| [2022] FWCFB 4 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Australian Workers' Union
(AM2020/104)
HORTICULTURE AWARD 2020
[MA000028]
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 1 FEBRUARY 2022 |
Horticulture Award 2020 – application to vary an award – piece rates –minimum hourly rate.
[1] On 15 December 2020, the Australian Workers’ Union (AWU) made an Application to vary cl.15.2 of the Horticulture Award 2020 (the Horticulture Award or the Award), 1 which deals with piece rates (the Application).
[2] In a decision 2 published on 3 November 2021 (the November 2021 Decision) we dealt with the Application and decided to vary the Horticulture Award to insert a minimum wage floor with consequential time recording provisions in cl.15.2. We were satisfied that such a variation was justified by work value reasons and was necessary to achieve the modern awards objective. We also expressed the provisional view that it is necessary to vary the Horticulture Award in the terms set out in the draft determination attached to that decision.
[3] We made the following directions to provide interested parties with an opportunity to comment on the proposed draft variation determination and the provisional view:
‘1. Submissions in response to the proposed draft variation determination and our provisional view should be filed by no later than 4.00pm on Friday 26 November 2021.
2. Submissions in reply are to be filed by no later than 4.00pm on Friday 10 December 2021.
3. Any request for an oral hearing is to be made by no later than 4.00pm on Monday 13 December 2021. Absent a specific request for an oral hearing, the matter will be determined on the papers. If a hearing is required, it will be held at 9:30am on Thursday 16 December 2021.
4. If no submissions are filed opposing our provisional view, we will issue a variation determination in the same terms as the draft determination.’
[4] In response to the directions, the following submissions were received:
• Australian Catholic Migrant and Refugee Office
• Australian Catholic Religious Against Trafficking in Humans (ACRATH)
• Australian Fresh Produce Alliance (AFPA)
• Australian Industry Group (Ai Group)
• Australian Workers’ Union (AWU)
• Fruit Growers Tasmania (FGT)
• Fruit Growers Victoria (FGV)
• Greater Shepparton City Council
• Growcom
• National Farmers Federation (NFF)
• Northern Victorian Fresh Tomato Growers Association
• NSW Cherry Growers Association
• NSW Farmers (Industrial) Association (NSWFA)
• United Workers' Union (UWU)
[5] The following submissions in reply were also received:
• Ai Group
• AWU
• UWU
• NFF
• NSW Farmers (Industrial) Association
[6] There were no requests for an oral hearing. Accordingly, we will proceed to determine the matter on the papers.
[7] A summary of submissions was prepared by Commission staff and attached to our Statement of 16 December 2021. 3 Interested parties were invited to comment on the accuracy of the summary of submissions, by 4 pm on Thursday 20 January 2022.4 Comments were received from:
• AWU, and
• FGT.
[8] The AWU noted there is a typographical error at [58] of the summary of submissions. The FGT submission seeks to clarify their submissions as summarised at [25] and [29] of the summary of submissions document. We have taken these submissions into consideration.
[9] In section 2 of this decision, we deal with a number of the issues raised in the submissions and in section 3 we deal with proposed changes to the draft determination. In section 4 we deal with the operative date of the variation determination.
[10] A number of the submissions from individual enterprises and some of the employer parties contend that a minimum wage floor for piecework should not be inserted in the Horticulture Award. In substance, these submissions ask that we reconsider our conclusion in the November 2021 Decision.
[11] Those parties who contend we should not implement the November 2021 Decision did not identify the source of the power to take the action proposed.
[12] Section 603 of the Fair Work Act 2009 (Cth) (the Act) sets out the Commission’s power to vary or revoke decisions:
‘603 Varying and revoking the FWC’s decisions
(1) The FWC may vary or revoke a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3)).
Note: If the FWC makes a decision to make an instrument, the FWC may vary or revoke the instrument under this subsection (see subsection 598(2)).
(2) The FWC may vary or revoke a decision under this section:
(a) on its own initiative; or
(b) on application by:
(i) a person who is affected by the decision; or
(ii) if the kind of decision is prescribed by the regulations—a person prescribed by the regulations in relation to that kind of decision.
(3) The FWC must not vary or revoke any of the following decisions of the FWC under this section:
(a) a decision under Part 2-3 (which deals with modern awards)
(b) a decision under section 235 or Division 4, 7, 9 or 10 of Part 2-4 (which deal with enterprise agreements);
(c) a decision under Part 2-5 (which deals with workplace determinations);
(d) a decision under Part 2-6 (which deals with minimum wages);
(e) a decision under Division 3 of Part 2-8 (which deals with transfer of business);
(f) a decision under Division 8 of Part 3-3 (which deals with protected action ballots);
(g) a decision under section 472 (which deals with partial work bans);
(h) a decision that is prescribed by the regulations.
Note: The FWC can vary or revoke decisions, and instruments made by decisions, under other provisions of this Act (see, for example, sections 447 and 448).’
[13] Subsection 603(1) confers a discretion to vary or revoke ‘a decision of the FWC that is made under this Act (other than a decision referred to in subsection (3))’. Paragraph 603(3)(a) expressly excludes decisions under Part 2-3 of the Act. The November 2021 Decision is a decision under Part 2-3 of the Act, it follows that s.603 does not provide a source of power to vary or revoke that decision.
[14] By the enactment of s.603 the legislature may be said to have turned its mind to the circumstances in which a Commission decision may be varied or revoked, accordingly, any implied power to review or revoke a decision may be excluded. However, for the reasons which follow, it is not necessary for us to determine whether there is an implied power to revoke a decision and, if there is, the circumstances in which the power may be exercised.
[15] Those who contend that we should not implement the November 2021 Decision advance a number of arguments in support of that proposition; in particular, that such a variation will result in:
• increased administrative and managerial burden and costs
• labour shortages, loss of productive workers due to lack of incentive and a need to lay off underperforming workers
• disadvantage or discrimination towards underperforming workers, and/or
• loss of global competitiveness in export markets.
[16] Many of the arguments now advanced were also put by the principal employer parties in the earlier proceedings and were fully canvased in the November 2021 Decision. The submissions now put challenge a number of the evidentiary findings in the November 2021 Decision; albeit not on the basis of any analysis of the evidence and without adducing any further evidence.
[17] Two particular aspects of the November 2021 Decision are challenged. The first concerns the extent to which a minimum wage floor will impact productivity. A number of submissions assert that the introduction of a minimum wage floor will disincentivise horticulture workers and productive workers will leave the industry. In particular, it is asserted that:
• ‘[a minimum wage floor] takes away incentive for working hard’ 5
• ‘we will lose our best workers who currently achieve well above the hourly rate’ 6
• ‘[a minimum wage floor] impacts the incentivisation of inexperienced pieceworkers to improve quickly and to become productive’ 7
• ‘if anyone works hard then they can make seriously good money. There is incentive to work. A floor price takes away that incentive.’ 8
• ‘the draft determination … will result in many employers no longer being able to afford to offer pieceworker rates because they can’t pay hourly rates for unproductive workers, or carry the extra administrative and supervisory burden required … our real concern is that that we’ll see another exodus from horticulture of the most willing and motivated workers’ 9
• ‘[a minimum wage floor] encourages laziness in employees who work at the average piece rate, to reduce work efficiency and fall below the average knowing that they can rely on getting the minimum casual rate’ 10
• ‘hourly rate could create workforce conflict, with more efficient workers becoming frustrated by less efficient workers who aren’t pulling their weight in comparison, with a reduced incentive for performing more efficiently … [and] penalises the capable experienced picker to a lower rate of pay’ 11, and
• ‘by setting a minimum floor rate it will mean that less productive workers will not be given employment opportunities. Quite simply, horticultural employers will not be able to afford to employ them.’ 12
[18] These assertions are speculative and unsupported by any evidence. Similar arguments were advanced in the earlier proceedings in which a number of the employer lay witnesses expressed the opinion that introducing a minimum wage floor would both ‘demotivate underperforming employees from lifting their performance and ‘disincentivise’ pieceworkers currently earning more than the minimum award rate’. 13
[19] In the November 2021 Decision we accepted the first assertion — at least in respect of some underperforming employees; but noted that underperformance can be managed, for example by setting proficiency targets. We did not accept the second assertion — noting a consistent theme in the employer evidence that piecework is an attractive option for workers because it provides an opportunity to earn substantially more than the minimum hourly rate:
• Mr King: piecework ‘is an effective way of attracting, motivating and retaining workers as the piece rate rewards performance and has no ceiling on earnings’. 14
• Ms Reardon: piecework is used to ‘promote productivity’ as employees are ‘incentivised to work their fastest’. 15
• Mr McClintock: ‘Piece rates are used and favoured because they attract motivated workers with a high rate of retention due to the high potential for earning when compared to the ordinary hourly rate’. 16
• Ms Silverstein: ‘We also use piece rates because the worker benefits and it creates an incentive for them to earn more money than on hourly rates.’ 17
• Mr Gaeta: ‘Payment by piece rate is suitable to motivate workers to work efficiently as their earning is dependent on their productivity’. 18
• Mr Han: ‘When harvest season ends we occasionally offer the best Pickers further employment in the packing shed, where they will be paid hourly rates, but they usually reject the offer because they know they can earn much better money going to do harvest work on other farms earning piece rates.’ 19
[20] At [361] of the November 2021 Decision we concluded:
‘We accept that appropriately set pieceworker rates can provide an incentive for workers to increase their output, as their earnings will increase. We are not persuaded that introducing a minimum wage floor will ‘disincentivise’ pieceworkers currently earning more than the minimum award rate. It seems to us that such an outcome is inherently unlikely.’
[21] Nothing in the recent submissions persuades us to depart from that conclusion.
[22] A number of the recent submissions also challenge the finding in the November 2021 Decision in respect of non-compliance with cl.15.2.
[23] For example, Mr Battistel states:
‘I find it very disturbing that the report stated that there was widespread non-compliance of the award which is not true. 99.99% of the farmers under the Horticulture Award pay by the award and with piece rates, which is agreed by both parties prior to starting depending on picking conditions with an average picker always well exceeding the hourly rate, most the time it is the picker that decides the rate as the picker has the upper hand due to severe picker shortages which has been the case over last 20 years and more so since covid.’ 20
[24] Similarly, Growcom submits:
‘it is difficult to understand how the Full Bench consistent with this observation has arrived at a finding that there is “widespread non-compliance with clause 15.2 of the Horticulture Award” with sufficient confidence to warrant making the significant changes to the Award requested by the AWU.
The language used in relation to employment conditions in the Australian horticulture industry is important and unfortunately is becoming increasingly loose. Claims unsupported by evidence of “widespread” underpayment or abuse of workers must be questioned. Similar words like “rampant” and “endemic” are creeping into discourse and used interchangeably. They are inaccurate and also harmful. At the very least, in its final determination we ask the Full Bench to review its use of language and use words that better reflect the evidence presented.’ 21
[25] The NSW Cherry Growers Association submits:
‘The cherry industry totally rejects the notion “that employers who obtain formal ‘piecework agreements’ with employees are few, and that the majority of employees who are remunerated under piece rates do not have a piecework agreement in place”.’ 22
[26] Sunny Ridge submits:
‘The Summary of Decision complains that there is widespread non-compliance with clause 15.2 of the Horticulture Award. There is no evidence to suggest that the larger firms are guilty of exploitation. They are regularly subject to inspection and audit and they cannot afford to cut corners. Sunny Ridge is one of the largest independent berry growers in Australia with 330 hectares of farmland on the Mornington Peninsula and the Yarra Valley in Victoria and the Sunshine Coast in Queensland, producing 4.2m kilos of fruit with a revenue of just over $47m.
To the extent that there has been under payment it is not necessarily a conscious or deliberate decision by growers, especially smaller ones, many of whom cannot afford the luxury of seeking legal advice, which in any event could not be definitive. Workers who earn well above the base rate by virtue of their productivity performance are by definition not being exploited.’ 23
[27] It is convenient to note here that Sunny Ridge later submits:
‘The decision to double the minimum rate on a public holiday is simply a gratuitous and unnecessary impost, which will inevitably result in many growers being unable to afford to pick their crops on these days.’ 24 [Emphasis added]
[28] This submission is directed at the note at cl.15.2(d) of the draft determination:
‘Note: A pieceworker is paid 200% of the piece rate for work on a public holiday (see clause 27.3).’
[29] Sunny Ridge’s submission plainly proceeds on the erroneous assumption that the November 2021 Decision increased the public holiday pieceworker rate. It did not. The note simply reflects the terms of cl.27.3 of the Award, which states:
‘27.3 Public holiday rates—other than casual employees
All work performed on public holidays will be paid for at the rate of 200% of the ordinary hourly rate or 200% of the piecework rate for a pieceworker.’
[30] Sunny Ridge’s submission demonstrates a lack of awareness of the existing award obligations and flies in the face of its contention that large employers comply with their award obligations and do not ‘cut corners’.
[31] In the November 2021 Decision we concluded that there was widespread non-compliance with cl.15.2 of the Horticulture Award, in particular:
• many growers do not determine pieceworker rates in accordance with the method prescribed by clause 15.2, as interpreted by the Federal Court in Hu (No.2) 25 and the Hu Appeal26;
• pieceworker rates are set unilaterally by the grower and presented to the employee on a ‘take or leave it’ basis, rather than being the product of any genuine negotiation between the employer and employee;
• pieceworker rates are adjusted unilaterally by the grower and adjustments are not the subject of negotiation; and
• pieceworkers are usually not provided with a written piecework agreement.’ 27
[32] The evidence supporting these findings is set out in section 4 of the November 2021 Decision.
[33] Nothing in the subsequent submissions persuades us to depart from our earlier finding.
[34] A number of the employer submissions advocate the introduction of a ‘trainee wage’. For example, Citrus Australia advances an ‘alternate variation’:
‘The Commission found that it takes a pieceworker two weeks to become competent in a role. Therefore, if an employee has no relevant experience, they should be started on a trainee basis with a trainee wage (a proportion of the minimum wage) so that there is an incentive to rapidly improve productivity.
If after a two-week period the trainee has not achieved the piece rate, they should have options; to continue as a trainee on a trainee wage, or to sign a waiver acknowledging that they are aware they do not meet the piece rate. At all times the trainee has free will to leave the employer.’ 28
[35] The NSW Cherry Growers Association submits:
‘If a new worker cannot pick at a productive rate, i.e they cannot pick to the equivalent hourly rate, then this should be reflected in terms of an apprentice type introductory rate for the time period determined for each industry, until such time the employee is to be deemed a competent worker.’ 29
[36] The AWU submits the proposal from Citrus Australia that a trainee wage rate be inserted into the Horticulture Award is beyond the scope of the submissions sought by the Full Bench in relation to the draft determination. Further it could not reasonably be dealt with as part of the current proceedings as it would need to be justified by evidence and work value reasons. 30
[37] No application has been lodged to vary the Horticulture Award to insert a trainee rate. In the event such an application is lodged the observations in section 2: ‘The Legislative Framework’, of the November 2021 Decision are apposite. In particular: 31
• ‘Variations to modern awards must be justified on their merits. The extent of the merit argument required will depend on the circumstances. Significant changes where merit is reasonably contestable should be supported by an analysis of the relevant legislative provisions and, where feasible, probative evidence.’
• ‘Additional considerations arise when the Commission is setting, varying or revoking modern award minimum wages. Section 157(2) of the Act provides that the Commission may make a determination varying modern award minimum wages if satisfied that the variation is justified by work value reasons and making the determination outside of the system of annual wage reviews is necessary to achieve the modern awards objective. If the Commission is setting, varying or revoking modern award minimum wages, the minimum wages objective set out in s.284 of the Act also applies.
• ‘The term ‘modern award minimum wages’ is defined in s.284(3):
“Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern awards, including:
(a) wage rates for junior employees, employees to whom training arrangements apply and employees with a disability; and
(b) casual loadings; and
(c) piece rates.” ’ [Emphasis added]
[38] Further, it would have to be shown that the introduction of a trainee rate is necessary to ensure that the Horticulture Award achieves the modern awards objective. In this respect it is relevant to note that Level 1 in the Horticulture Award may be considered to be an introductory or training rate and, if this is so, it is unlikely that insertion of a new ‘trainee rate’ would be ‘necessary’ within the meaning of s.138.
[39] A ‘Level 1 employee’ is one who: 32
• ‘undertakes induction training which may include information on the enterprise, conditions of employment, introduction to supervisors and fellow workers, training and career opportunities, plant layout, work and documentation procedures, work health and safety, equal employment opportunity and quality control/assurance;
• performs routine duties essentially of a manual nature and to the level of their training;
• exercises minimal judgment;
• works under direct supervision;
• is responsible for the quality of their own work; and
• is a new employee; or is an existing employee performing work within this grade who is undertaking training so as to enable advancement to Level 2. [Emphasis added]’
[40] Indicative duties of a Level 1 employee are: 33
• ‘performing general labouring duties;
• fruit or vegetable picking, thinning or pruning;
• operating small towing tractor engaged in transfer of produce bins and other containers during harvest;
• performing a range of housekeeping tasks in premises and grounds;
• sorting, packing or grading of produce where this requires the exercise of only minimal judgment;
• performing basic recording functions related to work performed at this level;
• providing assistance within the scope of this level to other employees as required; and
• undertaking structured training so as to enable advancement to Level 2.’ [Emphasis added]
[41] We note that a number of awards which also include piece rates and a minimum wage floor have a similar introductory or training Level 1 classification. These include:
• Meat Industry Award 2020 at A.3.1
• Silviculture Award 2020 at cl.12
• Sugar Industry Award 2020 at A.2.1
• Timber Industry Award 2020 at A.1.1
[42] A number of the recent submissions raise matters beyond the Commission’s jurisdiction. For example, ACRATH submits that there is a need ‘for an outside body to ensure that workers’ rights are protected and exploitative practices addressed’. 34 We note that the functions of the Fair Work Ombudsman include to promote compliance with the Act and fair work instruments (which include modern awards), including ‘by providing education, assistance and advice to employees, employers … and organisations and producing best practice guides to workplace relations or workplace practices.’35
[43] Citrus Australia expressed a preference for a national mandatory licensing scheme for labour hire operators and increased resourcing of the Fair Work Ombudsman.
[44] Sutton Farms makes a similar submission in relation to monitoring and compliance:
‘The real solution is to remove the employers that do not comply with the current regulations and make food safety, ethical sourcing and related management practices and benchmarks mandatory, before a business can produce. Then these should be monitored and policed properly and fully which is currently not happening while businesses can continue to operate without a base level of compliance, auditing and regulatory requirement to be adhered.’ 36
[45] It is not our role to comment on the appropriateness or otherwise of a national mandatory licensing scheme for labour hire operators, or on the resourcing of the Fair Work Ombudsman. These are matters for the Government.
[46] We do not propose to delay the operation of the determination varying the Horticulture Award until a national mandatory licensing scheme for labour hire operators is in place as suggested by Citrus Australia. We are also not persuaded by Citrus Australia’s submission that we should delay implementation having regard to the resourcing of the Fair Work Ombudsman. 37 We deal with the date of operation in section 4 of this decision.
[47] Sunny Ridge appear to raise an issue of procedural fairness, it submits that:
‘This momentous decision was taken without any notice to, or consultation with, major independent growers, including Sunny Ridge, who knew nothing about the issue of proceedings, let alone the extensive hearings involved and the nature of the evidence adduced. Thus a significant number of growers who are heavily impacted by the additional cost burden have had no opportunity to put the salient facts before the Commission.’ 38
[48] There is no doubt that the Commission is bound to ‘act judicially’, which includes an obligation to afford parties procedural fairness. But the application and content of the doctrine of procedural fairness is determined by the context. As Mason J observed in Kioa v West:
‘What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject matter, and the rules under which the decision - maker is acting.’ 39
[49] Relevantly, s.577(a) and (b) provide that the Commission must perform its functions and exercise its powers in a manner that:
‘(a) is fair and just; and
(b) is quick, informal, and avoids unnecessary technicalities’.
[50] The key contextual considerations in the matter before us are:
• the statutory framework
• the active involvement of a number of employer associations and individual employers, and
• the Application was made in December 2020 and since that time all material has been publicly available.
[51] The Application was made on 16 December 2020 and published on the Commission’s website on the same day. A dedicated webpage was established for the publication of all relevant material relating to the Application. Following this:
• Directions were issued on 18 December 2020 inviting any party opposing the Application to file submissions and evidence by 14 May 2021. The directions also set out a date for the hearing of the Application.
• Amended directions were issued on 5 March 2021.
• Submissions and evidence opposing the Application were filed by a number of employer associations as well as by individual businesses 40
• Hearings took place on 13, 15, 16, 20 and 30 July 2021.
[52] In accordance with the Commission’s usual practice, the modern awards subscription service was used to notify all subscribers to the Horticulture Award each time a new document was added to the dedicated website.
[53] In these circumstances we are satisfied that we have met our obligation to afford procedural fairness to those affected by the Application.
[54] A number of the individual employers and employer organisations raised a concern about a loss of flexibility in employee breaks. 41. Lucious Citrus Pty Ltd submits that the variation to the piece rate provisions:
‘removes the flexibility of persons on the piece rate who wish to take extra breaks throughout the day and earn less than the award.’ 42
[55] Breaks are provided for in cl.14 of the Horticulture Award:
‘14. Breaks
14.1 Meal break
(a) A meal break of not less than 30 minutes and not more than one hour will be allowed each day, to be taken not later than 5 hours after commencing ordinary hours of work. Provided that where there is agreement between the employer and an individual employee, the meal break may be taken at a time agreed.
(b) All work performed on the instruction of the employer during a recognised meal break will be paid for at 200% of the appropriate ordinary hourly rate. Such payment will continue until the employee is released for a meal break of not less than 30 minutes.
14.2 Rest break
(a) Employees will be allowed a paid rest break of 10 minutes each day or shift.
(b) Where agreement is reached between the employer and employee for an additional rest break, such rest break will be unpaid and in addition to the employee’s ordinary hours of work.
14.3 10 hour break after ceasing work for the day
(a) An employee is entitled to a break of 10 hours between finishing work on one day and commencing work on the next day or shift.
(b) Overtime rates will be paid in accordance with clause 21—Overtime for work required to be performed where an employee has not had the 10 hour break until such time as the employee is released and able to take the 10 hour break.’
[56] Cl.14 provides flexibility for an employer and an employee to agree on the timing of both the meal break and the rest break. Cl.14.2(b) also provides the flexibility for an employer and employee to agree to an additional rest break. The variation to cl.15.2 does not change the operation of the existing breaks provisions in the Horticulture Award.
[57] We propose to make a number of amendments to the draft determination. These are discussed below.
[58] Clause 15.2(a)(i) of the draft determination provides that the expression ‘the hourly rate for the pieceworker’ in cl.15.2 means:
the minimum hourly rate for the pieceworker’s classification level plus the 25% casual loading under clause 11.3 for a casual pieceworker
[59] The AFPA submits that draft cl.15.2(a)(i) could be read as requiring the 25% casual loading to be paid to all pieceworkers and submits the clause should be amended as follows:
hourly rate for the pieceworker means the minimum hourly rate for the pieceworker’s classification level plus, in the case of a casual pieceworker, the 25% casual loading under clause 11.3 for a casual pieceworker; 43
[60] The Ai Group submits that draft cl.15.2(a)(i) should be amended by inserting ‘under this Award’ after ‘the minimum hourly rate for the pieceworker’s classification level’, so as to confirm that this rate does not incorporate over-award rates paid pursuant to contract. 44
[61] The AWU submits the proposed amendments are unnecessary. 45
[62] We consider the confirmation suggested by the Ai Group unnecessary, as awards do not regulate over-award payments generally and it is clear that the ‘minimum hourly rate’ for an employee’s classification is specified in cl.15.1 of the Award. However, the drafting of cl.15.2(a)(i) can be made clearer. We will amend the draft determination to the effect proposed by AFPA, as marked-up below. We will also amend the heading of draft cl.15.2 to reflect cl.2 of the draft determination:
‘15.2 Pieceworker rates
(a) In clause 15.2:
(i) hourly rate for the pieceworker means the minimum hourly rate for the pieceworker’s classification level plus for a casual pieceworker the 25% casual loading under clause 11.3 for a casual pieceworker;’
[63] Clause 15.3 of the Horticulture Award prescribes rates for junior employees. The NSWFA submits that while it may be self-evident cl.15.3 should be taken into account when determining the hourly rate for the pieceworker who is a junior, for the purposes of clarity, an explanatory note should be inserted after cl.15.2(a)(i). 46
[64] The AWU does not dispute that the wage floor for a junior employee is determined by reference to the percentages in cl.15.3 and does not oppose adding a note in the following terms after draft cl.15.2(a)(i):
‘NOTE: Clause 15.3 contains percentages used to calculate the minimum hourly rate for junior employees.’ 47
[65] There is some merit in drawing attention to the junior rates clause, although we think a note to that effect can be worded more simply than proposed by the AWU. A new note is marked-up under cl.15.2(a)(i) in Attachment 1.
[66] Draft cl.15.2(a)(iii) defines a ‘pieceworker competent at the pieceworker task’ to mean:
‘a pieceworker who has at least 2 weeks’ experience performing the task (for example, picking apples, picking strawberries or pruning grape vines);’
[67] The AFPA submits that to accommodate part-time and irregular rosters the experience required for competency should be expressed in hours, and cl.15.2(a)(iii) amended as follows:
‘pieceworker competent at the piecework task means a pieceworker who has at least 76 hours2 weeks’ experience performing the task (for example, picking apples, picking strawberries or pruning grape vines);’ 48
[68] The AWU does not oppose the proposed amendment 49 and it is supported by FGT.50
[69] The proposed amendment provides greater certainty and we will amend the draft determination as proposed by the AFPA. The amendment is marked-up in Attachment 1.
[70] The NFF proposes an additional amendment to cl.15.2(a)(iii) to require the experience performing a task that counts toward competency to be confined to experience ‘with the employer’s enterprise’. 51 A similar proposal is made by both FGT and NSWFA.52 FGT proposes the following amendment:
‘pieceworker competent at the piecework task means a pieceworker who has at least 76 hours’ experience with their current employer performing the task (for example, picking apples, picking strawberries or pruning grape vines);’ 53
[71] NSWFA submits that such a variation would ‘simplify the verification process and acknowledge that nature of operations differ from farm to farm’. 54 Some of the submissions from individual employers also raise the question of how an employee will prove their competence.55
[72] The AWU does not consider the amendments to cl.15.2(a)(iii) proposed by the NFF and NSWFA to be necessary. The AWU submits that an employer will ‘logically draw upon experience from their own farm to set a rate that would enable a pieceworker with 2 weeks (or 76 hours’) of experience performing the task to earn the 15% uplift.’ The AWU further submits that if ‘there is no relevant experience, they will need to estimate the productivity of an employee with that level of experience.’ 56
[73] The additional amendment is opposed by 88 Days and Counting, which submits that it does not adequately set a time limit for developing the competency of a pieceworker and further that is fails to take into account past experience picking and pruning similar fruit and vegetables. 57 88 Days and Counting further submits that:
‘We also know from documents tendered to the FWC that individual fruit harvest seasons can be as short as 2 weeks (Greater Shepparton City Council, 2021). This is why we believe this proposed change by the NFF will create a loophole for farmers to continue exploiting piece workers meaning the chronic underpayment of these workers will continue.’ 58
[74] We accept that cl.15.2(a)(iii) leaves open the question of how the competence of a pieceworker is to be established, but we are not attracted to an amendment along the lines proposed by the NFF, FGT and NSWFA. We agree with 88 Days and Counting that such an amendment could result in employers failing to recognise the competence of pieceworkers.
[75] We note that draft cl.15.2(j) requires the employer to keep as employee records:
• a copy of each piecework record given to the pieceworker (cl.15.2(j)(i)), and
• a record of all hours worked by the pieceworker and the applicable piece rate at the time those hours were worked (cl.15.2(j)(ii)).
[76] The combination of the written piecework records already given to a pieceworker by the employer and the record the employer is required to keep of hours worked and the applicable piece rate for those hours, should suffice to establish the relevant experience of a pieceworker to a subsequent employer. We also consider that it will not impose a significant additional burden on employers to require them to provide a copy of record kept pursuant to cl.15.2(j)(ii) upon the request of a pieceworker or former pieceworker of the employer. We will add to draft cl.15.2 a new cl.15.2(k) to that effect. We will also add a note under cl.15.2(a)(iii) indicating that these records can be produced by pieceworkers as evidence of their competence.
[77] Draft cl.15.2(d) provides:
‘The employer must fix the piece rate at a level which enables a pieceworker competent at the piecework task to earn at least 15% more per hour than the hourly rate for the pieceworker.’
[78] The AFPA submits that while draft cl.15.2 has eliminated the subjective elements involved in the notions of ‘competent employee’ and ‘average competent employee’ in existing cl.15.2(b), there are 2 problems with the current draft:
• it requires the employer to set the piece rate so as to enable every competent employee to earn the 15% uplift, and
• it does not fix what the AFPA characterises as the ‘compliance and enforcement trap’ with the existing clause, because it prescribes no objective mechanism for calculating and fixing the piece rate. 59
[79] The NFF raises a concern similar to the first point above and also submits that the draft clause could be read to mean that the piece rate has to be set so that:
• ‘Each individual employee (with more than 2 weeks experience) is able to earn 15% more than the applicable hourly rate, so that each employee should have their own piece rate;
• Any employee (with more than 2 weeks experience) is able to earn 15% more than the applicable hourly rate, so that the entire workforce has a piece rate set to the pick rate of just one (e.g. the fastest and most productive) worker; or
• Every employee (with more than 2 weeks’ experience) is able to earn 15% more than the applicable hourly rate, so that the entire workforce has a piece rate set to the picking rate of the slowest and least productive worker.’
[80] The NFF submits this should be addressed by retaining the approach in the existing cl.15.2(b) of pegging the piece rate to the performance of the average pieceworker competent at the piecework task, or alternatively to set the piece rate on the basis of the mean picking rate of all competent pieceworkers. 60 The NFF’s proposed amendment to cl.15.2(d) is set out below:
‘The employer must fix the piece rate at a level which enables an average pieceworker who is performing the piece rate task and who is a pieceworker competent at the piecework task to earn at least 15% more per hour than the hourly rate for the pieceworker.’
[81] The AFPA’s proposal is along the same lines as the alternative suggested by the NFF, however, it sets out a methodology for calculating the piece rate. The AFPA notes that the new requirements under the draft cl.15.2(j) to keep time records would enable the employer to calculate average productivity. Accordingly, the AFPA submits that draft cl.15.2(d) should be amended as follows:
‘The employer must fix the piece rate at a level which enables a pieceworker competent at the piecework task to earn at least 15% more per hour than the hourly rate for the pieceworker. To do so:
(i) The employer must determine whether the piece rate enables a pieceworker competent at the piecework task to earn the minimum amount required by this clause by reference to the average productivity of its pieceworkers competent at the piecework task during the previous pay period.
(ii) If the piecework task was not performed during the previous pay period or if no pieceworkers competent at the piecework task performed the task during the previous pay period, the employer must determine whether the piece rate enables a pieceworker competent at the piecework task to earn the minimum amount required by this clause by reference to a reasonable pre-estimate of the average productivity of pieceworkers competent at the piecework task.
(iii) The employer must review its piece rates at the end of every pay period and adjust them if necessary to achieve the minimum piece rate required by this clause.’61
[82] FGT raises similar concerns to the AFPA and NFF and submits that c.15.2(d) is open to multiple interpretations based on:
• whether the intent is that piecework rates are to be set individually or collectively across all pieceworkers competent at the piecework task
• the process by which a piecework rate is to be determined to ‘enable’ a pieceworker to attain the ‘Uplift’
• the nature of worker selection to test whether a particular piecework rate is compliant with this clause for the basis of adjustment or enforcement.’ 62
[83] FGT proposes adding the following definitions to cl.15.2(a):
‘(v) The average hourly rate of an individual pieceworker competent at the piecework task for the payment period means the calculated value of adding all payments made to the pieceworker over the payment period using piece rates, and dividing this by the total hours worked by the pieceworker for the payment period in pieceworker tasks.
(vi) The average hourly rate of all pieceworkers competent at the piecework task for the payment period means the calculated value of:
• adding the average hourly rates of all individual pieceworkers competent at the piecework task for the payment period; and
• dividing this by the number of pieceworkers competent at the piecework task for the payment period.
NOTE: For the purposes of the above calculation, the average hourly earnings of any pieceworker competent at the piecework task can be no less than the hourly rate for the pieceworker as defined in clause 15.2(a)(i), as the employer is required to pay a pieceworker no less than this rate under clause 15.2(f).’
[84] FGT further submits that cl.15.2(d) should be amended as follows:
‘The employer must fix the piece rate at a level which ensures that the average hourly rate of all pieceworkers competent at the piecework task for the payment period is at least 15% more than the hourly rate for the pieceworker.’
[85] FGT submits that these proposed amendments would better meet the Commission’s stated aims at [561] of the November 2021 Decision.
[86] Comments were also received from horticulture employers in relation to the benchmarks set by the draft determination. Sunny Ridge submits that the draft determination fails to define the ‘average competent worker’ or provide a formula for easily and clearly identifying the same. 63 Growcom submits that there needs to be greater guidance in the final determination as to how piecework rates are calculated and set and states that the employee or cohort of employees to be used as a reasonable benchmark of productivity requires clarification.64
[87] The AWU opposes the proposals of both the NFF and the AFPA for reasons that include:
• the changes would potentially result in around half of pieceworkers competent at the piecework task not receiving the 15% uplift 65
• draft cl.15.2(d) requires the employer to set the piece rate at a level that would enable a worker with 2 weeks’ experience to earn at least 15% more than their hourly rate, so that their earnings will fluctuate according to their productivity (subject to the hourly wages floor)
• the employer parties are overstating the difficulties by not recognising that cl.15.2(d) is prescribing how the piece rate must be set, not a minimum rate for each employee
• a mechanism of the complexity proposed by AFPA is unlikely to be followed in an industry with a history of non-compliance and an individual employee will have little practical ability to assess whether the rate is properly set, and
• it is unnecessary for express provision to be made for ‘a reasonable pre-estimate’ if the task has not previously been performed by competent pieceworkers (as this would be the only workable interpretation). 66
[88] The UWU submits that contrary to the submissions of the employer parties, proposed clause 15.2(d) does not require that the piece rate be set so that every employee who is a ‘pieceworker competent at the piecework task’ earns the 15% uplift. 67 It states that, rather, the clause requires that the rate be set so that a competent pieceworker is enabled to earn the 15% uplift. The UWU submits that accordingly it does not consider necessary the proposed changes by FGT, AFPA and NFF that would require the piece rate to be fixed in accordance with the average pick rates of pieceworkers.
[89] The NFF and AFPA are correct in suggesting that setting the piece rate by reference to the performance of a competent pieceworker (as under draft cl.15.2(d)) rather than the performance of an average competent pieceworker, will tend to raise the piece rate. The approach proposed by the AFPA of setting the piece rate by reference to the average productivity of competent pieceworkers over the previous pay period will tend to produce a lower piece rate than draft cl.15.2(d) and, aside from the point that it will be calculated on the basis of previous performance rather than anticipated future performance, it may produce a rate that is closer to the rate required under the existing cl.15.2(b) of the Horticulture Award.
[90] An amendment along the lines proposed by the NFF — amending cl.15.2(b) to refer to ‘an average pieceworker competent at the piecework task’ — would reintroduce some of the conceptual complexity in the existing clause.
[91] The existing cl.15.2(b) provides:
‘The piecework rate fixed by agreement between the employer and the employee must enable the average competent employee to earn at least 15% more per hour than the minimum hourly rate prescribed in this award for the type of employment and the classification level of the employee. The piecework rate agreed is to be paid for all work performed in accordance with the piecework agreement.’
[92] Clause 15.2 of the Horticulture Award was considered by the Federal Court in Fair Work Ombudsman v Hu (No 2) 68 (Hu (No 2)) and Fair Work Ombudsman v Hu69 (the Hu Appeal). The UWU submits70 that the following key principles can be drawn from these judgments:
1. Clause 15.2 is a protective provision designed to provide a safeguard for pieceworkers. 71
2. While clause 15.2 requires the piecework rate to be fixed by agreement, in practical terms, this will almost invariably mean that the employer fixes the rate, and the employee decides whether to accept it.72
3. The clause requires the minimum piecework rate to be determined by the following method:
(i) Ascertain the hourly rate prescribed under the Award for the type of employment and the classification level of the employee (including, for example, casual loading if applicable) and then add 15% to that amount.
(ii) The hypothetical ‘average competent employee’ must be identified.
(iii) Identify the hypothetical hourly pick rate of the ‘average competent employee’ performing the work at the particular place of work at that particular time.
(iv) Divide the hourly rate plus 15% by the hourly pick rate of the hypothetical ‘average competent employee’ or, where an employer has already set a piecework rate, the employer can compare the hourly pick rate of the ‘average competent employee’ against the calculation performed at paragraph i above. 73
4. The determination of the pick rate of the ‘average competent employee’ is not an arithmetical exercise, but rather a predictive, theoretical exercise made by reference to the workforce that is available or potentially available to the employer.74 For example, for fruit or vegetable pickers, the hourly pick rate of the ‘average competent employee’ would be dependant upon the average quantity of fruit or vegetables such an employee would pick per hour.
5. 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 hypothetical competent employees.75 An employee who is not competent, for example, an employee who is still in training, must be excluded when determining the ‘average competent employee’.76
6. To determine what such a hypothetical employee will be able to earn, factors both personal and external to the hypothetical employee must be considered. These factors include:
(i) personal characteristics, such as diligence, aptitude, and experience; and an assumption that training and induction has been provided;
(ii) personal characteristics such as age, strength, and stamina (which while not relevant, on the evidence, in the case of picking mushrooms, may be relevant in relation to ‘some other types of horticulture’);
(iii) the general level of experience of the available workforce considered as a whole; and
(iv) external factors which may include density, quality, size of the product, the prevalence of unhealthy product which may be affected by growing conditions, as well as the nature and quality of the equipment provided.77
[93] Earlier in these proceedings, the AFPA proposed an alternative variation if the Commission were to form the view that the current piecework provisions need to be varied. 78 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.79
[94] The AFPA’s alternate variation, as set out in its opening submission, had 5 major elements:
1. It prescribes a specific process to determine the piecework rate, as follows: 80
(a) The employer must identify the cohort of competent employees, with ‘competent employee’ to be defined as someone who is suitable, sufficient or adequate to perform the work. The definition would also make it clear that the employee need not be ‘proficient’ to be competent. This part of the variation will provide specific guidance to employers as to how to set the competence threshold having regard to the complexity of the work and other factors. Importantly, an employee would be deemed to be competent after they have been performing the task for a prescribed period (indicatively, 4 weeks as a catch-all outer limit);
(b) The employer must calculate (or, in the case of the initial setting of the piecework rate, estimate):
(i) the total output 81 of the cohort of competent employees in a relevant period (Total Output) and
(ii) the total combined hours of work of this cohort during the same relevant period (Total Hours)
(c) The employer must divide the Total Output by Total Hours to obtain the Average Hourly Output of a Competent Worker, and
(d) For each applicable classification and type of employment, the employer must take the applicable minimum hourly rate, add 15% and then divide by the Average Hourly Output of a Competent Worker. The result is the minimum piecework rate.
2. The employer is required to review and adjust the piecework rate at prescribed intervals (say, every pay period) to make sure that it is set appropriately. 82
3. To provide further protection to novice employees who have not yet become competent, the employer is required to pay these employees at the level of the slowest competent employee.
4. The employer is required to keep a record of all hours worked by a pieceworker, as well as the calculations set out above.
5. The employer is required to pay a pieceworker at the applicable minimum hourly rate (instead of the piecework rate) for any work that does not yield any piecework output and is not an inherent part of the piecework.
[95] In the November 2021 Decision we noted that, in terms of transparency and fairness, the AFPA’s proposed clause is an improvement on the existing cl.15.2, but:
‘it is far too complex and such complexity would be a barrier to compliance. There is some substance to the AWU’s critique; the proposal does not ameliorate the complexity inherent in the current term and nor does it adequately address the subjectivity inherent in the selection of a ‘competent pieceworker’. This complexity is illustrated by clause 15.2(k) of the AFPA’s possible draft implementation of their proposal, which sets out the process for calculating the minimum piecework rate for a particular task, as follows:
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.’
Proposed clause 15.2(l) then defines a ‘competent pieceworker’ as follows:
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.’ 83
[96] We note that the AFPA’s new proposed variation to clause 15.2(d), as set out at [81] above, does address some of the concerns we raised with their earlier proposal in the November 2021 Decision. However, the proposed redrafting creates the following issues:
• as the piece rate is calculated on productivity in the previous pay period, changing crop or environmental conditions could make that previous productivity more difficult or impossible to achieve over the next pay period
• where a picking period on a farm is short, the piece rate might always be based on a ‘reasonable pre-estimate’ of average productivity rather than actual performance data, and
• it would not seem practicable to fix piece rates according to productivity during the previous pay period in an industry where some employers change piece rates frequently (including changing piece rates during the course of a working day).
[97] The intended operation of the AFPA’s proposed cl.15.2(d)(iii) is also unclear. We presume the AFPA is not proposing that employers would undertake a reconciliation at the end of each pay period and if necessary top up the piece rate payments to pieceworkers having regard to their average productivity during that pay period.
[98] In circumstances where there is considerable variation in the type of picking work across the industry, we do not propose to fix a method for calculating piece rates in the Award. The variation proposed by the AFPA might provide an appropriate method for setting a piece rate where crop density and picking conditions are stable from pay period to pay period. We encourage industry bodies such as the AFPA to develop guidance on setting compliant piece rates for particular picking work, to assist employers in the horticulture industry.
[99] However, in light of the recent submissions there would be benefit in rewording the minimum piece rate requirement under draft cl.15.2(d) by reference to the average productivity of pieceworkers competent at the piecework task. We think this will set the minimum piece rate more precisely and at a level more closely aligned to the rate required under cl.15.2(b) of the Award as it is at present. We will also include a definition of average productivity. Amendments to draft cl.15.2(d) and a new paragraph 15.2(a)(i) to this effect are marked-up in Attachment 1.
[100] We envisage the process of fixing a piece rate under the reworded cl.15.2(d) will be similar in some respects to that required under the existing cl.15.2(b) as explained by the Court in Hu (No 2) and the Hu Appeal, but will be simpler. It will be simpler because competence is clearly defined and it will generally not be necessary for an employer to contemplate any of the attributes of a hypothetical competent employee other than their productivity. The minimum level of the piece rate will have been met during a pay period if the rate is fixed so that any pieceworker working at the average productivity during the pay period of the pieceworkers competent at the piecework task, will earn at least 15% more than their hourly rate under the Award. If the employer has no competent employees performing the piecework task, the average productivity will need to be estimated on the basis of the productivity of the competent employees available or potentially available to the employer.
[101] Ai Group submits that draft cl.15.2(e) should be amended as follows, to make clear that amounts are only payable under the clause as a result of work performed at the request of the employer:
‘If a pieceworker does an employer requests a pieceworker to perform any work in addition to the task for which they are being paid a piece rate, the pieceworker must be paid for that additional work at the hourly rate for the pieceworker.’ 84
[102] We are not persuaded that the proposed amendment is necessary. No such express distinction is made, for example, in the definition of ‘overtime’ in cl.21.1 of the Award.
[103] Draft cl.15.2(f) provides:
‘Despite any other provision of clause 15.2 a pieceworker must be paid no less than the amount they would have received if paid for each hour worked at the hourly rate for the pieceworker.’
[104] The NFF raises a concern as to the compliance burden if cl.15.2(f) requires the employer to conduct an hour-by-hour comparison between the amount to be paid for piece work and the pieceworker’s hourly rate (and then make up the difference for any hour where the former is less than the latter).
[105] The NFF suggests that the comparison should be conducted over a pay period, provided that is no more than 2 weeks. The NFF proposes that the clause be amended as follows:
‘Despite any other provision of clause 15.2, over the course of a full pay period a pieceworker must be paid no less than the amount they would have received if paid for each hour worked at the hourly rate for the pieceworker.’ 85
[106] The AFPA raises a similar concern that cl.15.2(f) does not specify the period over which the comparison is to be done and submits the clause should be amended by inserting ‘, in each pay period’ after ‘clause 15.2’, with a similar amendment being made to the statement prescribed under cl.15.2(h)(iv). 86
[107] A number of submissions by employer associations and individual enterprises also raise concerns about the regulatory burden associated with the need to conduct an ‘hour by hour’ comparison. 87
[108] The present wording ‘for each hour worked’ was based on the AWU claim in this matter. The present wording ‘must be paid no less than the amount they would have received …’ was based on the wording of various other modern awards in which piece rates are underpinned by minimum payments. 88
[109] The AWU submits that if we see merit in the employers’ concerns, then having regard to the high level of itinerant and transient work the appropriate reconciliation period would be ‘per day or shift’. 89 Accordingly, the AWU submits the clause could be amended by inserting ‘, for each day or shift worked’ after ‘clause 15.2’.90
[110] It is not clear that draft cl.15.2(f) requires an hour-by-hour comparison (ie a ‘reconciliation period’ of an hour), but that reading is suggested by the commentary on the clause in the November 2021 Decision. 91 The Horticulture Award requires wages to be paid weekly or fortnightly.92
[111] We accept that clarification of the reconciliation period would make the Award clause simpler and easier to understand. The options include: a day, a week and a pay period (ie either a week or a fortnight).
[112] A reconciliation period of a day provides an appropriate balance between the interests of employers (by reducing regulatory burden) and protecting employees. The material before us suggests that a significant proportion of pieceworkers are engaged for one day or less. As Mr King notes in his First Statement, the ‘high attrition rate for picking work’ is a key challenge for the horticulture industry and ‘[m]any workers leave within the first day or two of the job’. 93
[113] Clauses 15.2(f) and 15.2(h)(iv) and Schedule I of the draft determination will be amended to insert a per day reconciliation period as marked-up in Attachment 1.
[114] The AFPA seeks clarification of how the minimum payment is calculated under the draft cl.15.2(f) and submits that the clause could be read as requiring a pieceworker to be paid as if they were a ‘timeworker’ including payment of penalties and loadings. The AFPA proposes that the clause be amended to make clear that the hourly rate for a pieceworker is ‘a flat hourly floor rate’. AFPA’s proposed amendments to the clause (including the amendment discussed above) are as follows:
‘Despite any other provision of clause 15.2, in each pay period a pieceworker must be paid no less than the number of hours worked during the pay period multiplied by the amount they would have received if paid for each hour worked at the hourly rate for the pieceworker.’ 94
[115] The AWU does not consider any change necessary, as the minimum payment is linked to definition of ‘hourly rate for the pieceworker’ in cl.15.2(a)(i), which is confined to the minimum hourly rate plus casual loading if applicable. 95
[116] In our view, the amended drafting proposed by the AFPA is clearer than the present draft clause and is to the same effect. We will adopt the substance of the AFPA’s proposal. An amendment along the lines of the AFPA’s proposal is marked-up in in cll.15.2(f) and 15.2(h)(iv) and Schedule I in Attachment 1.
[117] Draft cl.15.2(h) provides:
‘Before a pieceworker begins a piecework task for an employer, the employer must give the pieceworker a written record signed by the employer (a piecework record) that must:
(i) state the date and time the piecework is to commence;
(ii) describe the task for which the piece rate will be paid;
(iii) state the amount of the piece rate;
(iv) include the following statement:
‘Under the Horticulture Award 2020 a pieceworker must be paid no less than the amount they would have received if paid for each hour worked at their hourly rate under the Award (including the 25% casual loading for a casual pieceworker).’
and
(v) state the hourly rate for the pieceworker.
NOTE: An example of the type of record required by clause 15.2(h) is at Schedule I—Piecework Record. There is no requirement to use the form of record set out in Schedule I—Piecework Record.’
[118] Two issues have been raised in respect of this draft clause.
[119] The AFPA is concerned that draft cl.15.2(h) seems to contemplate that a piecework record can only cover one task; so that unnecessary paperwork will be required if a pieceworker is engaged to perform multiple tasks. The AFPA proposes the following amendments to the clause:
‘Before a pieceworker begins a piecework task for an employer, the employer must give the pieceworker a written record signed by the employer (a piecework record) that must:
(i) state the date and time the piecework is to commence;
(ii) describe the task(s) for which the piece rate will be paid;
(iii) state the amount of the piece rate for each piecework task;
(iv) include the following statement …’
[120] The AWU accepts that a piecework record can cover multiple tasks and does not consider any amendment necessary.
[121] As the AWU suggests, the present drafting does not preclude a piecework record covering multiple tasks. Where multiple tasks are covered, the requirement to ‘state the date and time the piecework is to commence’ should be understood as referring to the date and time the first piecework task is to commence.
[122] There is some merit in making it clearer that a piecework record can cover multiple tasks, but we are not attracted to the amendment proposed by the AFPA. That amendment may obscure an essential point of the clause, which is to ensure that before a pieceworker begins any particular piecework task for an employer, the employer must give the pieceworker a record describing that task and specifying the piece rate for that task. The proposed changes to paragraphs (ii) and (iii) when read together may also cause confusion as to what constitutes a separate task for the purposes of the piecework record.
[123] It seems to us that the desired clarification can be made by adding a note under draft cl.15.2(h) and amending the example pieceworker record attached to the draft determination so that it covers multiple tasks. We will also sightly simplify the wording of the existing note under cl.15.2(h). The amendments are marked-up in Attachment 1. We note that where a pieceworker performs multiple tasks and the piece rate for those tasks differs (as seems likely), draft cl.15.2(j)(ii) will require the employer to keep a record of the hours worked by the pieceworker at each of the different piece rates.
[124] Draft cl.15.2(i) provides:
‘If an employer proposes to change the piece rate or piecework task of a pieceworker the employer must first give the pieceworker a further piecework record including the new rate or task.
[125] The AFPA submits that as the Horticulture Award applies across a large variety of crops and growing set ups, piecework is generally performed in the field, and some growers change piece rates frequently, the requirement to provide a new piecework record before a new piece rate takes effect ‘may not be reasonably practicable in all cases [and] … may create a compliance trap … or delay a rate increase taking effect to the disadvantage of pieceworkers.’ 96 The AFPA proposes that draft cl.15.2(i) be replaced by the following 2 subclauses:
‘(i) If an employer proposes to engage the pieceworker to perform a new piecework task not covered by an existing piecework record, the employer must give the pieceworker a further piecework record including the new task before commencement of the new task.
(ii) If an employer proposes to change the piece rate of a pieceworker, the employer must inform the pieceworker of the new rate before commencement of work under the new rate and must give the pieceworker a further piecework record including the new rate as soon as reasonably practicable.’ 97
[126] The effect of the proposed amendment is that:
• in the case of a proposed change to the piecework task, a further piecework record need not be given to the pieceworker if the new task is already covered by an existing piecework record, and
• in the case of a proposed change to the piece rate, the employer must inform the pieceworker of the new rate before commencement of work under the new rate, and must give the pieceworker a further piecework record as soon as reasonably practicable.
[127] The AWU opposes the proposed amendment, noting that the requirement to provide a new piecework record before task or rate changes ensures the employer and employee are both clearly informed in writing. The AWU submits that in light of the compliance issues in the industry and the significant component of overseas workers, it is not appropriate for the requirement to provide a record setting the piece rate to depend upon a vague standard such as ‘as soon as reasonably practicable’ (which will be interpreted and applied in different ways across the industry). 98
[128] Considering the first point above, we assume the AFPA’s proposal that no new piecework record be required in case of a task change, would only apply where both the task was already covered by an existing piecework record with the same employer and there was no change to the piece rate for that task as prescribed in the existing record.
[129] We note that where there is such a task change and this entails a change of piece rate from that applying to the previous task, the employer will be required by draft cl.15.2(j)(ii) to keep a written record of the date and time of the rate change.
[130] It seems to us that this aspect of the AFPA’s proposal may slightly reduce regulatory burden without significantly reducing employee protections under the draft clause. We will adopt the substance of this aspect of the AFPA’s proposal.
[131] Considering the second aspect of the AFPA’s proposal, the only details in a piecework record that will need to be updated where there is a change in piece rate for a task covered by that record, will be the rate and the date and time piecework under that rate is to commence. Given that, as AFPA apparently accepts, a pieceworker must be informed of a new rate before it commences, it seems unlikely there would be a significant reduction in regulatory burden in permitting the new piecework record to be provided after the event. On the other hand, retaining the requirement that a new piecework record be given before a rate change will better ensure that employees understand that a rate change is being made and when it begins, and may reduce the risk of employers inadvertently failing to issue and keep accurate piecework records. Accordingly, we reject this aspect of the AFPA’s proposal.
[132] Draft cl.15.2(h) already requires the employer to issue a new piecework record to a pieceworker before changing the piecework task to one not covered by an existing piecework record with the pieceworker. It follows that the first aspect of the AFPA’s proposal can be given effect simply by removing the further requirement under draft cl.15.2(i) to issue a new piecework record when there is a change of piecework task. An amendment to this effect is marked-up in cl.15.2(i) in Attachment 1.
[133] The AWU’s submissions regarding the operative date of the determination calls attention to an issue with the drafting of cl.15.2(k).
[134] As discussed further in section 4 of this decision, the AWU is concerned there may be an influx prior to the operative date of the determination of applications for approval of enterprise agreements that ‘seek to “lock-in” piecework rates through enterprise agreements on the basis of a point-in-time BOOT assessment.’ 99 This raises an issue as to the interaction between draft cl.15.2(k) and s.206 of the Act. Section 206(1) is to the effect that where an enterprise agreement applies to an employee and a modern award covers the employee, the ‘base rate of pay payable to an employee under the agreement (the agreement rate) must not be less than the base rate of pay that would be payable … under the modern award (the award rate) if the modern award applied to the employee.’ Pursuant to s.206(2), if the agreement rate is less than the award rate then ‘the agreement has effect in relation to the employee as if the agreement rate were equal to the award rate.’
[135] Section 16(1) of the Act provides a general definition of ‘base rate of pay’:
‘General meaning
(1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.’ [Underlining added]
[136] Pursuant to s.16(2) this general definition does not apply to a pieceworker in relation to the pieceworker’s entitlements under the National Employment Standards (the NES) if a modern award applies to the pieceworker and specifies the pieceworker’s base rate of pay for the purposes of the NES.
[137] As required by s.148 of the Act, draft cl.15.2(k) provides for determination of the base and full rates of pay for the purposes of the NES for pieceworkers covered by the Horticulture Award. Regulation 1.10 of the Fair Work Regulations 2009 is to the effect that the rate of pay identified in the Award as the base rate of pay for the purposes of the NES is also the base rate of pay for the purposes of s.206 for a pieceworker covered by the Award. It follows that the base rate of pay for the purposes of s.206 for a pieceworker covered by the Horticulture Award is the rate determined under draft cl.15.2(k). As presently drafted, cl.15.2(k) provides:
‘(k) For the purposes of the NES the base rate of pay and full rate of pay of a pieceworker are the same and are worked out as follows:
(i) By dividing the total amount earned by the pieceworker during the relevant period by the total hours worked by the pieceworker during the relevant period.
(iii) If the pieceworker was continuously employed by the employer for a period of 12 months or more immediately before the rate of pay is to be worked out—the relevant period is the 12 months before the rate is to be worked out. If the pieceworker was continuously employed by the employer for a period of less than 12 months immediately before the rate of pay is to be worked out—the relevant period is that period.’ [Underlining added]
[138] Comparing the underlined wording of the definition of base rate of pay in s.16 with that in draft cl.15.2(k), it appears that the underlined wording in the draft clause might be misinterpreted as referring to the total payment actually made to the pieceworker rather than the total payment the pieceworker was entitled to receive under the Horticulture Award. Of course the 2 amounts would be the same if the pieceworker is actually paid in accordance with the Award.
[139] To avoid such a misinterpretation we will amend the wording of draft paragraph 15.2(k)(i) to better reflect the wording in s.16(1) of the Act
[140] The draft determination attached to the November 2021 Decision did not specify a date of operation.
[141] The NFF submits that s.166 will apply to the determination and that s.166(1)(a) establishes a ‘presumption that a determination which sets or varies a minimum wage should come into operation on 1 July in the next financial year after it is made.’ 100 Ai Group is also of the view that s.166 will apply to the determination.101
[142] The NFF contends that the implementation date should be 1 July 2022 ‘to allow for growers to adjust HR practices and to manage (as best they can) the current labour restraints caused by COVID 19.’ 102 In particular the NFF says:
• farms will be paying significantly more in wages than anticipated and budgeted until the end of the 2021/22 financial year, because the present significantly constrained labour pool will mean growers will have to hire or retrain unproductive staff and pay them the ‘piece rate floor’
• with wages comprising about 30%–50% of overheads, growers will not be able to manage such an increase in the short term
• to implement the new provisions growers will have to make significant changes to administrative processes—potentially including: changes in personnel management systems/practices to monitor employee productivity and dismiss insufficiently productive employees; engaging with labour markets and programs such as Pacific Australia Labour Mobility rather than relying on working holiday makers, and changing payroll systems, and
• these changes will have to take place under the cloud of COVID 19 and in a context of rapidly changing law and policy, particularly as to labour movement. 103
[143] The AFPA submits that the variation should have effect on 1 July 2022 because employers will need some lead time to comply. Similarly to the NFF, the AFPA submits employers will need time to:
• make financial arrangements to cope with increased labour costs
• adjust payroll systems
• cull unproductive employees, make hiring more selective and put in place additional management and supervision for pieceworkers, and
• understand and implement the changes so as to ensure compliance. 104
[144] The Ai Group submits that employers will also be required to: determine which pieceworkers are ‘competent at the piecework task’; establish systems to track which employees meet the threshold for application of the piece rate under cl.15.2(d), and establish systems to generate piecework records. The Ai Group further submits that the high proportion of micro and small businesses covered by the Award weighs in favour of an operative date of 1 July 2022 at the earliest. 105
[145] A number of the submissions made by individual horticulture enterprises and other employer bodies advance similar arguments. 106 In particular, a number of the individuals and employer bodies submit that implementation should be delayed to enable appropriate systems to be put in place.
[146] The AWU agrees that s.166 will apply to the determination, but submits that the Full Bench’s decision as to timing is discretionary and will turn on the facts of the particular case. 107
[147] Ai Group submits that that the Commission should take into account past decisions regarding appropriate operational dates, particularly those that pertain to award amendments that will increase employment costs. Ai Group refers in particular to the 2019 amendments to the Social, Community, Home Care and Disability Services Industry Award 2010. 108
[148] The AWU submits 109 an operative date of 1 January 2022 is appropriate (rather than the 1 July 2022 ‘default date’) for reasons including:
• The Full Bench’s findings of widespread non-compliance with Award cl.15.2 and significant underpayment of pieceworkers in comparison to the Award minimum hourly rate and the National Minimum Wage, which make it inappropriate to allow the existing provision to continue to operate until 1 July 2022 to the detriment of employees and law-abiding employers. This would also be contrary to the modern awards objective.
• The Full Bench described the intent of the draft determination as being to make the piecework term simpler and easier to understand, reduce regulatory burden and promote compliance, and employers and employees should not have to wait until 1 July 2022 for those outcomes.
• The Full Bench found that inserting a minimum wage floor would lead to an increase in productivity that to some extent would offset the likely increase in employment costs and regulatory burden, so the impact on employers of an earlier operative date is likely to be manageable and not to outweigh the positive factors.
• If the determination does not take effect until 1 July 2022 there may be an influx prior to this date of applications for approval of enterprise agreements that ‘seek to “lock-in” piecework rates through enterprise agreements on the basis of a point-in-time BOOT assessment.’ 110 The AWU asserts there was such an influx of agreements prior to the amendments that introduced overtime entitlements for casuals coming into operation.
• The AWU application was made on 15 December 2020 and has attracted media attention, so that employers have been on notice about the application since late 2020 and have been on notice about the ‘minimum wages floor’ and record keeping requirements since the Full Bench Decision on 3 November 2021.
[149] In reply the NFF submits: 111
• if growers are not given adequate time to implement the new provisions, non-compliance may increase
• the AWU’s and UWU’s proposed 1 January 2022 start date would be exceedingly difficult if not impossible for growers to achieve, because: it is only around 2 weeks after the Commission’s final decision; the changes would take effect during or just before the peak season for many commodities/regions, and many professional services growers will call upon to assist them to implement the changes may not be available over the Christmas/New Year period
• with present workforce shortages growers will not be able replace unproductive workers with more productive ones in the short term and increase productivity
• the AWU’s claims that there will be an influx of applications for approval enterprise agreements which seek to nullify the changes are speculative, and in any case there is no reason to believe the system would not filter out objectionable applications as it did previously, and
• it is not open to the Commission to conclude that growers should have started preparing for the change when the AWU made its application, indeed it would be unreasonable to expect growers to start preparations until a final decision is reached.
[150] Ai Group submits in reply that a 1 July 2022 operative date is supported by fairness to employers covered by the Award (Act s.134(1)) and the impact on business, including in relation to employment costs, productivity and regulatory burden (Act s.132(f)). 112 Ai Group also submits the AWU has presented no evidence for its concern about an influx of applications for approval of enterprise agreements and that this is misconceived.113 Similarly to the NFF, the Ai Group further submits that employers have not had an extended period of notice as to the outcome of the AWU’s application.114
[151] It is convenient to deal with the s.166 point first. Section 166 provides:
‘166 When variation determinations setting, varying or revoking modern award minimum wages come into operation
Determinations generally come into operation on 1 July
(1) A determination under this Part that sets, varies or revokes modern award minimum wages comes into operation:
(a) on 1 July in the next financial year after it is made; or
(b) if it is made on 1 July in a financial year—on that day.
Note: Modern award minimum wages can also be set, varied or revoked by determinations made in annual wage reviews. For when those determinations come into operation, see section 286.
FWC may specify another day of operation if appropriate
(2) However, if the FWC specifies another day in the determination as the day on which it comes into operation, the determination comes into operation on that other day. The FWC must not specify another day unless it is satisfied that it is appropriate to do so.
(3) The specified day must not be earlier than the day on which the determination is made, unless:
(a) the determination is made under section 160 (which deals with variation to remove ambiguities or correct errors); and
(b) the FWC is satisfied that there are exceptional circumstances that justify specifying an earlier day.
Determinations may take effect in stages
(4) The FWC may specify in the determination that changes to modern award minimum wages made by the determination take effect in stages if the FWC is satisfied that it is appropriate to do so.
Determinations take effect from first full pay period
(5) A change to modern award minimum wages made by the determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after:
(a) unless paragraph (b) applies—the day the determination comes into operation; or
(b) if the determination takes effect in stages under subsection (4)—the day the change to modern award minimum wages is specified to take effect.’
[152] The NFF and the Ai Group are correct in their views that s.166 will apply to the determination, on the basis of our earlier conclusion that the Application seeks to set modern award minimum wages for pieceworkers. 115
[153] Pursuant to s.166(1)(a) (and assuming the determination is made before 1 July 2022), the determination will come into operation on 1 July 2022 unless we specify another day of operation. Subsection 166(2) provides that we must not specify another day unless ‘satisfied it is appropriate to do so’.
[154] To the extent that s.166(1)(a) can be said to create ‘a presumption’ that the variation determination arising from these proceedings takes effect from 1 July 2022 it is not a difficult presumption to displace. We need only be satisfied it is ‘appropriate’ to specify a different day of operation.
[155] A number of Full Bench decisions have considered the implementation arrangements in respect of variations to modern awards.
[156] The Penalty Rates (Transitional Arrangements) Decision dealt with the implementation of the Commission’s decision to reduce Sunday and public holiday penalty rates in certain Hospitality and Retail sector awards. In particular, the Full Bench concluded that ‘any transitional arrangements must meet the modern awards objective and must only be included in a modern award to the extent necessary to meet that objective.’ 116 These observations have been adopted by subsequent Full Benches, including in relation to variations which advantaged the employees covered by the relevant modern award.117
[157] In relation to the s.134 considerations, the Penalty Rates Full Bench stated that the setting of transitional arrangements required a particular focus on: 118
• ‘relative living standards and the needs of the low paid (s.134(1)(a));
• the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden (s.134(1)(f)); and
• the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards (s.134(1)(g)).’
[158] Further, as the proposed variation sets modern award minimum wages for pieceworkers, it enlivens ss.157(2) and 284 of the Act.
[159] Section 284(2) provides that the minimum wages objective applies to the Commission’s functions or powers under Part 2-3 of the Act so far as they relate to, relevantly, setting or varying modern award minimum wages. The minimum wages objective is set out in s.284(1):
‘(1) The FWC must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.’
[160] The matters in s.284(1)(d) and (e) are not relevant in the present context. 119 As to s.284(1)(a), in the November 2021 Decision we concluded that ‘no probative evidence has been advanced to suggest, much less demonstrate, that the introduction of a minimum wage floor in clause 15.2 would have any appreciable impact on the performance and competitiveness of the national economy’.120 It follows that this consideration has no bearing on the determination of the operative date of the variation. The matters in s.284(1)(b) and (c) are in the same terms as s.134(1)(c) and (a) respectively.
[161] The Penalty Rates Full Bench also said:
‘We must also perform our functions and exercise our powers in a manner which is ‘fair and just’ (as required by s.577(a)) and must take into account the objects of the Act and ‘equity, good conscience and the merits of the matter’ (s.578).
…
Finally, fairness is a relevant consideration, given that the modern awards objective speaks of a ‘fair and relevant minimum safety net’. Fairness in this context is to be assessed from the perspective of both the employee and employers covered by the modern award in question.’ 121
[162] We apply the above observations to our consideration of the operative date of the variation we propose to make.
[163] As to the s.134 considerations, the following conclusions from the November 2021 Decision are particularly relevant:
• ‘Relative living standards and the needs of the low paid’ weighs in favour of inserting a minimum wage floor from an early operative date. There is widespread underpayment of pieceworkers in the horticulture industry and, further, a significant proportion of pieceworkers earn less than the National Minimum Wage. The proposed variation will assist in rectifying this situation. 122
• The ‘need to encourage collective bargaining’ and ‘the promotion of social inclusion through increased workforce participation’ weigh against varying the Horticulture Award to insert a minimum wage floor 123. It follows that these considerations favour a later operative date.
• The insertion of a minimum wage floor and consequential time recording provisions in the piecework clause in the Horticulture Award are likely to have a negative impact on business, by increasing employment costs and regulatory burden for those businesses that engage pieceworkers. These considerations favour a later operate date. 124
• The introduction of a minimum wage floor will increase compliance by providing an easily calculated minimum payment. The proposed variation is simple and easy to understand. These considerations weigh in favour of the insertion of a minimum wage floor, although not strongly so, and similarly lend some support to an earlier operative date. 125
[164] We now turn to the AWU’s submission that delaying the operative date until 1 July 2022 may lead to an influx prior to this date of applications for approval of enterprise agreements that ‘seek to ’lock-in’ piecework rates through enterprise agreements on the basis of a point-in-time BOOT assessment.’ 126
[165] We agree with the NFF’s characterisation of the submission advanced by the AWU; it is speculative. Further, it is not clear what capacity employers would actually have to ‘lock-in’ piece rates through enterprise agreements before the determination comes into operation. For example, this may not be feasible in operations where employers find a need to change piece rates frequently. Also, it may be difficult to establish that any fixed piece rates satisfy the BOOT against the Award as it is, when under the approach in Hu (No 2) the minimum amount of the piece rate could vary depending upon factors such as crop and environmental conditions and the characteristics of the workforce available to the employer at a particular time.
[166] The capacity for an enterprise agreement to exclude the effect of the amendments to the Horticulture Award, may also be limited by s.206 of the Act. As discussed in section 3.7 of this decision, s.206 is to the effect that the base rate of pay under such an enterprise agreement could not be less than the base rate of pay under the Award as it is from time to time. In particular, the base rate of pay under the agreement could not be less than the ‘minimum wage floor’ for piecework under draft cl.15.2(f).
[167] Other contextual issues also bear on the operative date issue. One such matter is our previous finding that the ‘totality of evidence presents a picture of significant underpayment of pieceworkers in the horticulture industry when compared to the minimum award hourly rate’:
‘A significant proportion of pieceworkers, and WHM’s in particular, earn less per hour than the NMW ($20.33 per hour; which is also the minimum hourly rate for a level 1 employee in the Horticulture Award) and a substantial proportion earn less than the ‘target rate’ for the ‘average competent pieceworker’ 127 prescribed in clause 15.2.’128
[168] Such a consideration weighs in favour of an early operative date. We have taken into account the matters set out above and the specific issues identified in the submissions. Ultimately a balance needs to be struck between the interests of employers and the interests of employees.
[169] Finally, we accept that employers will require a reasonable time to adjust to the imposition of a minimum wage floor for pieceworkers. Payroll systems, recruitment practices and supervision arrangements may need to be changed to adapt to the new award requirements. These considerations weigh in favour of a later operative date.
[170] In our view an operative date of 28 April 2022 is ‘appropriate’, within the meaning of s.166(2). Such an operative date is about 3 months from the date of this decision and almost 6 months from the November 2021 Decision. We have taken into account the ss.134 and 284 considerations to the extent they are relevant, and are satisfied that a 28 April 2022 operative date is fair, when assessed from the perspective of both the employers and employees covered by the Horticulture Award.
[171] A variation determination will be published shortly.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<MA000028 PR737832>
ATTACHMENT 1
FAIR WORK COMMISSION
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Australian Workers’ Union
(AM2020/104)
HORTICULTURE AWARD 2020
[MA000028]
Agricultural industry | |
JUSTICE ROSS, PRESIDENT |
XX MONTH 2022 |
Horticulture Award 2020 – Ppieceworker rates – minimum hourly rate.
A. Further to the decision [[2022] FWCFB 4] issued by the Fair Work Commission on 1 February 2022, the above award is varied as follows:
1. By deleting the sixth row of the table in clause 7.2, the reference to “clause 15.2(a) – Minimum wages—pieceworkers – An individual”.
2. By deleting clause 15.2 and inserting the following:
(a) In clause 15.2:
(i) the average productivity of a pieceworker competent at the piecework task over a period is calculated by dividing the total output of the pieceworkers competent at the piecework task over that period by the total of the hours worked on the piecework task by the pieceworkers competent at the piecework task over that period (where output is measured in the same unit used to specify the piece rate, for example, a punnet, bucket or kilogram);
(ii) hourly rate for the pieceworker means the minimum hourly rate for the pieceworker’s classification level plus for a casual pieceworker the 25% casual loading under clause 11.2 for a casual pieceworker;
NOTE: The minimum hourly rate for a junior pieceworker is worked out under clause 15.3.
(iii) pieceworker means an employee being paid a piece rate; and
(iiiv) pieceworker competent at the piecework task means a pieceworker who has at least 76 hours2 weeks’ experience performing the task (for example, picking apples, picking strawberries or pruning grape vines);.
NOTE: A pieceworker can use the employee records kept under clause 15.2(j) as evidence of their experience performing a piecework task.
(b) The following clauses of this award do not apply to a pieceworker:
(i) Clause 13—Ordinary hours of work and rostering arrangements;
(ii) Clause 18.3(c)—Meal allowance; and
(iii) Clause 21—Overtime.
(c) An employer may pay a full-time, part-time or casual employee a piece rate for performing a task.
(d) The employer must fix the piece rate at a level such that which enables a pieceworker working at the average productivity of a pieceworker competent at the piecework task will to earn at least 15% more per hour than the hourly rate for the pieceworker.
NOTE: A pieceworker is paid 200% of the piece rate for work on a public holiday (see clause 27.3).
(e) If a pieceworker does any work in addition to the task for which they are being paid a piece rate, the pieceworker must be paid for that additional work at the hourly rate for the pieceworker.
(f) Despite any other provision of clause 15.2 a pieceworker must be paid for each day on which they work no less than the amount they would have received if paid for each hour worked at the hourly rate for the pieceworker multiplied by the number of hours worked on that day.
(g) Pieceworkers are paid allowances under clause 18—Allowances (other than meal allowance) in addition to the rates payable under clauses 15.2(d), (e) and (f).
(h) Before a pieceworker begins a piecework task for an employer, the employer must give the pieceworker a written record signed by the employer (a piecework record) that must:
(i) state the date and time the piecework is to commence;
(ii) describe the task for which the piece rate will be paid;
(iii) state the amount of the piece rate;
(iv) include the following statement:
‘Under the Horticulture Award 2020 a pieceworker must be paid for each day on which they work no less than the amount they would have received if paid for each hour worked at their hourly rate under the award (including the 25% casual loading for a casual pieceworker) multiplied by the number of hours worked on that day.’
and
(v) state the hourly rate for the pieceworker.
NOTE 1: A piecework record can cover more than one piecework task.
NOTE 2: An example of a piecework record the type of record required by clause 15.2(h) is at Schedule I—Piecework Record. There is no requirement to use the form of record set out in Schedule I—Piecework Record.
(i) If an employer proposes to change the piece rate for a or piecework task of a pieceworker the employer must first give the pieceworker a further piecework record including the new rate or task.
(j) The employer must keep the following as employee records:
(i) a copy of each piecework record given to the pieceworker; and
(ii) a record of all hours worked by the pieceworker and the applicable piece rate at the time those hours were worked.
(k) An employer must give a pieceworker or former pieceworker a copy of the employee record in clause 15.2(j)(ii) upon request.
(k)(l) For the purposes of the NES the base rate of pay and full rate of pay of a pieceworker are the same and are worked out as follows:
(i) By dividing the total amount payable to earned by the pieceworker under this award during the relevant period by the total hours worked by the pieceworker during the relevant period.
(iii) If the pieceworker was continuously employed by the employer for a period of 12 months or more immediately before the rate of pay is to be worked out—the relevant period is the 12 months before the rate is to be worked out. If the pieceworker was continuously employed by the employer for a period of less than 12 months immediately before the rate of pay is to be worked out—the relevant period is that period.
3. By replacing the words “piecework rate” in clause 27.3 with the words “piece rate”.
4. By inserting a new Schedule I—Piecework record as follows:set out in the attachment to this determination.
Link to PDF copy of Piecework record |
Name of pieceworker: _____________________________________________
Name of employer: _____________________________________________
The piecework will commence on: ___/___/20___ at: _____ am/pm
Piecework Task 1
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The pieceworker will be paid for this task the piecework the amount of $_______ per ____________
Piecework Task 2
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The pieceworker will be paid for this task the piecework the amount of $_______ per ____________
Piecework Task 3
The piecework task is: ___________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
The pieceworker will be paid for this task the piecework the amount of $_______ per ____________
Under the Horticulture Award 2020 a pieceworker must be paid for each day on which they work no less than the amount they would have received if paid for each hour worked at their hourly rate under the award (including the 25% casual loading for a casual pieceworker) multiplied by the number of hours worked on that day.
The pieceworker’s hourly rate under the award is $_______ per hour.
Name of employer representative: ___________________________________________
Signature of employer representative: ________________________________________
Date signed: ___/___/20___
5. By updating the table of contents and cross-references accordingly.
B. This determination comes into operation on 28 April 2022. In accordance with s.166(5) of the Fair Work Act 2009, this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 28 April 2022.
PRESIDENT
1 Horticulture Award 2020, MA000028.
4 Ibid [4].
5 Citrus SA submission dated 25 November 2021 p.1.
6 Blueberry Fields submission dated 26 November 2021.
7 Citrus Australia submission dated 26 November 2021 p.9.
8 Grandview Orchards submission dated 25 November 2021 p.1.
9 Growcom submission dated November 2021 p.6.
10 Luscious Citrus Pty Ltd submission p.1 .
11 NSW Cherry Growers Association submission dated 25 November 2021 p.1-3.
12 PFT Agriculture submission dated 27 November 2021 p.1.
13 November 2021 Decision [358].
14 Exhibit AFPA 2 [49].
15 Exhibit NFF 1 [34].
16 Exhibit NFF 4 [23].
17 Exhibit NFF 5 [33]
18 Exhibit NFF 7 [8]
19 Exhibit NFF 8 [34]
20 Frank Battistel submission dated 26 November 2021 p.1.
21 Growcom submission dated November 2021 p.6.
22 NSW Cherry Growers Association submission dated 26 November 2021 p.2.
23 Sunny Ridge submission dated 25 November 2021 p.2.
24 Sunny Ridge submission dated 25 November 2021 p.3.
25 [2018] FCA 1034.
26 [2019] FCAFC 133.
27 [2021] FWCFB 5554 [362].
28 Citrus Australia submission dated 26 November 2021 p.9.
29 NSW Cherry Growers Association submission dated 25 November 2021 p.3.
30 AWU submission in reply, 10 December 2021 [6].
31 [2021] FWCFB 5554 [14] and [23]–[24].
32 Horticulture Award, sch.A cl.A.1.2.
33 Ibid, sch.A cl.A.1.3.
34 ACRATH submission dated 18 December 2021.
35 Act s.682.
36 Sutton Farms submission dated 26 November 2021 p.2.
37 Citrus Australia submission dated 26 November 2021 p.3
38 Sunny Ridge submission dated 26 November 2021 p.4.
39 (1985) 159 CLR 550 [32]
40 See November 2021 Decision [6] for a list of submissions and evidence.
41 Frank Battistel submission dated 26 November 2021 p. 2, Sutton Farms submission dated 26 November 2021 p.3, Industrial Committee (Representatives of Fruit Growers Victoria and Cobram and District Fruit Growers Association) p.3, Lucious Citrus Pty Ltd submission dated 26 November 2021 p.2.
42 Lucious Citrus Pty Ltd submission dated 26 November 2021 p.1.
43 AFPA submission dated 26 November 2021 [21]–[22].
44 Ai Group submission dated 26 November 2021 [4]–[6].
45 AWU submission in reply dated 10 December 2021 [41] and [43].
46 NSWFA submission dated 26 November 2021 [5]-[7].
47 AWU submission in reply dated 10 December 2021 [9]-[10].
48 AFPA submission dated 26 November 2021 [9]–[10].
49 AWU submission in reply dated 10 December 2021 [11]–[12].
50 FGT submission in reply dated 10 December 2021 [7]-[8].
51 NFF submission dated 26 November 2021 [19]–[20]. A similar amendment is proposed by the New South Wales Farmers (Industrial) Association submission dated 26 November 2021 [14]–[16].
52 NSWFA submission dated 26 November 2021 [14]-[16].
53 FGT submission dated 26 November 2021 [6]–[8].
54 NSWFA submission dated 26 November 2021 [16].
55 Frank Battistel submission dated 26 November 2021 p.2
56 AWU submission in reply, 10 December 2021, 36.
57 88 Days and Counting submission in reply dated 9 December 2021 p.1.
58 88 Days and Counting submission in reply dated 9 December 2021 p.1–2.
59 AFPA submission dated 26 November 2021 [4]–[13].
60 NFF submission dated 26 November 2021 [21]–[24].
61 AFPA submission dated 26 November 2021 [14]–[16].
62 FGT submission dated 26 November 2021 [29].
63 Sunny Ridge submission dated 26 November 2021.
64 Growcom submission dated 26 November 2021 p.7.
65 Presumably, the AWU means those pieceworkers who fall below the average productivity level.
66 AWU submission in reply dated 10 December 2021 [29]–[33].
67 UWU submission in reply dated 10 December 2021 [5].
68 [2018] FCA 1034.
69 [2019] FCAFC 133.
70 UWU, ‘Submissions – United Workers Union’, Submission in Horticulture Award 2020, AM2020/104, 19 March 2021 at [22] (‘UWU submission, 19 March 2021’).
71 Hu (No 2) [24], [140]; Hu Appeal [74], [75] (Bromberg J).
72 Hu (No 2) [25]; see also Exhibit UWU 2 [12]; Exhibit UWU 6 [10].
73 Hu (No 2) [26]–[27].
74 Ibid at [28]–[29], [34].
75 Ibid [31].
76 Ibid [30], [85].
77 Ibid [33]–[38].
78 AFPA submission, 11 June 2021, section E.
79 Ibid [42].
80 AFPA submission, 11 June 2021 [44].
81 Measured in an appropriate unit, such as punnet, bucket, kilogram, etc.
82 AFPA submission, 11 June 2021 [44].
83 November 2021 Decision [438]–[439] (paragraph numbers omitted).
84 Ai Group submission dated 26 November 2021 [7]–[8].
85 NFF submission dated 26 November 2021 [3]–[13].
86 AFPA submission dated 26 November 2021 [23]–[24] and [31] and Appendix. See also Fruit Growers Victoria submission dated 26 November 2021 p.1 and Growcom submission dated 26 November 2021 p.7.
87 For example, see submissions by Citrus Australia dated 26 November 2021, FGT dated 26 November 2021 and FGV dated 26 November 2021.
88 See, for example, Silviculture Award 2020 cl.15.2(a), Building and Construction General On-site Award 2020 cl.19.6(e)(i), Meat Industry Award 2020 cl.18.10 and Wool Storage, Sampling and Testing Award 2020 cl.16.3(d)(i).
89 AWU submission in reply dated 10 December 2021 [13]–[22]. The AWU also submits this would resolve the concern raised by Fruit Growers Tasmania—that hour-by-hour reconciliation would overcompensate employees where piecework payments are ‘lumpy’ (for example where filling a bin takes 2 hours, so that the pieceworker receives no payment in respect of the first hour and payment for a full bin in the second hour) (Fruit Growers Tasmania submission dated 26 November 2021 [9]–[19]).
90 The UWU makes a similar submission see UWU submission in reply dated 10 December 2021 [8].
91 [2021] FWCFB 5554 [574].
92 Award cl.16.1.
93 Exhibit AFPA 2 [41] and [43].
94 AFPA submission dated 26 November 2021 [25]–[27].
95 AWU submission in reply dated 10 December 2021 [49].
96 AFPA submission dated 26 November 2021 [29].
97 Ibid.
98 AWU submission in reply dated 10 December 2021 [37]–[39].
99 AWU submission dated 26 November 2021 [24].
100 NFF submission dated 26 November 2021 [33].
101 Ai Group reply submission dated 10 December 2021 [9]–[11].
102 NFF submission dated 26 November 2021 [34].
103 NFF submission dated 26 November 2021 [25]–[32].
104 AFPA submission dated 26 November 2021 [32]–[37].
105 Ai Group reply submission dated 10 December 2021 [7]–[8].
106 Blueberry Fields submission dated 26 November 2021, NSW Cherry Growers Association submission dated 25 November 2021, Citrus Australia submission dated 26 November 2021, FGT submission dated 26 November 2021, FGV submission dated 26 November 2021, HW Pogue & Co submission dated 24 November 2021 at p.1-2 Northern Victorian Fresh Tomato Growers Association submission dated 26 November 2021
107 AWU submission dated 26 November 2021 [9]–[12] citing the Full Bench’s discussion of appropriate transitional arrangements in Penalty Rates — Transitional Arrangements [2017] FWCFB 3001 [75].
108 Ai Group reply submission dated 10 December 2021 [14]–[20].
109 AWU submission dated 26 November 2021 [14]–[26] and AWU submission in reply dated 10 December 2021 [52].
110 AWU submission dated 26 November 2021 [24].
111 NFF submission dated 10 December 2021 [7]–[15].
112 Ai Group reply submission dated 10 December 2021 [15]–[16].
113 Ai Group reply submission dated 10 December 2021 [21]–[28].
114 Ai Group reply submission dated 10 December 2021 [29]–[30].
115 [2021] FWCFB 5554 [29] and [538].
116 [2017] FWCFB 3001 [143].
117 [2021] FWCFB 5244 [303]–[306].
118 [2017] FWCFB 3001 [143].
119 [2021] FWCFB 5554 [507]–[509].
120 Ibid a[556].
121 [2017] FWCFB 3001 [144] and [148].
122 [2021] FWCFB 5554 [478].
123 Ibid [484].
124 Ibid [524].
125 Ibid [530].
126 AWU submission dated 26 November 2021 [20]–[24].
127 See Dr Howe’s qualitative data [160] and [164]; the NFF survey, Chart 3 at [218]; OmniPoll survey [262]–[264]; Employee lay evidence [280]–[284]; McClintock data [314] and [319].
128 [2021] FWCFB 5554 [362].