Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards – common issue – award flexibility – time off instead of payment for overtime – TOIL at overtime rate – award specific issues.

1. Introduction

[1] A model term for providing time off instead of payment for overtime (TOIL) was determined in a decision of 8 July 2016 1 (the July 2016 model TOIL term) as part of the 4 yearly review of modern awards (the Review). A subsequent decision of 11 July 20162 varied awards which provided for overtime but did not give employees the option of taking time off instead of payment for working overtime and a number of award terms that provided TOIL at ‘ordinary rates’, that is, an hour off for an hour of overtime worked. A further decision on 31 August 20163 dealt with TOIL provisions in another 13 awards including those in the Maritime industry and Resources sector. After the 31 August 2016 decision, only 29 of the 113 modern awards which make provision for paid overtime remained outstanding.

2. TOIL at overtime rates

[2] Twenty-one of the remaining 29 awards (listed in Attachment A) currently provide for TOIL at ‘overtime rates’, that is, they provide an equivalent amount of time off as would have been paid, e.g. an hour of work at time and a half entitles an employee to one and a half hours’ off. A statement issued on 5 September 2016 4 (the 5 September 2016 Statement) outlined how the Full Bench would deal with these awards, as well as the 8 awards that were the subject of award-specific submissions during an earlier consultation process.

[3] In the decision of 6 October 2015, 5 the Full Bench determined that employees who are covered by awards that provide TOIL at ordinary rates should be afforded additional safeguards to protect them from any pressures arising from the ‘financial incentive’ that employers may have to encourage an employee to take TOIL rather than payment for overtime worked.6 That decision went on to observe that the same level of safeguards are not necessary in awards where TOIL is calculated by reference to the overtime rate, as there is less financial incentive for employers to enter into a TOIL arrangement.7

[4] In the 5 September 2016 Statement we expressed the provisional view that the July 2016 model TOIL term should be modified in respect of those awards that currently provide for TOIL at ‘overtime rates’, to remove the requirement in the model term for a TOIL agreement to be ‘in writing’. Accordingly the modified term (the model overtime rates TOIL term) makes the following changes to the July 2016 model TOIL term:

(i) deletes the words ‘in writing’ in respect to the requirement ‘that an employer and employer may agree to the employee taking time off …’ (paragraph T.T(a));

(ii) deletes the requirement that each amount of overtime requires a separate written agreement (paragraph T.T(b));

(iii) deletes the details of the content of the separate written agreement (paragraph T.T(c));

(iv) modifies the way that time off is accrued to be in accordance with the penalty applying to the time worked (paragraph T.T(d) and Example);

(v) deletes the requirement that the written agreement must be kept as an employee record (paragraph T.T(h));

(vi) deletes the requirement that a separate written agreement applies to requests to take time off under s.65 of the Act; and

(vii) does not insert the Schedule containing the template agreement.

[5] The modified term (the model overtime rates TOIL term) is at Attachment B. Attachment C outlines the changes made to the July 2016 model TOIL term as outlined above.

[6] In their submission of 23 April 2015 the Textile, Clothing and Footwear Union of Australia submitted that the requirement that an agreement to take TOIL must be in writing is an important safeguard in their industry 8. In order to retain such a safeguard, the requirement for an agreement to be ‘in writing’ as outlined in paragraph [4] at (i) will be preserved in the awards that currently provide such a condition9.

[7] Draft determinations inserting the modified TOIL term were prepared and published for comment on 15 September 2016. In those drafts, the TOIL term retained the words ‘may agree in writing� in awards which currently require that any agreement to take TOIL must be made in writing. It should be noted that while the agreement must be in writing, the detailed requirements at items (ii), (iii), (v), (vi) and (vii) listed in paragraph [4] have not been included in those draft determinations.

[8] Three of the 21 awards in Attachment A were listed for conference on 12 September 2016 to confirm whether or not the existing award term provides that TOIL is to be taken at the overtime rate. The awards are:

[9] Following the conference, a further statement was issued on 14 September 2016 10 (the 14 September Statement). We now turn to each of these three awards.

Airport Employees Award 2010

[10] No submissions were made at the conference in relation to the Airport Employees Award 2010. In accordance with the 14 September Statement consideration of the TOIL term in this award (clause 30.8) will be deferred until the Award stage of the review and will include a plain language re-write of the current clause, which appears to be unnecessarily complex. 11

Electrical Power Industry Award 2010

[11] At the conference the interested parties made submissions on whether or not time off in the Electrical Power Industry Award 2010 is provided for at the overtime rate. Clause 26.3 of the award provides:

‘26.3 Time off instead of overtime payment

Where overtime is worked and payment is due in the terms of this clause, time off may be granted instead of payment on the following basis:

(a) One day off may be substituted for a portion of the payment due with the balance of the payment being made in money where:

(i) at least a full day of overtime is worked on a Saturday or Sunday by a day worker; or

(ii) at least a full shift of overtime is worked on a rostered day off by a shiftworker, or where a shiftworker works a double shift in the absence of the incoming shift relief.

(b) A maximum of 10 such days off will be granted in any year. The year period for the granting of the maximum of 10 days will be the leave year for each employee. The taking of time is subject to operational requirements.

(c) The granting of such time off will not be used as a basis to increase the number of employees located at any establishment.’

[12] The Construction, Forestry, Mining and Energy Union submitted that the arrangement under clause 26.3 means that TOIL is to be taken at the overtime rate rather than on an hour for hour basis. That view was not opposed at the conference. 12 A draft determination replacing clause 26.3 in its entirety with the model overtime rates TOIL term was published on 26 September 2016. The draft determination removes the restrictions in the current award term as to when TOIL is available. The interested parties were given the opportunity to comment on the draft determination. No submissions were received opposing the insertion of the model overtime rates TOIL term and the determination (corrected for minor typographical errors) will now be issued.

Horse and Greyhound Training Award 2010

[13] The Australian Workers’ Union (AWU) made submissions at the conference regarding the Horse and Greyhound Training Award 2010. A provisional view was expressed that clause 22.3 of that award provides that TOIL is to be taken at the overtime rate. 13 A draft determination was published on 26 September 2016 replacing clause 22.3 with the model overtime rates TOIL term. No submissions were received opposing the draft determination and a variation determination will be issued in those terms.

Remaining awards

[14] Draft determinations to vary the remaining 18 awards providing for TOIL at overtime rates listed in Attachment A were published on 15 September 2016 and interested persons were provided with four weeks to comment.

[15] Apart from three submissions received identifying minor errors with a cross-reference, no submissions were received opposing the insertion of the model overtime rates TOIL term in these awards. The typographical issues have been addressed and we will now issue the determinations in final form.

3. Award-specific submissions

3.1 General

[16] In directions issued on 6 October 2015, interested persons were given an opportunity to make submissions on why a particular award should not be varied to include a model TOIL term. Submissions in relation to 8 awards were received and the awards were listed for conference on 12 September 2016. The 8 awards are:

[17] Further statements and directions were issued on 14 September 2016 14 and 26 September 2016 (the 26 September Statement).15

[18] As stated in the 14 September Statement, the insertion of the model TOIL term in the Live Performance Award 2010 will be referred to the Award stage of the Review.

[19] In accordance with the process set out in the 14 September Statement, draft determinations for the four awards below were published for comment on 26 September 2016 and interested persons were provided an opportunity to make submissions by 19 October 2016:

[20] No submissions were received opposing the draft determinations in respect of the Clerks—Private Sector Award 2010; the Medical Practitioners Award 2010 and the Social, Community, Home Care and Disability Services Award 2010. 16 Variation determinations in respect of these three awards will now be issued in final form.

[21] Two submissions were received in response to the draft determination in respect of the Broadcasting and Recorded Entertainment Award 2010. The Media, Entertainment and Arts Alliance (MEAA) supported the draft determination as published. The Television Networks (Seven Network Operations; Nine Network Proprietary Limited and Network Ten Proprietary Limited) were not opposed to a variation determination being made but made one suggested amendment to item 6 of the draft determination.

[22] Clause 52.3 of the Broadcasting and Recorded Entertainment Award 2010 which applies to journalists, currently provides as follows:

‘52.3 Daily overtime will be compensated for in the following manner.

(a) Up to and including the first hour of overtime will either be given as time off instead of payment, at the rate of time and a half, within the following fortnight or paid for at the rate of time and a half, at the discretion of the employer.

(b) Overtime in excess of one hour will be paid for at the rate of time and a half for the first hour and double time after that.

(c) An employee may, by mutual agreement with their employer, opt to take overtime as time off instead of payment at the rate of single time within the next 12 months. Such agreement will be recorded in writing.

(d) Any time allowed off duty instead of overtime will be deemed to be ordinary hours for the day or days on which the time off instead is taken.

(e) When an employee is not given the days or nights off duty as provided for in clause 45—Hours of work the employee will be paid at the rate of double time for all work done on any such day or days with a minimum payment for four hours.’

[23] The draft determination proposed the deletion of clause 52.3(a) and of the words “in excess of one hour” appearing in clause 52.3(b). The resulting provision would be:

‘52.3 Daily overtime will be compensated for in the following manner.

(a) Up to and including the first hour of overtime will either be given as time off instead of payment, at the rate of time and a half, within the following fortnight or paid for at the rate of time and a half, at the discretion of the employer.

(b) (a) Overtime in excess of one hour will be paid for at the rate of time and a half for the first hour and double time after that.

…

[24] The above change was opposed by the Television Networks who submitted that:

‘ …clause 52.3(b) provides Overtime in excess of one hour will be paid for at the rate of time and a half for the first hour and double time after that. The combination of 'in excess of one hour' and 'for the first hour' mean that double time only applies after two hours — not one.’

[25] Accordingly they seek that the words 'first hour' be replaced with 'first two hours' to preserve the existing entitlement by amending item 6 of the draft determination as follows:

‘6. By deleting the words “in excess of one hour” appearing in clause 52.3(b), by changing the words ‘first hour’ with ‘first two hours’ and renumbering clause 52.3(b) as clause 52.3(a).’

[26] If the Television Networks’ proposal was adopted, the varied clause would then read:

‘52.3 Daily overtime will be compensated for in the following manner.

(a) Overtime will be paid for at the rate of time and a half for the first two hours and double time after that.’

[27] The MEAA submission did not address the issue raised by the Television Networks.

[28] In these circumstances a further conference will be convened by Deputy President Kovacic, to seek to resolve the remaining issue in contention.

3.3 Awards subject to further consideration

[29] In the 26 September Statement, interested parties were given an opportunity to file submissions in respect of the insertion of the model TOIL term in the remaining three awards:

[30] These awards were the subject of a hearing on 5 December 2016.

Journalists and Published Media Award 2010

[31] Nationwide News Pty Ltd, Bauer Media Pty Limited and Pacific Magazines Pty Limited (the Media organisations) oppose the insertion of the model TOIL term in the Journalists and Published Media Award 2010, on the basis that clause 22.3 of the award currently provides that TOIL is the default position, rather than payment for overtime. The MEAA supports the insertion of the model TOIL term.

[32] We note that clause 4.10(a) of the award provides that Part 5—Hours of Work and Related Matters does not apply to employees employed in certain online publications (namely those online publications not associated with a print publication). In the context of the Award stage of the Review the MEAA is seeking to vary the coverage of the award – and in particular to delete clause 4.10(a). The outcome of the MEAA’s application may affect the coverage of the model TOIL term, were it to be inserted into the award.

[33] In these circumstances we have decided to defer further consideration of the variation of the TOIL provisions in this award until after the MEAA’s coverage application has been determined. At that time these proceedings will be relisted, for mention, to provide the interested parties with an opportunity to be heard as to how the matter is to proceed. In the meantime, Deputy President Kovacic will convene a conference of the interested parties with a view to resolving, or at least narrowing, the contested issues in relation to the TOIL term.

Pastoral Award 2010 and Horticulture Award 2010

[34] As a result of a conference held on 5 December 2016, the AWU and National Farmers’ Federation (NFF) have reached an agreed position in respect of the TOIL term to be inserted into these awards. On 7 December 2016 the parties submitted agreed draft determinations varying the Pastoral Award 2010 and Horticulture Award 2010 to insert a modified version of the TOIL term. Draft determinations will be published by the Commission shortly and all interested persons may send comments on the drafts to amod@fwc.gov.au by 4.00 pm on Wednesday 25 January 2017.

4. Next steps

[35] The TOIL provisions in the Airport Employees Award 2010 and Live Performance Award 2010 will be dealt with during the Award stage of the Review. The remaining 20 awards providing for TOIL at overtime rates identified at Attachment A will now be varied to insert the model overtime rates TOIL term.

[36] Variation determinations will be issued in respect of the Clerks—Private Sector Award 2010; the Medical Practitioners Award 2010 and the Social, Community, Home Care and Disability Services Award 2010, as set out at paragraph [20] above.

[37] A further conference will be convened in respect of the Broadcasting and Recorded Entertainment Award 2010, to seek to resolve the remaining issue in contention.

[38] Further consideration of the variation of the TOIL provisions in the Journalists and Published Media Award 2010 will be deferred until after the MEAA’s coverage application has been determined, though as set out at paragraph [33] above a further conference will be convened regarding the award with a view to resolving, or at least narrowing, the contested issues in relation to the TOIL term.

[39] Draft variation determinations will be published in respect of the Pastoral Award 2010 and the Horticulture Award 2010, taking into account the agreed AWU/NFF position. Interested persons may send comments on the drafts to amod@fwc.gov.au by 4.00 pm on Wednesday 25 January 2017.

PRESIDENT

ATTACHMENT A—Modern awards with TOIL at overtime rates

21 awards with TOIL at overtime rates

NOTES:

¹ The TOIL provision in this award will be dealt with during the Award stage

ATTACHMENT B—Model overtime rates TOIL term

T.OT Time off instead of payment for overtime

(a) An employee and employer may agree [in writing]¹ to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

(b) The period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made.

EXAMPLE: By making an agreement under clause T.OT an employee who worked 2 overtime hours at the rate of time and a half is entitled to 3 hours’ time off.

(c) Time off must be taken:

(i) within the period of 6 months after the overtime is worked; and

(ii) at a time or times within that period of 6 months agreed by the employee and employer.

(d) If the employee requests at any time, to be paid for overtime covered by an agreement under clause T.OT but not taken as time off, the employer must pay the employee for the overtime, in the next pay period following the request, at the overtime rate applicable to the overtime when worked.

(e) If time off for overtime that has been worked is not taken within the period of 6 months mentioned in paragraph (c), the employer must pay the employee for the overtime, in the next pay period following those 6 months, at the overtime rate applicable to the overtime when worked.

(f) An employer must not exert undue influence or undue pressure on an employee in relation to a decision by the employee to make, or not make, an agreement to take time off instead of payment for overtime.

(g) An employee may, under section 65 of the Act, request to take time off, at a time or times specified in the request or to be subsequently agreed by the employer and the employee, instead of being paid for overtime worked by the employee. If the employer agrees to the request then clause T.OT will apply for overtime that has been worked.

Note: If an employee makes a request under section 65 of the Act for a change in working arrangements, the employer may only refuse that request on reasonable business grounds (see section 65(5) of the Act).

(h) If, on the termination of the employee’s employment, time off for overtime worked by the employee to which clause T.OT applies has not been taken, the employer must pay the employee for the overtime at the overtime rate applicable to the overtime when worked.

Note: Under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause T.OT.

¹ The requirement to make an agreement ‘in writing’ has been retained in awards where this is a current award condition

ATTACHMENT C—Model overtime rates TOIL term – changes to July 2016 model TOIL term tracked

T.T Time off instead of payment for overtime

(a) An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

(b) Any amount of overtime that has been worked by an employee in a particular pay period and that is to be taken as time off instead of the employee being paid for it must be the subject of a separate agreement under clause T.T.

(c) An agreement must state each of the following:

(i) the number of overtime hours to which it applies and when those hours were worked;

(ii) that the employer and employee agree that the employee may take time off instead of being paid for the overtime;

(iii) that, if the employee requests at any time, the employer must pay the employee, for overtime covered by the agreement but not taken as time off, at the overtime rate applicable to the overtime when worked;

(iv) that any payment mentioned in subparagraph (iii) must be made in the next pay period following the request.

Note: An example of the type of agreement required by this clause is set out at Schedule I. There is no requirement to use the form of agreement set out at Schedule I. An agreement under clause T.T can also be made by an exchange of emails between the employee and employer, or by other electronic means.

(d) The period of time off that an employee is entitled to take is the same as the number of overtime hours worked equivalent to the overtime payment that would have been made.

EXAMPLE: By making an agreement under clause T.T an employee who worked 2 overtime hours at the rate of time and a half is entitled to 2 3 hours’ time off off.

(e) Time off must be taken:

(i) within the period of 6 months after the overtime is worked; and

(ii) at a time or times within that period of 6 months agreed by the employee and employer.

(f) If the employee requests at any time, to be paid for overtime covered by an agreement under clause T.T but not taken as time off, the employer must pay the employee for the overtime, in the next pay period following the request, at the overtime rate applicable to the overtime when worked.

(g) If time off for overtime that has been worked is not taken within the period of 6 months mentioned in paragraph (e), the employer must pay the employee for the overtime, in the next pay period following those 6 months, at the overtime rate applicable to the overtime when worked.

(h) The employer must keep a copy of any agreement under clause T.T as an employee record.

(i) An employer must not exert undue influence or undue pressure on an employee in relation to a decision by the employee to make, or not make, an agreement to take time off instead of payment for overtime.

(j) An employee may, under section 65 of the Act, request to take time off, at a time or times specified in the request or to be subsequently agreed by the employer and the employee, instead of being paid for overtime worked by the employee. If the employer agrees to the request then clause T.T will apply, including the requirement for separate written agreements under paragraph (b) for overtime that has been worked.

Note: If an employee makes a request under section 65 of the Act for a change in working arrangements, the employer may only refuse that request on reasonable business grounds (see section 65(5) of the Act).

(k) If, on the termination of the employee’s employment, time off for overtime worked by the employee to which clause T.T applies has not been taken, the employer must pay the employee for the overtime at the overtime rate applicable to the overtime when worked.

Note: Under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause T.T.

2. By inserting Schedule I as follows:

Schedule I—Agreement for time off instead of payment for overtime

Name of employee: _____________________________________________

Name of employer: _____________________________________________

The employer and employee agree that the employee may take time off instead of being paid for the following amount of overtime that has been worked by the employee:

Date and time overtime started: ___/___/20___ ____ am/pm

Date and time overtime ended: ___/___/20___ ____ am/pm

Amount of overtime worked: _______ hours and ______ minutes

The employer and employee further agree that, if requested by the employee at any time, the employer must pay the employee for overtime covered by this agreement but not taken as time off. Payment must be made at the overtime rate applying to the overtime when worked and must be made in the next pay period following the request.

Signature of employee: ________________________________________

Date signed: ___/___/20___

Name of employer
representative: ________________________________________

Signature of employer
representative: ________________________________________

Date signed: ___/___/20___

 1   [2016] FWCFB 4258.

 2   [2016] FWCFB 4579.

 3   [2016] FWCFB 6178.

 4   [2016] FWCFB 6333

 5   [2015] FWCFB 6847.

 6   Ibid at paras [34]–[36].

 7   Ibid at [36].

 8   See for example clause 39.5(a) of the Textile, Clothing, Footwear and Associated Industries Award 2010.

 9   The awards that currently provide for agreement in writing are shown in the table in Attachment A

 10   [2016] FWCFB 6591.

 11   Transcript – 12 September 2016 at para. 9.

 12   Ibid at paras 10–52.

 13   Ibid at paras 54–77.

 14   [2016] FWCFB 6591.

 15   [2016] FWCFB 6887.

 16   We note that a submission by the ASU identified a typographical error in clause 28.3(f) of the draft variation determination in respect of this award and that error will be corrected in the final determination.

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