| [2021] FWCFB 4584 |
| FAIR WORK COMMISSION |
STATEMENT |
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Horticulture Award 2020
(AM2020/104)
Agricultural industry | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 29 JULY 2021 |
Horticulture Award 2020 – application to vary an award – background paper published – further directions
[1] In a Statement issued on 26 July 2021, 1 interested parties were directed to file a written Aide Memoire by no later than 12noon (AEST), Thursday 29 July 2021. The Aide Memoire was to:
• direct the Full Bench to the evidence upon which the interested party will rely during the course of closing oral submissions, and
• include the party’s short written answers in response to the questions set out in the Background paper and any comments on the two Information Notes set out at [7] of the Statement.
[2] The following parties filed an Aide Memoire:
• Australian Workers’ Union (AWU)
• United Workers’ Union (UWU)
• Australian Fresh Produce Alliance (AFPA)
• National Farmers Federation (NFF)
• Australian Industry Group (Ai Group)
[3] The attached document summarises the parties’ responses to the questions set out in the Background Paper published on 26 July 2021 (Attachment A).
[4] An Additional Information Note on the piece rate data from Messrs McClintock and Kelly has been published today.
[5] The matter is listed for hearing at 9.30AM (AEST), Friday 30 July 2021. During the course of the oral hearing parties are invited to comment on the Additional Information Note and the Information Notes published on Monday, 26 July 2021:
• Information Note – Comparison of location data – NFF Survey and ABARES
• Information Note – Piece rate data – Anthony Kelly and Brent McClintock
[6] There are five other matters we wish the parties to address at the commencement of the hearing tomorrow.
[7] The UWU asked Dr Howe to provide a statement in relation to the proposed variation application to the Horticulture Award 2020 (AM2020/104) (the First Statement). 2
[8] The AFPA engaged Mr Greg Houston to prepare an expert report (the First Houston Report), 3 that reviews and critiques the expert reports of both Dr Howe and Dr Underhill, including the methodology, assumptions and conclusions in each report. Mr Houston’s analysis of Dr Howe’s First Statement is set out in section 3 of the First Houston Report.4
[9] Dr Howe provided a statement in response to the First Houston Report (the Howe Reply) 5 and Mr Houston provided a reply to the Howe Reply (the Houston Reply).6
[10] At [19] of her First Statement, Dr Howe says:
‘The data from my research outlined at [6] has supported a finding that piece rates are generally set at levels which mean that workers who are on a piece rate don’t earn at least Award minimum rates, in fact they are paid well below Award minimum rates, generally earning less than $15 an hour.’ [Emphasis added]
[11] At [6] of her First Statement, Dr Howe states:
‘Over a three year period from 2016–18, I led an interdisciplinary research project investigating labour practices in the horticulture sector. This involved interviews and focus groups with 121 growers, 124 workers and 110 other stakeholders from industry associations, trade unions, labour hire, local, state and federal government, accommodation providers and community groups. The Report including collection of data in relation to underpayment of wages and the use of piece rates in employment of working holiday makers. The Report was called “Towards a Durable Future: Tackling Labour Challenges in the Australian Horticulture Industry”. Attached to this statement and marked “JH-1” is a copy of this report.’
[12] The finding at [19] of Dr Howe’s First Statement was the focal point of the challenge to Dr Howe’s evidence.
[13] At [155] to [157] of the First Houston Report Mr Houston addresses the finding at [19] of Dr Howe’s First Statement and says:
‘Research report JH-1 does not appear to quantify the average pay received by piece rate workers or the proportion of piece rate workers that earn an hourly rate below the minimum wage.
Rather, Dr Howe’s conclusion that piece rate workers generally earn an hourly rate that is ‘well below the Award minimum rates’ appears to be based on outcomes of the focus group and findings from two other relevant reports, which I note at paragraph 150 above.
It is not clear how Dr Howe reaches the conclusion that workers who are on a piece rate earn ‘less than $15 an hour’ based on the research report JH-1.’ [Footnotes omitted]
[14] Research Report JH-1 is the report Towards A Durable Future: Tackling Labour Challenges in the Australian Horticulture Industry. It was the basis of a three-year national study into the conditions of work in the horticulture industry. The study was funded by industry and commissioned by VegetablesWA and was undertaken by an interdisciplinary research team consisting of five scholars across two universities. Dr Howe was the project leader on the study and the lead author on the final report.
[15] At [19] of the Howe Reply, Dr Howe states:
‘in response to paragraph 160 in the HoustonKemp report, in my first statement where I state at paragraph 19 that “the data from my research” is the basis for my view that piece rate workers are “paid well below the Award minimum rates, generally earning less than $15 an hour”, I am making this statement as a general, expert assessment formed through my extensive and robust mixed methodology research of labour practices in the horticulture industry over many years.’ [Emphasis added]
[16] At [98] of its closing submissions the AFPA submits:
‘A bare assertion of this kind is not a tenable basis for making qualitative findings about earnings in an industry and has no probative value.’
Question for the UWU: In a recent decision 7 a Full Bench attached very little weight to particular opinions in an expert report where the basis of the opinion was not expressed, noting that:
‘A bare expression of opinion, absent any sufficient explanation of the basis of that opinion, is normally given little weight. As observed in Davie v The Lord Provost, Magistrates and Councillors of the City of Edinburgh: 8
‘the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert.’ 9
Why should Dr Howe’s opinion in [19] of the Howe Reply be treated any differently?
[17] At [20] of the Howe Reply, Dr Howe states:
‘However, in order to fully respond to the HoustonKemp report’s claim that there is no evidence to support my conclusion that workers on piece rates are generally paid well below the Award minimum rates, generally earning less than $15 an hour, I now turn to a detailed summary of the findings and data from the research team’s three-year inquiry in relation to piece rates.’
[18] Dr Howe then sets out a summary of the findings and data from the Phase 2 semi-structured interviews conducted as part of the Durable Future research project. 10
[19] At [51] of the Houston Reply Mr Houston says:
‘Dr Howe’s response does not cause me to alter the opinions I express in para 155-157 of my first expert report has not changed after reviewing Dr Howe’s report. My reasoning is that:
a. Dr Howe’s reply report confirms that her opinion is based on outcomes of interviews and focus groups – it follows that the evidence Dr Howe seeks to rely on is qualitative in nature and so cannot be used to draw quantitative conclusions with any degree of statistical confidence;
b. the extracts presented by Dr Howe indicate that the vast majority of responses on low hourly earnings from piece rates are from working holiday makers (WHMs) which, alone, are not representative of the horticultural workforce. I note that:
i. of the 30 extract responses on low earnings from piece rates, 28 are from WHM interviews or focus groups; and
ii. of the 28 responses from WHMs, six did not contain information on hourly earnings from piece rates.
c. furthermore, participation in the interviews and focus groups is likely to suffer from self-selection bias, where those WHMs that do participate in the interviews/focus group are different to those who have not participated – for example, dissatisfied workers, including those that are underpaid, would be more likely to participate in the interviews and focus groups.’ [Emphasis added, footnotes omitted]
[20] The AFPA submits that Dr Howe’s finding at [19] of her First Statement ‘is not valid and has no probative value.’
Question for the AFPA: In relation to the qualitative data summarised at [21] to [28] of the Howe Reply Statement, on what basis is it said that this data has no probative value?
[21] The AWU asked Dr Underhill to provide a written report providing her opinions on the composition of the workforce in the horticulture industry and the average earnings of employees engaged as pieceworkers in the horticulture industry (Underhill Report). 11
[22] The Underhill Report states that Research Project 1 found piece rate workers earned, on average, significantly less than hourly paid employees. 12 A similar pattern was found in Research Project 2.13
[23] As mentioned earlier, the AFPA engaged Mr Houston to prepare an expert report that reviewed and critiqued the Underhill Report. Mr Houston’s analysis of the Underhill Report is set out in section 2 of the First Houston Report.
[24] Dr Underhill provided a statement in response to the First Houston Report (Underhill Reply). The Houston Reply Statement includes Mr Houston’s reply to the Underhill Reply.
[25] The AWU contends that the evidence shows pieceworkers in the horticulture industry ‘commonly earning hourly rates well below the minimum hourly rate prescribed by the Award for the type of employment and classification level.’ 14
[26] The AWU accepts that Dr Underhill’s research targeted a particular segment of the horticulture workforce (WHM picking workers in ‘picking regions’) and that approximately 90% of the respondents were WHMs. 15 Further, at [28] of the Underhill Reply, Dr Underhill says:
‘The publications based on our two surveys do not claim to be representative of the entire population of horticultural workers.’ 16
[27] In his critique of Dr Underhill’s survey methodology Mr Houston’s principal observations are that: 17
• the sampling methodology results in a non-representative sample, undermining its ability to generalise findings to horticulture workers in Australia, and
• the research suffers from self-response bias.
[28] At [35] of the Houston Reply Report (addressing Dr Underhill’s reply) Mr Houston states:
‘the presently available data can only properly be described as presenting pay outcomes for WHM workers, and cannot be extrapolated to a wider population of all horticultural workers, of which WHMs are only a subset.’
[29] At [50] of its closing submissions the AWU submits:
‘In cross-examination, Mr Houston confirmed that in his reports he was not criticising the studies undertaken by Dr Underhill or the conclusions and opinions drawn in those studies, but rather was critical of her drawing conclusions having regard to those studies that he described as being “much broader than the conclusions in the studies themselves”. Ultimately, the primary criticism made by Mr Houston of Dr Underhill’s conclusions was that the research projects were directed at WHMs in particular, rather than the horticulture workforce as a whole and, for that reason, might not be representatively of the workforce as a whole.’ [Footnotes omitted]
[30] The AWU submits that it is not necessary for the Commission ‘to make a specific finding of fact that the mean or median hourly rate dollar figures calculated for pieceworkers by Dr Underhill and found in table 3 of Exhibit AWU16 and Table 4 of Exhibit AWU17 or in Exhibit AWU28 are in fact reflective of the entire population of the horticulture industry in Australia.’ 18
[31] The AFPA contends that it is open to the Commission to find that some employers in the industry set their piece rates and/or time rates at inappropriately low levels or otherwise underpay their workers. But it is not open to make any findings as to what proportion of employers do so. 19
Question for the AFPA: No party contends that Dr Underhill’s survey results can be extrapolated to the wider population of all horticultural workers. Does the AFPA accept that Dr Underhill’s survey results can be taken as presenting pay outcomes for WHM workers, as suggested by Mr Houston?
[32] The Statements of Ms Tan 20 and Ms Ablett21 attach media releases, media articles and media interviews regarding a proposed agricultural visa and the UK Free Trade Agreement.
[33] At [16] of its closing submission the AFPA submits:
‘It is difficult to predict how long the pandemic-related travel restrictions (and travel reduction more generally) will continue. However, there is no reason to expect WHM numbers to return to pre-pandemic levels in the near future, or at all.’ [Footnotes omitted]
[34] The footnote cited in support of this submission states:
‘Including because of the proposal to introduce an agri-visa the details of which are not yet known and the impending abolition of the 88-day requirement as part of the UK-Australia free trade agreement: Statement of Elizabeth Tan dated 19 July 2021 (AFPA-5).’
Question for the UWU: What does the UWU put in reply to [16] of the AFPA closing submission?
[35] At [61] of its closing submission the UWU submits:
‘The fact that certain federal politicians have made public statements to the effect that there may be, in the future, a new kind of ‘agriculture visa’ is irrelevant to the issues for determination in this application. Counsel for the AFPA stated that the AFPA would “not be submitting that the Commission should presume that the agricultural visa will be implemented, or implemented at a particular time, or that it will have any particular – or that its protections in terms of labour regulation will mirror the protections that are in the Seasonal Workers Program…”. Given those limitations, it is clear that no weight can attach to any submission that the current workforce may look different in the future, if a series of unspecific and unknown events take place, and it would be wrong for the FWC to take any such matters into account in deciding whether to vary the Horticulture Award.’ [Footnotes omitted]
Question for the AFPA: What does the AFPA put in reply to [61] of the UWU’s closing submission?
Question for all parties: What findings are proposed on the basis of the material attached to the statements of Ms Tan and Ms Ablett?
4.1 Clause 15.2(b)
[36] The AFPA submits that: 22
1. The ‘logical consequence’ of the proposed variation would be that the 15% uplift for pieceworkers should be removed. The AFPA submits that the uplift is justified by the absence of a guaranteed hourly rate for pieceworkers as,:
‘The requirement that an average competent pieceworker earn more than a timeworker doing the same work is the quid pro quo for the risk of earning less than the timeworker if the pieceworker underperforms. This is the risk-reward bargain. If pieceworkers are to be guaranteed the same hourly earnings as timeworkers, the main downside of piecework is removed and the upside is with the pieceworker — the opportunity to earn more than a timeworker. It is then difficult to see what justification would remain for requiring the piecework rate to be set so that the average competent pieceworker earns more than the time worker performing the same work. Hence, the 15% uplift would no longer be “necessary to achieve the modern awards objective”.’ 23
The AFPA submits that if pieceworkers are to be guaranteed the hourly rates of timeworkers but also retain the benefit of clause 15.2(b), this would make the pieceworker mode of engagement unattractive for employers,:
‘This is because an employer engaging someone as a pieceworker would then face the double whammy of both the minimum hourly rates and the Uplift Term. In contrast, if the employer were to engage someone as a timeworker, they can avoid the Uplift Term but can still incentivise high productivity by paying unregulated above-award performance-based bonuses.’ 24
2. It is said to follow that the practical effect of the variation would be to abolish the piece-work safety net and replace it with a safety net based on hourly rates. This is because clause 15.2(b) would no longer be “necessary” to maintain a fair and effective safety net. The uplift would have to go and the piecework provisions would then no longer provide any additional earnings for pieceworkers.
[37] In reply, the UWU submits that the AFPA’s submission that if the Application was granted then the ‘logical consequence…would be that the 15% uplift for pieceworkers should be removed…’ should be disregarded:
‘There is no application to remove the "15% uplift" provided for in clause 15.2 and no reason to remove this incentive if a minimum rates floor were introduced.’ 25
[38] The Application does not seek to remove the 15% uplift for pieceworkers in clause 15.2(b); but the Commission is not required to make a decision in relation to an application in the terms applied for (s.599 of the Act) and the AFPA contends that if the Application is granted then the 15% uplift is no longer ‘necessary’ within the meaning on s.138.
Question for the Union Parties: In the event that the Application is granted why should the 15% uplift be maintained? Has an ‘uplift factor’ been provided in any other instance where pieceworkers are guaranteed a minimum hourly rate?
Question for all parties: If the 15% uplift factor is removed from clause 15.2(b) should the Horticulture Award retain the capacity for an employer and employee to enter into a piecework agreement?
[39] In its initial submission, the AFPA proposed an alternative variation if the Commission were to form the view that the current piecework provisions need to be varied. That alternative variation was said to be designed to ‘preserve the concept of a piecework-based safety net with an uplift of earnings for competent pieceworkers compared to timeworkers, but provide additional implementation machinery to support the transparent and consistent application of piecework rates.’ Appendix D to the AFPA’s closing submissions now sets out a draft of this proposal (see Attachment B to this Statement).
[40] AFPA submits that, if the Commission finds it necessary to consider AFPA’s proposal, it should find that the proposal is likely to:
• make it easier for growers to correctly set piece rates;
• make it easier for workers, unions and the FWO to enforce the Uplift Term;
• increase the earnings of pieceworkers who are currently paid less than the minimum hourly rate; and
• largely avoid the adverse consequences of the AWU’s proposed variation set out in the previous section of this submission.
Question for all other parties: What do you say about the AFPA’s proposed alternate variation?
[41] On 7 July 2021 the Commission published a Research Reference List. This was subsequently updated on 21 July 2021.
[42] At [41] of its closing submission the AFPA states:
‘Some of the sources in the FWC Reference List are not in evidence. These sources should not be used to make any findings of fact.’
Question for the AFPA: Which sources in the Research Reference List are said to not be in evidence?
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR732258>
ATTACHMENT A
PARTY RESPONSES TO QUESTIONS FROM BACKGROUND PAPER
Q1: Is it common ground that neither the Horticulture Award nor the Act and Regulations require an employer to keep a record of hours worked by a pieceworker?
[1] It is common ground that neither the Horticulture Award, nor the Act and Regulations require an employer to keep a record of hours worked by a pieceworker. 26
Q2: Are any of the observations at [9] to [14] contested?
[2] No party contested the observations at [9] to [14] of the Background Paper. 27
Q3: Does any party contest the proposition at [16]?
[3] No party contested the proposition at [16] of the Background Paper. 28
Q4: What does the AWU say about the AFPA submission regarding National Retail Association v FWC?
[4] The AWU submits that the decision in National Retail Association v FWC 29 is ‘of limited assistance in the present matter’, for three reasons:30
1. It is not apparent that there was any contest between the parties as to whether the minimum wages objective applied.
2. The issue arose in the context of Item 6(4) of the Transitional Provisions legislation which provided that the minimum wages objective applied if the variation ‘relates to’ modern award minimum wages. The language of ss 157(2) and 284(2)(b) of the Act is different.
3. The application in National Retail Association v FWC sought to change the rates applicable to the work of 20 year old employees. The present application does not seek to alter the rates of minimum wages in clause 15.1 or 15.3 or the level by reference to which any piecework rate is required to be set in clause 15.2(b). It is not equivalent.
Q5: If the minimum wage objective is enlivened by the Application what do the parties say about the matters set out at s.284(1)(a) to (e)?
[5] The AWU submits that:
‘In relation to the matters set out in s 284(1)(a) to (e), the AWU responds as follows. The matters in subparagraphs (b), (c) and (d) are identical to the matters identified in s 134(1)(a), (c) and (e) and the matter in subparagraph (e) does not appear to be relevant. The matter identified in subparagraph (a) is “the performance and competitiveness of the national economy, including business competitiveness and viabilitiy, inflation and economic growth.” Although not identical in its wording, that matter appears to overlap very significantly with the matter raised in s 134(1)(h). In any event, there is no evidence that has been advanced to suggest, much less demonstrate, that the variation sought would have any appreciable impact on the performance and competitiveness of the national economy in aggregate.’ 31
[6] The UWU confirmed that it would address this question during the course of oral closing submissions. 32
[7] The AFPA submits that: 33
‘The factual effects of the AWU’s proposed variation set out in section A.9 of AFPA’s closing submission dated 26 July 2021 can be linked to the factors in ss 284(1) and 134(1) as follows:
a) Increased costs to business and reduction in the workforce (as underperforming employees are culled and more automation is introduced) will reduce the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, will hinder employment growth, and will adversely impact businesses, raise employment costs and increase inflation (as some of the labour costs increases are passed on to consumers) (ss 284(1)(a), 134(1)(f), 134(1)(h)).
b) The reduction in the workforce (as underperforming employees are culled and more automation is introduced) will reduce social inclusion through reduced workforce participation (ss 284(1)(b) and 134(1)(c)).
c) The relative living standards and needs of the low paid will be positively affected for some workers (those that will earn increased remuneration) and negatively affected for others (those that can no longer find work in the industry or can no longer work on piece rates with a guaranteed 15% uplift as some employers switch to using a timework mode of engagement with unregulated above-Award performance bonuses) (ss 284(1)(c) and 134(1)(a)).
d) Performance of work will become less efficient and productive as some cohorts of employees will be de-motivated (s 134(1)(d)).
e) The issues with the vagueness and subjectivity of the concept of average competent employee in clause 15.2 about which the Union Parties complain will remain unremedied (s 134(1)(g)).
The other factors in ss 284(1) and 134(1) will not be materially engaged by the proposed variation.’
[8] The NFF submits that ‘certain of the considerations in section 284 are similar to those the Commission is required to consider in section 134, of the FW Act, and in particular sub-section 134(1)(a), (c) and (e)’ and adopts the AFPA’s submission on this point. 34
[9] Ai Group relies on [86] of its submissions of 1 June 2021. 35
Q6: Does any party contest the UWU’s submission regarding the key principles to draw from Hu (No 2) and the Hu Appeal (set out at [57] and [58] above)?
[10] No party, other than Ai Group, contested the UWU’s submission regarding these key principles. 36
[11] Ai Group submitted that:
‘Point 5 of paragraph [57] of the Background Paper states:
The ‘average competent employee’ is not necessarily ‘proficient’ but at least ‘suitable, sufficient for the purpose, adequate’ and must be selected from the pool of competent employees.
Consistent with paragraph [31] of Rangiah J’s Decision in Hu (No 2), the average competent employee is selected from the pool of hypothetical competent employees.
Point 6(iii) of paragraph [57] of the Background Paper states that the relevant factors used in determining what a hypothetical employee will be able to earn include the general level of experience of the available workforce considered as a whole.
As stated in paragraph [34] of Rangiah J’s decision in Hu (No 2), the assessment of the average competent employee must be made by reference to the workforce that is available or potentially available to the employer.’ 37
Q7: Does any party contest the summary at [60] and [61]?
[12] No party contested the summary at [60] and [61]. 38
Q8: Interested parties are invited to confirm that the summary of their submission is accurate, or, if not, to identify any correction or additions.
[13] No party, other than the NFF, identified any inaccuracies in the summary, or sought any corrections or additions.
[14] The NFF repeats its conclusions in paragraphs [8],[11]-[13], and [18]-[26] of the NFF submission and adds that the Commission should be slow to add economic burdens to employers such as those in the Horticulture industry, without a clear warrant to do so. 39
Q9: What do the other employer organisations say about the AFPA’s alternate proposal?
[15] The NFF broadly supports the AFPA’s proposal, subject to some observations. The NFF confirmed that it would speak to these observations during closing oral submissions. 40
[16] Ai Group submits that the AFPA’s proposal is ‘unopposed to the extent that it provides ‘implementation machinery’ to facilitate the proper application of the current piecework provisions in the Horticulture Award’, but Ai Group does not consider that the Commission has before it sufficient materials which would justify accepting any elements of the proposal which impose additional obligations upon employers which are not currently present in the Horticulture Award:
‘If the Commission is minded to give further consideration to any aspect of AFPA’s alternative proposal in the future, Ai Group respectfully requests that the parties be given a further opportunity to respond once any suggested amendment is further elaborated upon and condensed into a draft variation.’ 41
Q10: Are any of the observations at [155]-[157] contested?
[17] No party contested the observations at [155]-[157] of the Background Paper. 42
Q11: Does any party contest the proposition at [160]?
[18] No party contested the proposition at [160] of the Background Paper. 43
[19] Ai Group also submits that ‘the pieceworker rates at cl. 15.2(b), for some classifications, require the pieceworker agreement to enable the average competent employee to earn a rate which exceeds the ‘low-paid’ thresholds referred to above.’ 44
Q12: Does any party contest the proposition at [171]?
[20] Other than the UWU, no party contested the proposition at [171] of the Background Paper. 45
[21] The UWU submits:
‘The focus of s 134(1)(c) is not so narrow as to be confined only to obtaining employment. Social inclusion may also be promoted by assisting employees to remain in employment: Re Four Yearly Review of Modern Awards – Family and Domestic Violence Leave (2018) 276 IR 1, [282].
Further, ‘social inclusion’ requires more than simply being employed: a job with inadequate pay can create social exclusion if the income level limits the employee’s capacity to engage in social, cultural, economic, and political life: Annual Wage Review 2015–2016 [2016] FWCFB 3500, [467].’ 46
Q13: Are any of the observations at [184] contested?
[22] No party contested the observations at [184] of the Background Paper. 47
[23] The AWU did note however, that:
‘although the history of determination of the 15% figure in clause 15.2(b) of the Award is not entirely clear, it is partly explained by the fact that clause 15.2(f) excluded pieceworkers from hours of work, meal allowance and overtime provisions that would otherwise apply. That is relevant to the contention advanced by the AFPA that the 15% target in clause 15.2(b) should logically be removed if a minimum floor of rates in implemented.’ 48
Q14: Are the observations at [191] – [197] contested?
[24] The AWU submits that:
‘The first sentence in paragraph [191] suggests that “the exercise of modern award powers to increase modern award minimum wages is likely to have a negative impact on business, by increasing employment costs for those businesses that engage pieceworkers.” It is not clear whether the sentence is intended to be a general statement with respect to any increase in minimum wages. For the avoidance of doubt, however, the AWU does not accept that its proposed variation will increase employment costs for businesses that engage pieceworkers. At the very least, any substantial increase in employment costs should only occur if the business is using piece rates which are not properly set in accordance with clause 15.2(b) of the Award.’ 49
[25] The UWU confirmed that it did not contest the observations in [192]-[197], but would seek to address [191] in its closing oral submissions. 50
[26] AFPA does not agree that ‘the impact of an increase in modern award minimum wages upon productivity is less clear’ and maintains its submission that ‘the change would reduce the economic productivity of the sector (relevantly here, the amount of produce picked per hour worked) by de-incentivising substantial parts of the workforce.’ 51 AFPA otherwise agrees with the observations at [191] to [197] of the Background Paper.
[27] Ai Group and the NFF did not contest these observations. 52
Q15: Are there any corrections or additions to the summary of the party submissions in respect of the s.134 considerations at [161] to [217] above?
[28] The AWU made note of two considerations:
‘In relation to s 134(1)(b), the description of the submission of the AWU at paragraph [168] of the Background Paper should reflect that the AWU submits that there is little incentive for employers to engage in collective bargaining in circumstances in which the piecework arrangements permit employees to drive down labour costs without engaging in bargaining and that, for this reason, the proposed variation has the potential to encourage collective bargaining: AWU Outline of Submissions at [27].
In relation to s 134(1)(da), the AWU does not submit this is merely a neutral as suggested at paragraph [185] of the Background Paper. The AWU submits that the insertion of a guaranteed minimum payment for pieceworkers will assist in ensuring that the pieceworker rate provisions are only utilised for genuine piecework agreements which provide the capacity for an employee to earn an income that will compensate for other benefits foregone, including with respect to overtime, unsocial, irregular or unpredictable hours and weekend or public holiday work: AWU Outline of Submissions at [32].’ 53
[29] The UWU confirmed that it had no corrections but would seek to address the s 134(1) considerations in closing oral submissions. 54
[30] The AFPA referred to its responses to question 5 and 14 above. 55
[31] The NFF had no further corrections to additions. 56
[32] Ai Group submitted that:
‘At paragraph [182] of the Background Paper, it states that Ai Group rejects the UWU’s submissions that complying with clause 15.2(b) is onerous. Ai Group comments on the complexity of determining the correct piece rate under cl. 15.2(b) of the Horticulture Award at paragraphs [58] – [61] of our 1 June 2021 submission.
Ai Group takes the view that the unions’ proposed variations would not remove any of the complexities or difficulties involved in applying cl 15.2(b).’ 57
ATTACHMENT B
DRAFT CLAUSE 15.2 IMPLEMENTING AFPA’S PROPOSED ALTERNATIVE VARIATION
15.2 Piecework rates
a) An employer and a full-time, part-time or casual employee may enter into an agreement for the employee to be paid a piecework rate. An employee on a piecework rate is a pieceworker.
b) Subject to clause 15.2(n), all work performed in accordance with the piecework agreement must be paid at the piecework rate fixed by that agreement or the minimum piecework rate calculated in accordance with clause 15.2(k) (whichever is higher).
c) The calculation of the minimum piecework rate in clause 15.2(k) for casual employees will include the casual loading prescribed in clause 11.3(a).
d) Subject to clause 15.2(n), an agreed piecework rate is paid instead of the minimum rates specified in clause 15.
e) The following clauses of this award do not apply to an employee on a piecework rate:
i. Clause 13—Ordinary hours of work and rostering arrangements;
ii. Clause 18.3(c)—Meal allowance; and
iii. Clause 21—Overtime.
f) The employer and the individual employee must have genuinely made the piecework agreement without coercion or duress.
g) The piecework agreement between the employer and the individual employee must be in writing and signed by the employer and the employee.
h) The employer must give the individual employee a copy of the piecework agreement and keep it as a time and wages record.
i) Nothing in this award guarantees an employee on a piecework rate will earn at least the minimum ordinary time weekly rate or hourly rate in this award for the type of employment and the classification level of the employee, as the employee’s earnings are contingent on their productivity.
j) For the purposes of the NES:
i. The base rate of pay for a pieceworker is the base rate of pay as defined in the NES.
ii. The full rate of pay for a pieceworker is the full rate of pay as defined in the NES.
k) Each pay period, the employer must, for each group of pieceworkers performing a particular piecework task specified in the piecework agreement, calculate the minimum piecework rate for that task in that pay period in accordance with the following steps:
i. calculate:
• the total output of the competent pieceworkers in the group in the pay period (Total Competent Output); and
• the total combined hours of work of the competent pieceworkers in the group during the pay period (Total Competent Hours);
ii. divide the Total Competent Output by Total Competent Hours to obtain the Average Hourly Output of a Competent Worker;
iii. take the applicable minimum hourly rate, add 15% and then divide by the Average Hourly Output of a Competent Worker.
l) A competent pieceworker for the purposes of this clause is an employee who, in the reasonable opinion of the employer, is suitable, sufficient or adequate to perform the task or tasks assigned to the relevant group. An employee is deemed to be competent at a particular task or set of tasks after he or she has been performing these task(s) for 20 working days.
m) In calculating the piecework pay under this clause for an employee who is not yet competent, the employer must pay the employee on the basis of their actual output or the average rate of output of the slowest competent worker in the group during the pay period, whichever is higher.
n) If an employer requires a pieceworker to perform work that does not yield any piecework output and is not an inherent part of the agreed piecework:
i. the time spent performing this work is to be excluded for the purposes of all calculations under this clause; and
ii. the employer must pay the employee at the applicable minimum hourly rates for this work.
o) The employer must keep a record of the following:
i. the groups of employees (including the composition of the group and the tasks assigned to the group);
ii. the hours worked by all pieceworkers; and
iii. the calculations required by clauses 15.2(k) and 15.2(m).
2 Exhibit UWU7, Witness Statement of Dr Joanna Howe.
3 Exhibit AFPA6, Expert Report of Greg Houston.
4 Exhibit AFPA6, Expert Report of Greg Houston at [148] – [177].
5 Exhibit UWU8, Reply Witness Statement of Dr Joanna Howe.
6 Exhibit AFPA7, Expert Report in Reply of Greg Houston.
7 4 yearly review of modern awards – Social, Community, Home Care and Disability Services Award 2010 [2021] FWCFB 2383.
8 [1953] SC 34 at [40] per Lord President Cooper.
9 4 yearly review of modern awards – Social, Community, Home Care and Disability Services Award 2010 [2021] FWCFB 2383 at [172].
10 See Exhibit UWU8, Reply Witness Statement of Dr Joanna Howe at [21]-[28].
11 Exhibit UWU16, Report of Dr Underhill.
12 Exhibit AWU16, Report of Dr Underhill at [24] and Table 3.
13 Exhibit AWU16, Report of Dr Underhill at [26] and Table 4.
14 AWU closing submission, 26 July 2021 at [2(c)].
15 AWU closing submission, 26 July 2021 at [51].
16 Exhibit AWU17, Reply Report of Dr Underhill at [28]; also see Transcript, 15 July 2021 at PN1341.
17 Exhibit AFPA6, Expert Report of Greg Houston at [32].
18 AWU closing submission, 26 July 2021 at [52].
19 AFPA closing submission, 26 July 2021 at [27(b)].
20 Exhibit AFPA5, Witness Statement of Elizabeth Tan.
21 Exhibit UWU9, Witness Statement of Lyndal Ablett.
22 AFPA submission, 11 June 2021 at [27]-[33].
23 AFPA submission, 11 June 2021 at [27].
24 AFPA submission, 11 June 2021 at [28].
25 UWU submission in reply, 5 July 2021 at [28].
26 AFPA Aide Memoire, 29 July 2021 at [1]; AWU Aide Memoire, 29 July 2021 at [4]; UWU Aide Memoire, 29 July 2021 at [3], Q1; Ai Group Aide Memoire, 29 July 2021 at [3]-[4]; NFF Aide Memoire, 29 July 2021 at [3].
AFPA Aide Memoire, 29 July 2021 at [2]; AWU Aide Memoire, 29 July 2021 at [6]; UWU Aide Memoire, 29 July 2021 at [3], Q2; Ai Group Aide Memoire, 29 July 2021 at [5]; NFF Aide Memoire, 29 July 2021 at [4].
28 AFPA Aide Memoire, 29 July 2021 at [3]; AWU Aide Memoire, 29 July 2021 at [7]; UWU Aide Memoire, 29 July 2021 at [3], Q3; Ai Group Aide Memoire, 29 July 2021 at [6]; NFF Aide Memoire, 29 July 2021 at [5]-[7].
29 (2014) 225 FCR 154.
30 AWU Aide Memoire, 29 July 2021 at [8]-[12].
31 AWU Aide Memoire, 29 July 2021 at [13].
32 UWU Aide Memoire, 29 July 2021 at [3], Q5.
33 AFPA Aide Memoire, 29 July 2021 at [5]-[6].
34 NFF Aide Memoire, 29 July 2021 at [9]-[10].
35 Ai Group Aide Memoire, 29 July 2021 at [8].
36 AFPA Aide Memoire, 29 July 2021 at [7]; AWU Aide Memoire, 29 July 2021 at [14]; NFF Aide Memoire, 29 July 2021 at [11].
37 Ai Group Aide Memoire, 29 July 2021 at [9]-[12].
38 AFPA Aide Memoire, 29 July 2021 at [8]; AWU Aide Memoire, 29 July 2021 at [15]; UWU Aide Memoire, 29 July 2021 at [3], Q7; Ai Group Aide Memoire, 29 July 2021 at [13]; NFF Aide Memoire, 29 July 2021 at [12]-[13].
39 NFF Aide Memoire, 29 July 2021 at [15].
40 NFF Aide Memoire, 29 July 2021 at [18].
41 Ai Group Aide Memoire, 29 July 2021 at [17].
42 AFPA Aide Memoire, 29 July 2021 at [11]; AWU Aide Memoire, 29 July 2021 at [18]; UWU Aide Memoire, 29 July 2021 at [3], Q10; NFF Aide Memoire, 29 July 2021 at [19]. Ai Group did not provide a response to this question.
43 AFPA Aide Memoire, 29 July 2021 at [160]; Ai Group Aide Memoire, 29 July 2021 at [18]; UWU Aide Memoire, 29 July 2021 at [3], Q11; NFF Aide Memoire, 29 July 2021 at [21]. The AWU did not provide a response to this question.
44 Ai Group Aide Memoire, 29 July 2021 at [19].
45 AFPA Aide Memoire, 29 July 2021 at [13]; AWU Aide Memoire, 29 July 2021 at [19]; Ai Group Aide Memoire, 29 July 2021 at [20]; NFF Aide Memoire, 29 July 2021 at [22].
46 UWU Aide Memoire, 29 July 2021 at [3], Q12.
47 AFPA Aide Memoire, 29 July 2021 at [14]; AWU Aide Memoire, 29 July 2021 at [20]; UWU Aide Memoire, 29 July 2021 at [3], Q13; Ai Group Aide Memoire, 29 July 2021 at [21]; NFF Aide Memoire, 29 July 2021 at [23].
48 AWU Aide Memoire, 29 July 2021 at [20].
49 AWU Aide Memoire, 29 July 2021 at [22].
50 UWU Aide Memoire, 29 July 2021 at [3], Q14.
51 AFPA Aide Memoire, 29 July 2021 at [15]-[16].
52 Ai Group Aide Memoire, 29 July 2021 at [22]; NFF Aide Memoire, 29 July 2021 at [24].
53 AWU Aide Memoire, 29 July 2021 at [23]-[24].
54 UWU Aide Memoire, 29 July 2021 at [3], Q15.
55 AFPA Aide Memoire, 29 July 2021 at [17].
56 NFF Aide Memoire, 29 July 2021 at [25].
57 Ai Group Aide Memoire, 29 July 2021 at [23]-[24].