DECISION

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

4 yearly review of modern awards – Award stage – Group 2
(AM2014/198 and others)

4 yearly review of modern awards – award stage – exposure drafts – technical and drafting issues – Group 2 awards – outstanding issues.

[1] Section 156 of the Fair Work Act 2009 (the Act) requires the Fair Work Commission (the Commission) to review all modern awards every four years (the Review). In the Award stage of the Review the 122 modern awards have been divided into 4 groups. This decision deals with a small number of outstanding technical and drafting issues arising out of Group 2 of the Award stage.

[2] This is the third decision dealing with the technical and drafting issues in the awards in Group 2 and should be read in conjunction with the decisions issued on 10 October 2016 1 (the October 2016 decision) and 26 September 20182 (the September 2018 decision). Following the September 2018 decision there were outstanding issues in the following awards:

•  Graphic Arts, Printing and Publishing Award 2010

•  Health Professionals and Support Services Award 2010

•  Road Transport (Long Distance Operations) Award 2010

•  Road Transport and Distribution Award 2010

Graphic Arts, Printing and Publishing Award 2010 (the Graphic Arts Award)

[3] After the September 2018 decision there was one outstanding issue remaining in relation to the Graphic Arts Exposure Draft concerning the definition of the term ‘ordinary hourly rate’. We dealt with this issue at paragraphs [88] – [94] of the September 2018 decision, and outlined the preliminary view that all instances of the phrase ‘hourly rate’ in the exposure draft would be changed to ‘ordinary hourly rate’ and the following definition be inserted into the exposure draft:

‘ordinary hourly rate means the hourly rate for the employee’s classification specified in clause 8.2, plus any allowances specified as being included in the employee’s ordinary hourly rate or payable for all purposes’

[4] Two submissions were received in relation to the Graphic Arts Award, one from Ai Group 3 and one from ABI4. ABI does not oppose the preliminary view of the Commission to insert the definition of ordinary hourly rate (set out in paragraph [93] of the September 2018 decision).

[5] Ai Group made a detailed submission regarding the ordinary hourly rate issue, which also deals with an issue relating to payment of wages and overtime, penalties and public holidays (which was determined at paragraphs [79] – [87] of the September 2018 decision.

[6] In the September 2018 decision, we decided that references to the terms ‘time and a half’, ‘double time’, and ‘double time and a half’ in a number of clauses in the exposure draft, which reflect the current award, would be maintained. The relevant clauses of the exposure draft are as follows:

•  Clause 18.5

•  Clause 24.2(b)

•  Clause 24.3(a)

•  Clause 24.3(b)

•  Clause 24.4

•  Clause 31.3

•  Clause 31.4

[7] We adopted this course because we did not wish to introduce a new term or reference rate as this risked increasing the already complex nature of these provisions. Nor was it our intention to change entitlements as part of the drafting and technical stage of the Review process.

[8] In the September 2018 decision in relation to this issue we said the following:

‘Items 1 and 2—Payment of wages and Overtime, penalties and public holidays

[79] Ai Group submits that, consistent with earlier decisions of the Commission, the term ‘time and a half’ appearing in clause 18.5 should be replaced with ‘150% of the ordinary hourly rate’. Ai Group submits this ‘will make clear that the relevant penalty is to be calculated by reference to the award-prescribed rates and does not include over-award amounts.’

[80] Clause 18.5 of the exposure draft appears in the following terms:

‘If an employee is paid wages by cash and wages are not paid within ordinary working hours, all non-working time during which an employee is kept waiting for payment of wages will be paid at time and a half. The penalty in clause 18.5 will not apply where the delay is beyond the employer’s control.’ (original emphasis)

[81] Ai Group raises the same issue in relation to clauses 24.2(b), 24.3(a), 24.3(b), 24.4(a), 31.3 and 31.4, submitting that the terms ‘time and a half’, ‘double time’, and ‘double time and a half’ should be replaced with the terms ‘150% of the ordinary hourly rate’, ‘200% of the ordinary hourly rate’, and ‘250% of the ordinary hourly rate’, respectively.

[82] This issue was raised by the Ai Group in earlier submissions in 2015. The AMWU and Printing Industries Association of Australia (IPAA) sought to retain the current wording in the award. ABI was not opposed to changing the overtime amounts to percentages.

[83] Deputy President Bull conducted a conference of interested parties on 18 November 2015 and produced a Report to the Full Bench on 8 December 2015 which outlined the matters discussed at the conference and the outcome reached between the parties. In relation to this issue, the Report indicates that there is to be no change to percentages “as overtime appears to be compounding on shift work rates”.

[84] The Report to the Full Bench indicates that this matter was agreed between the parties, however it appears that Ai Group, at least, no longer agrees with keeping the provisions as they appear in the current award.

[85] In the July 2015 decision we said the following in relation to the terms “double time” and “200%”:

‘(vii) Double time versus 200%

[95] The AMWU and TCFUA, supported by a number of other unions submitted that replacing terms such as ‘time and a half’ and ‘double time’ with ‘150% of the minimum hourly rate’ or ‘200% of the minimum hourly rate’ (or ‘200% of the ordinary hourly rate’ in awards where there is an all purpose payment) reduces an employee’s entitlements under the award. They argue that where an employee is receiving an overaward payment, it is the higher rate that should be multiplied to calculate the amount payable. 66

[96] Modern awards provide a safety net of minimum entitlements. The modern award prescribes the minimum rate an employer must pay an employee in given circumstances. Overaward payments, while permissible, are not mandatory. Further, if an employer chooses to pay an employee more than the minimum amount payable for ordinary hours worked, the employer is not required to use that higher rate when calculating penalties or loadings. We are not persuaded by the submissions advanced by union parties and do not propose to replace the terms 150% and 200% with time and a half or double time, etc.’

[86] There is some complexity in this award as to how rates of pay are to be calculated in relation to the interaction with penalty rates. Clause 31.3 of the current award, which is reflected in clause 21.3(c) of the exposure draft, is as follows:

‘(c) The shift allowance is part of the employee’s weekly wage for the purpose of calculating the overtime rate payable in accordance with this award.’

[87] This means that overtime is compounded on the penalty rate. If we were to make the overtime rates a percentage of the ‘ordinary hourly rate’ this would remove the compounding of the penalty and lower the overtime rates for shiftworkers. We do not wish to introduce a new term or reference rate into the exposure draft as this risks increasing the already complex nature of these provisions. It is not our intention to change entitlements as part of the technical and drafting stage of this process. We have decided that the references to the terms ‘time and a half’, ‘double time’, and ‘double time and a half’ in the exposure draft, which reflect the current award, will be maintained.’

[9] In their submission of 12 October 2018, Ai Group refer to the clauses outlined at [5] above as the ‘impugned clauses’ and submit that they are not confined in their application to the performance of overtime by shiftworkers. In other words, they also apply to day workers. Ai Group submit:

‘We are concerned that by maintaining the references to ‘time and a half’, ‘double time’ and ‘double time and a half’ in the Exposure Draft, the Impugned Clauses may lend themselves to being interpreted to require the payment of an amount other than what is required by the Award during the performance of ordinary hours and/or in relation to employees performing daywork. This is particularly so in circumstances where the Exposure Draft uses different terminology (i.e. the term ‘ordinary hourly rate’) in a number of other provisions.’ 5

[10] Ai Group further submit they are concerned that our decision ‘may inadvertently create uncertainty about how the impugned clauses apply to specific categories of employees or in certain circumstances and as a result, give rise to disputation as to their proper interpretation in such circumstances.’ 6

[11] Ai Group then go on to submit that the definition of ordinary hourly rate which we outlined at [93] of the September 2018 decision be amended as follows:

‘ordinary hourly rate means the hourly rate for the employee’s classification prescribed by the award specified in clause 8.2, plus any allowances specified as being included in the employee’s ordinary hourly rate or payable for all purposes’ 7

[12] Ai Group further submit that the impugned clauses should be amended such that they required the calculation of the relevant penalty:

a) on a rate that includes the shift allowances prescribed by clause 21.3 of the Exposure Draft; and

b) on the ‘ordinary hourly rate’ in all other circumstances. 8

[13] Ai Group note that in the time frame they have not developed or proposed amendments to each of the impugned clauses.

[14] In light of the detailed submission made by Ai Group we propose to give all interested parties an opportunity to comment on the submission made by Ai Group. We will also provide Ai Group a further opportunity to file a written submission outlining their proposed amendments to each of the impugned clauses. All submissions in respect of these issues are to be filed by no later than 4.00pm on Monday 10 December 2018.

[15] The issues raised by Ai Group will be the subject of a conference before the President at 10am on 20 December 2018 in Sydney. If the issues are not resolved at the conference they will be determined on the papers, absent any request for an oral hearing. Any such request must be made by no later than 4pm on Thursday 20 December 2018.

Health Professionals and Support Services Award 2010 (the Health Professionals Award)

[16] In response to the summary of submissions document that was published on the Commission’s website on 13 September 2018 a submission was received from the Chiropractor’s Association of Australia (National) Ltd (CAA) on 26 September 2018 dealing with a number of technical and drafting issues which the CAA say were previously referred to in their submissions which do not appear in the summary of submissions.

[17] The CAA note that it shares the view held by the Fair Work Ombudsman that the Health Professionals Award does not clearly identify when overtime and other penalties apply. 9 It appears that the CAA are referring to an older version of the summary of submissions document that was published by the Commission in June 2016.

[18] The CAA also submits that there is confusion with:

•  the way the term “ordinary hours” is used interchangeably throughout the HPSS Award; and

•  whether or not the shiftwork loading is to be applied on a shift by shift basis, or whether it is applicable to all hours worked by the shiftworker and/or whether the loading is paid for the entire shift.

[19] The CAA submits that the above issues should remain in the summary of technical and drafting issues.

[20] The issues highlighted by the CAA were the subject of an extensive conference process conducted before Commissioner Roe in 2016 and were the subject of numerous reports issued by the Commissioner. 10 The issues were then dealt with in the October 2016 decision11 and outstanding matters were subsequently referred to a separate Full Bench to hear and determine.

[21] The recent summary document referred to in CAA’s submission was published prior to the September 2018 decision to assist with identifying the outstanding issues in relation to each exposure draft in Group 2. The issues referred to by the CAA were not included in the summary document as they have already been dealt with extensively and are not considered ‘outstanding’. It was never intended that the summary document be updated by the Commission following the September 2018 decision, rather exposure drafts will be updated and parties would be afforded one final opportunity to comment on the variations made to the exposure draft to incorporate the decision.

[22] We do not propose to take any further action in response to CAA’s submission.

[23] In the September 2018 decision we noted there was a substantive issue relating to overtime rates that would be referred to the Full Bench in AM2016/31. The issue relates to the wording of clause 19.1 of the exposure draft, which deals with overtime payments. Ai Group requested that the matter be determined by a separate Full Bench as it was substantive in nature.

[24] The hearings in this matter have been finalised and a decision reserved, therefore it is not practical that this bench deal with that issue. The issue will be referred to the Full Bench that will be constituted to deal with an issue relating to the part-time employment clause in the Health Professionals Award and the Horse and Greyhound Training Award (referred to at paras [109] – [116] of the September 2018 decision).

Road Transport (Long Distance Operations) Award 2010 (the RT (LDO) Award)

[25] Following the September 2018 decision there was one outstanding issue in the Road Transport (Long Distance Operations) Award 2010 relating to the articles of clothing allowance. We outlined a provisional view in the September 2018 decision that clause 12.3(b)(iii) be deleted from the exposure draft in its entirety as it appeared that the rationale for this clause in the exposure draft (and clause 14.2(b)(iii) in the current award) is unclear. 12 Interested parties were asked to provide a written submission relating to our provisional view.

[26] One submission was received from the National Road Transport Association, noting that they did not oppose the deletion as outlined by the Full Bench. 13 No other submissions were received. We confirm our provisional view. Clause 12.3(b)(iii) will be deleted from the exposure draft.

Road Transport and Distribution Award 2010

[27] In a decision issued on 30 September 2015 14 the Commission determined the general approach to be taken to casual loadings in all exposure drafts. In particular, in the case of awards which contain one or more ‘all purpose’ allowances the casual loading will be expressed as 25% of the ordinary hourly rate. The Full Bench stated that the preferable approach to any concerns as to whether certain allowances currently expressed as ‘all purpose’ would be at a higher rate for casual employees (due to the compounding effect of the casual loading), was to permit reconsideration, on an award by award basis, about whether any existing allowance should retain its ‘all purpose’ designation or be paid on a different basis.

[28] The RTD Exposure draft contains an all purpose allowance. Clause 13.3(a) states that special vehicle allowances is ‘paid for all purposes under this award.

[29] In the September 2018 decision we canvassed this issue (at [228]-[236]) and said (at [236]):

‘Parties will be invited to confirm if casual loading is in addition to the ‘minimum hourly rate’ or ‘ordinary hourly rate’ under this Award. The ‘ordinary hourly rate’ is the minimum hourly rate plus any applicable all purpose allowances.’

[30] No further submissions relating to this issue have been received. Absent any application to vary the all purpose designation of special vehicle allowances in the RTD Award the casual loading in the RTD Exposure Draft will be expressed as 25% of the ordinary hourly rate. Any application to vary this provision must be made by 4pm on Monday 3 December 2018. Any such application will be regarded as a substantive claim and will be referred to a separate Full Bench.

NEXT STEPS

[31] The issues raised by Ai Group in relation to the Graphic Arts Exposure Draft will be the subject of a conference before the President at 9.30am on 20 December 2018 in Sydney. All submissions in respect of these issues are to be filed by 4pm on Monday 10 December 2018. If the issues are not resolved at the conference they will be determined on the papers, absent any request for an oral hearing. Any such request must be made by no later than 4pm on 20 December 2018.

[32] Submissions should be sent to amod@fwc.gov.au.

[33] All outstanding technical and drafting issues for the remaining Group 2 awards have now been resolved or are being dealt with by separately constituted Full Benches.

[34] Each exposure draft will be updated and republished. Parties will be provided with one final opportunity to comment on the technical and drafting aspects of the exposure drafts in respect of the Group 2 awards. This will not be an opportunity to reargue matters which have already been determined, but will provide interested parties with an opportunity to comment on variations made to the exposure drafts to incorporate decisions relating to common issues and any technical drafting issues determined in this decision.

[35] A Statement regarding the process for finalising the exposure drafts and concluding the award stage of the review will be issued in due course.

PRESIDENT

Attachment A—List of Group 2 awards

Group 2 (19 awards)

 1   [2016] FWCFB 7254

 2   [2018] FWCFB 5986

 3   Ai Group submission, 12 October 2018

 4   ABI submission, 15 October 2018

 5   Ai Group submission, 12 October 2018 at 9

 6   Ai Group submission, 12 October 2018 at 13

 7   Ai Group submission, 12 October 2018 at 18

 8   Ai Group submission, 12 October 2018 at 22

 9   See Item 26 summary of submissions document dated 21 June 2016

 10   See Reports dated 30 October 2015, 27 November 2015, 5 January 2016 and 26 April 2016

 11   [2016] FWCFB 7254 at [97] – [102]

 12   [2018] FWCFB 5986 at [216] – [219]

 13   National Road Transport Association submission, 10 October 2018

 14   [2015] FWCFB 6656

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