AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.99 notification of industrial dispute
s.107 Reference to a Full Bench
Shop, Distributive and Allied Employees Association
and
$2 and Under and Others
(C1998/75644)
Various employees |
Retail industry |
JUSTICE GIUDICE, PRESIDENT |
|
SENIOR DEPUTY PRESIDENT WATSON |
|
COMMISSIONER RAFFAELLI |
MELBOURNE, 17 JANUARY 2003 |
Roping-in application - Workplace Relations Act 1996 - objects of Part VI - objects of Part XV - application for safety net award where businesses covered by Schedule 1A - approach to application for roping-in award - extent of federal award coverage - adequacy of Schedule 1A conditions - potential economic effects including employment effects of award - conditions to apply to Saturday work, Sunday work and evening work - exempt shop provisions - operative date.
DECISION
[1] On 26 June 1998 the Shop, Distributive and Allied Employees Association (SDA) served a letter of demand and log of claims on some 35,877 employers in the retail industry in Victoria. Shortly thereafter the SDA lodged a notification of dispute pursuant to s.99 of the Workplace Relations Act 1996 (the Act) arising from the non-acceptance of the claims. On 24 February 1999 the President granted applications by the Victorian Employers Chamber of Commerce and Industry (VECCI) and the Minister for Employment Workplace Relations and Small Business on behalf of the Commonwealth (the Commonwealth) pursuant to s.107 of the Act that the matter be referred to a Full Bench.
[2] On 24 July 2000 the Full Bench determined that a dispute should be found1. The Full Bench referred to Commissioner Whelan the task of properly identifying the respondents who were in dispute. On 29 December 2000 Commissioner Whelan made a finding of dispute between the SDA and some 24,422 employers.
[3] The SDA now seeks an award roping some 17,628 employers into the Shop, Distributive and Allied Employees Association - Victorian Shops Interim Award 20002 (the interim award). Whilst that number may be subject to some modification to accommodate developments, it is an indication of the number of employers whom the SDA seeks to have bound by the roping-in award. Of the 24,422 respondents found to be in dispute by Commissioner Whelan, the SDA submitted that some 4,000 would be more appropriately covered by other federal awards applying to hairdressers, fast food businesses and hardware shops. It does not seek an award against the remaining approximately 2,800 respondents for a range of reasons which were not fully canvassed.
[4] The application was initially programmed for hearing in November 2001. Those dates were vacated by consent. The application was then set down for hearing in May 2002. Again the dates were vacated by consent. The hearing finally commenced in August 2002 and concluded on 25 October 2002 at which time we reserved our decision.
Background
[5] The history of federal award coverage in the retail industry in Victoria is not long. The main federal award is the interim award which was made on 16 March 2000. It is the only award applying to various sectors of the retail industry in Victoria. The origins of the interim award are to be found in three multiple employer awards which were made in 1994. The awards were the Shop, Distributive and Allied Employees Association - Victorian Shops Interim Award 19943, the Shop, Distributive and Allied Employees Association - (Booksellers and Stationers) Interim Award 19944 and the Shop, Distributive and Allied Employees Association (Food and Liquor Stores) Interim Award 19945. These awards, subject to some exceptions, contained terms and conditions derived from awards of the Industrial Relations Commission of Victoria which had expired on 1 March 1993.6 The circumstances in which the awards were made are set out in a decision made by Commissioner Lewin on 22 April 1994.7 In his decision the Commissioner indicated that he intended to consolidate the three awards. In fact the awards were not consolidated until Commissioner Hingley did so as part of the simplification of the three awards (and a large number of others) in 2000.8 The interim award is the result.
[6] Employees in the State of Victoria who are not employed by a respondent to a Federal award fall within the operation of Subdivision B of Part XV of the Act. Subdivision B is entitled "Minimum Terms and Conditions of Victorian Employees". Section 500 is in these terms:
"(1) Subject to sections 507 and 508, minimum terms and conditions of employment for employees in Victoria are contained in Schedule 1A
(2) Subsection (1) is intended to supplement, and not to override, entitlements under:
(a) Part VIA of this Act; or
(b) any Commonwealth legislation other than this Act; or
(c) any legislation of Victoria or of any other State or Territory."
Section 501 deals with minimum wages. It is only necessary to set out s.501(1):
"(1) For the purposes of Schedule 1A, the Commission may from time to time, by order, set or adjust a minimum wage for employees within a work classification, other than employees who are subject to an award, a certified agreement or an AWA."
[7] It is also provided that employers must not enter into a contract of employment that provides a term or condition less favourable to an employee than the minimum under s.500(1) and that the minimum terms and conditions under s.500(1) are deemed to be terms and conditions of every employment agreement (see ss.505 and 506 respectively). An employee's right to the minimum entitlements is subject to two important qualifications. The first qualification is that the entitlements do not apply during any period in which the employee is subject to a certified agreement or an Australian Workplace Agreement (AWA) (s.507). The second qualification is that to the extent of any inconsistency with Schedule 1A, an award of the Commission prevails (s.508). The minimum terms and conditions of employment prescribed by Schedule 1A are:
"(a) pro-rata and cumulative annual leave equivalent to four weeks ordinary hours work per year;
(b) pro-rata and cumulative sick leave equivalent to one week's ordinary hours work;
(c) maternity, paternity or adoption leave and an alternative to work part-time in connection with the birth or adoption of a child;
(d) an entitlement to be given notice of termination or compensation in lieu thereof; and "
(e) a minimum wage for a work classification as determined by the Commission pursuant to s.501 of the Act."
[8] The employers whom the SDA seeks to have made respondent to the interim award are at present not covered by any federal award. It follows that persons employed by the respondents have a statutory entitlement to the terms and conditions contained in Schedule 1A, including minimum wage rates prescribed in minimum wage orders pursuant to s.501.
The SDA's Case
[9] The SDA submitted that there is a compelling case for an award to be made. It relied upon three broad bases. The first was the extent of the disadvantage inherent in the Schedule 1A minimum conditions by comparison with established and commonplace standards in the Commission's awards. The second basis was the disadvantage in terms of the actual employment benefits received by employees of the proposed respondents. The third basis was that it would be consistent with the Act and would further its objects to make an award.
[10] It contended that the following fundamental propositions can be identified from an examination of the principal objects of the Act and the objects of Part VI:
· sections 88A(a) and (b) indicate that wages and conditions of employment are to be "protected" by awards of the Commission;
· awards are to act as a safety net of wages and conditions; and
· the safety net is to be "fair", "effective" and "enforceable" (s.3(d)(ii) and ss.88A(a) & (b).
[11] In response to submissions made by the Commonwealth and the employers, the SDA submitted that the provisions of Part XV of the Act do not inhibit the exercise of the Commission's powers under Part VI of the Act. In particular it submitted that Part XV does not restrict the Commission's power to make awards in respect of Victorian employees and it does not limit or override the Commission's power in respect of dispute prevention and settlement conferred by Part VI.
[12] The union also relied upon the Commission's Safety Net Review Decision 20029 and the Statement of Principles appended to it, including the first award principle, and upon numerous authorities which in its submission support the making of a roping-in award in circumstances such as those before us.
[13] In relation to the question of whether the potential respondents should be bound by the interim award or by some other award, the SDA submitted that the interim award is appropriate. It adopted terminology used by the Commission in Australian Collieries Staff Association and Others v Bengalla Mining Company Pty Ltd and Others10 to support a submission that there are "links and commonalities" between the proposed respondents and the interim award. Those links and commonalities were said to be common occupations, competencies and work value assessments, a diversity of business types, business size and the extent of Sunday trading.
[14] It was also submitted that the terms of the interim award should be applied because the award has been simplified and contains flexible provisions appropriate to the industry, including provisions relating to hours of work which are tailored to the current trading hours environment. It contended that it is significant that the award contains an enterprise flexibility provision (clause 7) which has not been availed of by the respondent employers. Several matters raised by the Australian Retailers Association Victoria (the ARAV) in these proceedings (with which we deal later) were dealt with by Commissioner Hingley during the simplification process. The SDA submitted that the Commission should place significant weight on the Commissioner's findings and conclusions. It took us through the historical development of the interim award to demonstrate that it is the product of a series of comprehensive arbitrations, including the conditions to be applied to Saturday and Sunday work. In this respect it submitted that it is likely that a considerable number of the proposed respondents were subject at an earlier time to the provisions of one or other of the four state awards.
[15] It was further submitted that many of the provisions of the interim award are well established and are no more burdensome than provisions applying in other States. We were asked to draw the inference that since no application had been made by any employer to vary the award since its simplification in 2000 the terms of the award are generally satisfactory. In particular, the award recognises the current deregulated trading hours environment.
[16] It was submitted that it would be contrary to the public interest to make an award other than one which adopts in substance the terms of the interim award because to do so would lead to two different federal standards in the one industry. That would be inequitable and would lead to ongoing uncertainty and delay in future roping-in applications.
The Commonwealth's Case
[17] The Commonwealth opposed the application. In summary it relied upon the statutory framework, the Commission's wage fixing principles and approach to roping-in awards and the impact of the application on labour costs and employment, particularly youth employment.
[18] In dealing with the statutory framework, the Commonwealth submitted that the objects of the Act include a principle that "moving employees from the Schedule 1A safety net onto an award safety net should not be done at the expense of business viability and employment, particularly youth employment." It submitted that the application of the safety net provided for in Part XV of the Act, particularly in Schedule 1A, to the employees covered by the application distinguishes the application from other roping-in applications the Commission has dealt with in the past. The Commission should not replace one safety net with another if the result will be that some businesses cease to be viable and employees who are otherwise secure in their jobs lose their employment. That result would defeat the statutory purpose of a safety net. In this connection reliance was placed on the results of a survey, to be dealt with later, which purported to show that if the SDA's application were granted a significant reduction in employment would follow. Since 28% of Victorian retail employees are paid at the junior rate, the effects on youth employment in the short and the long term would be very detrimental.
[19] It was submitted that Part XV is a framework of provisions which formerly applied in Victoria by force of the laws of that State which was carried into federal law as part of arrangements made for the referral of certain industrial powers to the Commonwealth: see the Commonwealth Powers (Industrial Relations) Act 1996 (Vic). Part XV was intended to maintain the previous State arrangements and there is nothing in the Act to suggest that the operation of the Part should be seen as transitional or as an inferior safety net to that provided by Part VI. The objects of Parts VI and XV need to be considered together. Any relevant disadvantage suffered by employees covered by Schedule 1A by comparison with employees under federal awards is not uniform or inherent but is dependent on the circumstances of particular employees. The Commonwealth referred to a bill to amend Schedule 1A which is before the Commonwealth Parliament. If passed the resulting statute would update the safety net for Part XV employees. The Government's action in introducing the amendments was said to be a "considered and sensible" measure to update the minimum conditions for Part XV employees and should not be regarded as an admission that those conditions are inadequate or that the Commonwealth accepts that there is a need for "re-regulation of the Victorian system of minimum entitlements".
[20] The Commonwealth submitted that in the circumstances of this case we should take into consideration that when the federal awards which preceded the interim award were made in 1993 it was open to the SDA to pursue the wide-ranging service of a log against small retail businesses and it failed to do so. It has thereby permitted businesses to operate firstly under the Victorian system and then under Part XV. Those longstanding arrangements should not be lightly disturbed.
[21] The Commonwealth, supported by the ARAV, also submitted that there is no suggestion that there was any particular focus on the circumstances of small retail businesses in the processes which led to the making of the interim award or its predecessors. The provisions in the interim award had their origin in conditions in a number of state awards applying to a range of industry sectors and to all shops in the sectors regardless of size. The awards have all been through the simplification process envisaged by Item 51 of Part 2 of Schedule 5 to the Workplace Relations and Other Legislation Amendment Act 1996 (the WROLA Act).
[22] The Commonwealth, supported by the employer parties, strenuously opposed the application on the basis of its potential to affect labour costs and employment levels. It contended that the Victorian retail industry has the following characteristics:
· there are 38,700 retail businesses of whom 37,100 (90%) employ fewer than 20 employees;11
· Victorian retailers employ 277,200 persons of whom 112,200 (40%) are employed in firms with fewer than 20 employees;12
· the retail trade accounts for 5.3% of total factor income for all Victorian industries;13 and
· 15.8% of Victorian workers are employed in retail trade.
[23] It was submitted that the outlook for the Victorian retail trade indicates that if the application were granted there would be significant negative impacts on the businesses concerned. The Commonwealth estimated that up to one third of the businesses had commenced operations after the expiry of the state awards in 1993 and had therefore always operated in the deregulated environment of the Schedule 1A conditions. Their businesses may therefore only operate effectively on that cost structure. It was estimated that the impact of overtime and penalty rates on labour costs would be considerable, with many employers being required to reduce employment and decrease trading hours.
[24] The Commonwealth referred to reliance by the SDA on a survey conducted by the Australian Centre for Industrial Relations Research and Training (ACIRRT) for the Victorian Industrial Relations Taskforce (the ACIRRT Report).14 ACIRRT was commissioned by the Taskforce to investigate whether Schedule 1A employees are disadvantaged compared with Victorian employees covered by federal awards and agreements. The Commonwealth contended that the ACIRRT Report does not focus sufficiently on the retail industry and many of the findings need to be treated with caution. It also questioned the suggestion that Schedule 1A employees are by implication disadvantaged, drawing attention to the greater flexibility offered to employers and employees under these "non-award workplace relations arrangements."
[25] In relation to the apprehended negative impact of the proposed roping-in award on employment the Commonwealth relied upon two things. First, it contended that the resulting labour cost increases will inevitably lead to reductions in employment as increases in minimum wages do. Second, it relied upon the results of a survey of the employers affected which indicates that a significant reduction in employment is likely under the proposed award.
The ARAV Case
[26] The ARAV opposed the application. It challenged the SDA's description of the nature of the retail industry. In relation to federal award coverage, while the SDA contended that 15% of retail businesses operating 55% of retail workplaces are covered by federal awards, the ARAV submitted that the available data is inadequate and no firm conclusions can be drawn. It further submitted that reliance on statistics about the number of workplaces is misleading and the number of separate businesses is the important figure. It asserted (relying on the ACIRRT Report)15 that award-covered retail businesses operate 54% of retail workplaces and employ 68% of retail employees. Employers already covered by awards have the greatest number of stores and the largest number of employees.
[27] ARAV relied on ABS statistics showing that there are 23,409 retail businesses of which 96% employ fewer than 20 employees. When the retail side of the vehicle industry and hairdressing salons are excluded, only 15% of retail employees are covered by federal awards yet, as indicated in the previous paragraph, that 15% operates more than half of the workplaces and employs 68% of the workforce. It contended that the Commonwealth's data suggesting the conclusion that the majority of potential respondents employ fewer than 20 employees had not been challenged by the SDA. Overall it submitted that the available data does not permit fair conclusions about the proportion of the industry constituted by the respondents or the proportion of the industry which would be left operating under Schedule 1A conditions if the application were granted.
[28] In dealing with the statutory framework the ARAV submitted that the objects of the Act give primacy to the furtherance of agreement-making particularly between the employer and employee at the workplace upon a foundation of minimum standards. The obligation on the Commission to ensure the maintenance of an effective award safety net is a separate and secondary issue. Schedule 1A provides a foundation of minimum standards and there is no need for an award. It follows that an onus falls on the SDA to demonstrate that an award should be made and that the terms and conditions of the interim award are appropriate. It submitted that the SDA has not shown that it has attempted, unsuccessfully, to enter into agreements with the potential respondents at the workplace level or that making a roping-in award is the appropriate course to settle the dispute.
[29] In particular it submitted that the SDA has not shown that the existing respondents to the interim award are the same as the potential respondents in relation to their type and size of business, the persons they employ and the conditions under which they trade. It relied, finally, upon the following propositions which it contended emerge from the evidence:
· a substantial majority of respondents to the interim award employ more than 20 employees which is not representative of the industry as a whole; and
· the terms of the award are inappropriate for the industry as a whole, being restrictive and costly and not responsive to the needs of the broad range of types of shops in the industry.
[30] ARAV submitted that the provisions of the interim award do not complement the trading conditions in Victoria. It presented a detailed analysis of trading hours legislation and the applicable awards in States across Australia. It contended that other retail awards generally provide for lower penalty rates and permit unrestricted rostering during periods when trading is permitted. It contended that the interim award has restrictions on rostering and unnecessary penalties for work performed on Monday to Friday evenings, Saturdays and Sundays. Extension of these arrangements to the potential respondents would be unfair, would lead to cost increases and loss of jobs or reductions in hours. It relied heavily upon survey evidence in this respect.
[31] The ARAV provided a comprehensive account of the history of award regulation in Victoria, emphasising provisions which it concluded were particularly onerous for businesses employing fewer than 20 employees. We deal with some of those provisions later.
The VECCI Case
[32] VECCI opposed the application. It directed our attention to various statutory provisions and in particular ss.88B(2)(a) and (b). It also adopted the submissions of the Commonwealth and the ARAV. It emphasised the number and nature of additional restrictions which the interim award would impose upon the potential respondents and sought to demonstrate their effect through the presentation of an indicative roster. Like the Commonwealth and the ARAV, VECCI criticised the SDA's reliance on the ACIRRT Report.
[33] In an alternative submission, it was contended that the appropriate rate for work performed in non-exempt shops during ordinary hours on Saturday should be time plus 25%. It stressed the undesirability of giving any award provisions retrospective effect and argued for prospective operation in the case of some conditions.
The AIG Case
[34] The Australian Industry Group (AIG) opposed the application and adopted the submissions of the Commonwealth, the ARAV and VECCI. It is concerned that if the terms of the interim award are imposed on its members it will stop their ability to offer employment in flexible and creative ways which suit both them and their employees, will have a significant effect on margins, put pressure on employment and business flexibility and add to labour costs. It was submitted in the alternative that, if an award was made, it should not have retrospective effect but should have a phased implementation. The AIG also submitted that where employers have contracts or other long-term arrangements with employees about their terms and conditions of employment these should be allowed to continue and be offset against the terms of the award without disadvantage to the employer.
The Statutory Scheme
[35] The power to make an award in settlement of a dispute is discretionary. The jurisdiction may be exercised by declining to make any award or by making an award in relation to some or all of the matters in dispute. We are conscious that the function of dispute settlement is within Part VI of the Act. Section 88B of the Act provides specific guidance as to the manner in which Part VI functions are to be performed by the Commission. For present purposes it is sufficient to set out only part of that section:
"88B Performance of Commission's functions under this Part
(1) The Commission must perform its functions under this Part in a way that furthers the objects of the Act and, in particular, the objects of this Part.
(2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following:
(a) the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community;
(b) economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment;
(c) when adjusting the safety net, the needs of the low paid."
[36] Section 88B(1) obliges the Commission to perform its functions in a way that furthers the objects of the Act and in particular the objects of Part VI itself. It is not necessary to set out the objects of the Act. The objects of the Part VI are in s.88A. That section is:
"88A Objects of Part
The objects of this Part are to ensure that:
(a) wages and conditions of employment are protected by a system of enforceable awards established and maintained by the Commission; and
(b) awards act as a safety net of fair minimum wages and conditions of employment; and
(c) awards are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises; and
(d) the Commission's functions and powers in relation to making and varying awards are performed and exercised in a way that:
(i) encourages the making of agreements between employers and employees at the workplace or enterprise level; and
(ii) uses a case-by-case approach to protect the competitive position of young people in the labour market, to promote youth employment, youth skills and community standards and to assist in reducing youth unemployment."
[37] Taking into account the terms of s.88B(2), particularly the expression "must ensure that a safety net of fair minimum wages and conditions of employment is established", and the terms of ss.88A(a) and (b), we have no doubt that when performing functions under Part VI the Commission is obliged to give serious consideration to the making of a safety net award where none exists, subject to specific provisions in Part VI such as s.111(1)(g) and s.111AAA.
[38] In opposing the application the employer organisations and the Commonwealth relied on alleged adverse economic and employment effects. They contended that the imposition of the terms of the interim award would reduce flexibility in rostering and increase employment costs through the imposition of penalty rates. This would lead, it was contended, to reductions in employment. They relied upon the principal object of the Act in s.3 and sub-sections 3(a) and (aa) in particular:
"3 Principal object of this Act
The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by:
(a) encouraging the pursuit of high employment, improved living standards, low inflation and international competitiveness through higher productivity and a flexible and fair labour market; and
(aa) protecting the competitive position of young people in the labour market, promoting youth employment, youth skills and community standards and assisting in reducing youth unemployment"
[39] They also relied upon subparagraph (b) in sub-section 88B(2) of the Act, which provides:
"(2) In performing its functions under this Part, the Commission must ensure that a safety net of fair minimum wages and conditions of employment is established and maintained, having regard to the following:
...........................
(b) economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment;
..............."
[40] While we are conscious of our statutory responsibility to have regard to and apply these economic considerations in performing our functions under Part VI, care needs to be taken to maintain a balanced approach. The Commission is obliged to have regard to all of the matters referred to in s.3, the objects of Part VI in s.88A, the terms of s.88B and other statutory provisions, often being required to balance competing considerations. We are particularly conscious that we are enjoined by s.88B(2) to ensure that a safety net of fair minimum wages and conditions of employment is established and maintained having regard to the matters specified in that section. It follows that it is necessary to consider what has been put to us in relation to the likely employment effects of the order sought (or any alternate order which might be made) and balance those considerations against other statutory considerations.
[41] The object of Part XV should have little influence in the exercise of the discretion to make a safety net award. That object is not referred to in Part VI at all. Furthermore s.111AAA provides that the Commission should cease dealing with an industrial dispute, unless it is satisfied that to do so would not be in the public interest, where the subject employees are covered by a state award or a state employment agreement. The terms "state award" and "state employment agreement" are defined in s.4 of the Act. It is clear from the definitions that there are no state awards or state employment agreements in Victoria. This is an indication that the legislature did not intend that where employees are enjoying the minimum terms and conditions prescribed in Part XV the exercise of the award-making powers under Part VI should be subject to any inhibition arising from that circumstance. It follows that the Commission can and should take into account the fact that employees covered by Part XV do not have the benefit of a safety net award and give weight to that consideration in light of the provisions in s.88B(1), s.88B(2) and s.88A(a) and (b).
The Commission's Principles and Approach to Roping-in Awards
[42] It was common ground that the application should be considered by reference to, among other things, the Commission's Principles and previous decisions in relation to roping-in awards. We have given consideration to the submissions on those issues.
[43] Principle 1 provides:
"1. ROLE OF ARBITRATION AND THE AWARD SAFETY NET
Existing wages and conditions in the relevant awards of the Commission constitute the safety net which protects employees who may be unable to reach an enterprise or workplace agreement. The award safety net also provides the benchmark for the no-disadvantage test that the Workplace Relations Act 1996 (the Act) requires be applied before agreements are certified.
As a result of the award simplification process, awards will, where necessary, be varied so that they:
· act as a safety net of fair minimum wages and conditions of employment (s.88A(b));
· are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises (s.88A(c)); and
· encourage the making of agreements between employers and employees at the workplace or enterprise level (s.88A(d)).
This evolving award system will remain the safety net referred to in the Act. It will, and is intended by the legislature to, change in response to economic, social and industrial circumstances."16
[44] We do not think that the terms of this principle add or detract in any substantial way from the conclusions we have reached concerning the statutory framework. Nevertheless the principle does emphasise the important role of the award safety net in providing a basis for the operation of enterprise bargaining through the operation of the no-disadvantage test (see s.170LT(2)).
[45] Principle 11 deals with first awards and extensions to existing awards. That principle reads:
"11. FIRST AWARD AND EXTENSION TO AN EXISTING AWARD
Any first award or an extension to an existing award must be consistent with the Commission's obligations under Part VI of the Act.
In determining the content of a first award the Commission will have particular regard to:
(a) relevant minimum wage rates in other awards, provided the rates have been adjusted for previous National Wage Case decisions and are consistent with the decision of the August 1989 National Wage Case;
(b) the need for any alterations to wage relativities between awards to be based on skill, responsibility and the conditions under which the work is performed (s.88B(3)(a));
(c) section 89A and the need to ensure that it does not contain provisions that are not either allowable award matters, or both incidental to allowable award matters and necessary for the effective operation of the award; and
(d) the award simplification criteria in s.143 of the Act."
[46] We agree with the Commonwealth that this principle deals with what a new award should contain. It does not provide any direct guidance as to the exercise of the discretion to make or not to make an award.
[47] We accept that the history of industrial regulation is a relevant consideration. It is clear that the potential respondents have been free of award regulation since March 1993. We do not think it is useful to speculate on the number of employees who might still have the benefit of award conditions pursuant to deemed employment contracts.17 Nor is it possible to estimate the number of employers who commenced operation after 1 March 1993 and therefore have not previously been subject to award regulation. On any view it is likely that by far the majority of the potential employers and their employees have been operating under Schedule 1A conditions alone for a considerable period of time. All parties rely on this state of affairs to some extent, the SDA submitting that it serves to underline the disadvantage suffered by the employees and the employers submitting that it would be unfair now to rope the employers into the interim award.
[48] Frequent reference was made in the submissions to recent consideration by a Full Bench of the issues which might arise in a roping-in application in Bengalla.18 In that case the Full Bench took into account the statutory scheme, the nature and scope of the existing award and the character of the operations of the employers whom it was sought to rope in. We respectfully agree with that approach. In the application of that approach, it is clear that employers are entitled to an investigation of the facts of their case where they contest the roping-in.19 We would add that in exercising the discretion the Commission must take into account the fact that the provisions of Part VI, particularly ss.88A(a) and (b) and ss.88B(1) and (2), encourage the establishment of safety net awards.
[49] We have noted that the Commonwealth submitted that there is no suggestion that there was any particular focus on the circumstances of small retail businesses in the processes which led to the making of the interim award or its predecessors. The Commonwealth did not suggest any areas in which the award would require modification, suggesting that the onus is upon the SDA to demonstrate that each term of the interim award is "appropriately adapted" to the circumstances of small retail businesses. Three observations should be made about this submission.
[50] Firstly, the Commission has a discretion in deciding a roping-in application to insert special provisions in the roping-in award or to provide that certain provisions of the "parent" award should not apply. Secondly, we think the submission overstates the onus upon the SDA in a case of this kind. The discretion must be exercised in light of all of the relevant circumstances as revealed by the material before the Commission. Allegations that particular provisions in the interim award are inappropriate, backed up by some material, are likely to be more persuasive than generalised assertions that the applicant must prove its case. This is because of the history of the various provisions in the interim award, a history to which we have earlier referred. Thirdly, while, as we later find, around two thirds of the employers sought to be bound employ 10 or fewer persons, there are numerous employers who employ many more than 10 persons. It follows that while small businesses are important, they are not the only businesses sought to be bound.
The Extent of award Coverage
[51] ABS material supplied to us by the SDA indicates that in 1999 there were 35,900 businesses in the Victorian retail trade sector.20 The Commonwealth relied upon later data from the same source which indicates that the number of businesses is 38,700. Other research material suggests that there were 38,838 retail workplaces in Victoria in July 2000.21 On the basis of all of this material we accept that there are approximately 39,000 retail businesses in Victoria. The Commonwealth relied on ABS data in contending that 37,100 of those businesses employ fewer than 20 persons.22 No serious challenge was made to this estimate and we accept it.
[52] There are a total of 34 federal awards applying in the retail industry in Victoria. As we have indicated, the interim award is the only one with general application. In addition there are 11 awards applying to particular parts of the retail industry and 22 awards which apply to one employer only. Awards applying to particular parts of the industry include those applying to mannequins and models, hairdressing salons, fast food shops, hardware shops, pharmacies and the retail sector of the vehicle industry. The SDA estimates there are some 5,232 Victorian retail employers bound by a federal award. The ARAV suggested the number is only 3,900.
[53] The SDA produced research material to show that 21,528 or 55.4% of Victorian retail workplaces were subject to federal award or agreement coverage in July 2000.23 The material also shows that 68.5% of retail employees in Victoria (some 155,251 persons) were employed pursuant to federal awards or agreements at the same date.24 We accept that between 50 and 60% of Victorian retail workplaces are already covered by federal awards and agreements. We also accept that approximately 70% of the employees in the industry in Victoria are covered by federal awards and agreements. The extent of award coverage is a significant factor in this case. While the number of potential respondents is large by any standard, the fact that 70% of employees in the industry in Victoria are already covered by federal awards and agreements is a consideration which favours the SDA case. In so finding we are conscious that federal agreements are required to pass the no-disadvantage test as a condition of certification and therefore contain conditions at least comparable with those to be found in the federal awards applying in Victoria.
[54] We were told that there are currently 1323 respondents to the interim award. The SDA provided what purported to be a detailed analysis of the types of shops covered by the award. The analysis shows that of the total number of respondents 483 are video shops which were made respondent to the award in 2000. There are also some 135 employment agencies. In addition there are 282 respondents which could not be identified or were duplications. This leaves some 423 respondents operating a broad range of retail businesses. While this analysis was the subject of criticism, the figures we have set out may be taken as largely correct.
[55] There was some debate concerning the size of the businesses covered by the interim award measured by reference to the number of persons they employ. The SDA estimated that between 66.3 and 71.4% of the respondents overall have 10 employees or fewer. We are prepared to accept that around two-thirds of the respondents have 10 or fewer employees. It is not possible, however, to identify with any precision the employment profile of the 423 respondents in the general group.
[56] The SDA estimates that if the application for a roping-in award is granted a maximum of 13,000 Victorian retailers will be operating outside the federal system. If allowance is made for over 5,000 specialty retailers which the SDA intends to seek to rope into federal awards applying to such retailers and for other factors, the number of general retailers remaining outside the federal system may be as low as 2,400, in its submission. We accept the SDA's bona fides in producing these estimates and we appreciate the efforts they have made. We agree with the SDA, however, that they remain estimates rather than precise calculations and reliance on them must therefore be limited. Nevertheless, as we have indicated, we place more weight on the proportion of retail employees already covered by federal awards and agreements.
Disadvantage to Employees Subject to Schedule 1A Conditions.
[57] The SDA contended that retail employees in Victoria not subject to federal awards or agreements are disadvantaged because the conditions in Schedule 1A provide only limited protection. The key areas of disadvantage were said to be: the absence of provision for overtime, penalty rates, annual leave loading, shift loadings and severance entitlements.
[58] In this connection the SDA relied upon data in the ACIRRT Report. The report contains the results of a survey of a final sample of 835 workplaces undertaken by Dr Ian Watson of ACIRRT. The report was the subject of comment by the Commission in its decisions on applications to vary minimum wages pursuant to s.501 of the Act in 2001 and 2002.25 Dr Watson also undertook an examination of the August 2000 survey data in relation to the retail sector in Victoria. Dr Watson gave evidence about his survey and his examination of the data in respect of the retail and wholesale sector.
[59] The ACIRRT Report shows that, for the Victorian workforce as a whole, over 560,000 Victorian employees, or 33.2 per cent of all Victorian employees, were Schedule 1A employees, that is employees without federal award or agreement coverage.26 Dr Watson's assessment of the retail sector data was that 71,000 or 31.5% of retail employees were Schedule 1A employees.27
[60] The ACIRRT Report records that for Victoria as a whole 35,740 Schedule 1A employees were in receipt of minimum rates below $10.50 per hour28 and 235,009 Schedule 1A employees were paid at the minimum rate of pay paid in their workplace (as distinct from the minimum wage payable for the relevant classification under the relevant Minimum Wages Order).29 Further data suggested that 24% of Schedule 1A retail workers received a minimum hourly rate of $10.50 in August 2000, compared with 16.7% of federal award covered employees.30 However the data provide no clear evidence of the number of Schedule 1A workers in Victoria, either in the retail industry or generally, who were paid only at the level of the minimum wage applicable to them under the relevant Industry Minimum Wages Order. It is not possible to deduce from the survey what the relevant statutory minima were or whether employees were paid at or in excess of the statutory minima.
[61] The Victoria-wide survey also examined whether Schedule 1A workplaces provided overtime rates, penalty rates for weekend work, shift allowances and annual leave loading, despite the absence of a legal obligation in Schedule 1A to do so. Just under one-third of Schedule 1A workplaces paid annual leave loadings, about one-quarter paid penalty rates for weekend work, about 41% paid overtime rates and only 6% provided for the payment of shift allowances. It is not possible to estimate the extent to which Schedule 1A employees who would have qualified for payment of the various award benefits were denied such benefits.
[62] The ACIRRT material does not allow a quantitative assessment of the disadvantage suffered in practice by Schedule 1A employees, whether in the Victorian workforce as a whole or in the retail sector. We agree with the Commonwealth that many of the findings need to be treated with caution due to the larger confidence intervals and the small sample sizes involved, although we have reservations about the suggestion made by the Commonwealth that Schedule 1A employees enjoy an advantage flowing from greater flexibility offered to employers and employees under these "non-award workplace relations arrangements." It is probable that some Schedule 1A employees are paid wages at the minimum level prescribed and that they do not have the benefit of many conditions which commonly apply to employees covered by federal awards and agreements. We find that some Schedule 1A employees in the Victorian retail sector are likely to be so disadvantaged, although it is not possible to quantify either the numbers of such employees or the extent of that disadvantage. The disadvantage where it exists will vary depending principally upon the current hourly rate, the number of hours worked and the times at which they are worked by the employees concerned. We add that equally any rectification of the disadvantage, to the extent which it is currently occurring, will be reflected in increased labour costs for the business concerned.
[63] In advancing their submissions on the likely employment effects of making an order in the terms sought, the ARAV and the Commonwealth relied on the results of surveys of the parties to the dispute. The ARAV also relied on the evidence of a limited number of employer witnesses who gave their predictions of what might occur if the application were granted. The Commonwealth brought to our attention economic studies concerning the employment effects of minimum wage adjustments.
[64] The ARAV surveyed parties to the dispute who were their members and the Commonwealth surveyed employer parties to the dispute who were not represented by employer organisations in the proceedings. The results of the ARAV survey were tendered on the basis that "they ... provide some historical data and it is really a question of weight that the Commission does or does not place upon the evidence and we tender them, only insofar as they provide a picture of at least the respondents - the 164 respondents to the survey and what they said about it." The results of the Commonwealth survey were also tendered. Each of the surveys was subject to examination and criticism by a witness called by the SDA: Dr Ian Gordon, Director of the Statistical Consulting Centre, University of Melbourne.
[65] The ARAV sent survey forms to each of its 1,400 member companies who were subject of the SDA application and received 164 responses, a response rate of 11.7%. Dr Gordon illustrated the impact of this low response rate by pointing out that whilst 35% of the survey respondents traded on Sunday, the percentage of all of the 1,400 firms surveyed trading on Sunday could be anywhere between 4% and 92%. Dr Gordon made other criticisms which it is not necessary to detail. We are satisfied that the low response rate, by itself, means that reliance on the survey results must be heavily qualified. In particular no findings can be made in relation to the ARAV members subject of the SDA application. At best, the survey results indicate the position of the 164 firms responding. They cannot be taken to indicate the position of the proposed respondents as a whole, or the position of the ARAV members within that group.
The Commonwealth Survey
[66] The Department of Employment and Workplace Relations commissioned a professional survey company to conduct a survey of small retailers who were parties to the dispute but not represented by the ARAV, VECCI or AIG. The purpose of the survey was to obtain the views of the group concerning the impact of the interim award.
[67] A random sample of 2,500 employers was selected, of whom 773 were confirmed as eligible to complete the survey. Of that group 302, or 39%, responded to the survey. Dr Gordon gave evidence that 39% ought be regarded as the maximum response rate, with the true response rate being somewhere between 20% and 39%, depending upon how many of the 2,500 surveyed firms whose eligibility to be included in the survey was unknown fell within the scope of the survey. Dr Gordon regarded the maximum possible response rate of 39% as being low enough to create concerns about the reliability of the results.
[68] The major results reported in the Commonwealth survey are that if the terms of the interim award were applied:
· 29% of those businesses trading on Sundays (or around 11% of all respondents) said that they would decrease their trading hours and a further 18% (or around 7% of all respondents) would cease trading on Sunday;
· of those businesses trading on Saturdays 25% reported that they would decrease their trading hours and a further 3% would cease trading on Saturday;
· 55% of respondents reported that they would continue trading, 20% reported they would sell their business and 5% reported they believed the business would close, 21% were unsure;
· around half the surveyed businesses reported an expectation of increased administrative costs and reduced flexibility in rostering should the award have effect;
· 61% of respondents reported that the making of the award would not alter the number of persons employed by them, 34% reported they would reduce employment, 2% reported they would increase employment, with the remaining 3% being unsure; and
· (by extrapolation) there would be a decrease in employment in the order of 2,500 (or around 13% of employment by the entire survey population) should the award be granted in full.
[69] Sixty-two per cent of the survey respondents also reported that they paid more than current Schedule 1A pay and conditions to at least the majority of employees.
[70] The Commonwealth survey provides confirmation that some proportion of the employees whose terms and conditions of employment are based on Schedule 1A conditions are disadvantaged relative to employees covered by federal awards and agreements. Whilst caution is required in relying on the specific magnitudes reported, the finding that only 62% of respondents paid more than current Schedule 1A pay and conditions to at least the majority of employees, suggests that there is a sizeable group of retail employees in Victoria who are disadvantaged by not being covered by a federal award or agreement.
[71] It is self-evident that granting the award sought, in full or in part, would increase employment costs of any proposed respondent which is directly affected by the provisions in the interim award and which is not already affording such conditions to employees by way of over-award payment. The Commonwealth survey suggests that, in respect of such employers, there would be some adverse employment consequences. We accept that there would be an adverse effect in some cases. We do not accept, however, that the survey results provide a reliable basis for determining the extent of likely employment effects. There are several reasons for this.
[72] The maximum response rate to the survey was 39% and the actual response rate was between 20 and 39%. Having regard to Dr Gordon's evidence we think this response rate is too low. This gives rise to a second concern - the possibility of non-respondent bias. The non-respondents to the Commonwealth survey are self-selected, being those employers who chose not to respond. Non-respondent bias might occur through self-interest affecting response rates. Given the context of the survey and the advice in the covering letter that the Commonwealth was opposing the application, it is probable that those who would be affected by the proposed award would be more likely to respond than those who would not. Whilst some examination of non-respondents was carried out by reference to employment patterns, no comparison was made between respondents and non-respondents to test the extent to which the employers in each group afforded their employees conditions in excess of those prescribed in Schedule 1A.
[73] The survey responses reflect perceived effects reported by respondents, not actual effects. Significant variation may occur between expected and actual outcomes.31
[74] The employment effects reported are gross effects: that is, the perceived effect on employment within the respondent's firm. These effects might be offset, at least in part, by positive employment effects amongst other employers. As an example, a firm which ceased trading on a Sunday would reduce its employment but this loss in employment might be offset in the broader context by a nearby competitor increasing staff levels to accommodate increased trade on Sundays. This is not an unrealistic example since it is clear that many firms do trade on Sundays and pay penalty rates to their employees. The perceptions of the respondent employers may not take the impact of the proposed award on other employers into account. An employer's response to becoming bound by the interim award might vary depending upon whether a close competitor also becomes bound or is unaffected because it already applies the terms of the interim award and upon other factors.
[75] Further, the survey material identifies perceived employment responses to implementation of the award as claimed. The questionnaire sets out the collection of changed conditions for weekdays, Saturdays and Sundays. For example, information provided in the survey form on the page asking questions in relation to Sunday employment sets out the impact of the proposed award on Sunday hourly rates for permanent and regular part-time employees and casual employees and sets out additional obligations in relation to voluntary work on Sundays, the absence of ordinary time work on Sundays and meal allowances payable. Because the employer responses deal only with the aggregate effect of all the changes they provide no information as to the perceived effect of the components of the change. Accordingly they are of no assistance in assessing the perceived effect of an award in terms other than those proposed by the SDA.
Should there be an award?
[76] We have carefully considered all that has been put to us and we have reached the following conclusions. It is beyond doubt that the safety net provided in Part XV for Schedule 1A employees is less comprehensive and at a lower level than the safety net provided by the Commission's awards in the retail industry. In Victoria the number of retail employees covered by Schedule 1A conditions is far outweighed by the number covered by federal awards and agreements. We are also aware, and think it is significant, that the safety net provided by Part XV is inferior to that provided by the awards operating in other States. We do not discern any legislative intention that in the State of Victoria the safety net provided in Part XV should be regarded as the equivalent of the safety net provided by awards made under Part VI. So far as the interests of employees are concerned, we think it is fair that we apply to the employees of the respondents the benefit of an award safety net like that which the Commission has determined is appropriate for retail employees covered by awards made under Part VI. For us to do otherwise would be to apply inconsistent standards to employees in the same industry without justification for doing so.
[77] Those opposing the application have pointed to the difficulties which award respondency will bring for employers, including increased costs, reduction in flexibility and administrative inconvenience. They have also foreshadowed reductions in employment. We are concerned about the effects that a roping-in award might have upon employers, including those employing fewer than 20 employees and upon employment levels, particularly upon employment levels of young people. While the quantification of those effects is impossible on the data provided we have no doubt that some adverse effects are likely. But we do not think those considerations outweigh the equity arguments advanced by the SDA on behalf of the employees.
[78] We have taken into account the fact that most of the approximately 17,000 employers affected did not appear before us either to oppose the award or otherwise. Nevertheless, for the reasons we have identified some caution is desirable. We intend, therefore, that the roping-in should take place in a staged process so that all of the increases in labour costs are not introduced at the same time. Before dealing with implementation, however, we shall deal with the alternative arguments advanced, principally by the ARAV and supported by VECCI and AIG, that if we decide to make an award not all of the conditions in the interim award are suitable for application on the broad basis which the SDA seeks. This will involve an examination of the history of a number of the provisions which the ARAV has challenged and of their suitability in the current context.
[79] The issues which we intend to examine are the following:
· the conditions to apply to Sunday work;
· the conditions to apply to Saturday work;
· the minimum payment for evening work during the week; and
· exempt shop provisions including trading hours and penalty rates.
Sunday work
[80] The interim award currently provides that, for shops other than Class A Exempt shops and newsagents, Sunday is not part of ordinary hours and that Sunday work is voluntary and attracts a penalty rate of double time. For Class A Exempt shops ordinary hours are 7.00am to 10.00pm seven days a week. Ordinary hours for newsagents commence at 5.00am. The ARAV submitted that for all other shops Sunday should be ordinary hours between 9.00am and 6.00pm, that employees might therefore be rostered to work on Sunday and that the penalty rate for work during ordinary hours on Sunday should be time plus 25%.
[81] The ARAV points out that since 1 March 1993 retail employers including the proposed respondents have been permitted to engage staff at ordinary time rates on Sunday, subject only to the rights of employees who by virtue of the provisions of the Employee Relations Act 1992 (Vic) had a deemed contractual right to Sunday work provisions found in one of the expired state awards.32 We accept that a significant number of the proposed respondents engage employees to work specifically on Sundays. Those arrangements would be contrary to the interim award and could only be continued through agreements certified under the Act or AWA's.
[82] Roughly one third of the potential respondents apparently trade on Sundays.33 The practice of Sunday trading throughout large sections of metropolitan Melbourne and many provincial centres is too well known to require formal proof. Since 1998 the SDA has made agreements with 35 retailers. Around 90% of those agreements provide for ordinary hours on Sunday. Subject to exceptions for some types of shops, Sunday is not part of ordinary hours in Western Australia34 or the Northern Territory35 and is completely outside ordinary hours in South Australia36 and Tasmania.37 Generally, some part of Sunday is included in ordinary hours in New South Wales,38 Queensland39 and the Australian Capital Territory.40
[83] In 1992 the Industrial Relations Commission of Victoria considered an application by employers for the hours between 7.00am and 6.00pm on Sunday to be part of the ordinary hours of work prescribed by the then existing state awards.41 At the time of the application the law of Victoria permitted trading on up to 10 Sundays per year.42 In deciding the application the Full Commission said:
"... we do not consider that the limited provision made for trading on a maximum of 10 Special Sundays each year warrants a reassessment of the existing rates prescribed in the awards for Sunday work, In our view the legislative development does, of itself, demonstrate changed community attitudes or expectations by workers relating to Sunday work in the retail industry. Sunday has not become an accepted trading day for shops generally in Victoria and the demand for employees to work on Sunday is not a normal and general expectation in the retail industry."43
[84] Commissioner Lewin, as we have seen, made the federal awards, the predecessors of the interim award, in 1994. He decided to adopt unaltered the provisions for Sunday work contained in the state retail awards. His stated reasons for doing so were that he thought it inappropriate to alter the entitlements for existing employees when making an interim federal award, and that enterprise bargaining could occur on the issue pending the making of a first, as distinct from an interim, award.44
[85] On 18 February 1996 ARAV (then known as the Retail Traders Association of Victoria) made application to vary the three interim awards pursuant to the award simplification provisions in the WROLA Act. The variations sought included a provision that the hours between 7.00am and 6.00pm on Sunday be ordinary hours and work done during those hours attract a penalty of time and a half. While that part of the claim was subsequently abandoned, the ARAV continued to pursue a revised spread of hours in the simplification proceedings.
[86] In a decision handed down on 27 January 1999, Commissioner Hingley declined to include Sunday in ordinary hours (or to alter the penalty rate).45 In the course of his decision the Commissioner said:
"I am not persuaded, on what is before me, that the combination of deregulated shop trading hours and the evolution of new shopping lifestyles and consumer demands, consequentially means that for retail workers, an expanded daily spread of hours, late night hours and Saturday and Sunday work, are a sought after lifestyle corollary, diminishing the unsociability of such work schedules. It is a corollary of such changes, should the Commission so determine, that current or future employees with little or no bargaining power may be obliged to work extended evening, Saturday or Sunday hours against their domestic responsibilities or personal convenience as ordinary hours to retain or gain their employment."46
We of course accept the ARAV's submission that the Commissioner's decision was confined to the case before him. In this case we must take into account that for the vast majority of employees of the potential respondents, the possibility of being required to work on Sundays as part of the ordinary working week and without penalty payments is presently a reality.
[87] It is significant that the case before us directly involves some 17,000 employers. As we noted earlier, there are only 1300 respondents to the interim award. In total the SDA estimates some 5,232 Victorian retailers are covered by federal awards. In those circumstances we think it is appropriate that we approach this matter giving due weight to Commissioner Hingley's decision but conscious of the large number of employers, a majority of which operate relatively small businesses, who will be bound by our decision.
[88] On the material before us we have concluded we should recognise the reality that retailing is a seven-day a week industry in Victoria. In that respect we see no reason to distinguish between retailing and the many other industries which operate over seven days, whether those industries be in the services sector of our economy, in arts and entertainment, in health services, in manufacturing, distribution, or any other sector. In many of those industries the Commission's awards recognize work performed on Sunday as part of standard working hours. The spread of hours we have decided upon for non-exempt shops is 9.00am to 6.00pm. Although evidence on the precise opening and closing times of the potential respondents was sparse, the responses to the ARAV survey suggest that most Sunday trading occurs between those times.
[89] We turn now to the appropriate rate of remuneration for Sunday work. Arbitrated decisions on the issue are difficult to find. Reference was made to decisions in the hospitality and fast food industries. In the first decision the rate for work performed in ordinary hours on Sunday was fixed at time and three quarters.47 In the fast food industry the rate was fixed at time and a half.48 We are conscious of the fact that our decision permitting ordinary hours of work on Sunday has the potential to cause consequential claims in other awards, not least in the interim award itself. It is also significant that, so far as we are aware from the parties submissions, this is the first time the Commission has decided that ordinary hours of work should be permitted in non-exempt shops on Sundays. For that reason it is desirable that all parties potentially affected have the opportunity to make submissions, and if necessary call evidence, in relation to the appropriate rate of remuneration for work in ordinary hours on a Sunday. We therefore intend to provide an opportunity for further submissions on the issue. We shall make provision for a penalty rate of 50% for work performed in ordinary hours on Sunday as an interim measure.
Saturday Work
[90] We turn now to the rate of remuneration for work performed in ordinary hours on Saturdays. The interim award currently provides for a flat dollar loading per hour for work performed between 7.00am and 6.00pm in non-exempt shops and booksellers and stationers and between 7.00am and 10.00pm in Class A Exempt shops other than booksellers and stationers. The loading is fixed and will not increase until it equates to a loading of 25% of the full time ordinary rate.
[91] The explanation for the present award provisions is to be found in the decision of the Industrial Relations Commission of Victoria sitting in Full Session in 1992.49 In that decision the Victorian Commission decided that the appropriate rate for work during ordinary hours on Saturday was time and a quarter. At that time the rate for work on Saturday was time and a half. A provision was introduced to ensure that there would be no reduction in remuneration for ordinary hours worked on Saturdays and the new penalty of 25% was to be implemented over a period of time.
[92] In his 1994 interim awards decision, to which we have referred, Commissioner Lewin endorsed this approach to the implementation of the Industrial Relations Commission of Victoria's decision.50
[93] In light of this history we think the appropriate course is to adopt the rate of time and a quarter for work performed during ordinary hours on Saturdays. We shall also include a provision which protects the existing level of remuneration enjoyed by employees who work ordinary hours on Saturday. We shall ensure that the award we make provides for a rate of time and a quarter for full-time and part-time employees for work performed in ordinary hours on a Saturday, consistent with the decisions we have referred to. The rate for casuals working on Saturday should be provided for in a consistent way.
Evening Work
[94] We turn now to the issue of the additional amount to be paid for evening work. The interim award presently provides that the rate of remuneration for work performed during ordinary hours after 6.00pm on weekdays shall be time and an additional amount of 25% per hour, provided that the additional amount shall be paid for a minimum of three hours. The ARAV proposes that the three-hour minimum should not be applied to employees covered by any award we make. We do not see any justification for requiring the employers who will be bound by our award to make a minimum penalty payment of three hours. We accept the ARAV's submission.
Exempt Shops Provisions
[95] It is not necessary to traverse the history of the provisions. For many years trading hours legislation and the state and federal awards applying in the Victorian retail industry have afforded special recognition to shops selling a limited range of `convenience lines' - items for everyday consumption. The most recent example of that recognition is to be found in the interim award provisions which prescribe some different hours of work arrangements for employees in shops formerly described as Class A Exempt and Class B Exempt respectively.
[96] Turning first to Class A Exempt shops, now dealt with in cl.4.1 of the interim award, the provisions relating to those shops were altered significantly when the interim award was simplified by Commissioner Hingley in 2000. The principal alteration was to the definition of the class itself. Each of the three interim federal awards made by Commissioner Lewin in 1994 contained a definition of Class A Exempt shops. In his simplification decision Commissioner Hingley deleted some parts of the definitions of Class A Exempt shops because there were no such types of businesses respondent to the award at that time.51 The Commissioner provided, however, that employers which would formerly have qualified as Class A Exempt could gain exempt status on application to the Commission.52
[97] ARAV submitted that should an award be made in this case the number of employers potentially qualifying as Class A Exempt under the award will be very large. Further, it submitted that parts of the definitions excluded from the award by Commissioner Hingley because they had no application should be re-included in the award because of their likely application to some of the potential respondents. Finally, it submitted that the definition should be drafted so as to be capable of application of its own force without the need for an application to be made to the Commission.
[98] We accept the thrust of those submissions. Commissioner Hingley's approach was correct in the circumstances but a different approach is required in this case because of the number and variety of retail businesses to be bound by the award. We approve in principle the draft definition proposed by the ARAV.53 The award will not require an application to the Commission as a prerequisite to achieving Class A Exempt status.
[99] Class B Exempt shops are shops which are permitted by the interim award to employ persons to work on Sundays between the hours of 10am and 5pm at ordinary time. They are defined in cl.4.3 of the interim award. It is not necessary to set out the history of the Class B exempt provisions. In light of our decision to permit ordinary time to be worked on Sundays between the hours of 9.00am and 6.00pm there will be no need to make separate provision for Class B Exempt shops in the award we make.
Date of Operation
[100] We indicated earlier that we intend that the roping-in should take place in stages so that not all of the increases in labour costs occur at the same time. Despite the long delays in the proceedings we do not think any retrospective operation is appropriate. The substantive hearings were twice delayed as the result of consent applications for adjournment. Furthermore the major parties mounted substantial cases and in the circumstances some delay in determining the application was to be expected. There are no exceptional circumstances.
[101] In considering the implementation of the award, in addition to the matters already mentioned we have taken into account that the employers have had many months notice of the possibility of being roped-in to the award and that we have adopted the major part of the alternative submissions advanced by the employers. We have decided that, except in two respects, the award should operate one calendar month from the date of this decision. The two exceptions are the penalty rate for ordinary hours on Saturday and the interim penalty rate for ordinary hours on Sunday. Those provisions should commence to operate four calendar months from the date of this decision.
Conclusion
[102] We direct the SDA to prepare the order necessary to give effect to our decision as soon as practicable. We shall sit in February 2003 at a time and place to be notified in order to consider the further hearing of the application in relation to the rate to apply to work performed in ordinary hours on Sunday.
BY THE COMMISSION:
PRESIDENT
Appearances:
J. Ryan with S. Moore and J. Merlino for the Shop, Distributive and Allied Employees Association.
V. Paul with S. White for the Australian Retailers Association of Victoria.
E.R. Cole with C. Horan and M. Steele for the Minister for Employment and Workplace Relations.
F. Field for the Australian Industry Group.
P. Eberhard for the Victorian Chamber of Commerce and Industry.
P. Davison for the Master Grocers Association of Victoria.
T. Klemis for the Bread Manufacturers Industrial Association of Australia and the Baking Industry Association of Victoria.
W. Jones for the Restaurant and Catering Association of Victoria.
J. Greenham for Louis Vuitton.
Hearing details:
2001.
Melbourne.
August 8 (Before Boulton J, Watson SDP and Raffaelli C).
November 30.
December 18.
2002.
Melbourne.
July 9 (before Giudice J and Watson SDP).
August 5, 6, 7 and 8.
October 24 and 25.
6 Employee Relations Act 1992 (Vic), s.172(6).
8 See in particular the Commissioner's decision of 10 June 1999, Print R5283.
11 ABS Small Business in Australia (Cat No 1321.0), unpublished data.
13 Australian National Accounts - State Accounts publication (Cat No 5220.0).
14 The Report is entitled Statistical Research on the Victorian Labour Market. It is Part 2 of the Independent Report of the Victorian Industrial Relations Taskforce (2000).
16 (2002) 112 IR 411 at 469, Attachment A.
17 Employee Relations Act 1992 (Vic) s.24(3).
20 ABS Catalogue 1321.0 Table 3.4.
22 ABS Small Business in Australia (Cat No 1321.0), unpublished data.
25 PR907792 and (2002) 116 IR 328.
27 Exhibit SDA 8, Appendix C ,Table 3
30 Exhibit SDA 8, Table 8, Appendix C.
31 See, for example, the comments in the Safety Net Review Decision May 2002 with respect to Australian Bureau of Statistics New Capital Expenditure expectations data, PR002002 at para. [30].
32 See, Employee Relations Act 1992 (Vic), s.24(3).
33 Exhibit ARA 37, p.2 and Exhibit Commonwealth 2, Figure 2.1.
34 Shop and Warehouse (Wholesale and Retail Establishments) State Award 1997.
35 Retail, Wholesale and Distribution Employees (NT) Award 2000.
36 Retail Industry (South Australia) Award.
38 Shop Employees (State) Award.
39 Retail Industry Interim Award - State.
40 Retail and Wholesale Industry - Shop Employees - ACT Award 2000.
41 The Clothing and Footwear Shops Award, Electrical Furniture and Hardware Shops Award, Food Shops Award and General Shops Award.
42 Shop Trading Act 1997 (Vic).
51 Print S3125 para [43] and [44].
52 Ibid at para [45] and [46].
53 Exhibit ARA 41 pp.142 and 143.
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