STATEMENT

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

Section 157 proceeding
(C2019/5255)

4 yearly review of modern awards – classifications applying to employees who are required to hold undergraduate qualifications – proper relativity with the C10 classification rate found in the Manufacturing and Associated Industries and Occupations Award 2010.

Background

[1] On 14 December 2018, a Full Bench issued a decision (the December decision) 1 concerning an application by the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) for increases to the minimum rates of pay for pharmacists in the Pharmacy Industry Award 2010 (Pharmacy Award) on work value grounds. In a subsequent decision issued on 13 June 2019 (the June decision)2 the Full Bench summarised the three main conclusions reached in the December decision as follows:

‘(1) The APESMA had demonstrated that there was an increase in work value associated with the introduction of Home Medicine Reviews (HMR) and Residential Medication Management Reviews (RMMR) that justified a discrete adjustment to award remuneration by means of the introduction of a new allowance. We invited further submissions about the form of this allowance (including whether it should be an annual or weekly allowance or an allowance payable each time a HMR or RMMR is performed) and its quantum (first conclusion).

(2) We were satisfied that there had been an increase in the work value of pharmacists since 1998 in respect of the introduction of inoculations, the provisions of emergency contraception, the downscaling of medicines to pharmacy-only status, and a general increase in the level of responsibility and accountability. We invited parties to make further submissions as to how these findings should be reflected in an adjustment to remuneration, noting that not all pharmacists administer inoculations or dispense emergency contraception (second conclusion).

(3) There was a lack of alignment in pay rates and relativities as between pharmacists (who require a four-year undergraduate degree) under the Pharmacy Award and those for classifications requiring equivalent qualifications under the Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing Award), as well as a lack of a consistent relationship with the Australian Qualifications Framework (AQF). We considered that this might potentially constitute a work value consideration relevant to the 4 yearly review of the Pharmacy Award. We invited further submissions as to this matter, and foreshadowed the possibility that this aspect of the review might need to be referred back to the President of the Commission for consideration as to the procedural course to be taken pursuant to s 582 of the Fair Work Act 2009 (FW Act) since it might have implications for other awards of the Commission (third conclusion).’

[2] This Statement deals with the third conclusion.

[3] In the December decision the Full Bench invited further submissions in respect of third conclusion ([3] above) and foreshadowed the possibility that this aspect of the review might need to be referred back to the President for consideration as to the procedural course to be taken pursuant to s.582 of the Fair Work Act 2009 (the Act) since it might have implications for other awards of the Commission.

[4] Submissions were subsequently filed by the APESMA, the Pharmaceutical Society of Australia (PSA), the Pharmacy Guild of Australia (PGA), and the Australian Business Industrial and the NSW Business Chamber (ABI).

APESMA

[5] The APESMA submitted that the starting rate for a pharmacy intern should be aligned with the rate for the C2(b) classification (which requires an advanced diploma plus additional training) under the Manufacturing and Associated Industries and Occupations Award (Manufacturing Award), being $1132.40 per week. In the alternative, it submitted that the rate should be at least $952.60, which is equivalent to the minimum starting wage for a professional with a four year degree in the Health Professionals and Support Services Award 2010, the Nurses Award 2010, the Professional Employees Award 2010 (Professional Employees Award) and the Educational Services (Teachers) Award 2010 (Educational Services Award). It proposed that the existing relativities for pharmacist classifications in the Pharmacy Award be maintained by reference to the adjusted entry level rate. This would rectify the inequity identified in the third conclusion, it was submitted, and would also be justified by the changes in work value identified in the second conclusion.

Pharmaceutical Society

[6] The PSA submitted that the Full Bench should proceed to review and address the issue identified in the third conclusion.

Pharmacy Guild

[7] The PGA submitted that the adjustments to the rates it proposed would produce fair and relevant minimum wages and it was not necessary for the Commission to consider the relativity between pharmacists’ rates and those in the Manufacturing Award. In the alternative, it submitted that this matter should be referred back to the President for consideration as a common issue.

ABI

[8] ABI submitted 3 that the third conclusion raised issues of broad application to the operation of modern awards generally. The structure of classifications in the Manufacturing Award and the nexus with C10 had not been the subject of arbitral consideration and the Commission should be cautious in treating these as an unalterable or unquestionable reference point. It was, ABI submitted, reasonably open to question how ‘comfortably’ the manufacturing classification structure and the C10 nexus sat with a contemporary work value assessment as contemplated by s.156(4) and also ss.134 and 135 of the Act. ABI also contended that it was ‘highly questionable’ whether the AQF alone could serve as a satisfactory proxy for determining work value. Therefore, it was submitted,4 the matter should be referred for further consideration by the President as it was relevant to the jurisdiction as a whole and likely to affect all or a substantial number of modern awards.

[9] In the June decision the Full Bench stated that it was persuaded by the ABI’s submission and that this matter should be referred to the President for consideration as to the procedural course to be taken pursuant to s.582 of the Act. The Full Bench found that the issue has ramifications for other awards which contain classifications applying to employees who are required to hold undergraduate qualifications including, but not limited to the Professional Employees Award. It noted that a similar issue has been raised in connection with proceedings currently on foot concerning the Educational Services (Teachers) Award (Teachers Award).

Consideration

[10] There are currently 29 other modern awards that include classifications applying to employees who are required to hold undergraduate qualifications. 5 These modern awards are set out at Attachment A ranked in order by the highest proportion of award-reliant employees.6 The top four modern awards7 with the highest levels of award reliance are:

•  Children’s Services Award 2010;

•  Social, Community, Home Care and Disability Services Industry Award 2010;

•  Health Professionals and Support Services Award 2010; and

•  Nurses Award 2010

[11] Commission staff have prepared tables setting out the current wage rates and relativities to the C10 rate in the Manufacturing Award for the five awards, based on the weekly wage rates following the Annual Wage Review 2018-19 decision. These tables are set out at Attachment B. 8

[12] As adverted to earlier, the Teachers Award is currently the subject of proceedings concerning an application by the Independent Education Union (IEU) 9 to increase the rates of pay for all classifications of teacher under that award on work value grounds. One of the bases upon which the IEU’s application is advanced is that, as with the Pharmacy Award, the pay rates for undergraduate degree-qualified teachers in early childhood and school education are not properly or fairly aligned with classifications requiring equivalent qualifications in the Manufacturing Award or with the AQF. That application is being heard by a Full Bench in conjunction with an application by the IEU for an equal remuneration order for early childhood teachers, and closing submissions in the matters will be received on 4 and 5 September 2019.

[13] My provisional view is that the 29 awards with classifications requiring undergraduate degrees should be referred to a separate Full Bench for review and that the Full Bench commence its review with the four awards listed at [10] for efficiency purposes (priority group). However it will be necessary for this Full Bench to take into account the outcome of the IEU’s work value application in respect of the Teachers Award. Accordingly the review of modern awards listed in Attachment A will commence after the determination of the IEU’s application to vary the Teacher’s Award. The review of these awards will be conducted on the Commissioner’s own motion pursuant to s. 157 of the Act.

[14] The Full Bench may take into consideration the tables set out at Attachment B and will consider the alignment in pay rates and relativities; whether there is a lack of consistent relationship with the Australian Qualifications Framework (AQF); 10 and whether the AQF alone is a satisfactory proxy for determining work value.

[15] The transitional provisions in cl.26 of Schedule 1 to the Fair Work Act 2009 (the Act) enables the Commission to continue to apply the repealed s.156 of the Act to a review of a modern award conducted as part of the 4 yearly review that had commenced but had not been completed before 1 January 2018. Section 156(2) required the Commission to review all modern awards and empowered the Commission to make determinations varying or revoking modern awards and to make modern awards.

[16] While the 4 yearly reviews of the 29 awards at Attachment A have not yet been completed, there may be a question as to whether new issues can be dealt with in a continuing review under the transitional arrangements. 11 Whether or not these issues can be dealt with under the transitional arrangements, they clearly can be dealt with in award variation proceedings under s.157 of the Act. Proceedings under s.157 may be brought on the Commission’s initiative.12

[17] As an initial step, parties are invited to comment on:

•  the provisional view set out at [13] above;

•  the accuracy of the list of awards at Attachment A and whether they have an interest in other awards that should be part of this list

•  whether the Full Bench should consider additional awards as part of the priority group.

[18] Submissions should be sent to amod@fwc.gov.au by no later than 4pm on Friday 20 September 2019. Any submissions in reply are to be filed by 4pm on Friday 4 October 2019. Absent a request for an oral hearing by 4pm on Friday 4 October 2019, I propose to determine any contested issues on the papers.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

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Attachment A

List of modern awards that include classifications applying to employees who are required to hold undergraduate qualifications

Attachment B

Relativity between Children’s Services Award 2010 rates and Manufacturing and Associated Industries and Occupations Award 2010 rates

Relativity between Social, Community, Home Care and Disability Services Industry Award 2010 rates and Manufacturing and Associated Industries and Occupations Award 2010 rates

Relativity between Educational Services (Teachers) Award 2010 rates and Manufacturing and Associated Industries and Occupations Award 2010 rates

Relativity between Health Professionals and Support Services Award 2010 rates and Manufacturing and Associated Industries and Occupations Award 2010 rates

Relativity between Nurses Award 2010 rates and Manufacturing and Associated Industries and Occupations Award 2010 rates

Attachment C

Australian Qualifications Framework Levels

•  Level 1 – Certificate I

•  Level 2 – Certificate II

•  Level 3 – Certificate III

•  Level 4 – Certificate IV

•  Level 5 – Diploma

•  Level 6 – Advanced Diploma, Associate Degree

•  Level 7 – Bachelor Degree

•  Level 8 – Bachelor Honours Degree, Graduate Certificate, Graduate Diploma

•  Level 9 – Masters Degree

•  Level 10 – Doctoral Degree

 1   [2018] FWCFB 7621

 2   [2019] FWCFB 3949

 3   ABI submission 4 March 2019 at 3.25

 4   ABI submission 4 March 2019 at 3.30

 5   This total excludes the Manufacturing Award and the Pharmacy Award. The total of 29 includes six awards that are unclear on the requirement. These are the Banking, Finance and Insurance Award 2010, the Book Industry Award 2010, the Live Performance Award 2010, the Electrical Power Industry Award 2010, the Aboriginal Community Controlled Health Services Award 2010 and the State Government Agencies Award 2010

 6   Wright S & Buchanan J (2013), Award reliance, Workplace Research Centre, University of Sydney Business School, Fair Work Commission Research Report 6/2013, December, Table F.36

 7   The Education Services (Teachers) Award 2010 also has a high level of award reliance but it is the subject of separate work value proceedings, see [12] below

 8   C1 Manufacturing Award classification is covered by the Professional Employees Award

 9   AM2018/9

 10   The AQF is set out at Attachment C

 11   See [2019] FWCFB 361 at [21] – [23]

 12   Section 157(3)(a)