respect, we submit that, contrary to the approach urged by the ACTU 12, the Commission can and should draw on its powers under Part 2-3 of the Act to supplement the jurisdiction contemplated for the purposes of the Review.

To the extent that the Commission considers using its general modern award powers, it should of course do so in a way that is reflective of the material before it and the limited timeframes for the Review. Nonetheless, there should not be some presumed imperative to maintain the current content of modern awards (in substance if not form) regardless of the changed circumstances of the amendments to the Act. In this regard we respond to the ACTU’s submissions regarding the history and context of current award terms and observe that blindly retaining current provisions on the assumption that they are a product of their ‘unique industrial history’ or an ‘outcome of industry specific submissions or decisions’ should not be seen as precluding a reconsideration of current terms of the safety net in light of the modified legislative framework.

The recent legislative reforms are a catalyst for the Commission to ensure that the awards complement and facilitate a greater level of clarity and consistency in relation to the regulation of casual employment introduced by the legislature. Whilst we do not seek to exclude the possibility that there are justifiable award specific reasons for adopting different approaches to matters such as the definition of ‘casual employee’ or the approach to be taken in relation to casual conversion; such differences should not be retained for reasons of historical inertia absent some critical assessment of the necessity for their retention.’ 13

[15] The ACTU, supported by various unions, submits as follows:

‘The objects of the FW Act envision a role for both the NES and modern awards in establishing a guaranteed safety net. Accordingly, the ACTU submits that a purposive approach to constructing the term “inconsistent” warrants a construction which would allow for modern awards to contain terms that are not identical to the NES. This contention is further reinforced by the FW Act s 55, which allows for the inclusion in modern awards of terms which are ancillary, incidental or supplementary to the NES.

In this light, the ACTU submits that modern award terms should not be considered to be “inconsistent” merely because they differ from the newly enacted provisions of the FW Act, but rather where there is a fundamental tension or incompatibility between their operation and the operation of the NES.’ 14

[16] In reply to the ACTU submissions, Ai Group submits that ‘there is no cause for reading down the meaning of ‘consistent’ in clause 48 to essentially require nothing more than an assessment of whether there is an incompatibility in the operation of the respective provisions’. 15

[17] Ai Group also contends that ‘neither the contemplation in the objects of the Act of a safety net comprised of both awards and the National Employment Standards (NES) or the existence of s.55 justifies the ACTU’s proposed approach to interpreting what is meant by ‘consistent’ in clause 48. The mere fact that it may be possible to craft award terms that supplement the NES does not mean that the legislature intended or even contemplated that the Commission might adopt such an approach in the course of the Review’. 16

[18] The SDA advances the following submission in relation to the operation of clause 48(3) that:

‘… it is an inference properly to be drawn from the language of clause 48 of the Amending Act that a relevant term does not need to be identical to relevant provisions of the Act as amended in order to be retained. A relevant term may in fact confer or provide for different (but not inconsistent) or better rights or entitlements other than those for which the Act provides without necessarily triggering any obligation on the part of the FWC to determine to vary the award.’ 17

[19] In reply, Ai Group submits that ‘the assessment of whether terms are ‘consistent’ with the Act, as amended, should not turn on whether the award deliver ‘better’ rights or entitlements’ but should instead be approached in the manner proposed in Ai Group’s initial submissions.

[20] In its reply submission, Ai Group relies on [47] to [59] of its initial submission and urges an interpretation of clause 48(2)(a) that ‘emphasises a need to consider whether there is substantive alignment between the approach to matters dealt with in the Amending Act and the awards’. Ai Group notes that this would include the new definition of ‘casual employee’ and the new NES provisions relating to casual conversion. Ai Group contends that such an approach is supported by an ordinary reading of the relevant words of the statute, having regard to their context and legislative purpose.

[21] At [49] of its initial submission, Ai Group set out the reasoning in support of its submission:

‘… an ordinary reading of clause 48(2)(a) of Schedule 1 to the Act suggests that it requires a consideration of whether the ‘relevant term’ ‘accords’ and ‘is compatible with’ the Act. Crucially, we contend that it also requires a consideration of whether the relevant terms are ‘constantly adhering to the same principle or course’ as adopted in the Act. By extension, clause 48(3)(a) is satisfied if the ‘relevant term’ does not accord with or is not compatible with the Act, or if it in some way departs from the principles or course adopted in the Act in relation to the same subject matter.’

[22] In its reply submission the SDA notes that the position of Ai Group, the NRA, ACCI, and ABI is broadly consistent with the SDA’s position.

[23] The SDA also submits that the position of the MGA is not supported by the Act, the objects of the Act with reference to the explanatory memoranda and relevant Minister’s speeches nor the Discussion Paper of the FWC.

[24] The AMWU relies on its initial submissions and the submissions of the ACTU to the extent that these are contrary to the submissions of the Employers.

[25] The IEU relies on the reasoning in paragraphs [17]–[22] of its initial submissions.

2.2 The Fire Fighting Award

2. Is an award clause that excludes casual employment (as in the Fire Fighting Award) a ‘relevant term’ within the meaning of in Act Schedule 1 cl.48(1)(c), so that the award must be reviewed in the Casual terms review?

[26] In the June Statement the Full Bench observed that, of the interested parties that responded to this question, there was general consensus that:

•  the Fire Fighting Award does not contain any relevant terms within the meaning of the Act Schedule 1, cl.48(1)(c)

•  the Commission has no jurisdiction to review the Award under cl.48

•  in the alternative, if the Fire Fighting Award does contain a relevant term, there is no inconsistency with the Act as amended and no uncertainty or difficulty relating to the interaction between the Award and the Act as amended, and

•  no further consideration of the Fire Fighting Award should occur as part of the Casual Terms Review.

[27] We also noted that some of the submissions address a similar issue in relation to the Black Coal Mining Award 2010. This Award will be considered in Stage 2 of the Casual Terms Review.

[28] In its reply submission the ACTU relies on its earlier submission and supports the submission of the UFU and the CFMMEU – Mining and Energy Division.

[29] The ACTU also notes that the UFU, AI Group, ACCI, and ABI submit that there is no relevant term, with the UFU, AI Group and ACCI submitting that at any rate there is no uncertainty or inconsistency.

[30] The ACTU submits that, in the absence of any party pressing for its inclusion, the Fire Fighting Award should be excluded from the review on jurisdictional grounds, and the relevant principle so determined.

[31] In its reply submission ABI submits that ‘there appears to be a general consensus about the answer to this question and no further submissions are necessary’. 18

2.3 Definitions of casual employee/casual employment

3. Has Attachment 1 to the Discussion Paper wrongly categorised the casual definition in any award?

[32] In the June Statement the Full Bench observed that there was broad agreement with the categorisation of the casual definitions in awards in Attachment 1 to the Discussion Paper.

[33] However, some parties raised issues or queries in relation to the categorisation of the following awards:

•  Building and Construction General On-Site Award 2020

•  Car Parking Award 2020

•  Children’s Services Award 2020

•  Cleaning Services Award 2020

•  Corrections and Detention (Private Sector) Award 2020

•  Hydrocarbons Field Geologists Award 2020

•  Live Performance Award 2020

•  Market and Social Research Award 2020

•  Mobile Crane Hiring Award 2020

•  Nursery Award 2020

•  Pest Control Industry Award 2020

•  Ports, Harbours and Enclosed Water Vessels Award 2020

•  Racing Clubs Events Award 2020

•  Racing Industry Ground Maintenance Award 2020

•  Registered and Licensed Clubs Award 2020

•  Storage Services and Wholesale Award 2020, and

•  Transport (Cash in Transit) Award 2020.

[34] These matters will be considered when those awards are reviewed in Stage 2 of the Casual Terms Review.

[35] Further, in relation to the awards being considered in Stage 1 of the Review, while the NFF and the SDA agreed or did not object to the categorisation of clause 11.1 of the Pastoral Award and the Retail Award respectively, they queried whether clause 11.2 of those Awards define casual employment and asserted to the effect that those clauses should not be regarded as relevant to or be disturbed by the Review.

[36] In the June Statement we said that we would consider these submissions further following the filing of any submissions in reply.

[37] In its reply submission the NRA disagrees with the position advanced by the SDA and submits:

‘Whilst clause 11.2 could, on some readings, be taken as a directive to an employer rather than a definition of casual employment in and of itself, the practical effect of clause 11.2 is to denote as a casual employee any individual who does not fit within the definitions of full-time or part-time employment.’ 19

[38] The MGA adopts a similar position and submits that cl.11.2 of the Retail Award is a relevant term because it attempts to define casual employment in reference to what it is not and does not agree with the SDA’s position that cl.11.1 and 11.2 of the Retail Award are ‘wrongly categorised’ as ‘engaged as a casual’ and ‘residual category’ type definitions.

[39] In its reply submission, Ai Group agrees with the proposition that clause 11.2 of the Retail Award does not define or describe casual employment, as contemplated by cl.48(1)(c)(i), but submits that:

‘… falls within the scope of clause 48(1)(c)(ii) in that it deals with the circumstances in which casuals are to be employed; those circumstances being that the employee is not covered by clause 9 or clause 10 of the award. Clause 11.2 also arguably falls within the ambit of clause 48(1)(c)(iii), as we have previously submitted.

Regardless of these technicalities, clause 11.2 is obviously interconnected with clause 11.1. In reviewing clause 11.1, it is appropriate that the Commission also consider other provisions of the award that operate in conjunction with ‘relevant terms’ and whether there is, as a consequence of the combined operation of these provisions, any difficulty or uncertainty relating to the interaction between the award and the Act, as amended. Further, the Commission is not limited to making a determination varying only ‘relevant terms’. It may vary clause 11.2 in order to make the award consistent or operate effectively with the Act, if it makes the finding contemplated in clause 48(3)(a) or 48(3)(b).’ 20

[40] Ai Group also confirmed its view that varying the definition of casual employment under the Retail Award to align with the new statutory definition would ameliorate problems associated with the continued operation of clause 11.2 in the changed statuary context and submits that if the Commission does not align the definition of casual employee in the Retail Award with that in s.15A of the Act then clause 11.2 should be deleted.

[41] In reply the SDA notes the respective position of the parties.

4. For the purposes of Act Schedule 1 cl.48(2):

•  is the ‘engaged as a casual’ type casual definition (as in the Retail Award, Hospitality Award and Manufacturing Award) consistent with the Act as amended, and

•  does this type of definition give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

[42] In the June Statement the Full Bench observed that most submissions contended that the ‘engaged as a casual’ type casual definition (as in the Retail, Hospitality and Manufacturing Awards) was not consistent with the Act as amended and gives rise to uncertainty or difficulty relating to the interaction between the Awards and the Act as amended (or at the least, has the potential to do so).

[43] The position of Ai Group at [81] to [85] of their initial submissions is broadly consistent with the position of the ACTU at paragraphs [44] to [45] of their initial submissions. ACCI and ABI advance similar submissions.

[44] The NRA submits that a concurrent interpretation of both definitions is open to the Commission; although it accepts at that it could give rise to uncertainty.

[45] The MGA describes the casual definition in the Retail Award as ‘inadequate’ and refers to the advantages of the new definition in terms of clarity.

[46] The only party to put a substantively different view was the SDA which submitted, in the context of the Retail industry, that the ‘engaged as a casual’ type definition in the Retail Award does not, in and of itself, create inconsistency or uncertainty or difficulty with the Act as amended.

[47] In reply the SDA submits that ‘it is not, at this early stage, clear whether the ‘engaged as such’ definition is inconsistent with the Amending Act’ and that ‘were the FWC to find that the definitions were in fact inconsistent, that any variation should be constrained in its effects to the objects of the Act.’ 21

[48] In its reply submission the ACTU supports the submissions made by the IEU and the AEU and disagrees with the submission of Ai Group to the effect that maximum limits on casual engagement in the Teachers’ Award should be removed – and submits that:

1. These terms are non-definitional by nature and therefore do not come within the jurisdiction of the Review; and,

2. At any rate, these terms are not inconsistent with the Act as amended, nor do they give rise to any uncertainty or difficulty.

[49] On this basis, ACTU submits that these features of the current prescription should be retained.

[50] The ACTU also responds to the submission about inconsistency and submits that:

‘…an NES provision and an Award provision do not need to be identical to be consistent, and moreover, that where there is difference: so long as the two provisions are capable of side-by-side operation, uncertainty or difficulty does not necessarily arise. There are many cases in which a fair work instrument may provide better (i.e. not identical) conditions when compared to the NES, but so long as the obligation is clear, there is no uncertainty or difficulty. Difficulty does not equate to a preference that an obligation did not exist.

To the extent that submissions are made in favour of removing aspects of the “residual category” definition, the ACTU submits that our earlier submission – in favour of retaining the procedural aspects of these terms – offers a sensible pathway forward.’ 22

[51] In its reply submission, Ai Group agrees with the proposition that there appears to be broad agreement that the type of definition described in question 4 is not consistent with the Act as amended and gives rise to uncertainty or difficulty as contemplated by clause 48.

[52] As to the SDA’s position, Ai Group submits that the SDA ‘does not provide detailed or persuasive reasoning in support of its position’ 23 and that the Commission should find that the ‘engaged as a casual’ definition is not consistent with the Act as amended and gives rise to uncertainty or difficulty as contemplated by clause 48, for the reasons set out in its initial submission at [81] – [85].

[53] ABI also addresses the SDA’s submission in its submission in reply and contends that cl 11.2 of the Retail Award is a ‘definitional clause’ (in that it is an operative clause that categorises certain employees as casual employees) and submits:

‘In ‘noting’ the ACTU Submission at [45], the SDA appears to acknowledge that the retention of the definition could give rise to uncertainty or difficulty, albeit that the SDA Submission itself notes that no uncertainty or difficulty arises. With respect, it is not clear whether it is being suggested that a difficulty or uncertainty is raised. For the reasons already stated, ABI and NSWBC contend that such uncertainty or difficulty does arise.’ 24

[54] In its reply submissions NRA reiterates that the ‘engaged as such’ definition must necessarily derive its content from the Act itself, which subsequent to its amendment now includes a definition of casual employment and submits:

‘Whilst this may not necessarily be inconsistent with the Act as amended, it does not provide any particular assistance to the lay reader of the Retail Award. As such, whilst legal minds may not perceive uncertainty, the NRA reiterates its position that such uncertainty that may arise is a matter of practical application rather than legal interpretation.’ 25

[55] MGA also disagrees with the SDA’s position and submits that ‘engaged as a casual’ type definition in the Retail Award is definitional with respect to casual employees as it attempts to define casual employees in reference to what casual employees are not.

[56] MGA agrees with the Ai Group that the ‘engaged as a casual’ type definition in the Retail Award is not consistent with the Act in that an employee could be designated as a casual under the ‘engaged as a casual’ type Award definition but not be a casual under the definition in the Act, and vice versa.

[57] MGA also agrees that the ‘engaged as a casual’ type definition reflects a substantively different approach to the definition in the Act and submits:

‘Due to this different approach, MGA/TMA agrees that the ‘engaged as a casual’ type definition gives rise to uncertainty or difficulty in relation to the interaction between the Retail Award and the Act as amended…

MGA/TMA submits that the inconsistency and uncertainty or difficulty renders the ‘engaged as a casual’ type definition inadequate with the definition in the Act. The more definitive construction in the Act as amended will provide a clearer understanding of the casual employment relationship for casual employees engaged under the Retail Award. As such, MGA/TMA submits that the current ‘engaged as a casual’ type casual definition in the Retail Award requires amendment to include express reference to s.15A of the Act in order to provide consistency with the Act as amended.’ 26

5. For the purposes of Act Schedule 1 cl.48(2), are the employment arrangements described as ‘casual’ under Part 9 of the Pastoral Award consistent with the definition of ‘casual employee’ in s.15A of the Act?

[58] In the June Statement the Full Bench observed that the parties that responded to this question agreed that:

•  cl.11.1 of the Pastoral Award should be varied to align with the definition in s.15A of the Act, and

•  if this course is adopted, there will not be any inconsistency, difficulty or uncertainty with the operation of Part 9 of the Pastoral Award and the Act as amended.

[59] The NFF and AWU further submitted that the shearing conditions in the Pastoral Award have an extremely long, complex and unique industrial history and the Review should avoid disturbing their operation.

[60] In its reply submission the SDA noted the respective position of the parties.

6. For the purposes of Act Schedule 1 cl.48(2):

•  are ‘paid by the hour’ and ‘employment day-to-day’ casual definitions (as in the Pastoral Award and Teachers Award) consistent with the Act as amended

•  are ‘residual category’ type casual definitions (as in the Retail Award and Pastoral Award) consistent with the Act as amended, and

•  do such definitions give rise to uncertainty or difficulty relating to the interaction between these Awards and the Act as amended?

[61] In the June Statement the Full Bench observed that there were a variety of views expressed in submissions as to the status and effect of ‘paid by the hour’, ‘employment day-to-day’ and ‘residual category’ type definitions in the Awards.

[62] Of those parties who responded to this question, several submitted that these types of definitions may be or are inconsistent with the Act and give rise (or potentially give rise) to uncertainty or difficulty relating to the interaction between the Awards and the Act as amended.

[63] In respect of the ‘day-to-day’ requirement in the Teachers Award, the AIS submitted that it is unclear whether this imposes a further limitation on the new statutory definition of casual employee, but that this therefore presents difficulties as to how the Award definition should be applied for the purposes of the Award and the NES. The IEU submitted that the Teachers Award definition of casual employment is not inconsistent with the definition of casual employee in s.15A of the Act and does not give rise to uncertainty or difficulty.

[64] The ACTU submission, supported by a number of unions, was that ‘paid by the hour’ and ‘employment day-to-day’ definitions must be carefully examined to establish their true function, and ‘residual category’ type definitions (to the extent they are definitional) represent the outcome of extensive consideration in relation to their relevant industries and have previously been held necessary to meet the modern awards objective. Accordingly, the ACTU submitted that to the extent these definitions are inconsistent with the Act, their substantive operation should be preserved to the extent possible.

[65] In addition to the ACTU, Ai Group and the SDA also queried whether the ‘residual category’ type definition forms part of the casual definitions in awards, as follows:

•  Ai Group said that while this is unclear, such clauses are relevant terms for the purposes of cl.48(1)(c)(iii) and their retention will create an inconsistency with the Act as amended or an uncertainty or difficulty. This may be ameliorated by replacing the definition of casual employment in the award with one that aligns with s.15A.

•  The SDA submitted that cl.11.2 of the Retail Award is not definitional with respect to casual employees and the proper according of rights consonant with an employee’s status as a permanent full-time and permanent part-employee are outside the Review’s terms of reference.

[66] In its reply submission ACCI submitted:

‘ACCI acknowledges that there are a range of different views submitted by a number of parties in relation to the ‘paid by the hour’, ‘employment day-today’ and ‘residual category’ types of casual definitions, we submit however that there is generally broad consensus that such categories may give rise to inconsistency, uncertainty or difficulty in their interaction with the Act as amended. Though reasoning for such inconsistency, uncertainty or difficulty may differ between submissions.

Whilst the ACTU submission contends that the residual type casual definition represents the outcome of extensive consideration in relation to relevant industries, it has previously been found to meet the Modern Awards objectives, and should be preserved to the extent possible, ACCI respectfully submits that the Commission is directed under the review provisions1 to vary the award/s to ensure they are consistent or operate effectively with the Act. The provisions do not direct the Commission to consider the development or otherwise of specific award casual definitions in varying awards under the Review.

Indeed if the Commission is minded to vary such award terms it should look to ameliorate the inconsistency, uncertainty or difficulty in their interaction with the Act by replacing such definitions of casual employment in the awards with one that aligns with s15A of the Amending Act.’ 27

[67] In its reply submission Ai Group observes, in response to the IEU submission, that the operation of substantively different definitions for ‘casual employee’ and ‘casual employment’ within an award is ‘obviously unduly complex and apt to confuse’ and ‘it is not an outcome that the Commission should permit to operate going forward; even if it requires the Commission to act of its own motion (and independently of any compulsion to act pursuant to clause 48) to vary the awards pursuant to ss.157 or 160’.

[68] Ai Group continues to rely on its initial submission at [93] – [97] and submits that the ACTU’s submission is ‘highly generalised’:

‘It does not provide any details of the purported ‘extensive consideration’ previously given to such provisions, or of the extent to which there has been a serious or detailed assessment by the Commission of the merits of such provisions. Accordingly, the submissions should not be given any significant weight…

…the Commission should not adopt the subsequent suggestion from the ACTU that awards should include a procedural requirement to consider the nature of the work to be performed and whether it is better suited to permanent employment. This is not currently a feature of the Retail Award or indeed a requirement that is generally found in awards. This is a radical proposal that ought not be entertained. No persuasive case for it has been made out and there is no obviously justifiable basis for awards curtailing an employer’s capacity to offer employment on either a casual or permanent basis in circumstances where employees have access to a legislative right to access a pathway from casual to permanent employment under the NES.’ 28

[69] In its reply submission ABI reiterates the position put in its initial submissions as follows:

‘17. As developed in our primary submission, the use of different definitions to define the same term is highly likely to give rise to uncertainty or difficulty and does so in these examples.

18. To the extent that employees can be categorised differently under the Act clause and the relevant Award clause, a difficulty, uncertainty or inconsistent arises almost axiomatically.

19. The ACTU’s submission seeking the preservation ‘to the extent possible’ of clauses which have been the subject of extensive consideration is not supported or provided with a suggested draft determination.

20. In the abstract, it is therefore difficult to engage with this submission.

21. That being said, regardless of the extent of the consideration of the current clauses, or whether they were said to satisfy the modern awards objective, the Full Bench’s responsibility in this review is to assess consistency, certainty and difficulty with respect to the new statutory provision.

22. In our view the obvious and appropriate course is to adopt the statutory definition in the relevant awards.’ 29

[70] In its reply submission the NRA agreed with the proposition that the definition of full-time and part-time employment is outside the scope of this review, but notes that clause 11.2 of the Retail Award does not seek to define full-time or part-time employment, but rather seeks to define casual employment as ‘anything other than full-time or part-time.’ The NRA reiterates its submission that with the amendment of the Act to include s.15A, it is at least theoretically possible for an employee to be neither a full-time nor part-time within the meaning of the Retail Award, or casual within the meaning of the Act as amended and submitted that:

‘To this extent, the “residual category” of casual employment may give rise to an uncertainty or inconsistency, as the Act as amended now defines casual employment by reference to specific indicia, as distinct from the Retail Award defining casual employment by what it is not.’ 30

[71] In reply the MGA disagrees with the Ai Group that it is not clear that the ‘residual category’ type casual definition in the Retail Award forms part of the casual definition under the Award and submits that the ‘residual category’ type casual definition in the Retail Award clearly forms part of the casual definition under the Award; hence MGA agrees that the ‘residual category’ type casual definition in the Retail Award is a relevant term for the purposes of cl.48(1)(c)(iii).

[72] In reply the SDA submits that as clause 11.2 of the Retail Award ‘is not relevant, it follows that the Commission should not vary the provision’. 31

[73] In reply the AEU submits that the IEU’s submissions regarding Questions 6 and 7 raise an important issue as to the meaning and interaction of the terms casual ‘employee’ and ‘employment’, issues which have not been raised by other parties to this Review and submits that the Commission should consider the IEU’s submissions in the first instance before assessing other parties’ submissions regarding Questions 6 and 7.

[74] The AIS submits, at paragraph 13 of its submission, that it is ‘unclear’ as to whether the ‘day-to-day’ requirement in cl 12.1 of the Teachers Award imposes a limitation on s 15A of the Act, and this lack of clarity “therefore presents difficulties” and should be removed or amended on that basis. In reply the IEU submits:

‘No reasoning is offered for the asserted lack of clarity. It is noted that s 15A makes no reference to the units of time for which a casual engagement is made. There is no apparent reason why “employment day-to-day” is inconsistent with the description of and criteria for casual employee under s 15A.

The position of the AIS may also have proceeded from an erroneous assumption that the definition of casual employment in cl 12 of the Teachers Award, and the definition of casual employee in s 15A of the Act, are dealing with the same subject. They are not. Once this is understood, there is no lack of clarity as to whether cl 12 imposes a limitation on s 15A. As explained in the IEU Submissions at paragraphs 28 to 39, there is nothing in s 15A of the Act which precludes or is inconsistent with cl 12 of the Teachers Award.

ACCI, at paragraph 45 of its submission, takes a similar position to that of the AIS. Again, however, there is no analysis offered in support and its assertion does not refer to any particular example. There is no discussion of the difference between an arrangement to be “paid by the hour” and one of “employment day-to-day”; each references a different aspect of an employment relationship. There is also no specific examination of cl 12.1 of the Teachers Award.

The AIG’s submissions in answer to Question 6, at paragraphs 87 to 97, do not deal with the “employment day-to-day” element of the question.

The two preceding paragraphs above support the submission at paragraph 5 above.

The AEU’s submissions at paragraph 14 state that s 15A of the Act defines casual employment. It does not. Paragraphs 14 then proceeds to discuss Award definitions in general. It is submitted by IEU that the particular employment circumstances of employees under the Teachers Award, demonstrates the dangers of such generalisations. 32

7. Where a casual definition includes a limit on the period of casual engagement (as in the Teachers Award), if the definition is amended in the Casual terms review should that limit be recast as a separate restriction on the length of any casual engagement?

[75] In the June Statement the Full Bench observed that several different views were put in response to this question.

[76] The ACTU, AEU and IEU did not support removal of the limit on casual engagement periods in the Teachers Award, albeit on somewhat different grounds.

[77] The ACTU submission was that such limits on the period of casual engagement are non-definitional by nature and should be retained. The AEU supported recasting award casual definitions that limit casual engagement periods as separate restrictions (as proposed in the draft determination at Attachment A to the Submission Summary Document) to minimally disturb the Award’s current, substantive effects while making the Award definition of casual employment consistent with the Act. The IEU submitted that as cl.12.1 of the Teachers Award defines casual employment, not casual employee, by reference to the time limit on the employment of casual employees, there is no reason for cl.12.1 to be amended in the Review.

[78] AIS submitted that the Associations would prefer the removal of the limitation on casual engagement periods in cl.12.1 of the Teachers Award altogether, as this is necessary to achieve the modern awards objective.

[79] ABI submitted that to the extent such restrictions on casual engagement periods are to be maintained, they would need to be separated from the casual definition in awards.

[80] ACCI (supported by the AHA) submitted that the reference in cl.12.1 of the Teachers Award should be better understood as a limit on the length of casual employment rather than as comprising part of the casual definition. ACCI considered that if the reference were to remain in the casual definition in the Teachers Award, it would create a clear inconsistency with the definition in s.15A of the Act.

[81] ACCI proposed that the Commission consider removing the limitation on the engagement of casual employees, as it is likely to create interaction issues between the Teachers Award and the NES insofar as it will restrict the ability of an employee to ever access their NES entitlement to casual conversion. In its reply submissions, ACCI stated:

‘Whilst a number of submissions seek to retain the limit on casual engagement in the Teachers Award, none of these submissions appear to have addressed how retaining such a provision can operate consistently and without difficulty with respect to an employee NES entitlement to casual conversion.

As set out in our initial submission, maintaining a limitation on the engagement of casual employees under the Teachers Award creates interaction issues between the Award and the Act as amended with respect to casual conversion. As AiG’s submission also rightly points out, the maintenance of such a term would also be contrary to s55(1) of the Act as casual employees under the Teachers Award will not be in full receipt of all the benefits of the new casual conversion provisions in the NES.

ACCI therefore maintains that it is not open to the Commission to retain such clauses unamended or by simply recasting such terms as limits on casual engagement periods because of the interrelated effects of such a clause on an employee’s casual conversion rights under the NES as amended. Limits on the engagement of casuals in awards should be removed during the review process in order to address the inconsistency it creates with the Amended Act.’ 33 (Footnotes omitted)

[82] Ai Group made a similar point and submitted that the Commission should not adopt the proposed course of action. Ai Group submitted that the inclusion of terms in an award that limit the length of a casual employee’s engagement to 12 months or less would be contrary to s.55(1) of the Act (as they result in employees not receiving in full, or at all, the benefit of elements of the new casual conversion NES).

[83] In reply Ai Group continued to rely on its initial submission at [98] – [106] in relation to this question and emphasised its contention that recasting the current definition of casual employment as a separate restriction would give rise to a contravention of s.55(1) of the Act.

[84] In reply, and having considered the other submission filed, ABI contended that these clauses do have the effect of defining casual employment (contrary to the ACTU). By way of example, in the Teachers Award, the temporal limitation in clause 12.1 is included following the words ‘Casual employment means….’ (original emphasis).

[85] As for the submission put by the IEU that clause 12.1 defines casual employment not casual employees, ABI notes that there is no definition of casual employee in the award and therefore, the definition of casual employment in effect operates as a definition of the type of employee engaged in casual employment (i.e. a casual employee).

[86] As to the broader question of whether these restrictions should be retained or removed from the relevant awards, ABI note that there is force to the argument put by ACCI and others that a limitation on the duration of casual employment will serve to exclude the NES casual conversion provision.

[87] In reply the AEU rejects the Ai Group’s and ACCI’s contention that maximum casual engagement period in the Teachers Award would exclude the casual conversion entitlements in the NES. The AEU supports the IEU’s submissions.

[88] The AEU also rejects the Ai Group’s contention that, if it is necessary to amend the definition in the Teachers Award, it is unnecessary to recast the maximum casual engagement period in the Teachers Award to meet the modern awards objective and refers to paragraphs [21]-[22] of initial submissions in this Review, and further notes that not recasting the maximum casual engagement period at cl 12.1 would have the practical effect of removing a substantive and longstanding provision of the Teachers Award and that varying an award to remove such a substantive, longstanding provision requires a strong case to be made that such a variation meets the modern awards objective. The AEU submits:

‘There is no evidentiary case, and minimal submissions before the Commission that such a variation would meet the modern awards objective, and we note that the AIG itself does not have a direct interest in the Teachers Award.

In the absence of such a case is therefore necessary to maintain the status quo of the Award to make such a variation recasting the maximum casual engagement period at cl 12.1 of the Teachers Award.’ 34

[89] In reply to AIS’s submission the IEU submitted:

‘At its highest, the AIS submission is that it is necessary for cl 12.1 to be removed in order to achieve the modern awards objective. Any submission of that nature should be supported by a cogent argument, addressing the fact that the Teachers Award has contained a limitation on the length of any casual engagement since at least the time of award modernisation, and accordingly should be assumed to have met the modern awards objective at the time it was made. In the absence of any principled submission addressing the matters in s 157 of the Act, a party’s ‘preference’ for a different award term is insufficient to engage the Commission’s jurisdiction to vary a modern award.’ 35 (Footnotes omitted)

[90] The IEU also submits that the AEU submission in support of recasting cl 12 should be rejected.

[91] The IEU submits that Ai Group’s submission that the time limit on casual employment in cl 12.1 of the Teachers Award is contrary to s 55 of the Act, because cl 12.1 ‘would exclude the new provisions of the NES relating to casual conversion’ is ‘misconceived’:

‘Clause 12.1 does not exclude Division 4A of the Amendment Act. But in any event, Division 4A does not create a right to be employed for any particular period of time; rather it gives rights to those who are employed for the qualifying period.

There will be numerous casual employees – if not the majority of casual employees – who, by the nature of their engagement as casual employees, will never qualify for casual conversion. The effect of the AIG’s submission at paragraphs 99 to 101 is that employers would be prohibited from employing a casual employee for any duration short of the qualifying period for the casual conversion. That is clearly a nonsensical outcome which should be rejected out of hand.’ 36

[92] As to Ai Group’s suggestion that there is no basis for varying the Teachers Award to include a limit of casual employment, the IEU submits:

‘This is wholly incorrect. The Teachers Award already contains a limit on casual employment; no variation is required. The variation which the IEU has proposed (set out at paragraph 26 below) does not seek to introduce a new limit on the period of casual employment. Rather, the IEU’s proposed variation leaves cl 12.1 in place. That clause has been in the Teachers Award for a long period of time. Therefore, the fourth sentence of paragraph 103 is wrong and should be rejected. Furthermore, the submission in the fifth sentence of paragraph 103 is unsupported by anything in the legislation and should also be rejected.’ 37

[93] As to ACCI’s submissions, the IEU notes that, at [50], it accepts that cl 12.1 is a limit in the length of casual employment; but then at [51], ACCI submits that such a clause imposes an additional requirement for casual employment not subject to the definition in s 15A. The IEU submits:

‘This submission fails to grasp the distinction between the definition in s 15A and the function of cl 12.1. As stated above, there is nothing in s 15A which precludes putting a limit on the duration of a casual engagement. It would be a surprising (and unintended) outcome if s 15A prevented an employer from telling a prospective causal employee that the engagement is only for three weeks.’ 38

8. For the purposes of Act Schedule 1 cl.48(3), would replacing the casual definitions in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award with the definition in s.15A of the Act or with a reference to that definition, make the awards consistent or operate effectively with the Act as amended?

[94] In the June Statement the Full Bench observed that many submissions support replacing the casual definitions in the Retail, Hospitality, Manufacturing, Teachers and Pastoral Awards with the definition in s.15A of the Act to make the Awards consistent or operate effectively with the Act as amended. In those submissions, the generally expressed preference is to make reference to the statutory definition rather than reproducing s.15A in its entirety, as proposed in the Ai Group’s draft determination at Attachment B of the Submission Summary Document.

[95] The SDA submits that it is unclear whether cl.11.2 of the Retail Award is inconsistent with the definition in s.15A of the Act, but that if the Commission concludes that there is an inconsistency requiring a variation, it prefers that the Retail Award incorporate any definition to ensure that the Award remains a comprehensive standalone instrument.

[96] The ACTU submits that supplanting existing award definitions with a reference to the new definition in s.15A is not the only means by which to fulfil the Review’s requirements and that if the Commission is minded to replace the award definitions, all non-definitional aspects of those clauses should be retained.

[97] The AMWU submits that it is not necessarily opposed to the replacement of award casual definitions with the definition in s.15A, but agrees with the ACTU that this will depend on the other associated outcomes that flow from the Review and that if the Commission does so, all non-definitional aspects of those award clauses should be retained.

[98] In its reply submission, Ai Group notes that the ACTU, supported by various unions, submits that supplanting existing definitions with a reference to the NES is not the only means by which the requirements of the Review can be fulfilled. In reply, Ai Group submits:

‘They do not however advance any specific alternate approach, other than indicating that all non-definitional aspects of award clauses should be retained. They have not filed any draft determinations, as contemplated by the Commission’s directions. Accordingly, such a vague and generalised submission should not in any way guide the Commission’s approach to the Review’. 39

[99] At [55] – [57] of Ai Group’s reply submission:

‘The Commission should not adopt a blanket approach of simply recasting award terms that are currently definitional in nature to create new obligations upon employers or necessarily assuming that non-definitional terms relating to casual employment should be retained. An award should be varied in the manner required to make the award consistent or operate effectively with the Act and should only include terms that are necessary, as contemplated by s.138 of the Act. Further, a change in the definition of ‘casual employee’ may result in some other provisions no longer being necessary. For example, the shift to the statutory definition in lieu of the ‘engaged and paid as such’ model arguably removes the necessity for an award to require that an employer advise an employee that they are engaged as a casual employee – a point that we deal with in relation to question 10 of the Discussion Paper.

In conducting the Review, the Commission should not adopt an approach of simply seeking to retain current award-specific provisions relating to casual employment. It may be that there are industry specific considerations that justify a departure from a general approach of aligning casual definitions in awards with a reference to s.15A of the Act; but the mere fact that a current definition or associated provision has been in operation for a long time should not be viewed as a sufficient reason, in and of itself, for retaining it.

To the extent that it is relevant to an exercise of the Commission’s discretion and in particular, a consideration of whether the awards should be amended to refer to s.15A of the Act; we observe that the consistent adoption of a definition of casual employment that squarely aligns with s.15A across the awards system will assist in making the system simpler and easier to understand, as contemplated under s.134(1) of the Act. The Commission should seek to adopt a uniform approach to amending casual definitions in awards, unless cogent reasons (beyond the preferences of particular employer or employee organisations) for doing otherwise in an individual award are established.’ 40

[100] Ai Group also observes that no party appears to oppose replacing the casual employment definition in the Hospitality Award or Manufacturing Award with a reference to s.15A of the Act and submits that such a variation should be made.’ 41

[101] The IEU submits that ‘[b]y operation of s.46(1)(b) of the Acts Interpretation Act 1901 (Cth), the definition of casual employee in s.15A applies to the Teachers Award and all modern awards’. 42

[102] Ai Group responds to the IEU submission at [65] – [74] of its reply submission as follows:

‘Section 46(1)(b) of the Interpretation Act must be read in conjunction with s.40A of the Act.

Whilst s.46(1)(b) of the Interpretation Act provides that an expression used in an instrument is to have the same meaning as that in an authorising Act or instrument, we submit that consideration also needs to be given to whether a ‘contrary intention’ may be discerned from the text and context in which the expression is found in the instrument. That is, whether the text and context in which the expression ‘casual employee’ found in the Teachers Award indicates that it was not objectively intended for ‘casual employee’ to bear the same meaning as that found in the Act.

The approach above was similarly taken by the Full Bench in Re 4 Yearly Review of Modern Awards — Family and Domestic Violence Leave 43. In considering whether the coverage of the expression ‘de facto partners’ was the same in the NES and the model term, the Full Bench had regard to the operation of s.46(1)(b) of the Interpretation Act as follows:

“[34] A modern award is an instrument falling under s 46 of the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009 (the AI Act). Consequently, except so far as the contrary intention appears, expressions used in a modern award have the same meaning as in the Act (AI Act, s 46(1)(b)).

[35] The definition of “de facto partner” in s 12 of the Act requires co-habitation and we see no contrary intention in the model term or the awards in which it presently appears…” 44.’

[103] In reply, ABI prefers the broadly supported position that the awards should make reference to the statutory definition and submits that it is unnecessary to simply restate the casual definition and that a reference to the Act would suffice.

[104] The NRA responds to the SDA’s position that s.15A should be replicated in the Award and disagrees with that approach, noting that where a matter is comprehensively dealt with in the Act it is common practice for the Retail Award to refer to the Act (see, for example, clauses 28.1, 29.1, 30, 31, 32, and 33.1).

[105] The NRA submits that the only effective means to ensure that the Retail Award and the Act remain in accordance with each other is for the Retail Award to refer to the Act.

[106] MGA agrees with the Ai Group that replacing the casual definitions in the Retail Award with express reference to the definition in the Act as amended will make the definition consistent or operate effectively with the Act as amended and that adopting a reference to the definition in the Act as amended would be preferable to replacement with the whole definition in its entirety.

[107] MGA disagrees with the SDA position that incorporating the definition in the Act in its entirety is necessary to ensure that the Retail Award remains a comprehensive standalone definition and submits that ‘because the definition in the Act is complex and lengthy, it is not suitable to incorporate the definition in its entirety.’ 45

[108] In reply the SDA opposes the replacement of the current Award definition with a reference to the Act:

‘While the SDA’s primary position is that it is unclear whether the GRIA definition is inconsistent with the Award, were the Commission to find so it should replace the definition with the new statutory definition. To conclude otherwise would undermine the Award being an effective reference point for employers and employees.’ 46

[109] The AIS submits, at [15], that replacing the casual definition in the Teachers Award with the definition in s 15A is ‘the preferred approach of the Associations’.

[110] In reply the IEU submits, for the reasons set out in [36]–[39] of its initial submission, there is no inconsistency between clause 12.1 of the Award, and s 15A of the Act, but it may be helpful to include the following in clause 2 of the Teachers Award after the definition of ‘all other teachers’:

‘Casual employee has the meaning in s 15A of the Act.

Casual employment means the employment of casual employees in accordance with clause 12.

A variation in this form leaves cl 12.1 to serve the purpose it always had, which was to impose a time limit on the duration of the casual employment.

By this minimal variation, any concerns about inconsistency are met. Any further variation is not necessary.’ 47

9. If an award is to be varied to adopt the casual definition in s.15A of the Act, should the Commission give advanced notice of the variation and the date it will take effect?

[111] In the June Statement the Full Bench observed that there is a high level of support for the Commission giving advance notice of any variations to awards pursuant to the Review and the date on which variations will take effect. This is framed somewhat differently in submissions – for example, ABI supports the Commission giving as much notice as it is empowered to give; whereas ACCI’s submission talks of ‘a limited period of advance notice’. A number of these submissions refer to the limitation imposed on the Commission by Act Schedule 1, cl. 48(4).

[112] Ai Group notes cl.48(4) does not require that the Commission must make a determination as soon as the Review finds that there is an issue contemplated in cl.48(2); but rather, it says that the Commission must make a variation as soon as reasonably practical. Ai Group submits that the Commission could refrain from concluding the review of a relevant term until 27 September 2021, and then make a determination after that date. Ai Group submits further that there may be less of an imperative to provide advanced notice, or as much advanced notice, of changes to be made to definitions in awards grouped under Stage 2 of the Review.

[113] The NFF and the NRA were the are the only parties that did not support the giving of advance notice of any variations to award casual definitions.

[114] The NFF’s view is that the Pastoral Award should be varied without delay given its concerns about multiple and, in some ways, competing definitions of casual employment. The NRA does not believe it is necessary for the Commission to give advance notice of a variation to award casual definitions − at least where the definition is of the ‘engaged as such’ character − and questions the legal effect of a delayed operative date in respect of variations to casual definitions in modern awards that directly conflict with s.15A of the Act.

[115] In reply, Ai Group continues to rely on [110] – [119] of its initial submission.

[116] ABI makes no further submission on this point.

[117] MGA submits that advanced notice of the variation and the date it will take effect ‘is required to enable employers to take preliminary steps to address breaches of the Retail Award in respect of existing employees and new employees who are treated as casuals for the purpose of the Retail Award, but who are not casual employees under the definition in the Act.’ 48

2.4 Permitted types of employment, residual types of employment and requirements to inform employees

10. For the purposes of Act Schedule 1 cl.48(2):

•  are award requirements to inform employees when engaging them that they are being engaged as casuals (as in the Manufacturing Award and Pastoral Award) consistent with the Act as amended, and

•  do these requirements give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

[118] In the June Statement the Full Bench observed that the majority of submissions in response to the first limb of question 10 submit that an award requirement to inform employees when engaging them that they are being engaged as casuals is consistent (or is not inconsistent) with the Act as amended and does not give rise to uncertainty and or difficulty.

[119] Ai Group submits that the answer to this question depends, in part, upon whether the casual definition in awards is amended so as to adopt the s.15A definition. However, even if this occurs, Ai Group considers it arguable that the retention of such clauses gives rise to uncertainties and difficulties in relation to their interaction with the Act as amended. Accordingly, Ai Group submits that such clauses should be deleted by the Commission pursuant to cl.48(3) (see the draft determination at Attachment B of the Submission Summary Document) or under s.157 of the Act.

[120] Several submissions contend that award clauses (such as cl.11.4(d) of the Manufacturing Award) which require employers to inform casual employees on their engagement ‘of the likely number of hours they will be required to perform’ are not consistent with the new statutory definition, and in particular, s.15A(1)(a). They submit that this is also likely to result in uncertainty and difficulty as to the interaction between the award clauses and the Act as amended.

[121] However, the AMWU (supported by CFMMEU – Manufacturing) submits that cl.11.4(d) of the Manufacturing Award is consistent with the Act as amended and does not give rise to any difficulty of uncertainty.

[122] In its reply submission Ai Group opposes the position that no inconsistency or uncertainty or difficulty arises from the relevant clauses and relies on [120]-[135] of its initial submission.

[123] In reply, ABI submits that:

‘It is not clear the basis upon which the AMWU asserts that a requirement to inform casual employees on their engagement ‘of the likely number of hours they will be required to perform’ could be consistent with the statutory definition requiring the absence of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person.

At minimum, this is likely to give rise to uncertainty or confusion in that compliance with the award provisions brings with it a material risk that a firm advance commitment to continuing and indefinite work according to an agreed pattern of work will be made.

Beyond assertion that no difficulty or uncertainty arises, the AMWU submission is not persuasive.’ 49

[124] In response to Ai Group’s submission the AMWU submits:

‘This operation of clause 11.4(a) will not be disturbed if the Manufacturing Award is varied so as to adopt, or refer to, the definition of ‘casual’ that is provided for in s.15A of the FW Act. It is an obligation that can continue to operate independently of s.15A.

In relation to clause 11.4(d) the AMWU does not agree with the submissions of Employer parties

that the requirement to inform employees of the likely number of hours they will be required to perform is likely to give rise to inconsistencies, difficulties, or uncertainties.

The submission that:

“An obligation to advise casual employees, at the time of their engagement, of the likely number of hours that they will be required to perform might be construed as a ‘firm advance commitment to continuing and indefinite work’ in a manner that is inconsistent with the requirements of s.15A(1).”

must be rejected because:

1. Firstly, it is only the “likely hours” that a casual will be required to work; and

2. Secondly, s.15A states expressly that a regular pattern of hours “does not itself indicate a firm advance commitment to continuing and indefinite work”.’ 50

[125] In reply the CFMMEU C&G disagrees with the ABI, ACCI and Ai Group submissions:

‘In regard to advising an employee in writing that they are to be employed as a casual, the CFMMEU C&G supports the view expressed in paragraph 66 of the Discussion Paper that these terms “do not appear to raise any issues of inconsistency, or uncertainty or difficulty”, and submits that there will clearly be no inconsistency if the awards either repeat or make reference to the meaning of a casual employee in s.15A of the Act.

As to the requirement to inform a casual employee of their hours of work, it is clear from the plain language of the award clause that the employer is only required to indicate the likely hours to be worked. The word likely is well understood as meaning “such as well might happen or be true; probable” or “apparently suitable; promising”, it is obviously not a firm commitment and therefore not inconsistent with the definition of a casual in s.15A of the Act. Indeed s. 15A(3) of the Act makes this abundantly clear:

(3) To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.

Further support is found in the Explanatory Memorandum which explains in paragraph 18:

18. New subsection 15A(3) provides, for avoidance of doubt, that a regular pattern of hours does not, of itself, indicate the requisite firm advance commitment. A casual can be expected to work a regular pattern of hours and still meet the statutory definition when taking all the circumstances of their offer and acceptance into account.

In response to Q.11 the ACCI submits that the Commission should seek to clarify that the full-time and part-time definitions contained in awards are not captured by the definition of casual employment in s.15A of the Act. AIG submit that that the three awards do not expressly distinguish part-time employment and full-time employment from casual employment on the basis that part-time employment is ongoing employment (or ‘continuing and indefinite work’ within the meaning of s.15A of the Act). AIG contends that such a situation could be reasonably argued to give rise to an uncertainty or a difficulty in the sense contemplated by cl.48(2), and proposes that this could be rectified by the Commission varying award definitions of full-time and part-time employees to insert new clauses to the following effect:

X.X A full-time employee is not a casual employee as defined in s.15A of the Act.

X.X A part-time employee is not a casual employee as defined in s.15A of the Act.

The CFMMEU C&G disagrees with the ACCI and AIG submissions that any uncertainty can arise and submits that in regard to the Manufacturing Award no variation is necessary. Clause 8 of the Manufacturing Award already provides as follows:

8. Types of employment

8.1 Employees under this award will be employed in one of the following categories:

(a) full-time;

(b) part-time; or

(c) casual.

If the awards are varied to include or refer to the definition of a casual in s.15A of the Act then, under the Manufacturing Award, as employees can only be employed in one of the categories a full-time or part-time employee cannot be a casual employee and a casual employee cannot be a full-time or part-time employee.’ 51(CFMMEU C&G’s Footnote omitted)

11. For the purposes of Act Schedule 1 cl.48(2):

•  are award definitions that do not distinguish full-time and part-time employment from casual employment on the basis that full-time and part-time employment is ongoing employment (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award) consistent with the Act as amended, and

•  do these definitions give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

[126] In the June Statement the Full Bench observed that there were a variety of views put in response to this question.

[127] The ACTU (supported by a number of unions), AEU and SDA in substance submit that there is no inconsistency between the definition of casual employment in s.15A and existing award definitions of full-time and part-time employment, nor any uncertainty or difficulty. Accordingly, such definitions are outside the scope of the Review.

[128] Similarly, the NFF submits that the Pastoral Award is understood in accordance with the well-established meanings of full-time and part-time employment and any change to the Award would create confusion and may have unanticipated consequences.

[129] ABI and ACCI (supported by AHA) submit that it is unclear whether terms defining full-time and part-time employment are relevant terms. However, together with Ai Group, they consider that the lack of express distinction between full-time and part-time employment and casual employment (on the basis that part-time employment is ongoing employment or ‘continuing and indefinite work’ within the meaning of s.15A of the Act) may give rise to difficulty or uncertainty. Ai Group proposes that this could be rectified by the Commission varying award definitions to clarify that full-time and part-time employees are not casual employees as defined in s.15A of the Act.

[130] Similarly, the NRA submits, particularly in relation to the Retail Award, that award definitions that do not distinguish full-time and part-time employment from casual employment on the basis that full-time and part-time employment is ongoing employment, are not consistent with the Act as amended and give rise to uncertainty or difficulty. The NRA suggests a variation to cl.10.1 of the Retail Award to resolve this issue.

[131] In relation to the Teachers Award, the IEU submits that when the relevant clauses of the Teachers Award are read together, the distinction between full-time and part-time employment and casual employment is apparent. The AIS submits that while there is arguably a common understanding that references to full-time and part-time employment in the Teachers Award are references to ongoing employment, the Award could be varied to clarify this.

[132] Some parties 52 argued that award provisions defining full-time and part-time employment are not ‘relevant terms’ and therefore cannot be the subject of the Review.

[133] Ai Group agrees that they are not ‘relevant terms’; but submits that the provisions could be varied through the exercise of the Commission’s general award powers.

[134] In reply ABI submits that:

‘while it is not clear whether award definitions which fail to distinguish between permanent and casual employment are relevant terms, if they are, and any uncertainty arises (which would be uncertainty whether a permanent employee under an award could be considered a casual employee under the Act) this should be remedied.

AI Group’s proposed solution would achieve this, however it is not clear whether the introduction of such a clause is necessary in every case, having regard to the requirements of s 138.’ 53

[135] The SDA submits that the definitions of full-time and part-time employment in the Retail Award are not relevant terms for the purposes of the review and do not give rise to any uncertainty.

[136] In reply the NRA reiterates its submission that it is possible for an employee to satisfy both the definition of a casual employee in s.15A of the Act as amended and the definition of a part-time employee within the Retail Award:

‘Even if the definitions of full-time and part-time employment are not relevant terms for the purposes of the review, it would nevertheless be appropriate for the Full Bench to exercise its general powers under s.160 of the Act to remedy this deficiency having regard for the new legislative paradigm.’ 54

[137] In reply MGA submits that the Retail Award currently has no clear dichotomy between part-time and full-time employment from casual employment, which may give rise to uncertainty or difficulty relating to the interaction between the Retail Award and the Act as amended and on that basis supports ACCI’s submission that the Commission should seek to clarify that the full-time and part-time definitions contained in the Retail Award is not encompassed or captured by the definition of casual employment in s15A of the Act as amended.

[138] MGA submits that:

‘there is a need to distinguish between full-time and part-time employment being ongoing employment and that casual employment has no firm advance commitment to continuing and indefinite work. Without any differentiation between the part-time and full-time employment and casual employment, this is likely to give rise to uncertainty or a difficulty contemplated by cl.48(2).’ 55

[139] In reply the SDA submits that:

‘…they are not in fact relevant terms within the scope of the Review and that as such, the FWC should take no action in their respect.

Furthermore, because the full-time and part-time definitions are not relevant, it follows that they cannot be inconsistent with the Act.

The proposal of AIG at paragraph 138 of its submissions could create inadvertent complexity. Such a proposal, being intrinsically outside of the scope of this review, is best left to an Award variation application should an apparent difficulty arise.’ 56

[140] In reply, the AMWU does not agree that the extant definitions of full and part time employment give rise to any difficulties or uncertainties and that varying the Manufacturing Award in the manner proposed by Ai Group at [138] would likely lead to confusion and uncertainty.

[141] In reply the IEU submits:

‘At paragraph 17 of its submission, the AIS suggests (‘arguably’) that there is a ‘common understanding’ that references to full and part time employment in the Teachers Award are references to ongoing employment and not casual employment. For the reasons outlined in the IEU Submissions at paragraphs 44 to 46, the distinction between full-time and part-time employment on the one hand, and casual employment on the other, is not a matter of “common understanding”, but rather reflected in the terms of the Award to which we have referred.

The clauses of the Award identifying full-time, part-time, casual and fixed-term employment have been there for many years. The AIS has not identified a single occasion when there has been any “potential argument” of the kind referred to in the second sentence of paragraph 17.

Furthermore, the hypothesis suggested in the second sentence of paragraph 17 of the AIS submissions is a non-sequitur. The question of full-time and part-time employment as compared to casual employment, even applying the definition in s 15A, is unrelated to the number of hours offered. The solution suggested in the draft variation is unnecessary and opposed by the IEU.’ 57

12. Does fixed term or maximum term employment fall within the definition in s.15A of the Act?

[142] In the June Statement the Full Bench observed that all interested parties agreed that the proper construction of s.15A of the Act is that it does not capture fixed term or maximum term employment. Several submissions refer to the indicia at s.15A(2) of the Act as indicating that maximum and fixed term employment are not forms of casual employment.

[143] ABI observes that fixed term employment could, without further context, conceivably fall within the scope of s.15A(1) (but that it is unlikely that a fixed term employee would be understood to be a casual because of s.15A(2)), and suggests that the Commission could clarify in awards that fixed term employees are not entitled to a casual loading.

[144] Ai Group submitted in its reply submissions:

‘In our May Submission, we observed that awards do not commonly contain provisions that are specifically applicable to fixed term employment. We nonetheless indicated that we may seek to respond to any provisional views of the Commission or submissions made by parties in relation to this question.

The Statement indicates that all parties agree that the proper construction of s.15A of the Act is that it does not capture fixed term or maximum term employment.

Should the Commission reach an alternate view to the construction proffered by the parties and should this cause the Commission to reach a view that awards should accordingly be varied to address this matter, we may seek to be heard in relation to the issue.’

2.5 Related definitions and references to the NES

13. Are outdated award definitions of ‘long term casual employee’ and outdated references to the Divisions comprising the NES (as in the Retail Award and Hospitality Award) relevant terms?

[145] In the June Statement the Full Bench observed that other than Ai Group, interested parties generally agreed that outdated award definitions of ‘long term casual employee’ are (or are arguably) relevant terms within the meaning of the Act Schedule 1 cl.48(1)(c).

[146] The ACTU submits that to the extent these clauses may be taken as defining or describing casual employment or providing for the manner in which employees are to be employed as casual employees or are relevant to a clause providing for conversion of casual employment; they are relevant terms.

[147] There is also broad consensus that outdated references to the NES are not relevant terms within the meaning of the Act Schedule 1 cl.48(1)(c).

[148] In reply Ai Group agreed with the Commission’s observation at paragraph [61] of the June Statement about outdated references to the NES and remains of the view that the definition of ‘long term casual employee’ in the Retail and Hospitality Awards is not a ‘relevant term’ for the purposes of clause 48 of the Act. It does not purport to ‘define or describe’ casual employment for the purposes of clause 48(1)(c)(i) of the Act. Rather, it seeks to define a subset of those who are ‘casual employees’, as per the relevant definition of that term. Ai Group submits:

‘In any event, it may not be necessary for the Commission to conclusively determine whether the definition constitutes a ‘relevant term’, because the Commission can exercise its general modern award powers to vary the relevant award terms, as proposed in our May Submission and the draft determinations filed therewith.’ 58

[149] In reply, the ACTU submits that the exercise of the Commission’s general award variation powers should only be done following an application by an interested party, at which point the interaction between that application and the Review may be properly determined.

[150] In reply ABI makes no further submissions on this issue other than to state that the definition of long term casual may not define, but may describe casual employment.

[151] In reply to ABI’s submission that ‘it is arguable than [sic] a definition of long term casual employee is a term defining or describing casual employment’ the SDA submits that ABI does not consider the other outdated references to Divisions as relevant terms.

14. If they are not relevant terms, but nevertheless give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended:

•  can they be updated under Act Schedule 1 cl.48(3), or alternatively

•  can they be updated in the course of the Casual terms review by the Commission exercising its general award variation powers under Part 2-3 of the Act?

[152] In the June Statement the Full Bench observed that the parties were in general accord that award terms that are not relevant terms cannot be updated under Act Schedule 1 cl.48(3), but could be amended by the Commission exercising its general award variation powers under Part 2-3 of the Act. However, Ai Group makes the further comment that provisions that are not relevant terms themselves can be updated under cl.48(3) if other terms in those awards, which are relevant terms, give rise to a difficulty or uncertainty relating to the interaction between the provisions and the Act.

[153] The majority of parties that address the point submit that the Commission should vary the Retail and Hospitality Awards to remove references to long term casual employees, to make the Awards operate effectively with the Act as amended. However, the SDA submits that the Commission’s jurisdiction to vary is not enlivened because this term is not inconsistent with the Act, or difficult or uncertain in its operation. The Ai Group maintains that such terms are not relevant terms, but does not oppose the Commission exercising its general award variation powers, as proposed in the draft determinations at Attachment B to the Submission Summary Document.

[154] The parties also generally agree that the Commission may exercise its powers under s.160 of the Act to vary outdated references to the Divisions comprising the NES concurrently with the Review, to make relevant awards simple and easy to understand.

[155] The ACTU (supported by a number of unions) comments that any such exercise of power would be outside the Review process, and the SDA submits that this may blur jurisdictional boundaries, which is better avoided.

[156] At [69] – [70] of its initial submission the ACTU submits:

‘These clauses may be capable of being updated pursuant to the FWC’s general award variation powers. However, whilst such a process might occur in the course of a Review, it would not strictly speaking be part of the Review process itself so that for example, there would be no statutory requirement to make a determination in relation to such a matter as soon as reasonably practicable after the Review is conducted.

The approach that is taken by the FWC will relevantly be guided by the power under which the FWC acts – for example, if varied according to the FWC’s general powers, the MA Objective would apply, and the exercise would not be bound by the terms of the Review.’

[157] In its reply submission, Ai Group does not contest the general propositions advanced by the ACTU.

[158] The SDA contends that the definition of ‘long term casual employee’ in the Retail Award is a ‘relevant term’; but it is not inconsistent with the Act; nor does it give rise to an uncertainty or difficulty.

[159] In its reply submission, Ai Group submits that if the Commission finds that the definition is a ‘relevant term’ it should, also find that the definition gives rise to uncertainties and difficulties:

‘The award purports to define the term by reference to s.12 of the Act; however s.12 no longer contains a definition for ‘long term casual employee’. The definition was removed by the Amending Act. The uncertainties and difficulties to arise from an award term that refers to a provision of the Act that no longer exists, are self-evident.

The issue should be addressed by adopting the proposed amendments set out in the draft determinations filed by Ai Group with its May Submission.’ 59

[160] Ai Group also submits that the ‘blurring of jurisdictional boundaries’ 60 feared by the SDA would not necessarily follow if the Commission exercised its general modern award powers whilst conducting the Review as such powers can be exercised by the Commission of its own motion where appropriate.

[161] In reply ABI submits that ‘the Commission is empowered to do what it is empowered to do’ and that should it wish to exercise its available powers independently of its powers under Schedule 1 cl.48(3), it may do so.

[162] MGA submits that if these are not considered relevant terms, but nevertheless give rise to uncertainty or difficulty, they should be varied pursuant to the Commission’s powers under s.160 of the Act.

[163] In reply the SDA opposes the position suggested by Ai Group at [143(b)] of Ai Group’s initial submissions as both unnecessary and beyond the scope of the current Review.

2.6 Casual minimum payment or engagement, maximum engagement and pay periods

[164] A number of submissions deal with questions 15 and 16 together, and we consider it convenient to do likewise in reviewing the parties’ positions on these issues.

15. Are award clauses specifying:

•  minimum casual payments (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award)

•  casual pay periods (as in the Retail Award, Hospitality Award and Pastoral Award)

•  minimum casual engagement periods (as in the Hospitality Award), and

•  maximum casual engagement periods (as in the Teachers Award)

relevant terms?

16. For the purposes of Act Schedule 1 cl.48(2):

•  are such award clauses consistent with the Act as amended, and

•  do such award clauses give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

[165] In the June Statement the Full Bench observed that putting to one side award clauses specifying maximum casual engagement periods, a common response to questions 15 and 16 was that:

•  such clauses are not or do not appear to be relevant terms as they do not fall within cll.48(1)(c)(i)-(iv)

•  even if the Commission were to decide otherwise, such clauses are consistent with or are not inconsistent with the Act as amended and do not give rise to uncertainty or difficulty, and

•  accordingly, the Commission has no jurisdiction to vary such clauses as part of the Review.

[166] Some parties hold different views in relation to whether particular clauses may be relevant terms. For example:

•  the AEU submits that clauses of this type are relevant terms

•  the AIS has not formed a definitive view on whether these terms are relevant terms

•  the IEU submits that cll.12.1 and 12.2 of the Teachers Award (which limit the period of casual employment and provide that this maximum period can be extended) are both relevant terms within the meaning of cll.48(1)(c)(ii) and (iii)

•  the MGA submits that casual pay periods and regular pay periods are relevant terms

•  the NFF submits that clauses such as cl.11.7 of the Pastoral Award which mandate a minimum pay for casual employees (linked to a minimum period of engagement) are relevant terms within the meaning of cl.48(1)(c)(iii), and

•  the NRA submits that such clauses fall within the description of ‘relevant term’.

[167] ACCI and Ai Group also submit that clauses specifying maximum casual engagement periods (as in the Teachers Award) are relevant terms.

[168] Regardless of whether or not such clauses are relevant terms, all parties appear to agree that these clauses are consistent with or are not inconsistent with the Act as amended and do not give rise to any uncertainty or difficulty.

[169] The only matter raised was by the NFF, which suggests that it might be argued that an offer of work which complies with cl.11.7 of the Pastoral Award constitutes an ‘advance commitment’ made by the employer to ‘an agreed pattern of work for the person’. The NFF submits that although the risk of this argument succeeding is small, to avoid confusion the Commission should insert a note that this was not the intent of the clause.

[170] In reply, Ai Group agrees with the observation made by the Commission at paragraph [70] of the June Statement. Ai Group disagrees with the submissions of the NFF and NRA and with the MGA’s submissions to the extent that they relate to the types of provisions identified in question 15. Ai Group referred to and relied on paragraphs [144] – [149] of its initial submission.

[171] The ACTU made no submission in reply on this point, save to note that ‘there appears to be broad agreement with the thrust of the ACTU’s earlier submissions.’ 61

[172] In its reply submission the AEU withdrew its submission that such terms are ‘relevant terms’.

[173] In reply MGA submits that the minimum casual payments and regular casual pay periods are relevant terms:

‘A term relating to minimum casual payments is a relevant term because it in effect encourages employers to engage casual employees for at least the same duration that the minimum casual payment covers. As such, there is a direct link between a minimum casual payment and a minimum period of engagement, which ‘provides for the manner in which casual employees are to be employed’; and is therefore a relevant term.

The Retail Award only permits irregular pay periods, in the sense of payment at the end of each engagement, for casual employees. As such, a term relating to casual pay periods is a relevant term because a regular or irregular pay period are circumstances that relate directly to employment as a casual employee.’ 62

[174] MGA also submits that minimum casual payments (and minimum periods of engagement) and regular casual pay periods are not inconsistent with the Act as amended and do not give rise to uncertainty or difficulty:

‘Clauses providing for minimum casual payments (and minimum periods of engagement) and regular casual pay periods do not in themselves detract from the definition of casual employment in s.15A(1). However, MGA/TMA agrees with the NRA that clauses providing for minimum casual payments (and minimum periods of engagement) infringe on an employer’s ability to engage a casual employee ‘as required according to the needs of the employer’, and hence may go towards rendering an employee incapable of falling under the definition of casual employment in s.15A(1).’ 63

[175] The AMWU notes that no employer appears to contend that clause 11.3 is a relevant term and agrees with the Ai Group submission that: ‘an award obligation to engage a casual for a relatively small number of hours on each occasion is not inimical to the statutory definition’:

‘In addition, it is relevant that the Award doesn’t actually require the employee to work those hours, provided the equivalent minimum payment is made in lieu.’ 64

2.7 Casual loadings and leave entitlements

[176] A number of submissions deal with questions 17 and 18 together and the Full Bench consider it convenient to do likewise in reviewing the parties’ positions on these issues.

17. Is provision for casual loading (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award) a relevant term?

18. If provision for casual loading is a relevant term:

•  for the purposes of Act Schedule 1 cl.48(2), does the absence of award specification of the entitlements the casual loading is paid in compensation for (as in the Hospitality Award, Manufacturing Award cl.11.2 and the Teachers Award) give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended, and

•  if so, should these awards be varied so as to include specification like that in the Retail Award or the Pastoral Award?

[177] In the June Statement the Full Bench observed that parties expressed conflicting views on whether provision for casual loading is a relevant term, and if so, whether clauses which do not specify the entitlements the casual loading is paid in compensation for give rise to uncertainty or difficulty such that they should be varied.

[178] For example:

•  the AEU, AHA, AIS, MGA, NFF and NRA submit that award clauses specifying casual loadings are relevant terms,

•  ABI, ACCI, ACTU (supported by a number of unions), Ai Group, HIA and the SDA submit that award clauses specifying casual loadings are not relevant terms, and

•  the AMWU does not concede that the casual loading provision in the Manufacturing Award it is a relevant term.

[179] If the Commission considers that casual loading clauses are relevant terms, ABI, ACCI, AHA, AIS and the NRA submit that the absence of specification gives rise (or where there is a live issue under an award, has the prospect of giving rise) to uncertainty or difficulty. Allstaff submits that prior Commission test cases appear to have included long service leave entitlements in a casual employee’s 25% loading.

[180] ABI, ACCI, AHA, AIS and the NRA submit that specifying the relevant entitlements the casual loading is said to cover would cure any such uncertainty. Several of these submissions support the Commission making a variation consistent with the specification in the current Retail and Pastoral Awards. AIS further submits that consideration should be given to a variation that apportions specific proportions of the loading to each entitlement as this may further assist a court in dealing with such situations under s.545A.

[181] In contrast, a number of interested parties − the ACTU (supported by a number of unions), AEU, AMWU (supported by CFMMEU – Manufacturing), AWU, FAAA, HIA, IEU and the UWU − submit that casual loading clauses that do not specify the entitlements covered are not inconsistent with the Act as amended and do not give rise to difficulty or uncertainty. Some further submit that any attempt to identify the casual loading components in awards may create difficulties.

[182] Ai Group and the SDA do not consider such provisions to be relevant terms and accordingly do not make a submission on this point.

[183] In its reply submission, ACCI submits:

‘As the Commission’s Statement dated 9 June 2021 observes, there are “conflicting views on whether the provisions for casual loading is a relevant term”.

It was submitted by a number of parties that the casual loading is ‘a relevant term’ on the basis that it refers to a specific requirement to which a casual employee is employed and therefore provides for “the manner in which casual employees are to be employed” (Schedule 1 cl.48)(1)(c)(iii)).

The manner in which casual employees are to be employed can be interpreted in a number of different ways. As the Discussion Paper observed:

“the ‘manner in which casual employees are to be employed’ may include award terms and conditions of employment of casual employees generally – for example, casual loadings in lieu of provision of paid leave and other ‘relevant entitlements’, hours of work, breaks, ordinary pay rates, allowances, overtime, shiftwork and penalty rates, payment of wages and classifications.”

ACCI submits that in practice such a broad interpretation in a number of submissions and observed in the Discussion Paper would practically allow any provision dealing with terms and conditions of employment for a casual to be subject to the review, including other terms not covered by the Discussion Paper including those dealing with personal/carers leave, maximum weekly hours and community service leave.

Moreover such an interpretation would in effect render the remaining consideration for review contained in s48(1)(c) with little basis for existence in the legislation as most would seem to falling within such a broad scope of interpretation of cl 48(1)(c)(iii).

ACCI suggests such an approach was not intended by parliament to be the effect of the words contained in cl 48(1)(c)(iii) as it will not only lead to impractical outcomes but would ignore the plain and ordinary meaning of the words “manner in which casual employees are to be employees” for two key reasons.

Firstly, the term “manner in which” when given its plain and ordinary meaning pertains to the way in which something is done or happens. Properly understood therefore, cl 48(1)(c)(iii) directs the Commission to matters pertaining to the way in which a casual employee is to be

engaged or employed – not to general terms and conditions of those engagements, including any entitlements such as a casual loading.

Secondly as already set out in our submission dated 24 May 2021 at paragraph 105, any consideration of the casual loading would involve the consideration of terms dealing with an entitlement a casual receives during the course of their engagement, after they are employed, not a term dealing with prospective considerations for those who are “to be employed”.

ACCI therefore maintains that cl 48(1)(c)(iii) does not on a plain and ordinary meaning intend for the review process to be a broad wholesale reconsideration of the terms and conditions for casual employees and therefore should not be considered to cover such terms as those pertaining to a casual loading.’ 65 (Footnotes omitted)

[184] In reply, Ai Group noted that it had previously submitted that award terms providing for the payment of a casual loading are not ‘relevant terms’ and confirmed that it maintains this view, notwithstanding the submissions of some parties expressing a contrary position.

[185] The ACTU made no submission in reply on this point, save to note that ‘there appears to be broad agreement that these are not relevant terms.’ 66

[186] In reply, MGA disagrees with the SDA that provision of a casual loading does not directly touch on matters raised by the Amending Act as the subject matter for consideration in the Review, and hence is not a relevant term and submits that provision of a casual loading is a relevant term:

‘because it is a specific requirement for engaging casual employees, and therefore ‘provides for the manner in which casual employees are to be employed’.’ 67

[187] MGA agrees with ABI that the absence of award specification of entitlements the casual loading is paid in compensation for could give rise to uncertainty, and that specifying the relevant entitlements the casual loading is said to cover would eliminate such uncertainty.

[188] In reply the SDA opposes the position of the NRA and advanced four points:

1. The casual loading is not a relevant term.

2. Even if it was a relevant term it causes no difficulty or uncertainty in its interaction with the Act.

3. The review of other provisions which do not fall within the purview of this Review process is best left to Award variation applications or the proper reviews of the Commission. To include them in this expedited process could cause jurisdictional complexity and inadvertent impacts to the detriment of all parties.

4. The historical context of each Award, as referred to at paragraphs 21 to 28 of the SDA’s initial submissions, would necessitate an Award by Award review and calculation of the casual loading in each. For practical reasons, this is best left to other processes of the Commission.

[189] In reply the IEU submits:

‘The AIS submits that the provision for casual loading in the Teachers Award is a “relevant term”. There is no reasoned (or any) argument made in support of that assertion. As is explained in paragraphs 58 and 59 of the IEU Submissions, a “relevant term” under Clause 48(1)(c) of Schedule 1 is one which (i) defines or describes casual employment; and (ii) deals with the circumstances in which employees are to be employed as casual employees; or (iii) provides for the manner in which casual employees are to be employed. Accordingly, the provision for a casual loading which is to be paid after employment has commenced, is not a “relevant term”. The reference to s 15A(2)(d) does not change the construction of Clause 48(1)(c) of Schedule 1.’ 68

[190] The IEU submits, for the reasons set out in [68] of its initial submissions and having regard to the context of the industry covered by the Teachers Award, and in the absence of specific evidence, the AIS submission ‘is not made out’. 69

2.8 Other casual terms and conditions of employment

[191] As a number of submissions deal with questions 19 and 20 together, we consider it convenient to do likewise in reviewing the parties’ positions on these issues.

19. Are any of the clauses in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award that provide general terms and conditions of employment of casual employees (not including the clauses considered in sections 5.1–5.5 and 6 of this paper) ‘relevant terms’ within the meaning of Act Schedule 1 cl.48(1)(c)?

20. Whether or not these clauses are ‘relevant terms’:

•  are any of these clauses not consistent with the Act as amended, and

•  do any of these clauses give rise to uncertainty or difficulty relating to the interaction between the awards and the Act as amended?

[192] In the June Statement the Full Bench observed that a common response given to questions 19 and 20 was that:

•  award provisions that set general terms and conditions of employment of casual employees are not or are not necessarily relevant terms, and

•  even if the Commission were to decide otherwise, such clauses are consistent with or are not inconsistent with the Act as amended and do not give rise to uncertainty or difficulty.

[193] Some parties hold views in relation to whether particular clauses are or may be relevant terms:

•  the AEU submits that such clauses in the Teachers Award are relevant terms for the purposes of the Review

•  the AHA submits that cl.11.3 of the Hospitality Award is a relevant term

•  the AIS has not formed a definitive view on whether terms and conditions for casual employees in the Teachers Award are relevant terms, and

•  the NRA submits that to the extent that rostering provisions, such as cl.15 of the Retail Award, apply to casual employees these are ‘relevant terms’.

[194] However, regardless of whether such clauses are relevant terms, all parties other than the NRA agree that such clauses are consistent with or are not inconsistent with the Act as amended and do not give rise to any uncertainty or difficulty relating to the interaction between those Awards and the Act.

[195] The NRA submits that rostering provisions give rise to a certain degree of difficulty as they potentially infringe several areas relevant to considering whether the employer has given a commitment to a particular piece of ongoing work. Accordingly, the NRA submits that it may be appropriate for the Review to consider the utility in specifying whether standard rostering provisions apply to casual employees, or if alternative provisions are required.

[196] In reply Ai Group disagrees with the AHA’s submission that clause 11.3 of the Hospitality Award is a ‘relevant term’:

‘Clause 11.3 prescribes the maximum number of ordinary hours that a casual employee can be engaged to work per day, shift or week. It does not define or describe casual employment, deal with casual conversion, deal with the circumstances in which they are to be employed or provide for the manner in which they are to be employed; noting that in our submission, the latter two propositions relate to the way in which a casual employee is to be engaged.

In any event, we note that the AHA’s response to question 20 is ‘no’.’ 70

[197] Ai Group also disagrees with the NRA submission that to the extent that clause 15 of the Retail Award applies to casual employees, it is a ‘relevant term’ and that it gives rise to difficulties, having regard to the definition of casual employment at s.15A of the Act:

‘We disagree that clause 15 is a ‘relevant term’. Even if it applies to casual employees, it is not a term that meets any of the descriptors at clause 48(1)(c) of the Act, noting again our submission that clause 48(1)(c)(iii) relates to matters associated with how a casual employee is to be employed rather than terms and conditions that apply during the course of a casual employee’s employment. Clause 15 would fall in the latter category.

Even if clause 15 was found to be a ‘relevant term’, our response to question 20 would be ‘no’. This is because the definition of a ‘casual employee’ in the Act turns on the offer and acceptance of casual employment between the employee and their employer. It does not turn on post-employment conduct. Accordingly, clause 15 would not, in our submission, colour an assessment of whether an employee is a casual employee as defined by the Act.’ 71

[198] In reply the NRA reiterated its previous submission on this point, and notes that:

‘…a modern award provision does not need to specifically direct itself to casual employment in order to “provide for the manner in which casual employees are to be employed.”

Rather, any modern award provision which is expressed as applying to “employees”, without limitation, may provide for the manner in which casual employees are to be employed, particularly where that provision may give rise to inconsistency or uncertainty.’ 72

[199] The NRA disagrees with the proposition advanced by the SDA that the Retail Award should be presumed to not be “uncertain or difficult” on two bases:

‘Any review undertaken of the Retail Award historically occurred in the context of the Act prior to amendment. Where the Act has been amended, sometimes substantially, it cannot be presumed that any modern award is necessarily consistent with the Act as amended…

The statement that the Retail Award is “not uncertain or difficult” by virtue of recent review activity is simply not borne out by recent proceedings. A separately constituted Full Bench has recently held that clause 10 of the Retail Award is “uncertain” 73, whilst clause 16.6 of the Retail Award has been noted as “ambiguous” with little in the way of resolution of that ambiguity.74…

The NRA submits that where uncertainty or difficulty is identified as arising from the interaction of the award and the Act as amended, such uncertainty ought to be dealt with sooner rather than later.’ 75

[200] In reply the SDA notes that the Act makes clear at s.15A(3) that: “To avoid doubt, a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.” The SDA submits that to the extent that the Act has already provided clarity on the issue, the ‘point raised by the NRA mischaracterises the issue and artificially creates a difficulty to be cured with a variation which would upset long standing industrial conditions.’ 76

[201] In reply, the ACTU noted that ‘it appears broadly common ground that these are not relevant terms.’ 77

2.9 Retail and Pastoral Award (model casual conversion clause)

21. Is it the case that the model award casual conversion clause (as in the Retail Award and Pastoral Award) is detrimental to casual employees in some respects in comparison to the residual right to request casual conversion under the NES, and does not confer any additional benefits on employees in comparison to the NES?

22. For the purposes of Act Schedule 1 cl.48(2):

•  is the model award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

23. For the purposes of Act Schedule 1 cl.48(3), would removing the model clause from the awards, or replacing the model clause with a reference to the casual conversion NES, make the awards consistent or operate effectively with the Act as amended?

24. If the model clause was removed from the awards, should other changes be made to the awards so that they operate effectively with the Act as amended (for example, adding a note on resolution of disputes about casual conversion)?

[202] In the June Statement the Full Bench observed that the employer parties submitted that the model award casual conversion clause is detrimental to casual employees in some respects in comparison to the residual right to request casual conversion under the NES and does not confer any additional benefits on employees in comparison to the NES.

[203] In the June Statement the Full Bench observed that the employer parties maintained that the model award casual conversion clause is inconsistent with the NES as it gives rise to a different entitlement and will also give (and is giving) rise to uncertainty and difficulty relating to the interaction between the awards containing the model clause and the Act as amended. For example:

•  ACCI (supported by AHA) submitted that this uncertainty and difficulty applies regardless of whether the model conversion clause and the casual conversion NES can operate in parallel to each other, or whether the model clause is considered to be ancillary or supplementary to the NES and has effect to the extent that it is not detrimental to an employee in any respect when compared with the NES, and

•  the NFF submitted that if the Pastoral Award creates an additional right to request casual conversion, this may cause a lay person to wrongly assume the right to request casual conversion only arises each 12 months.

[204] In contrast, the ACTU (supported by a number of unions) submitted that the model clause is broadly consistent with the residual right to request casual conversion in the NES and is capable of operation with only minor variation to remove any uncertainty. The SDA submitted that the model award clause is not inconsistent with the Act as amended, can operate concurrently to the benefit of the employees and does not give rise to uncertainty or difficulty such that any power to determine to vary its provisions is enlivened.

[205] The ACTU (supported by a number of unions) accepts that the model award casual conversion clause is less favourable to casual employees in some respects when compared to the residual right to request casual conversion under the NES. However, it submits that the model clause is also more favourable than the NES in some respects (ie its anti-avoidance provision and the application of the 12 month eligibility period in the retail sector). The SDA does not accept that the model casual conversion clause in the Retail Award is detrimental compared to the residual right to request casual conversion under the NES, and also submits that in some respects, the Award model term could be considered to confer additional advantage upon employees.

[206] The ACTU submits that the model casual conversion clause contained in the Retail and Pastoral Awards is more favourable for employees than the NES in at least the following respects:

(a) The ‘anti-avoidance’ provision (i.e. clause 11.7(n) of the Retail Award and clause 11.8(m) of the Pastoral Award). 78

(b) As submitted by the ACTU, ‘[t]he operation of a 12 month period over which work patterns giving rise to eligibility for conversion to permanent employment in the retail sector may operate more favourably for some casual employees in that sector. This is due to the longer period, in some cases for some workers, operating to overcome seasonal ebbs and flows in trade …’ 79.

[207] ACCI (supported by AHA) and ABI also suggested that the model award casual conversion clause may not be incidental or ancillary to the casual conversion NES, or supplementary to the NES.

[208] The SDA has made similar submissions. 80

[209] In its reply submissions, ACCI submitted:

‘…section 66L has the same effect as clause 11(n)-(p) of the General Retail Industry Award. In practice, an employer who engaged, then re-engaged, a casual employee to avoid a casual conversion right arising (as is expressly prohibited under the model clause) would similarly breach section 66L of the FW Act which prohibits an employer from terminating an employee’s employment to avoid a casual conversion right arising. This provision would be breached even if that employer subsequently re-engaged that employee…

ACCI maintains that a longer period of 12 months to assess a pattern of work is a detriment to an employee, because the very ebbs and flows within those 12 months may render the pattern irregular. Under the residual right to request, employees may choose when to make the request, meaning that if there is a favourable 6-month period of work where the employee has worked a regular pattern, the employee is permitted to choose that period to base their request on.

ACCI further submits the beneficial intent of the shorter period is supported by the comments in the Explanatory Memorandum which states “In comparison to the FWC Model Clause, the nature of casual conversion would be further strengthened by… shortening the period of service required to demonstrate a regular pattern of work”.

ACCI maintains that to the extent that it is relevant, the model award casual conversion clause is detrimental to casual employees in some respects in comparison to the residual right to request casual conversion under the NES, and does not confer any additional benefits on employees in comparison to the NES.

ACCI notes the submissions of the ACTU and SDA in relation to question 22…

ACCI also maintains that removing the model clause from the awards, or replacing the model clause with a reference to the casual conversion NES, would make the awards consistent or operative effectively with the Act as amended.

Some parties have suggested that this is not required as a part of the Review.

As set out in our initial submission, we submit that the elements of section 48(3) have been made out and therefore “the FWC must make a determination varying the modern award to make the award consistent or operate effectively with the Act as so amended”.

In terms of what form this may take, we rely on our initial submission that the preferred approach is to make reference to the casual conversion provisions in the NES, rather than reproducing the terms of the NES within the modern awards, which is consistent with the approach of Full Benches of the Fair Work Commission during the award modernisation process.

The ACTU has also suggested that to the extent that the Commission is minded to remove the model clause and replace it with either the casual conversion NES provision or a reference thereto, such features of the model clause as are identified to be more favourable to workers should be retained.

For the reasons outlined above in relation to question 21, ACCI submits that there are no clauses that are more favourable to workers and therefore no features of the model clause should be retained.’ 81

[210] In its reply submission, Ai Group notes that s.66L(4) of the Act contains a ‘similar protection’ to that in clause 11.7(n) of the Retail Award and clause 11.8(m) of the Pastoral Award. Section 66L(4) states:

(1) An employer must not reduce or vary an employee’s hours of work, or terminate an employee’s employment, in order to avoid any right or obligation under [Division 4A].

Note: The general protections provisions in Part 3-1 also prohibit the taking of adverse action by an employer against an employee (which includes a casual employee) because of a workplace right of the employee under the Division.

[211] Ai Group submits:

‘By virtue of s.66L(1) and the general protections provisions in Part 3-1 of the Act, casual employees are not worse off under the Act vis-à-vis the Retail and Pastoral Awards.

Moreover, we do not accept the proposition advanced by the ACTU, that ‘the requirement [in the award clause] to not engage and re-engage may capture anti-avoidant conduct that may not be captured by the prohibition on termination [in s.66L(1) of the Act] and should therefore be retained’ 82.

If, hypothetically, an employer was to terminate a casual employee’s employment for a reason that did not include the avoidance of any right or obligation arising from the Act in relation to casual conversion, but the employer did determine that the casual employee would not be re-engaged in order to avoid such a right or obligation; the employer would be in breach of s.340(1)(b) of the Act.

That is, the employer would have fallen foul of the requirement to not take adverse action against the employee in order to prevent the exercise of a workplace right by the employee. We note in this regard that:

(a) By virtue of s.342(1) of the Act, a refusal by an employer to offer a prospective employee employment is a form of ‘adverse action’.

(b) By virtue of s.341(3) of the Act, a prospective employee is taken to have the workplace rights they would have if they were employed.

(c) By virtue of s.341(1)(a) of the Act, the right to be offered permanent employment and the residual right to request conversion under the NES constitute ‘workplace rights’ in the relevant sense.

As a result, although s.66L(1) of the Act does not expressly prohibit a refusal to re-engage on the basis of avoiding casual conversion rights and obligations, by virtue of s.340 of the Act, the relevant conduct is nonetheless prohibited. A prospective casual employee can make an application to the Commission pursuant to s.372 of the Act to deal with a dispute between themselves and their prospective employer about an alleged contravention of s.340(1)(b).

Accordingly:

(a) The ‘anti-avoidant conduct’ captured by the award casual conversion clauses referenced by the ACTU and SDA are prohibited by the Act; and

(b) There is clearly no basis for retaining the extant award provisions. Such provisions would not be ‘necessary’ in the sense contemplated by s.138 of the Act.’ 83

[212] In response to the ACTU and SDA submission that the Retail Award ‘may’ be more beneficial to some employees covered by the award, on account of seasonal fluctuations in customer demand, which may in turn affect the hours worked by such employees, Ai Group opposes the position put by the ACTU and SDA and submits:

‘First, the Retail Award covers a diverse range of sectors. The proposition advanced by the ACTU and SDA assumes a degree of homogeneity that does not accord with the diversity of operations covered by the award. For instance, even if the Commission were to accept that supermarkets experience some seasonal fluctuations, it cannot safely proceed on the basis that the extent or nature of those fluctuations are the same or even similar to fluctuations experienced by a retail establishment that sells women’s clothing, hardware shops, bottle shops and / or furniture stores, to name but a few examples.

Second and in any event, the ACTU and SDA’s submissions appear to misconstrue the operation of the definition of ‘regular casual employee’ in the Retail Award.

An employee is entitled to request to convert to permanent employment if the employee has ‘in the preceding period of 12 months worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee’ in accordance with the Retail Award.

Contrary to the submissions made by the unions, a consideration of an employee’s pattern of hours over a period of 12 months rather than 6 months, in circumstances where there are seasonal fluctuations, does not necessarily enhance that employee’s prospects of becoming eligible to convert. If, over the course of a 12 month period, the employee’s hours of work fluctuated, depending on the nature and extent of those fluctuations, they would likely be rendered ineligible to request conversion. This is because the pattern of hours worked by the employee would not be able to be performed as a full-time or part-time employee in accordance with the award.

Critically, the casual conversion provisions do not contemplate a potential averaging of an employee’s hours of work, the ‘smoothing out’ of fluctuations or any other such concept. What is required is a consideration of the pattern of hours that was in fact worked by the employee over the relevant 12 month period and a consideration of whether that pattern can be accommodated by the full-time or part-time provisions of the award, without substantial amendment. The pattern of hours worked by an employee is to be identified by reference to the days on which they worked, and the times at which they started and finished work on those days.

On its face, it appears unlikely that the type of variability contemplated by the ACTU and SDA would be able to be accommodated without significant adjustment. We note in this regard that the SDA describes the circumstances in its contemplation as those of ‘retail employees whose hours can vary significantly depending on season’ 84 (emphasis added).

The definition of ‘regular casual employee’ was formulated by a Full Bench of the Commission when it determined that the model clause would be inserted in the Retail Award (along with a number of other awards). As is evidenced from the Commission’s decision, having regard to the extensive evidence that was heard in those proceedings, the definition was in fact designed to ensure that employees’ whose hours of work were affected by temporary surges in demand or other seasonal factors, would not be eligible to request conversion under the model clause:

[375] In relation to the first question, we consider that the ACTU’s proposal for a 6 month eligibility period is not appropriate for the model provision. The evidence before us, in particular that of Ms Colquhoun and Ms Neill, indicated that, at least in some industries, a 6 month period would tend to render eligible for conversion casual employees whose employment was seasonal or for the purpose of meeting a temporary surge in demand or which for other reasons was not likely to continue on an ongoing basis. We note that a number of awards which currently contain a casual conversion clause provide for a 12 month qualifying period. We consider that a calendar period of 12 months is the appropriate qualifying period for the model provision.

[376] In relation to the second question, the ACTU’s proposed clause makes eligible for conversion after the qualifying period is reached all casual employees except an “irregular casual employee”, which is defined to mean a casual employee “engaged to perform work on an occasional or non-systematic or irregular basis”. Although this formulation captures the gravamen of the purpose of a casual conversion clause – that is, to allow casual employees engaged on a long-term, regular basis a mechanism to convert to permanent employment – we nonetheless have 2 concerns about this formulation. The first is that it is lacking in firm criteria by which the employer can determine whether a casual employee is eligible for conversion, and essentially requires the employer to make an evaluative judgment. Although the formulation is comparable to the criteria used in s.384(2)(a) of the FW Act for determining whether a casual employee has served the minimum employment period necessary to qualify as a person protected from unfair dismissal, the critical difference is that under the ACTU proposal the employer would be liable for a civil penalty for breach of s.45 of the FW Act if it made the wrong judgment about whether the formulation was satisfied. The second difficulty is that the formulation does not make it necessary that the casual employee’s working pattern be transferable to full-time or part-time employment in accordance with the provisions of the relevant modern award. The essence of the casual conversion concept, we consider, is that the casual employee has been working a pattern of hours which, without significant adjustment, may equally be worked by the employee as a full-time or part-time employee. The purpose of a casual conversion clause is not to require the employer to engage in a major reconstruction of the employee’s employment in order that the employee is able to convert.

[377] We therefore consider that the qualifying criterion should be that the casual employee (over a calendar period of 12 months) has worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time employment provisions of the relevant award. That formulation accommodates the possibility that conversion could require some adjustment to the employee’s working pattern. It will obviously follow from the adoption of that criterion that the more flexible the hours of work provisions for full-time and part-time employees are, the greater the opportunity there will be for casual conversion to occur. 85 [Emphasis added]

The observations made by the Commission demonstrate that the definition was not intended to operate in the manner that the ACTU and SDA contend. The corollary may, in some circumstances, be true. That is, in some circumstances, due to seasonal variability, an employee may work a certain pattern of hours for a period of 6 – 12 months, which does render then eligible to be offered a permanent position under the NES casual conversion provisions, even though when viewed over a 12 month period under the award, they would not meet the definition of a ‘regular casual employee’.’

[213] For the reasons articulated above, on the basis of the material before the Commission, the Commission should not accept the ACTU and SDA’s submissions in relation to this matter.

[214] Ai Group agrees with ACCI and ABI that the model casual conversion clause is not ancillary, incidental or supplementary to the casual conversion provisions contained in the NES, for reasons advanced at [204] – [213] of Ai Group’s initial submission in relation to the Manufacturing Award:

‘In essence, the model casual conversion provision does not operate in conjunction with or in addition to the casual conversion provisions in the NES. Rather, it reflects an entirely different scheme that operates independently of the NES. For this reason, it cannot be said to be ancillary, incidental or supplementary to the NES.’ 86

[215] Ai Group also submits that any amended provision, as suggested by the ACTU, would need to satisfy s.138 of the Act and that:

‘… in light of the recent amendments to the NES, it is no longer necessary for the Retail or Pastoral Awards (or any other award containing a casual conversion clause) to continue to deal with the subject matter. This is because such provisions cannot be said to be necessary to ensure that the awards, together with the NES, ensure a fair and minimum safety net. This is particularly so when regard is had to the premise upon which such provisions were inserted in the relevant awards.’ 87

[216] As to Question 23, Ai Group observed that the employer parties submitted that removing the model clause from the awards and replacing this with a reference to the casual conversion NES, would make the awards consistent or operate effectively with the Act as amended for the purposes of the Act, Schedule 1 cl.48(3).

[217] The ACTU (supported by a number of unions) accepts that while such a course would lead to consistency, this is not required by the Review and other options may be more meritorious. The ACTU submits that if the Commission is minded to replace the model clause with the casual conversion NES provision (or a reference to the NES), such features of the model clause as are identified to be more favourable to workers should be retained.

[218] Ai Group submits that the elements of the model clause identified by the ACTU and SDA are not more beneficial for employees than the NES and accordingly, their proposition that the awards should retain such elements is irrelevant.

[219] Ai Group also submits that a provision that requires that consideration be given to the pattern of hours worked by a casual employee over a period of 12 months could not be included in the awards, because:

1. The award would not be consistent with the Act, as amended. Rather, the award would prescribe a fundamentally different eligibility criteria than that prescribed by the NES.

2. If the 12 month period were to apply in lieu of the 6 month time period prescribed by the NES, such a provision would exclude the benefit provided by the NES to at least some employees for the purposes of s.55(1) of the Act and it would not be saved by s.55(4) of the Act, because it would be detrimental to those employees. Such a clause would therefore be of no effect. 88

3. The Commission cannot be satisfied that such provisions would be necessary to ensure that the awards achieve a fair and relevant minimum safety net, as required by s.138 of the Act. There is no material before it that establishes that terms of the nature contemplated by the unions, when considered in the context of the recently amended NES, are necessary.

[220] The SDA submits that the deletion of the model clause would ‘deprive employees of the rights accorded by a clause which is ancillary or incidental to the Act as amended, can operate concurrently with its provisions and … is not uncertain or difficult in its operation.’ 89 In reply to that submission Ai Group submits:

1. For the reasons explained above, the model clause does not afford rights to employees that are not available under the NES.

2. Even if it did, this is not of itself a reason to maintain the current clause. The application of clause 48 and ss.134 and 138 are to guide the Commission’s determination.

3. The model clause is not ancillary or incidental to the Act. The model clause provides an inherently different scheme for conversion from casual to permanent employment. It does not operate in conjunction with the NES.

4. The proposition that the clause can ‘operate concurrently’ with the NES is neither here nor there. That is not the test that applies pursuant to clause 48 or s.138 of the Act.

5. For the reasons articulated in our May Submission, the model clause does give rise to uncertainties and difficulties. 90

[221] In conclusion Ai Group submits:

‘The proposition that the model clause should be retained is unsustainable. The awards would not be consistent or operate effectively with the Act and the awards would contain a provision that is not necessary for the purposes of s.138 of the Act. We set out the bases for these contentions in detail in our May Submission.’ 91

[222] In its reply submission the ACTU supports the submission of the SDA and the AWU in respect of the Retail Award and the Pastoral Award.

[223] In its reply submission ABI addressed the SDA’s submission that the award conversion provision could be more beneficial on the basis that:

‘…the 6 month period referred to at section 66F(b) of the Act as amended could be considered less advantageous retail employees whose hours can vary significantly depending on season and who may in consequence be denied an opportunity for conversion which a 12 month period of consideration would facilitate.’

[224] ABI characterises this submission as ‘curious’ on the basis that the award provision is available to a casual employee who has in the preceding period of 12 months worked a pattern of hours on an ongoing basis:

‘It is not clear how an employee whose hours varied significantly on a seasonal basis could access this provision, and why such access would be more readily available under the award provision than the conversion entitlement under the Act.’ 92

[225] ABI also notes that the submission that the lack of an ‘anti-avoidance’ provision in the Act conversion entitlements provides a detriment in comparison to the Award clause which ‘appear to overlook s 66L of the Act’.

[226] In relation to question 22 ABI submits:

‘The parties’ divergence on this question demonstrates the uncertainty which has arisen in relation to the interaction between the Act conversion entitlement and the Award regime.

This is most aptly demonstrated by the ACTU’s submission that the award conversion clause is capable of operation with only minor variation to remove any uncertainty alongside the SDA’s submission that the two provisions can operate concurrently.

The conversion entitlement should be either a single entitlement (which can exist in the Act) or needs to exist as two distinct entitlements (which will inevitably give rise to uncertainty or difficulty).’ 93

[227] As to question 23, ABI maintains that the answer to this question is ‘yes’ and submits that the ACTU’s suggestion that ‘other options may be more meritorious’ than replacing the Award provision with the Act conversion entitlement ‘is difficult to respond to without a proposed variation.’

[228] In its reply submission the NRA supports the view advanced by ACCI that the model casual conversion clauses may not be permitted terms pursuant to s.55(4) of the Act and rejects the SDA’s submission that a 12-month assessment period under the model clause is more beneficial to employees as it mitigates the effect of seasonality:

‘The NRA submits that a longer assessment period is more likely to capture more seasonal variation, rather than less, whereas a six-month assessment period allows a casual employee to time their request in such a way as to minimise the effect of major seasonal events (for example, Black Friday and Christmas trading periods).

The NRA reiterates its submission that concurrent operation of both the NES and modern award casual conversion provisions would service little more than to create confusion and uncertainty for both employees and employers.’ 94

[229] The NRA notes that the SDA agrees with the proposition that replacing the model casual conversion clause with a reference to the NES would make the awards consistent and operate effectively with the Act as amended and also:

‘The NRA notes that there has long been a practice of not reproducing the terms of the NES in the modern awards. The NRA submits that this practice ought to be continued, noting that doing so saves the costly and time-consuming requirement for the modern awards to be separately varied in response to legislative amendment.’ 95

[230] In reply, MGA agrees with the Ai Group and NRA that the Retail Award model casual conversion clause is detrimental to casual employees in comparison to the residual right to request casual conversion under the NES and disagrees with the SDA that there should be continuing concurrent operation of the award model casual conversion clause and the Act as amended.

[231] MGA agree with ABI that the model award casual conversion clause is inconsistent with the Act as amended as it gives rise to a different entitlement and that retention of both the model award clause and the residual right to request casual conversion under the NES gives rise to uncertainty and difficulty:

‘MGA/TMA submits that it is not possible for the model conversion clause and the residual right to request casual conversion under the NES to operate in parallel to each other as it is not perfectly clear whether both casual conversion provisions could apply to employees who are eligible to request casual conversion under both regimes, and if so, whether the employer is required to satisfy its obligations in respect of both regimes.’ 96

[232] MGA also disagrees with the SDA’s submission that the model casual conversion clause is not inconsistent with the Act as amended, and disagrees that concurrent operation is possible.

[233] MGA submits that removing the model clause from the awards and replacement with a reference to the casual conversion NES, ‘is necessary to enable effective operation of the awards with the Act as amended’ and that reference to the casual conversion NES in the awards is sufficient and that no other changes, such as to include a note on dispute resolution under s.66M of the Act, are necessary.

[234] In reply, the SDA rejects Ai Group’s submission and does not accept that the Retail Award’s model award casual conversion clause is in fact detrimental. In fact, several of its provisions provide a real benefit compared to the Act.

[235] As to the ACCI submission, the SDA submit:

‘While ACCI correctly points out several advantages in the NES provision, particularly in relation to dispute resolution, it does not immediately follow that the model clauses are indeed detrimental when it is considered that they can operate concurrently.

The submission made by ACCI at paragraph 147 that the shorter amount of time required for a regular pattern of hours is an advantage is not always the case. In the retail industry, the seasonal changes in business practice means that a shorter averaging time would result in a significant detriment to many retail employees. The 12-month averaging period of the model conversion clause provides a real benefit to casual employees ensuring a more accurate method of capturing their hours. For this reason, the model provision can be said to supplement the Act.

As the NES provision must operate, the retention of the model provision provides nothing but an extra opportunity for employees who meet its criteria to request conversion of employment. Such a circumstance cannot be said to create an undue difficulty or burden on employers.

This is provided for under section 55(6) of the Act which provides:

To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:

(a) those terms operate in parallel with the employee's NES entitlement, but not so as to give the employee a double benefit; and

(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.’ 97

[236] The SDA also responds to ABI’s submission that the retention of the two casual provisions would create uncertainty and difficulty in relation to the Amending Act at page 10 of its submissions:

‘On the contrary, it is perfectly clear that both provisions could apply to casual employees on the basis that the qualifying criteria for each, while similar, differ. Most notably the requirement of 6 months pattern of employment in the Act and 12 months in the GRIA provision.

It is submitted that the points made by the AIG at paragraph 184(b) of an uncertain status mischaracterises the potential uncertainty of the status of the provision. That is, it is quite clear that unless the FWC varies the Award, the status of the model provision is settled. Particular note should be given to the position of the FWC itself, as noted, that the provisions may indeed be retained as at the Discussion Paper paragraph 17.

Similarly, the point made by the AIG at 184(c) is, it is submitted, an artificial one:

If both casual conversion schemes were to apply to a casual employee, it is not clear whether an employer is required to satisfy its obligations in respect of both sets of provisions or whether one, in effect, overrides the other. To this end, the interaction between the Act and the awards is plainly uncertain and gives rise to difficulties.

Award provisions (and indeed Enterprise Agreement provisions) can provide different benefits compared to the NES based on similar qualifying criteria as noted regarding section 55 above at paragraph 113. However, to try and draw from this circumstance (of two operative provisions) the possibility that one provision, without being varied, would simply override the other is tenuous at best.’ 98

[237] The SDA notes the position of Ai Group at paragraphs 185 and 186 of its submissions as well as those of the NRA at 4.5.1 of its submissions, those of ACCI at paragraphs 174 to 180, and those of ABI (at page 11) endorsing the removal of the model clause. In response, the SDA submits:

‘The Awards need to be of practical use for parties with varying levels of industrial expertise. The need to find such a fundamental employment term, particularly one which is relatively new, in a separate document would create difficulty and, it is submitted, an increased risk of inadvertent non-compliance.’  99

[238] As to question 24 the SDA submits that while its primary position is that the Commission should not remove the model clause, if the Commission is so minded the SDA would seek to respond to this question at that time. Prima facie there would be no detriment to the inclusion of a note on dispute resolutions and the casual conversion provision.

2.10 Manufacturing Award casual conversion clause

[239] The AMWU made the following general submissions concerning the Manufacturing Award casual conversion clause in reply to the Ai Group’s earlier submissions:

•  the casual conversion clause in the Manufacturing Award does not exclude the NES casual conversion provisions because it does not prevent an employee from receiving the benefit of conversion to permanent employment but rather facilitates it;

•  an employee who does not avail themselves of the right under the award clause after six months employment, or who seeks to exercise the right but whose conversion is refused by the employer, will still be able to access the NES entitlement;

•  if there is any doubt about whether the award clause excludes the NES, this could be resolved by adding words to the clause to preserve the operation of the NES;

•  additionally, the award clause supplements the NES provisions within the meaning of s.55(4), in the sense that it adds to the NES entitlement by providing an opportunity to convert what would otherwise not be able to be utilised, and extends the NES entitlement by making it available to employees in small businesses;

•  the current clause 11.5 is permitted to be included in the Manufacturing Award by s.136(1)(a) or (c);

•  the corollary of the above submissions is that there is no basis to find that clause 11.5 is of no effect;

•  the submission of Ai Group that clause 11.5 ‘practically’ excludes the NES to the extent that it would result in employees using the award term rather than the NES term is contrary to authority (Family Friendly Working Arrangements Decision [2018] FWCFB 1692 [155]) and wrong;

•  the Act contemplates a role for both awards and agreements to provide substantive entitlements in relation to matters dealt with in the NES, as s.55(5) and (6) make obvious, and as stated by the Full Bench in Maritime Union of Australia v FBIS International Protective (2014) 245 IR 287 at 292;

•  Ai Group’s submission that employees exercising the casual conversion entitlement under the Manufacturing Award will not receive benefits provided by the NES is wrong, because the alleged benefits in the NES do not apply to casual employees who have been employed for 6 or more months but less than 12 months;

•  likewise, because the NES provisions do not apply at all to employees with less than 12 months’ employment, it cannot be said that the award provision negates the NES;

•  contrary to the Ai Group’s submissions, the fact that the Act and regulations were not amended to expressly permit awards to contain casual conversion provisions is indicative that a modern award could continue to include a term dealing with casual conversion;

•  Ai Group’s alternative submission that the retention of clause 11.5 was not necessary to achieve the modern awards objective and therefore contrary to s.138, was ‘both opportunistic and ill conceived’, and the Manufacturing Award was recently reviewed and found to be meeting the modern awards objective;

•  The variation sought by the Ai Group would significantly reduce existing rights under the Manufacturing Award by preventing access to conversion after six months’ employment, by casual employees who are not ‘irregular casual employees’ and do not have a regular pattern of hours within the meaning of ss.65B and 66F, and by employees engaged by employers employing less than 15 employees;

•  The AMWU had not brought any evidentiary case in support of the proposed removal of clause 11.5;

•  the introduction of a less beneficial entitlement into the NES cannot displace a finding that a more beneficial entitlement in an award clause is a necessary inclusion in a modern award;

•  the consideration in s.134(a), (b), (c) and (d) strongly tell against the granting of the variation sought by the Ai Group, with the balance of the considerations in s.134 being neutral or not applicable;

25. Is the Manufacturing Award casual conversion clause more beneficial than the residual right to request casual conversion under the NES for casual employees employed for less than 12 months, but detrimental in some respects in comparison to the NES for casual employees employed for 12 months or more?

[240] In the June Statement the Full Bench observed that all interested parties that made a submission agreed or conceded that the Manufacturing Award casual conversion clause is more beneficial than the residual right to request casual conversion under the NES for casual employees employed for less than 12 months, but detrimental in some respects in comparison to the NES for casual employees employed for 12 months or more.

[241] In addition to the 6 months’ qualifying period, the unions submit that the casual conversion entitlement in the Manufacturing Award is more beneficial than the NES entitlement in that it is likely that it covers a wider scope of casual employees than those covered by the casual conversion NES (due to the reference to a ‘regular pattern of hours’ in s.66F of the Act).

[242] Some of the submissions also discuss the status and effect of the Manufacturing Award casual conversion clause. In particular, ACCI (supported by AHA) submits that as the Manufacturing Award casual conversion clause is not an ancillary, incidental or supplementary term for the purposes of s.55(4) of the Act, it is therefore not necessary to consider whether the clause is more or less beneficial than the NES; and Ai Group does not agree that removing the Manufacturing Award term would reduce the present entitlements of casual employees employed for less than 12 months under the Award, because the Award term is of no effect by virtue of s.56 of the Act.

[243] The AMWU (supported by the ACTU, AWU, CFMMEU – Manufacturing) submits that removing the Manufacturing Award clause would reduce the present entitlements of casual employees employed for less than 12 months under the Award as it presently operates with the NES, and would likely also remove casual conversion entitlements entirely from a definable class of casual employee, contrary to the modern awards objective.

[244] The ACTU submits that the 6 month qualifying period for casual conversion in the Manufacturing Award should be retained in light of its long history and on the basis that it is more beneficial than the NES. In reply, Ai Group submits:

‘The fact that the casual conversion provision in the award permits requests for conversion within a shorter period of time than the NES and / or the fact that the clause has applied in the industry for some time are not of themselves bases for retaining the clause or parts of them. The Commission’s power to include such terms in the award is constrained by clause 48 and s.138 of the Act. For the reasons set out in the May Submission and elsewhere in this submission, such an approach should not be adopted by the Commission…

We accept that it is conceivable that some casual employees would be eligible to request conversion under the clause contained in the Manufacturing Award, who would not be eligible for conversion under the NES. We note, however, that there is no evidence before the Commission that might establish whether such a class of casual employee in fact exists. Ultimately, this will depend on whether casual employees covered by the Manufacturing Award do in fact work hours that would render them eligible to request conversion under the award but would not cause the NES casual conversion provisions to apply to them. We note that the AMWU puts its proposition no higher than to say that casual employees ‘may have regular engagements without having regular hours’ 100.’101

[245] Ai Group also disputes the AMWU’s proposition that ‘any unfavourable comparison between the [casual conversion provision found in the Manufacturing Award] and the [residual right to request under the NES] can be considered academic’ 102 because the clause in the Manufacturing Award applies after 6 months whereas the residual right under the NES applies after 12 months.

[246] In its reply submission ACCI clarifies that it did not intend to agree or concede that the Manufacturing Award casual conversion clause is more beneficial for casual employees employed for less than 12 months and submits:

‘There are in fact a number of circumstances whereby the Manufacturing Award conversion clause will not have effect at a time prior to the NES residual right to conversion. In addition to the exception noted by the AMWU at footnote 30 of its submission, other circumstances include the following:

a. Where 6 months applies for the purposes of 11.5(b) and (d), and casual employee engaged on an occasional or non-systematic or irregular basis for 6 months or more; and

b. Where 12 month applies for the purposes of 11.5(b) and (d) by virtue of 11.5(j), regardless of any time spent as an irregular casual employee.

It should be noted the above provisions allow for an employee to elect to convert rather than there being a requirement to offer conversion, with specific notice obligations that differ to those of the NES.

Indeed, in the situation where the 12 month period applies for the purposes of 11.5(b) and (d), and the employee has spent the first 6 months of employment as an irregular casual employee, the right to elect under the Manufacturing Award conversion clause would not arise until the employee had been employed for 18 months – 6 months after the right to request has arisen under the NES.

It is therefore pertinent to note that at paragraph 79 of the AMWU’s submission, that whilst the AMWU acknowledges that the Manufacturing Award regulates the conversion process in different terms to the NES, it seeks to justify this inconsistency on two grounds – one of which being that the Manufacturing Award conversion clause applies at a different time in terms of the overall employment relationship. This point is further emphasized at paragraph 87 of the AMWU’s submission, where it claims that if the Manufacturing Award conversion clause is operating as intended “the NES entitlement will have little work to do because in most cases the casual employee will have converted to permanent employment prior to the NES Entitlement crystalising.”

The reality, as illustrated above, is that there are a number of circumstances whereby the NES entitlement will have work to do, even if it is (mistakenly) assumed that all eligible casual employees will elect to convert under the Manufacturing Award conversion clause. We say mistakenly on the basis of well-established historical and current practice, whereby the vast majority of eligible casuals are likely to continue to elect against Award conversion - meaning that the NES entitlement will in practice be enlivened.

The difficulty and uncertainty arising from having two different (i.e. Manufacturing Award and NES) casual conversion entitlements operating in parallel is clear, particularly when one considers that the Manufacturing Award conversion entitlement may in practice arise before, after, or at the same time as the NES conversion entitlement.

This difficulty and uncertainty is further exacerbated should the AMWU’s submission at paragraph 71 be accepted that a distinction exists in practice between the operation of the Award conversion provision and the NES entitlement, such that the removal of the Award provision would “likely also have the effect of removing casual conversion entitlements entirely from a definable class of casual employee”.

In fact, the very basis of the AMWU’s argument (through the citation of a variety of case law from paragraphs 63 – 70 of its submission) serves to highlight the ambiguity and confusion awaiting any layperson (most relevantly, employers and their casual employees) who may already be grappling with determining whether a casual employee worked a regular pattern of hours for the purposes of the NES entitlement, without adding another layer of determining eligibility under a different test (“regular and systematic”) should the Manufacturing Award casual conversion provision remain.

Of course, this is largely an academic exercise, as employer report the vast majority of employees engaged on a casual basis do not elect to convert to full or part time employment. However, the employer will risk exposure to technical breaches of the Award should the provision remain – and the receipt by the employee from the employer of conflicting casual conversion rights (i.e. Casual Employment Information Statement and Manufacturing Award casual conversion clause) is otherwise likely to achieve nothing more than sowing seeds of confusion and distrust between employer and employee. This is particularly the case in those award-reliant businesses, where multiple modern awards have effect.

It therefore appears to be incorrect to claim that there is no inconsistency, uncertainty or difficulty arising from retaining of the Manufacturing Award conversion provision – or to claim that it could operate effectively with the NES entitlement. Further, for the sake of completeness, it is also clear that it is not something that can be ‘cured’ by seeking to recast such (no longer enforceable) entitlements that only has application to employees employed for less than 12 months.’ 103

[247] In reply the AMWU submits that the solution would be ‘to insert an obligation into the Manufacturing Award in equivalent terms to s.66B of the FW Act, but have it operate after six months.’ 104

[248] The AMWU also submits:

‘The AiG contend that the deletion of clause 11.5 would not result in a reduction of entitlements because the term is currently of no effect due to s.56. The AiG contend in the alternate even if the variation it presses results in reduction to entitlements is not of itself a reason to refrain from making the variation.

Contrary to the AiG submission the fact that an award variation would have the effect of substantially reducing the safety net is a very compelling reason to refrain from making such a variation.

As stated above, such a significant variation would ordinarily need to be very persuasively prosecuted and be founded upon a substantial and detailed merit and evidenced based case.

The AiG’s submissions in this review fall well short of this threshold.

To the extent that the FWC considers the extant clause 11.5 is not consistent with the Act or is otherwise difficult or uncertain, it should make such variations as it sees fit so that it operates effectively with the Act.

Excising the entitlement (and thereby significantly reducing the safety net) would be a drastic action to take that is not warranted within the confines of this review.’ 105

[249] The ACTU supports the submission of the AMWU.

[250] The AWU submits:

‘The casual conversion entitlements in the Manufacturing and Associated Industries and Occupations Award 2020 (“Manufacturing Award”) are clearly more beneficial than the casual conversion entitlements in the NES at least to the extent that they provide eligible casual employees with an opportunity to elect to convert to permanent employment after being employed for a period of six months. An employee is not eligible for casual conversion under the NES until they have been employed for at least 12 months.

There are a number of other modern awards that currently provide a casual employee with the opportunity to access permanent employment after being employed for six months, including the following awards which cover AWU members:

- Asphalt Industry Award 2020;

- Building and Construction General On-site Award 2020;

- Cement, Lime and Quarrying Award 2020;

- Concrete Products Award 2020;

- Food, Beverage and Tobacco Manufacturing Award 2020; and

- Sugar Industry Award 2020.

The Horse and Greyhound Training Award 2020 provides conversion opportunities for eligible casual employees after 12 weeks of employment.

On any measure, increasing the minimum period of employment that is required before a casual employee can access an opportunity to convert to permanent employment by six months is a substantial change that can operate to the detriment of casual employees.

As employer groups such as the Australian Industry Group (“AIG”) and the Australian Chamber of Commerce and Industry (“ACCI”) are well aware via their participation in the IR Working Groups process in 2020, the intent of the FW Amendment Act was to create a minimum statutory right to casual conversion, it was never intended that it would operate to reduce existing conversion rights in modern awards or enterprise agreements.

The Revised Explanatory Memorandum for the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (“Revised Explanatory Memorandum”) clearly identifies that the introduction of casual conversion entitlements into the NES was intended to operate to the benefit of employees and not to reduce existing entitlements.

The Outline to the Revised Explanatory Memorandum refers to (our emphasis):

giving regular casual employees a statutory pathway to ongoing employment by including a casual conversion entitlement in the National Employment Standards (NES) of the Fair Work Act…

The Regulatory Impact Statement: Casual Employment Reforms in the Revised Explanatory Memorandum (“Regulatory Impact Statement”) identifies “the Problem” concerning casual conversion as (our emphasis): “casual employees do not have universal access to an entitlement to request to convert to full-time or part-time employment where appropriate”.

The Regulatory Impact Statement then proceeds to discuss three options for reform. Option Two was to amend the FW Act, amongst other changes, to (our emphasis): “provide a universal, strengthened casual conversion mechanism as a National Employment Standard entitlement”. Option Two was ultimately identified as the Preferred Option.

The Human Rights Compatability Statement refers twice to a (our emphasis): “minimum standard casual conversion right for eligible employees”.

Given this background, it is clear that the FW Amendment Act was not intended to reduce existing casual conversion rights in modern awards and enterprise agreements, the intent was clearly to introduce a universal minimum standard that can be improved upon, i.e. supplemented, in modern awards and enterprise agreements in accordance with s 55(4)(b) of the FW Act.

The pedantic and technical arguments relied upon by AIG and ACCI to try and persuade the Commission to reduce existing casual conversion entitlements via the Review are opportunistic and cynical.

The importance of giving effect to the purpose of the provisions in the FW Act which was so enthusiastically embraced by the AIG in the recent Mondelez High Court proceedings appears to have been conveniently forgotten by AIG in terms of the Review.

If the Commission forms the view that any amendments to the casual conversion conditions in the Manufacturing Award are required by the Review, the Commission should ensure the changes do not reduce existing casual conversion conditions and particularly the ability to access conversion opportunities after six months of employment.’ 106

[251] In response to Ai Group’s argument that the existing casual conversion clause in the Manufacturing award excludes the NES, is of no effect and should be removed, the CFMMEU C&G submits:

‘The argument of the AIG is surprising in its absurdity. First of all they accept that the casual conversion clause in the Manufacturing Award is more beneficial than the NES, but then say that the award clause practically excludes the NES because the NES would never apply and should therefore be removed.

The AIG mischievously refer to paragraph [155] from the Family Friendly Working Arrangements Decision ([2018] FWCFB 1692) as somehow supporting their argument. All paragraph [155] does is reflect what the AIG submitted, and notes that such an argument can be raised against any entitlement under an award or agreement that is more beneficial to employees than a minimum standard under the NES. It does not provide a concluded view. This is not surprising given the earlier consideration by that Full Bench of s.55 of the Act including the following paragraphs:

[135] The task of statutory construction must begin and end with the statutory text. The statutory text must be considered in its context, which includes the legislative history and extrinsic materials, but legislative history and extrinsic materials cannot displace the meaning of the statutory text. The text of s.55 is to be construed so that it is consistent with the language and purpose of the Act as a whole. The ability to construe s.55 in a manner that departs from the natural and ordinary meaning of its terms in the context in which they appear, is limited to construing the provision according to the meaning which, despite its terms, it was plain the Parliament intended it to have.

[136] The EM states the purpose of s.55:

‘206. Clause 55 sets out the relationship between the NES on the one hand and modern awards and enterprise agreements on the other.’

[137] The nature of the NES is central to the context in which s.55 is to be read. Section 61 introduces the NES. Subsection 61(1) provides:

‘61 The National Employment Standards are minimum standards applying to employment of employees

(1) This Part sets minimum standards that apply to the employment of employees which cannot be displaced, even if an enterprise agreement includes terms of the kind referred to in subsection 55(5).

Note: Subsection 55(5) allows enterprise agreements to include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards.’

[138] Importantly, the ‘minimum standards’ in the NES comprise minimum employment entitlements of employees. Any obligations of an employee or ‘rights’ of an employer under the terms of the NES constitute qualifications to the employee receiving a benefit, not substantive employer benefits or rights. Accordingly, the NES only binds employers:

‘44 Contravening the National Employment Standards

(1) An employer must not contravene a provision of the National Employment Standards.

Note: This subsection is a civil remedy provision (see Part 4-1).’

[139] In contrast, modern awards and enterprise agreements bind employers, employees and other persons to whom they apply (ss.45 and 50).

…………

[143] Section 55(6) explains how the NES interact with award and agreement terms that ‘subsume’ an NES entitlement:

‘Effect of terms that give an employee the same entitlement as under the National Employment Standards

(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:

(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and

(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.

Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.’

[Emphasis added]

[144] Two aspects of s.55(6) may be noted. First, s.55(6) makes clear that the NES and the relevant award or agreement terms operate in parallel, but not so as to provide employees with a double benefit. The Supplementary EM explains this as follows:

‘25. … [Agreement terms as provided for in ss.55(4) and (5)] operate in parallel with the NES entitlement, and do not confer a double entitlement. The same applies to terms of modern awards that are ancillary or supplementary to a NES entitlement. This means that a NES entitlement can be sourced both in the NES and in an enterprise agreement or modern award and can be enforced as an entitlement under either. Also, the mechanisms contained in the agreement are available to resolve any dispute about the entitlement.

26. This means, for example, that an enterprise agreement could include provisions about requests for flexible work arrangements (as provided for by Division 4 of the NES), and disputes about whether or not an employer had reasonable business grounds for refusing an application could be dealt with by FWA (or an alternative dispute resolution provider) under the dispute procedure in the agreement, even though dispute resolution about this issue is generally not available (see clauses 739 and 740 of the Bill).’

[145] Second, s.55(6) does not provide that the terms of the NES relating to the NES entitlement apply to the corresponding award or agreement entitlement; rather, it provides that the terms of the NES relating to the NES entitlement apply to the corresponding award or agreement entitlement as a minimum standard. As observed earlier, the NES ‘minimum standards’ comprise minimum entitlements of employees, not minimum entitlements of employers and employees.

[146] Section 55(1) provides:

‘National Employment Standards must not be excluded

A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.’ [Emphasis added]

[147] The EM states in relation to s.55(1):

‘208. The intent of the NES is that it provides enforceable minimum entitlements for all eligible employees. This is reflected in subclause 55(1), which provides that a modern award or enterprise agreement may not exclude the NES, or any part of it.

209. This prohibition extends both to statements that purport to exclude the operation of the NES or a part of it, and to provisions that purport to provide lesser entitlements than those provided by the NES. For example, a clause in an enterprise agreement that purported to provide three weeks’ annual leave would be contrary to subclause 55(1). Such a clause would be inoperative (clause 56).’

[Emphasis added]

[152] Section 55(7) provides that ancillary, incidental and supplementary terms permitted by s.55(4) (and terms permitted by s.55(5)), do not contravene the prohibition in s.55(1) of terms that exclude the NES or any provision of the NES:

‘Terms permitted by subsection (4) or (5) do not contravene subsection (1)

(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).’

[153] As noted earlier, in a preliminary jurisdictional decision in this matter, the Full Bench of the Commission declined to strike out elements of the then ACTU claim, finding that:

‘we consider that it is reasonably arguable that the effect of s.55(7) is that a modern award term which, under s.55(4) is supplementary to a NES provision and does not result in any detriment to an employee when compared to the NES as a whole, does not contravene s.55(1) even if it excludes some other provision of the NES. If so, clause X.1 would be a permissible modern award term even if it excludes s.65(5).’

[154] The EM describes s.55(4) as follows:

‘214. This provision allows modern awards and enterprise agreements to deal with machinery issues (such as when payment for leave must be made). It also allows awards to provide more beneficial entitlements than the minimum standards provided by the NES. For example, an award or agreement could provide for more beneficial payment arrangements for periods of leave, or provide redundancy entitlements to employees of small business employers. Similarly, an agreement could provide a right to flexible working arrangements. The term about a dispute settlement procedure would also apply to that right.’”

(footnotes omitted)

19. It is not in dispute that the casual conversion clause in the Manufacturing Award is more beneficial to employees than the NES, particularly as it is one based on a right to elect to convert (not a right to request), its earlier application and wider coverage including employees of small business employers. This more beneficial arrangement is permitted to be included in modern awards pursuant to s.55(4) and should therefore remain. If there are any provisions in the award clause that provide the same terms as the NES then these terms can operate in parallel and if there are any terms that are less than the NES then the NES standard applies.’ 107

[252] The CFMMEU C&G also rejects the Ai Group’s argument that clause 11.5 of the Manufacturing Award is not necessary to ensure that the award achieves the modern award objective and that the clause should be removed by the Commission exercising its powers under s.157 of the Act for two reasons:

1. The Commission is not required under the Casual terms review to vary awards to ensure that they meet the modern awards objective.

2. A recent Full Bench decision has determined that the Manufacturing Award as now varied, including the existing casual conversion clause, is necessary to meet the modern awards objective referring to the 4 yearly review of modern awards decision on the Finalisation of Exposure Drafts and variation determinations – Tranche 2 ([2019] FWCFB 8569 at [400]).

[253] The CFMMEU C&G rejects the various employer submissions as a ‘blatant attempt to reduce existing award conditions’ and submits:

‘…s.55(6) of the Act permits award terms and NES provisions dealing with the same entitlement operating in parallel. Should the Commission find that there are any identifiable inconsistencies, or difficulties or uncertainties with a relevant term then the Commission should only vary the awards to address the particular inconsistency, difficulty or uncertainty, and not use it as an avenue to gut existing award provisions.’ 108

[254] The CFMMEU C&G also submits that the employer responses to Q.27 ‘contain nothing of substance and completely ignores the relationship between awards and the NES as provided for under the Act.’ The CFMMEU repeats its submission that the more beneficial terms of the award clause can operate in parallel with the NES, with the NES applying as a minimum where necessary.

26. For the purposes of Act Schedule 1 cl.48(2):

•  is the Manufacturing Award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between the award and the Act as amended?

[255] In the June Statement the Full Bench observed that the employer parties that made a submission submitted that there are substantial differences between the casual conversion clause in the Manufacturing Award and the casual conversion NES such that the Award clause is not consistent with the Act as amended and gives rise to uncertainty or difficulty.

[256] Ai Group submits that having regard to the modern awards objective, the Commission should vary the Award by deleting the casual conversion provision to make the Award consistent and operate effectively with the Act for the purposes of cl.48(3) of the Act.

[257] The ACTU (supported by a number of unions) submits that the Manufacturing Award casual conversion clause is consistent with the Act as amended. Further and in the alternative, the ACTU submits that the clause is capable of side-by-side operation with the Act as amended, with minor amendments as necessary. Likewise:

•  the AWU submits that award provisions which permit conversion after 6 months are supplementary to the casual conversion NES, operate to the benefit of employees and are not inconsistent with the Act, and

•  the AMWU (supported by the AWU and CFMMEU – Manufacturing) submit that the Award clause is consistent with the Act as amended because it can be said to supplement the NES within the meaning of s.55. The AMWU also submits that there is no uncertainty or difficulty that arises due to the interaction between the Award clause and the casual conversion NES, and to the extent that the Full Bench considers otherwise, this could be resolved by the AMWU’s proposed draft determination (at Attachment D to the Submission Summary Document).

[258] The ACTU submits that the casual conversion clause in the Manufacturing Award is consistent with the Act. 109 We oppose this submission and refer to the May Submission at paragraphs [228] – [229].

[259] The ACTU submits, in the alternate, that the casual conversion clause in the Manufacturing Award ‘is capable of side-by-side operation with the Act as amended, with minor amendments as necessary’, but does not explain the nature of the amendments contemplated. For the reasons articulated below in response to the AMWU’s submissions, Ai Group opposes any outcome that results in the simultaneous operation of the casual conversion schemes contained in both the Manufacturing Award and the NES.

[260] In its reply submission Ai Group argues that the AMWU’s submission that the casual conversion clause contained in the Manufacturing Award ‘is consistent with the Act as amended because it can be said to “supplement” the NES … within the meaning of s.55’ 110 of the Act, should not be accepted; and relies on its initial submission at [209]-[213].

[261] Ai Group also contends that AMWU’s argument that ‘the effect of the [casual conversion clause in the Manufacturing Award] cannot ever be detrimental to an employee in any respect because it applies after six months whereas the [casual conversion entitlement in the NES] applies after 12 months’, 111 is ‘inaccurate’:

‘For instance, if by virtue of the facilitative provision at clause 11.5(j) of the award, agreement has been reached to apply clause 11.5 as though the reference to ‘6 months’ is instead ‘12 months’, the clause may operate in a way that is less beneficial than the NES. Importantly, under the NES, the employee would have the benefit of the employer being required to consider and offer permanency to a casual employee, absent reasonable grounds for not making the offer, or, if the employer does not make an offer, they would be compelled to provide written reasons for why they are not doing so. In addition, these steps would be required to be taken within a shorter period of time than the period of time that could permissibly lapse under the award clause if an employee was to make a request for conversion.

We also note that the Manufacturing Award does not require an employer to provide their reasons for refusing a request to convert an employee in writing, which is a further point of distinction between the award and the NES. The absence of written reasons from an employer may be detrimental to an employee in the event that they wish to dispute the employer’s refusal or even seek advice as to whether they should do so.’ 112

[262] Ai Group also contends that the AMWU’s submission that there is ‘no uncertainty or difficulty’ arising from the interaction between the Manufacturing Award and NES casual conversion provisions is ‘plainly unsustainable’:

‘The uncertainty arises first and foremost because of the operation of s.55 of the Act and the underlying issue of whether clause 11.5 of the award has any effect. The side-by-side operation of clause will also give rise to confusion and practical uncertainties amongst employers and employees.’ 113

[263] Ai Group strongly opposes the position advanced by the AMWU, that the extant casual conversion clause found in the Manufacturing Award should be retained, subject to the insertion of a new opening paragraph and notes 1 and 2. The effect of proposed variations would be to make express that the casual conversion provision in the award operates in addition to the provisions contained in the NES. Ai Group advances six reasons in support of its position:

1. The resulting award clause would contravene s.55 and therefore be of no effect (see [193] – [215] of Ai Group’s initial submission).

2. The resulting clause would not be necessary to ensure that the award achieves the modern awards objective and would therefore be inconsistent with s.138 of the Act (see [216] – [224] of Ai Group’s initial submission). In response to the AMWU’s assertion that the extant clause is in part more beneficial than the NES, Ai Group says that that of itself does not provide a sound basis for retaining the clause. Section 138 and the modern awards objective requires a more nuanced assessment of the safety net provided by the award and the NES. ‘It does not permit the simplistic cherry-picking proposed by the AMWU.’

3. The AMWU’s proposition would result in ‘self-evidently absurd and unfair outcomes’. It would require the application of two casual conversion schemes, in parallel. As a result, by way of example:

(a) By virtue of s.125B of the Act, an employer would be required to provide a new casual employee with the ‘Casual Employment Information Statement’. That statement sets out the operation of the casual conversion provisions in the NES.

(b) By virtue of clause 11.5(b) of the award, once the employee has been engaged for a 6 month period, the employer would be required to continually assess whether the employee satisfies the definition of ‘irregular casual employee’ and is eligible to seek conversion under the clause.

(c) For present purposes, if it is assumed that the employee became so eligible 6 months after they were first engaged by their employer; by virtue of clause 11.5(b) of the Manufacturing Award, the employer would be required to provide the employee with a copy of clause 11.5 of the award.

(d) The employee would thereafter have a right to request conversion in accordance with clause 11.5 and if such a request is made, the employer would be required to consider and respond to that request in accordance with the award.

(e) For present purposes, if it is assumed that the employee did not request conversion or that they did request conversion but this was refused; the employer would then be required to assess whether the employee satisfies the criteria prescribed by s.66B of the Act, when the employee has been employed for 12 months.

(f) If the employee satisfies that legislative criteria, the employer must either offer the employee conversion to permanent employment in accordance with s.66B(2) of the Act or advise the employee in writing of why such an offer is not being made, consistent with s.66C.

(g) If the employer does not comply with their obligations described at paragraph (f) above, the employee would have a residual right to request conversion pursuant to s.66F of the Act. The employer would be required to respond to such a request in accordance with ss.66G – 66J.

Ai Group contends that the regulatory burden that would flow from the parallel operation of the two casual conversion schemes is, in our submission, self-evident. An employer other than a small business would be saddled with the obligations imposed by both schemes in circumstances where each is of itself onerous. Contrary to the AMWU’s submission, employers would in the vast majority of cases be required to assess whether a casual employee is eligible for conversion having regard to two different sets of eligibility criteria and over an extended period of time; because as the evidence demonstrated in proceedings before the Commission during 2017, the vast majority of casual employees in the manufacturing sector do not wish to convert to permanent employment and therefore, would not request conversion under the Manufacturing Award, even if they became eligible after 6 months.¹¹⁴

Ai Group contends that the application of the two schemes would clearly not be ‘fair’ for employers for the purposes of s.134(1) of the Act. ‘The significant compliance burden that would face employers is both unjustifiable and unwarranted.’¹¹⁵

The following two elements of the extant clause are said to further compound the unfairness that flows from the provision and tells against its retention:

(a) The clause lacks firm criteria by which an employer is to determine whether the employee is eligible to convert and it requires an employer to make an evaluative judgement, which, if made incorrectly, could render them liable for a civil penalty breach.

(b) The clause may result in an employer having to engage in ‘a major reconstruction of the employee’s employment’¹¹⁶ in order to facilitate their conversion.

1. The introduction of casual conversion rights and obligations in the NES amounts to a significant and material change in circumstances, that has an important bearing on the application of ss.134(1) and 138 of the Act. Section 134(1) prescribes the modern awards objective as one that is to be considered having regard to not only the content of the relevant award but also the NES. 117

Ai Group contends that, in light of the recent amendments to the NES, the casual conversion clause contained in the Award cannot be said to be necessary, as required by s.138 of the Act:

‘This is particularly so in circumstances where there is an absence of any material before the Commission that establishes that any group of casual employees who wish to convert and who would be eligible to convert under the Manufacturing Award would be deprived of that opportunity under the NES.’ 118

2. It would not be appropriate for certain aspects of the award clause to be ‘cherry-picked’ and retained such that they operate in a way that supplements the NES. This is because there is an absence of any material that demonstrates that such provisions are necessary to ensure that the Manufacturing Award provides a fair and relevant minimum safety net.

3. Further, the casual conversion provisions contained in the NES provide for ‘a fundamentally different means through which casual employees have an opportunity to transfer to permanent employment.’ The scheme was intended by Parliament to be a universal one 119 and was designed with the intention of ensuring ‘balance and fairness’120. The calculation of the regulatory impact of the scheme was undertaken on the basis that the eligibility criteria prescribed by the Act would apply and did not account for the possibility that employees would be required to consider more than one set of criteria or that the requirement to assess whether an employee is eligible for conversion would have to be undertaken more than once.121

[264] In conclusion Ai Group submits that:

‘The introduction of award provisions that essentially expand the application and scope of the casual conversion provisions in the NES would, in our respectful submission, inappropriately undermine or seek to overcome the outcome determined by Parliament as being a balanced and fair one. Whilst we do not cavil with the proposition that an award can, as a matter of law, supplement the NES in the way contemplated by s.55 of the Act, the Commission should not, in our submission, exercise its discretion to vary the Manufacturing Award in circumstances where Parliament has very recently settled on a carefully balanced scheme that is designed to apply fairly and in a balanced way to employers and employees. Award provisions that fundamentally alter the way in which that scheme applies would upset the balance struck by the relevant suite of legislative provisions. This would not be appropriate or fair to employers.’ 122

[265] In reply ABI submits:

‘The ACTU’s primary position is that the Manufacturing Award casual conversion clause is consistent with the Act as amended. It is not clear whether the position put ‘further and in the alternative’ that the clause is capable of side by side operation with the Act with minor amendments suggests that the ACTU considers that the Award provision may not in fact be consistent with the Act. This confusion in of itself presents an obvious difficulty or uncertainty. As noted in our primary submission, the prospect of concurrent and different casual conversion regimes existing in both the Act and the relevant Award will give rise to considerable uncertainty and confusion.’ 123

[266] The AMWU submits in reply that the interaction difficulties alleged by the Ai Group, ABI and ACCI could easily be resolved by varying the Manufacturing Award in the manner proposed in the draft variation filed by the AMWU on 24 May 2021.

27. For the purposes of Act Schedule 1 cl.48(3), would confining the Manufacturing Award clause to casual employees with less than 12 months of employment and redrafting it as a clause that just supplements the casual conversion NES, make the award consistent or operate effectively with the Act as amended?

[267] In the June Statement the Full Bench observed that the employer parties that made a submission generally support replacing the Manufacturing Award casual conversion clause with a reference to the casual conversion NES, to make the Award consistent and operative effectively with the Act as amended. They submit that a provision of the kind contemplated in question 27 would create inconsistency and uncertainty. However, the NRA submits that confining the Award clause to casual employees with less than 12 months of employment and redrafting it as a clause that just supplements the casual conversion NES, would make the Award consistent or operate effectively with the Act as amended if the variation determination comes into effect on or after 27 September 2021 (to accommodate the transition period referred to in the Act, Schedule 1 cl.47).

[268] In contrast, the ACTU (supported by a number of unions) submits that while such an approach would make the Manufacturing Award clause consistent and operate effectively with the Act as amended, it is not strictly speaking necessary.

[269] The AMWU submits there is no inconsistency between the Award clause and the casual conversion NES, nor is there any difficulty or uncertainty, and therefore there is no jurisdiction to vary the Award pursuant to Schedule 1 cl.48. To the extent that it might be considered necessary to vary the Manufacturing Award, the AMWU proposes the draft determination at Attachment D to the Submission Summary Document.

[270] In reply Ai Group responds to the AMWU’s submission that casual employees who have accrued a right to request conversion under the Manufacturing Award in circumstances where the employer has failed to comply with clause 11.5(b) of the Award should not have that right extinguished:

‘We firstly note that there is no evidence before the Commission that establishes that the class of employees to whom the AMWU’s submission relates in fact exists or, if it does exist, the size and nature of that group of employees. In the absence of any material that demonstrates that employers are failing to meet their obligation to provide the notification required by clause 11.5(b) and that as a result, there is a group of employees who are eligible to convert and who wish to convert, but would not have the opportunity to convert under the NES; the Commission should give the union’s submission little if any weight.

Moreover, we have previously made submissions about the relative benefits of the Commission providing some notice, to the extent permissible under the Act, of any variations it decides to make to the definition of ‘casual employee’ in the awards. 124 In our submission, there is similarly benefit in the provision of some notice in respect of variations that it determines to make to casual conversion provisions. This period would allow any such casual employee an opportunity to exercise their right to request conversion.

Finally, even if some casual employees were to lose their right to request conversion under the award, in our submission, the overall benefits that would flow from ensuring consistency between the awards and the NES and the application of a single casual conversion scheme to employers and employees outweighs the potential lost opportunity of some employees to seek conversion under the award.’ 125

[271] In its reply submission ABI submits:

‘The divergence in the positions of the parties on this issue suggests considerable uncertainty, even among the industrial parties. As noted above and in our primary submission, ABI and NSWBC question the relevance of a forensic benefit/detriment comparison of the Award and the Act provisions, particularly having regard to the task of the Commission in the Review. Further, as also noted above, the prospect of distinct and inconsistent (different) casual conversion regimes coexisting at the same time will necessarily give rise to uncertainty and difficulty and should be avoided.’ 126

[272] In reply the AMWU disagrees with the assertions put by Ai Group. In particular, the fact that an award term may cover a wider scope of employees is not a proper basis for a finding that is inconsistent with the NES:

‘There are current examples of awards and agreements have the effect of extending NES entitlements to employees that would otherwise be excluded (see for example clause 45.2 of the Manufacturing Award).

In response to the AiG’s submission at [233]-[234] the AMWU contends that there is no material before the FWC that justifies a conclusion that the removal of clause 11.5 is necessary to achieve the modern awards objective, and that further, as the moving party, the AiG bears the relevant evidentiary burden.

That the Manufacturing Award provides for casual conversion entitlements in different terms to those found in other awards is wholly irrelevant.

The particulars of the Manufacturing Award term have subsisted in the same or substantially the same form for over twenty years, far longer than those in other awards. They have consistently and repeatedly been found to be necessary and relevant, including after the insertion of casual conversion entitlements provided for in different terms in other awards.

At no point, (including, relevantly, during the recently concluded review of modern awards) did the AiG express a concern about clause 11.5 in light of the casual conversion entitlements in other awards.

That it now complains on this basis is indicative of the ill-conceived and opportunistic nature of the AiG submission.

Without prejudice to anything else in this submission, or its Primary Submissions, the AMWU contends that if the submissions of the employers in relation to uncertainty, difficulty and/or consistency are accepted and/or the AMWU’s primary submissions are not accepted, the AMWU contends the Manufacturing Conversion Clause should not be removed, but that rather, the Full Bench should make such amendments as it considers necessary to ensure the clause supplements the NES and/or operates effectively with the NES and that any clauses that are considered “detrimental” within the meaning of s.55 are amended.

It should do so in a way that preserves the more beneficial features of the Manufacturing Conversion Clause including that:

a. The Manufacturing Conversion Clause provides for a means to convert after six months rather than twelve months (the NES entitlement);

b. The Manufacturing Conversion Clause may cover a wider scope of casual employees (than the NES Entitlement)

c. The Manufacturing Conversion Clause has application to employees of small businesses, (whereas such employees are excluded under the NES)

d. The Manufacturing Conversion Clause provides for a right of election which is a more robust conversion mechanism, than a mere right to request (as is provided for in s.66F).

For the avoidance of doubt, the AMWU is not opposed to an express term being inserted into the Manufacturing Conversion Clause that restricts its operation to between six- and twelve-months qualifying employment (this is what the AMWU understands is being suggested within question 27 of the Discussion Paper).

Should the Commission determine that some modification to clause 11.5 is necessary, the AMWU seeks to be heard on the final terms of any variation.’ 127

2.11 Hospitality Award casual conversion clause

28. Is the Hospitality Award casual conversion clause more beneficial than the residual right to request casual conversion under the NES for any group of casual employees?

[273] In the June Statement the Full Bench observed that the employer parties submitted that the Hospitality Award casual conversion clause is not more beneficial than the residual right to request casual conversion under the NES for any group of casual employees, and some submit that the NES entitlement is more beneficial in a number of respects.

[274] The ACTU (supported by a number of unions) submits that it is difficult to assess whether the Hospitality Award clause is more beneficial than the NES entitlement, but draws attention to a number of features of the Award casual conversion clause. The UWU submits that some aspects of cl.11.7 of the Hospitality Award may confer an entitlement which is more favourable than those provided for in the NES.

[275] In its reply submission the AHA notes the submission of the UWU in respect of clause 11.7 and its proposed reworded clause 11.7 in Attachment 1 to the submission; and does not support the proposed reworded clause 11.7:

‘In accordance with the Act Schedule 1 cl.48(3), the Commission is required to vary a modern award to make it consistent with, or operate more effectively with, the Act as amended.

The existing casual conversion clause at 11.7 of the Hospitality Award is not consistent with the Act as amended, and it therefore gives rise to uncertainty or difficulty relating to the interaction between it and the Act.

Reworded clause 11.7, as proposed by United Workers Union in its submission of 24 May 2021, does not address the full extent of the inconsistency that exists between it and the Act as amended.

The AHA maintains its position that for the purposes of Act Schedule 1 cl.48(3), deleting the casual conversion clause at 11.7 of the Hospitality Award and replacing it with a reference to the casual conversion entitlements in the NES would be appropriate.’ 128

[276] The ACTU supports the submission of UWU on this matter. ACCI supports the submission of AHA.

29. Is the Hospitality Award casual conversion clause detrimental in any respects for casual employees eligible for the residual right to request casual conversion under the NES?

[277] In the June Statement the Full Bench observed that the employer parties submitted that the Hospitality Award casual conversion clause is detrimental in some respects for casual employees eligible for the residual right to request casual conversion under the NES.

[278] The UWU and the ACTU (supported by a number of unions) accept that in some respects the Hospitality Award is less favourable than the Act (such as the Award requirement for the qualifying period to be in the same establishment or classification stream). However, the ACTU submits that any inconsistency, difficulty or uncertainty is minimal and could be resolved in a straightforward manner.

30. For the purposes of Act Schedule 1 cl.48(2):

•  is the Hospitality Award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between the award and the Act as amended?

[279] In the June Statement the Full Bench observed that the employer parties that made a submission submitted that the Hospitality Award casual conversion clause is not consistent with the Act as amended and gives rise to uncertainty or difficulty relating to its interaction with the Act.

[280] The ACTU (supported by a number of unions) submits that any inconsistency, uncertainty or difficulty is minor and if identified could be resolved.

[281] In reply, Ai Group submitted that the ACTU’s submission that ‘any’ inconsistency, uncertainty or difficulty is ‘minimal at its highest’ and that such issues are ‘capable of straightforward resolution’, does not proffer any such resolution:

‘The extent to which the current clause is inconsistent with the Act and the scope of the uncertainty or difficulty is neither here nor there for the purposes of clause 48(2).’ 129

31. For the purposes of Act Schedule 1 cl.48(3), would removing the Hospitality Award casual conversion clause from the award, or replacing it with a reference to the casual conversion NES, make the award consistent or operate effectively with the Act as amended?

[282] In the June Statement the Full Bench observed that the employer parties submitted that removing the Hospitality Award casual conversion clause and replacing it with a reference to the casual conversion NES would make the Award consistent or operate effectively with the Act as amended for the purposes of the Act, Schedule 1 cl.48(3).

[283] The ACTU (supported by a number of unions) accepts that while such a course would lead to consistency, this is not required by the Review and other options may be more meritorious. The ACTU submits that if the Commission is minded to replace the Award clause with the casual conversion NES provision (or a reference to the NES), such features of the clause as are identified to be more favourable to workers should be retained. The UWU submits that the Hospitality Award casual conversion clause should be retained but varied as set out in Attachment E to the Summary Submission Document.

[284] In reply, Ai Group submits that the effect of the variation proposed by the UWU in respect of the Hospitality Award can be summarised as follows:

1. Clause 11.7 of the Hospitality Award, as varied, would purport to apply in addition to the NES.

2. The clause would apply, as it does now, to a ‘regular casual employee’ who has been employed by an employer ‘on a regular and systematic basis’ for several periods of employment or on an ongoing basis, during a period of at least 12 months. This eligibility criteria is different to that which is prescribed by s.66B(1) of the Act; however employees who satisfy the definition at clause 11.7(b) may also satisfy ss.66B(1)(a) and (b).

3. Once the aforementioned 12-month period has been attained, the employee would be eligible to request conversion under the award. If the employee also satisfies the criteria at s.66B(1), their employer would be required to either make an offer to convert or to provide written reasons as to why such an offer is not being made. The employer must do so within 21 days. If, however, an employee requested conversion under the award clause and the employer accepted that request within 21 days, the award clause would exclude, in a practical sense, the NES and the employee would not receive the benefit provided by it in respect of casual conversion.

4. An employer would be permitted to refuse a request made by an employee on reasonable business grounds. Clause 11.7(f) would be amended to reflect the list of examples set out in the Act at s.66C(2) of the matters that may be taken into account by an employer.

5. The clause would include a new obligation on an employer to provide an employee with a written response to their request to convert within 21 days.

6. The extant clause 11.7(l) would be deleted, which is in the following terms:

(1) Nothing in this clause requires the employer to convert the employment of a regular casual employee to full-time or part-time employment if the employee has not worked for 12 months or more in a particular establishment or in a particular classification stream.

7. A further anti-avoidance clause would be inserted in the award, in terms that are substantially the same as s.66L of the Act.

8. The clause would provide that a dispute about the operation of the clause ‘shall be dealt with in accordance with section 66M of the Act’, even though s.66M(2) provides that s.66M does not apply in relation to a dispute if an award applies to the employee and the award provides a procedure for dealing with the dispute (as is the case in the Hospitality Award).

[285] Ai Group submits that the proposed clause should not be adopted for five reasons:

1. The proposed variation would not make the Hospitality Award consistent or operate effectively with the Act, as required by clause 48(3) of Schedule 1:

‘As can be seen from our aforementioned description of the way in which the clause would operate, it would give rise to an entitlement of casual employees to request conversion in respect of whom, simultaneously, the Act would require that their employer make an offer of permanency and / or provide written reasons for not doing so. The two sets of provisions would not operate in a coherent or compatible way. The proposed clause is apt to give rise to confusion, particularly in relation to how it interacts with the NES, and it cannot be said to operate effectively with the NES. The UWU’s proposal, if accepted, would in fact have the effect of introducing an award clause that is inconsistent with the Act and would give rise to uncertainties and difficulties of the very kind that clause 48 of Schedule 1 to the Act is designed to remove from the award.’ 130

2. The proposed clause would exclude the NES, as contemplated by s.55(1) of the Act. For instance, an employee would not receive the benefit of their employer being required to consider whether the employee is eligible for conversion and whether an offer of conversion can be made. This distinction between the two schemes is particularly pronounced when regard is had to the absence of any requirement in clause 11.7 of the Hospitality Award or the UWU’s proposal that an employer inform an employee when they become eligible to request conversion under the award.

3. The proposed clause would not be an ancillary, incidental or supplementary term for the purposes of s.55(4) of the Act. Ai Group relies upon its initial submissions at [204] – [213] and therefore, it would be of no effect. 131

4. The proposed clause is not necessary to ensure that the award achieves the modern awards objective, per s.138 of the Act. Ai Group relies on its initial submission at [239] – [240].

5. The UWU’s proposed clause selectively adopts certain elements of the casual conversion scheme contained in the NES (such as the proposed clause 11.7(g)) and removes other elements of the award clause that do not appear in the NES (such as the current clause 11.7(l)):

‘No justification has been provided for this approach. The UWU’s proposed amendments effectively seek to enhance the operation of the extant award provision by removing those aspects that are less beneficial than the NES and adopting those parts of the NES that it prefers. A case has not been made out for such a clause. The submissions made above at [135] – [137] in relation to the Manufacturing Award are also apposite to the UWU’s proposed approach.’ 132

[286] In reply, ABI submits that the proposal by UWU gives rise to uncertainty whether the entitlement is meant to reflect the Act entitlement or whether it is meant to stand as a concurrent entitlement to the Act (as has been suggested in a similar context by SDA):

‘This uncertainty, alongside the obvious difficulties arising should concurrent but different entitlements be established, warrants the replacement of the award clause with the NES entitlement.’ 133

32. If the casual conversion clause was removed from the Hospitality Award, should other changes be made to the award so that it operates effectively with the Act as amended (for example, adding a note on resolution of disputes about casual conversion)?

[287] In the June Statement the Full Bench observed that if the Hospitality Award clause was removed, the employer parties did not propose any other changes to the Award.

[288] The ACTU (supported by a number of unions) does not oppose the insertion of notes into the Award where appropriate, but is unable to take a general position on whether any other consequential or associated changes are needed until it has the opportunity to see a proposal and make submissions.

2.12 Other matters

[289] In the June Statement the Full Bench observed that the CPSU submitted that the State Government Agencies Award 2020 [MA000121], currently allocated to Group 3 of the Review, should be dealt with in Group 4 of the Review so that its casual terms can be considered in the same group as the Victorian State Government Agencies Award 2015 [MA000134] and stated that it would express a provisional view about the CPSU’s request to move the State Government Agencies Award 2020 after the filing of the submissions in reply.

[290] In reply, IRV confirmed that it does not object to the CPSU’s submission that the SGAA be reallocated from Group 3 to Group 4 for the purposes of the Review.

Attachment B – Provisional views

1. Is it the case that the Commission does not have to address the considerations in s.134(1) of the Act in varying an award under Act Schedule 1 cl.48(3), but an award as varied under cl.48(3) must satisfy s.138 of the Act?

Provisional view

Clause 48(3) of Schedule 1 requires the Commission to vary a modern award if either a relevant term is not consistent with the Act or there is uncertainty or difficulty relating to the interaction between the award and the Act. Any variation made in accordance with this requirement must make the Award consistent or operate effectively with the provisions of the Act relating to casual employment specifically, as well as the Act generally. Any variations required to be made by clause 48(3) of the Schedule must therefore also conform with the requirements of s.138 – that is, the varied award terms must be necessary to achieve (relevantly) the modern awards objective in s.134(1). To ensure compliance with s.138, the modern award objectives in s.134(1)(a)-(h) need to be taken into account even though on a strict reading, s.134 of the Act does not apply to the Casual terms review.

2. Is an award clause that excludes casual employment (as in the Fire Fighting Award) a ‘relevant term’ within the meaning of in Act Schedule 1 cl.48(1)(c), so that the award must be reviewed in the Casual terms review?

Provisional view

The Fire Fighting Award does not contain any provisions concerning casual employment and therefore does not include any term falling within any of the categories in cl.48(1)(c) of Schedule 1. It therefore contains no ‘relevant term’ required to be reviewed in accordance with cl.48(2). The same conclusion applies to other awards of the same character.

3. Has Attachment 1 to the Discussion Paper wrongly categorised the casual definition in any award?

We do not propose to express a provisional view about this matter.

4. For the purposes of Act Schedule 1 cl.48(2):

•  is the ‘engaged as a casual’ type casual definition (as in the Retail Award, Hospitality Award and Manufacturing Award) consistent with the Act as amended, and

•  does this type of definition give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

Provisional view

The ‘engaged as a casual’ type casual definition is not consistent with s.15A(1) of the Act because it permits some persons who do not meet the conditions prescribed in paragraphs (a)-(c) of s.15A(1) to be engaged as casual employees and paid a casual loading in lieu of NES leave entitlements. For example, the ‘engaged as a casual’ type definition permits a person who has offered and accepted employment on the basis of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work to be treated and paid as a casual employee. There is relevant uncertainty or difficulty because a person could be a casual employee under the award but not a casual under the Act, or vice versa. This conclusion applies equally to clause 11.1 of the Retail Award.

5. For the purposes of Act Schedule 1 cl.48(2), are the employment arrangements described as ‘casual’ under Part 9 of the Pastoral Award consistent with the definition of ‘casual employee’ in s.15A of the Act?

Provisional view

No. Clause 50.1 of the Pastoral Award requires that all persons employed in a shed in one or more of the five prescribed categories be employed as casuals. As a consequence, workers who do not meet some or all of the conditions prescribed in paragraphs (a)-(c) of s.15A(1) may be treated as casuals under the award and paid in accordance with the provisions of Part 9 of the Pastoral Award, purportedly in lieu of receiving NES leave entitlements. Accordingly, a variation to clause 50.1 is required by cl.48(3) of Schedule 1.

6. For the purposes of Act Schedule 1 cl.48(2):

•  are ‘paid by the hour’ and ‘employment day-to-day’ casual definitions (as in the Pastoral Award and Teachers Award) consistent with the Act as amended

•  are ‘residual category’ type casual definitions (as in the Retail Award and Pastoral Award) consistent with the Act as amended, and

•  do such definitions give rise to uncertainty or difficulty relating to the interaction between these Awards and the Act as amended?

Provisional view

‘Paid by the hour’ definitions are inconsistent with s.15A(1) for the same reason as ‘engaged as a casual’ type definitions (noting that in cl.11.1 of the Pastoral Award, the ‘paid by the hour’ requirement is attached to an ‘engaged as such’ casual employment definition).

‘Employment day-to-day’ casual definitions may not be inconsistent with s.15A because ‘day-to-day’ employment may be understood to mean that there is no commitment of work from one day to the next. In clause 12.1 of the Teachers Award, the definition is coupled with a requirement that casual employment not extend for more than four consecutive weeks or term weeks, subject to the capacity for a limited extension under clause 12.2. This does not of itself raise any inconsistency with s 15A(1) because time-limited casual employment does not involve a ‘firm and advance commitment’ as per s 15A(1)(a). However, definitions of this type could give rise to relevant difficulties or uncertainty because of differently-expressed casual definitions in s 15A and in the awards.

‘Residual category’ type casual definitions (as in cl.11.1 of the Retail Award and cl.11.1 of the Pastoral Award) are ‘relevant terms’ because they deal with the circumstances in which employees are to be employed as casual employees. They may not be directly inconsistent with s.15A(1) because, having to the provisions in the awards concerning full-time and part-time employment, the residual area of their operation is likely to be coterminous with the s 15A(1) definition. However definitions of this type could give rise to relevant interaction difficulties or uncertainty because of differently-expressed casual definitions in s 15A and in the awards.

7. Where a casual definition includes a limit on the period of casual engagement (as in the Teachers Award), if the definition is amended in the Casual terms review should that limit be recast as a separate restriction on the length of any casual engagement?

Provisional view

Yes, on the premise that we consider that such a limitation constitutes a ‘relevant term’. A limitation on the length of any casual employment should not be expressed as part of the definition of casual employment. If any such limitation is separated from the casual definition, it does not cause interaction issues with the NES casual conversion entitlements in Div.4A of Pt.2-2 of the Act, is not inconsistent with those entitlements and is not prohibited by s.55(1). The casual conversion entitlements operate on the basis of employment meeting the prescribed conditions for a period of at least 12 months: s.66B(1)(a) and s.66F(1)(a). If an award clause limits casual employment to a period of less than 12 months, there is no interaction between that clause and Div.4A, nor can such a clause exclude the Div.4A entitlements since those entitlements cannot apply to such time-limited employment.

8. For the purposes of Act Schedule 1 cl.48(3), would replacing the casual definitions in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award with the definition in s.15A of the Act or with a reference to that definition, make the awards consistent or operate effectively with the Act as amended?

Provisional view

Yes, recognising that separately identifiable non-definitional casual award provisions may be retained.

9. If an award is to be varied to adopt the casual definition in s.15A of the Act, should the Commission give advanced notice of the variation and the date it will take effect?

Provisional view

A limited period of advance notice will be provided. As far as practicable, the necessary variations to awards will be operative from 27 September 2021.

10. For the purposes of Schedule 1 cl.48(2):

•  are award requirements to inform employees when engaging them that they are being engaged as casuals (as in the Manufacturing Award and Pastoral Award) consistent with the Act as amended, and

•  do these requirements give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

Provisional view

Award clauses that require employees to be informed upon engagement that they are engaged as casuals are not inconsistent with s.15A(1), provided that the definition of casual employment in the award is consistent with s.15A(1). No uncertainty or difficulty relating to the interaction between such clauses and the Act arises. They may be retained consistent with the answer to question 8.

Provisions such as clause 11.4(d) of the Manufacturing Award, which require employers to inform casual employees on their engagement ‘of the likely number of hours they will be required to perform’, are not directly inconsistent with s.15A(1). Such provisions do not necessarily require a ‘firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person’ referred to in s.15A(1). However, such provisions will give rise to relevant interaction uncertainty or difficulty because they create doubt as to what steps are necessary to both comply with the award clause and to meet the casual definition in the Act (by not giving the type of ‘firm advance commitment…’ referred to in s.15A(1)).

Rather than removing such provisions altogether, the appropriate variation to comply with clause 48 of Schedule 1 is to modify the award to make it clear that the employer need only provide, if practicable, a non-binding estimate of the hours likely to be worked.

11. For the purposes of Act Schedule 1 cl.48(2):

•  are award definitions that do not distinguish full-time and part-time employment from casual employment on the basis that full-time and part-time employment is ongoing employment (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award) consistent with the Act as amended, and

•  do these definitions give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

Provisional view

It is well-established that full-time and part-time employment conceptually involves employment on a continuing basis for an indefinite period with a fixed minimum number of weekly working hours - see e.g. AMIEU v Diamond Valley Pork Pty Ltd [2021] FWCFB 532. This may be modified by award prescription (such as the averaging of hours over longer periods) or by the contract of employment (for example, a fixed-term employment contract). Considered in this context, award provisions that do not distinguish full-time and part-time employment from casual employment by reference to full-time and part-time employment being ongoing employment are not, for that reason alone, conceptually inconsistent with the definition of casual employment in s.15A(1).

Furthermore, award clauses defining (or not defining) the incidents of full-time and part-time employment are not award terms of the type referred to in cl.48(1)(c) of Schedule 1 and are not therefore ‘relevant terms’ that can be the subject of this review.

12. Does fixed term or maximum term employment fall within the definition in s.15A of the Act?

Provisional view

On a contextual and purposive construction of s.15A, no.

13. Are outdated award definitions of ‘long term casual employee’ and outdated references to the Divisions comprising the NES (as in the Retail Award and Hospitality Award) relevant terms?

Provisional view

Definitions of ‘long term casual employee’ are ‘relevant terms’, are award terms of the type referred to in cl.48(1)(c)(i) of Schedule 1 – that is, they define or describe casual employment. Other outdated references to the NES which are not part of any provision defining or dealing with casual employment are not ‘relevant terms’.

14. If they are not relevant terms, but nevertheless give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended:

•  can they be updated under Act Schedule 1 cl.48(3), or alternatively

•  can they be updated in the course of the Casual terms review by the Commission exercising its general award variation powers under Part 2-3 of the Act?

Provisional view

Such provisions which are not ‘relevant terms’ can be updated by the Commission exercising its general award variation powers under Pt.2-3 of the Act. Under s.160, the Commission can on its own initiative vary modern awards to remove ambiguity or uncertainty or correct error.

15. Are award clauses specifying:

•  minimum casual payments (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award)

•  casual pay periods (as in the Retail Award, Hospitality Award and Pastoral Award)

•  minimum casual engagement periods (as in the Hospitality Award), and

•  maximum casual engagement periods (as in the Teachers Award)

relevant terms?

16. For the purposes of Act Schedule 1 cl.48(2):

•  are such award clauses consistent with the Act as amended, and

•  do such award clauses give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

Provisional view

These provisions are ‘relevant terms’ since they provide for the manner in which casual employees are to be employed: cl.48(1)(c)(iii).

These provisions are not inconsistent with the Act, and do not give rise to uncertainty or difficulty as to the awards’ interaction with the Act, provided they are properly separated from award provisions defining casual employment.

17. Is provision for casual loading (as in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award) a relevant term?

18. If provision for casual loading is a relevant term:

•  for the purposes of Act Schedule 1 cl.48(2), does the absence of award specification of the entitlements the casual loading is paid in compensation for (as in the Hospitality Award, Manufacturing Award cl.11.2 and the Teachers Award) give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended, and

•  if so, should these awards be varied so as to include specification like that in the Retail Award or the Pastoral Award?

Provisional view

Provisions requiring the payment of a casual loading are ‘relevant terms’ because they provide for the manner in which casual employees are to be employed: cl.48(1)(c)(iii).

No relevant uncertainty or difficulty arises if an award does not specify which entitlements are compensated by the casual loading, provided that the award defines casual employment in a way consistent with s 15A(1). Casual loadings have, in part, the purpose of compensating casual employees for not having access to certain NES benefits. There is no established or agreed formulation as to what proportion of the casual loading compensates for each such benefit. Accordingly, awards do not need to be varied to include any such specification and it is not appropriate to do so.

19. Are any of the clauses in the Retail Award, Hospitality Award, Manufacturing Award, Teachers Award and Pastoral Award that provide general terms and conditions of employment of casual employees (not including the clauses considered in sections 5.1–5.5 and 6 of this paper) ‘relevant terms’ within the meaning of Act Schedule 1 cl.48(1)(c)?

20. Whether or not these clauses are ‘relevant terms’:

•  are any of these clauses not consistent with the Act as amended, and

•  do any of these clauses give rise to uncertainty or difficulty relating to the interaction between the awards and the Act as amended?

Provisional view

These provisions are ‘relevant terms’ since they provide for the manner in which casual employees are to be employed: cl.48(1)(c)(iii).

These provisions are not inconsistent with the Act, and do not give rise to uncertainty or difficulty as to the awards’ interaction with the Act, provided they are properly separated from provisions defining casual employment.

21. Is it the case that the model award casual conversion clause (as in the Retail Award and Pastoral Award) is detrimental to casual employees in some respects in comparison to the residual right to request casual conversion under the NES, and does not confer any additional benefits on employees in comparison to the NES?

Provisional view

The model award casual conversion clause is less beneficial for employees than the NES casual conversion entitlements in at least the following respects:

•  the obligations imposed upon employers, other than small business employers, by Subdiv.B of Div.4A of Pt.2-2 of the Act are not provided for in the model clause and provide an additional pathway for casual conversion;

•  under the residual right to request casual conversion in Subdiv.B of Div.4A of Pt.2-2, the requisite ‘regular pattern of hours’ must be worked over at least the previous 6 months, whereas under the model clause the requisite ‘pattern of hours’ must be worked over 12 months; and

•  certain disputes about the NES entitlements may be pursued as small claims in the Federal Circuit Court of Australia, whereas this is not the case with respect to the model clause.

The model clause is not more beneficial than the NES entitlements with respect to the ‘anti-avoidance’ provision (e.g. Retail Award cl.11.7(n)). A protection at least equivalent to the model clause is provided for in s.66L(1) of the Act. The general protections provisions in Pt.3-1 of the Act also provide additional protection.

The SDA’s submission that the model clause in the Retail Award is more beneficial than the NES entitlements, because the requirement in the model clause for a ‘regular pattern of hours’ to be worked over 12 months allows variations in hours due to seasonality to be taken into account, is not accepted. Section 66B(1)(b) refers to a period of ‘at least the last 6 months’, so that if a regular pattern of hours has emerged over 12 months, the employer must make an offer of conversion (subject to s.66C). The residual right in s.66F requires the ‘regular pattern of hours’ to be have been worked in the 6 months prior to the employee’s request. Because this effectively allows the casual employee to select the requisite 6 month period, it will be easier for the employee to demonstrate a regular pattern of hours because a period with the least seasonal variability can be selected.

22. For the purposes of Act Schedule 1 cl.48(2):

•  is the model award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between these awards and the Act as amended?

Provisional view

The model clause may give rise to uncertainty and difficulty relating to the interaction between awards and the Act. Different prescriptions in awards and the Act about conversion rights are likely to cause confusion and may give rise to complications with respect to compliance.

23. For the purposes of Act Schedule 1 cl.48(3), would removing the model clause from the awards, or replacing the model clause with a reference to the casual conversion NES, make the awards consistent or operate effectively with the Act as amended?

Provisional view

Removing the model clause from awards and replacing it with a reference to the NES provisions concerning casual employment would make the awards consistent and operate effectively with the Act.

24. If the model clause was removed from the awards, should other changes be made to the awards so that they operate effectively with the Act as amended (for example, adding a note on resolution of disputes about casual conversion)?

Provisional view

It may be appropriate to add a note that disputes about casual conversion may be dealt with under an award dispute resolution procedure.

25. Is the Manufacturing Award casual conversion clause more beneficial than the residual right to request casual conversion under the NES for casual employees employed for less than 12 months, but detrimental in some respects in comparison to the NES for casual employees employed for 12 months or more?

Provisional view

The Manufacturing Award casual conversion clause (cl.11.5) is more beneficial than the NES residual right to casual conversion to the extent that it allows a request for conversion to be made after only 6 months’ casual employment. However, clause 11.5(j) provides for a facilitative mechanism for this period to be extended to 12 months in prescribed circumstances. The award clause is less beneficial in the following respects:

•  it requires the employer to give notice of the right to request conversion within 4 weeks of the employee becoming qualified to do so, as distinct from before or as soon as practicable after the employee commences employment under s125B;

•  the award right is a one-off right, as distinct from the ongoing residual right in the Act;

•  the time for the employer to respond to the request is shorter under the Act (21 days) than the award (4 weeks);

•  the award arguably provides for broader and less defined grounds for the employer to refuse a request.

26. For the purposes of Act Schedule 1 cl.48(2):

•  is the Manufacturing Award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between the award and the Act as amended?

Provisional view

Clause 11.5 of the Manufacturing Award will give rise to uncertainty and difficulty relating to the interaction between the Manufacturing Award and the residual right of casual conversion in the Act because the significantly different prescriptions in the award and the Act about the same subject matter will cause confusion and complications with respect to compliance. Clause 11.5 is also inconsistent with the Act insofar as some casual employees would not be entitled to request conversion under the award, but would be entitled to request conversion under the Act.

27. For the purposes of Act Schedule 1 cl.48(3), would confining the Manufacturing Award clause to casual employees with less than 12 months of employment and redrafting it as a clause that just supplements the casual conversion NES, make the award consistent or operate effectively with the Act as amended?

Provisional view

Redrafting clause 11.5 of the Manufacturing Award so that it applies the residual right of conversion under the Act on the basis that an employee is eligible to make a request if the employee has been employed by the employer for a period of at least 6 months beginning the day the employment started, would make the award consistent and operate effectively with the Act.

Alternatively, removing clause 11.5 from the Manufacturing Award and replacing it with a reference to the NES casual conversion entitlements would also make the award consistent and operate effectively with the Act.

28. Is the Hospitality Award casual conversion clause more beneficial than the residual right to request casual conversion under the NES for any group of casual employees?

Provisional view

Clause 11.7 of the Hospitality Award may allow for casual employees who do not meet the conditions in s.66F(1)(b) to request conversion.

29. Is the Hospitality Award casual conversion clause detrimental in any respects for casual employees eligible for the residual right to request casual conversion under the NES?

Provisional view

Clause 11.7 of the Hospitality Award is detrimental to employees compared to the residual right to request casual conversion under the NES in at least the following respects:

•  under clause 11.7, there is no requirement for the employer to give the employee notice of the right to request conversion;

•  under clause 11.7, there is no time limit for the employer’s response to the request;

•  clause 11.7 does not require the employer to discuss the request before refusing it, or give a written response to the request, or give reasons for refusing the request;

•  the reasonable grounds upon which a request may be refused under clause 11.7 do not need to be based on facts that are known or reasonably foreseeable at the time of the refusal; and

•  a request under clause 11.7 need not be granted if the casual employee has not worked for 12 months ‘in a particular establishment or in a particular classification stream’ (cl.11.7(l)).

30. For the purposes of Act Schedule 1 cl.48(2):

•  is the Hospitality Award casual conversion clause consistent with the Act as amended, and

•  does the clause give rise to uncertainty or difficulty relating to the interaction between the award and the Act as amended?

Provisional view

Clause 11.7 of the Hospitality Award is inconsistent with the Act and gives rise to uncertainty or difficulty relating to the interaction between the award and the Act.

31. For the purposes of Schedule 1 cl.48(3), would removing the Hospitality Award casual conversion clause from the award, or replacing it with a reference to the casual conversion NES, make the award consistent or operate effectively with the Act as amended?

Provisional view

Yes. Clause 11.7 should be removed and replaced with a reference to the NES casual conversion entitlements. Clause 11.7 is on balance detrimental to employees, and any possible benefit is likely to be of little practical significance.

32. If the casual conversion clause was removed from the Hospitality Award, should other changes be made to the award so that it operates effectively with the Act as amended (for example, adding a note on resolution of disputes about casual conversion)?

Provisional view

It may be appropriate to add a note that disputes about casual conversion may be dealt with under the award’s dispute resolution procedure.

Other matters

Provisional view

The State Government Agencies Award 2020 should be dealt with in Group 4 rather than Group 3 of the Review so that its casual terms can be considered in the same group as the Victorian State Government Agencies Award 2015.

 1   [2021] FWCFB 2222.

 2   Ibid at [5].

 3   [2021] FWCFB 3313.

 4   Ibid at [8].

 5   [2021] FWCFB 2222.

 6  

[2021] FWCFB 3313.

 7   The CFMMEU (Manufacturing) supports and adopts the reply submissions of the ACTU. With respect to the Manufacturing Award, the CFMMEU (Manufacturing) supports and adopts the reply submissions of the AMWU and the CFMMEU C&G.

 8   The CFMMEU C&G supports the general submissions filed by the ACTU and the AMWU in respect of the Manufacturing Award.

 9   The CEPU supports, adopts and relies upon the submissions of the AMWU, ACTU and CFMMEU C&G.

 10   ACCI submission in reply, 16 June 2021 at [7]-[10].

 11   Section 3(b) of the Act.

 12   ACCI submission dated 24 May 2021 at [18].

 13   Ai Group submission in reply, 16 June 2021 at [21]-[32].

 14   ACTU submission dated 24 May 2021 at [27] – [28].

 15   Ai Group reply submission 16 June 2021 at [13].

 16   Ai Group reply submission 16 June 2021 at [14].

 17   SDA submission dated 24 May 2021 at [9].

 18   ABI submission in reply, 16 June 2021 at [12].

 19   NRA submission in reply, 16 June 2021 at [1.1.3].

 20   Ai Group reply submission, 16 June 2021 at [37] – [38].

 21   SDA submission in reply, 16 June 2021 at [28].

 22   ACTU submission in reply, 16 June 2021 at [7]-[8].

 23   Ai Group reply submission 16 June 2021 at [42].

 24   ABI submission in reply, 16 June 2021 at [15].

 25   NRA submission in reply, 16 June 2021 at [1.2.3].

 26   MGA submission in reply, 16 June 2021 at [10]-[11].

 27   ACCI submission in reply, 16 June 2021 at [11]-[13].

 28   Ai Group submission in reply, 16 June 2021 at [49]-[51].

 29   ABI submission in reply, 16 June 2021 at [17]-[22].

 30   NRA submission in reply, 16 June 2021 at [1.3.4].

 31   SDA submission in reply, 16 June 2021 at [35].

 32   IEU submission in reply, 16 June 2021 at [10]-[15].

 33   ACCI submission in reply, 16 June 2021 at [14]-[16].

 34   AEU submission in reply, 16 June 2021 at [9.3]-[9.4].

 35   IEU submission in reply, 16 June 2021 at [17].

 36   IEU submission in reply, 16 June 2021 at [19]-[20].

 37   IEU submission in reply, 16 June 2021 at [21].

 38   IEU submission in reply, 16 June 2021 at [23].

 39   Ai Group reply submission, 16 June 2021 at [54].

 40   Ai Group reply submission, 16 June 2021 at [55] – [57].

 41   Ai Group reply submission, 16 June 2021 at [58].

 42   IEU submission, 24 May 2021 at [38].

 43   [2019] FWCFB 5144.

 44   Re 4 Yearly Review of Modern Awards — Family and Domestic Violence Leave [2019] FWCFB 5144 at [34] – [35].

 45   MGA submission in reply, 16 June 2021 at [19].

 46   SDA submission in reply, 16 June 2021 at [41].

 47   IEU submission in reply, 16 June 2021 at [26]-[28].

 48   MGA submission in reply, 16 June 2021 at [20].

 49   ABI submission in reply, 16 June 2021 at [31]-[33].

 50   AMWU submission in reply, 16 June 2021 at [12]-[14].

 51   CFMMEU C&G submissions in reply, 16 June 2021 at [12]-[15].

 52   See for example ACTU submission, 24 May 2021 at [62] and SDA submission, 24 May 2021 at [67].

 53   ABI submission in reply, 16 June 2021 at [33].

 54   NRA submission in reply, 16 June 2021 at [1.5.3].

 55   MGA submission in reply, 16 June 2021 at [23].

 56   SDA submission in reply, 16 June 2021 at [55]-[57].

 57   IEU submission in reply, 16 June 2021 at [30]-[32].

 58   Ai Group submission in reply, 16 June 2021 at [85].

 59   Ai Group submission in reply, 16 June 2021 at [88]-[89].

 60   SDA submission, 24 May 2021 at [73].

 61   ACTU submission in reply, 16 June 2021 at [12].

 62   MGA submission in reply, 16 June 2021 at [26]-[27].

 63   MGA submission in reply, 16 June 2021 at [29].

 64   AMWU submission in reply 16 June 2021 at [19].

 65   ACCI submission in reply, 16 June 2021 at [17]-[25].

 66   ACTU submission in reply, 16 June 2021 at [13].

 67   MGA submission in reply, 16 June 2021 at [31].

 68   IEU submission in reply, 16 June 2021 at [35].

 69   IEU submission in reply, 16 June 2021 at [36].

 70   Ai Group submission in reply, 16 June 2021 at [99]-[100].

 71   Ai Group submission in reply, 16 June 2021 at [102]-[103].

 72   NRA submission in reply, 16 June 2021 at [1.6.1.]-[1.6.2.].

 73   [2021] FWCFB 1608 at [120].

 74   [2018] FWCFB 6075 at [40] to [45].

 75   NRA submission in reply, 16 June 2021 at [1.7.2]-[1.7.8].

 76   SDA submission in reply, 16 June 2021 at [99].

 77   ACTU submission in reply, 16 June 2021 at [14].

 78   ACTU submission dated 24 May 2021 at [91(a)].

 79   ACTU submission dated 24 May 2021 at [91(b)].

 80   SDA submission dated 24 May 2021 at [80] – [82].

 81   ACCI submission in reply, 16 June 2021 at [27]-[39].

 82   ACTU submission dated 24 May 2021 at [91(b)].

 83   Ai Group submission in reply, 16 June 2021 at [109]-[114].

 84   SDA submission dated 24 May 2021 at [81].

 85   4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [375] – [377].

 86   Ai Group submission, 16 June 2021 at [126].

 87   Ai Group submission in reply, 16 June 2021 at [129].

 88   Section 56 of the Act.

 89   SDA submission dated 24 May 2021 at [84].

 90   Ai Group submission dated 24 May 2021 at [182] and [184].

 91   Ai Group submission in reply, 16 June 2021 at [135].

 92   ABI submission in reply, 16 June 2021 at [45].

 93   ABI submission in reply, 16 June 2021 at [47]-[49].

 94   NRA submission in reply, 16 June 2021 at [2.1.9]-[2.1.10].

 95   NRA submission in reply, 16 June 2021 at [2.3.1].

 96   MGA submission in reply, 16 June 2021 at [36].

 97   SDA submission in reply, 16 June 2021 at [110]-[113].

 98   SDA submission in reply, 16 June 2021 at [117]-[120].

 99   SDA submission in reply, 16 June 2021 at [124].

 100   AMWU submission dated 24 May 2021 at [73].

 101   Ai Group reply submission 16 June 2021 at [137] and [139].

 102   AMWU submission dated 24 May 2021 at [76].

 103   ACCI submission in reply, 16 June 2021 at [43]-[52].

 104   AMWU submission in reply, 16 June 2021 at [85].

 105   AMWU submission in reply, 16 June 2021 at [86]-[91].

 106   AWU submission in reply dated 16 June 2021 at [10]-[23].

 107   CFMMEU C&G submission in reply, 16 June 2021 at [17]-[19].

 108   CFMMEU C&G submission in reply, 16 June 2021 at [28].

 109   ACTU submission dated 24 May 2021 at [107].

 110   AMWU submission dated 24 May 2021 at [78].

 111   AMWU submission dated 24 May 2021 at [80].

 112   Ai Group submission in reply, 16 June 2021 at [145]-[146].

 113   Ai Group submission in reply, 16 June 2021 at [147].

¹¹⁴ 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [385].

115 Ai Group submission in reply, 16 June 2021 at [155]. Also see 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [376].

116 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [376].

 117   4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 at [363].

 118   Ai Group submission in reply, 16 June 2021 at [160].

 119   Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 – Revised Explanatory Memorandum at page 14.

 120   Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 – Revised Explanatory Memorandum at page ix.

 121   Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 – Revised Explanatory Memorandum at page xvii – xxi.

 122   Ai Group submission in reply, 16 June 2021 at [163].

 123   ABI submission in reply, 16 June 2021 at [54].

 124   Ai Group submission, 24 May 2021 at [110] – [119].

 125   Ai Group submission in reply, 16 June 2021 at [166]-[168].

 126   ABI submission in reply, 16 June 2021 at [55].

 127   AMWU submission in reply, 16 June 2021 at [97]-[106].

 128   AHA submission in reply, 16 June 2020 at [6]-[9].

 129   Ai Group submission in reply, 16 June 2021 at [181].

 130   Ai Group submission in reply, 16 June 2021 at [173].

 131   Section 57 of the Act.

 132   Ai Group submission in reply, 16 June 2021 at [177].

 133   ABI submission in reply, 16 June 2021 at [59].