| [2020] FWC 6647 |
| FAIR WORK COMMISSION |
STATEMENT |
Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective
Review of certain C14 rates in modern awards
(C2019/5259)
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 10 DECEMBER 2020 |
Review of the classification rates at the C14 rate in modern awards – introductory rates – Next steps.
[1] This statement concerns the review of modern awards which have classification rates at the C14 level which are either not transitional rates or where the transition period is not specified.
[2] The issue first arose in the 2018-19 Annual Wage Review proceedings. 1 In those proceedings the Australian Council of Trade Unions (ACTU) and Australian Catholic Bishops Conference contended that the Expert Panel should set the C14 rate at a level which lifted certain hypothetical single-earner household types; that is, single earners in a couple with one or two children, above the 60 percent relative poverty line. The Expert Panel rejected that proposal, predominantly on the grounds that the size of the increase required to lift these household types above the relative poverty line would run a significant risk of disemployment and adversely affecting the employment opportunities of low-skilled and young workers.2 In reaching its conclusion the Expert Panel also noted that the C14 rate was more often than not a ‘stepping stone’ or transitional classification to higher-paid work:3
‘Low-paid employment is often temporary and can act as a ‘stepping stone’ to higher-paid work. Almost two-thirds of workers who enter low paid employment leave within one year and most move into higher paid work. 4 The C14 (or NMW) rate of $719.20 per week only features in 45 of the 122 modern awards (details of which are set out in Appendix 1). In 39 of those modern awards it is a transitional rate from which employees progress after a period…
In 8 of those modern awards the transition to a higher rate occurs after 38 hours of induction training. In 18 of those modern awards the transition occurs after 3 months and the remaining 13 modern awards in which the NMW rate is transitional either other periods are specified or the relevant classification appears to be transitional but no particular period is specified…
In the remaining 6 modern awards 5 containing a C14 (or NMW) rate, the related classification is not a transitional level. It is not clear why these 6 modern awards prescribe a rate at this level, which is not a transitional rate. This is an issue which should be the subject of further examination in the current 4 yearly Review of modern awards.
We would also observe that the remaining 77 modern awards only provide for wage rates above the C14 or NMW rate.’ 6 (footnotes omitted)
[3] On 28 August 2019, I issued a Statement 7 (the August 2019 Statement) concerning the review of modern awards which have classification rates at the C14 level which are either not transitional rates or where the transition period is not specified.
[4] As noted in the quote above, some 45 modern awards include a rate of pay at the C14 (or National Minimum Wage, NMW) rate which is currently $753.80 per week, calculated on the basis of 38 ordinary hours, or $19.84 per hour. Some of those modern awards include multiple classifications at the NMW rate. These 45 modern awards may be divided into 5 categories:
(i) 8 modern awards in which the transition to a higher classification level occurs after 38 hours induction training;
(ii) 18 modern awards in which the transition occurs after 3 months;
(iii) 5 modern awards in which the C14 classification is transitional but a period other than 3 months is specified;
(iv) 8 modern awards in which the C14 classification appears to be transitional but no particular transition period is specified; and
(v) 6 modern awards in which the C14 classification level is not a transitional level.
[5] In the August 2019 Statement, I expressed the provisional view that the 14 awards in catgories (iv) and (v) be referred to a Full Bench for review. The review would consider whether the C14 classifications in each award provides a fair and relevant safety net of terms and conditions. Parties were invited to comment on the provisional view and the accuracy of the list of awards. The relevant awards are set out below.
• Cement, Lime and Quarrying Award 2020 8
• Concrete Products Award 2020
• Meat Industry Award 2020
• Oil Refining and Manufacturing Award 2020
• Port Authorities Award 2020
• Rail Industry Award 2020
• Stevedoring Industry Award 2020
• Air Pilots Award 2020
• Broadcasting, Recorded Entertainment and Cinemas Award 2020
• Dry Cleaning and Laundry Industry Award 2020
• Funeral Industry Award 2020
• Sugar Industry Award 2020
• Travelling Shows Award 2020
[6] A number of unions and employer groups filed submissions 9 in response to theAugust 2019 Statement.
[7] Conferences of interested parties were convened on 8 October 2019 10 and 29 November 2019.11 At the conferences the Media, Entertainment and Arts Alliance advised that it would not be making an application in relation to the Broadcasting, Recorded Entertainment and Cinemas Award 2020. The Construction, Forestry, Maritime, Mining and Energy Union advised that12 it will not being making an application in relation to the Port Authorities Award 2020 or the Stevedoring Industry Award 2020.
[8] A further Statement 13 was issued on 2 December 2019 (the December 2019 Statement) outlining the next steps that were to be taken as follows:
• The unions will make applications to vary the relevant awards in the manner they propose;
• The ACTU will coordinate the unions’ application process and advise my chambers (by email to chambers.ross.j@fwc.gov.au) when that process is complete; and
• Following this a further conference will be convened and the Commission will prepare a background paper including the information set out at [7] of the Statement.
• After all of the relevant applications have been filed the Commission will prepare a background paper setting out the following information in relation to each contested application:
• The pre modern awards which informed the making of the current modern award.
• A comparison between the classification structure in the modern award and the relevant pre modern awards.
• Whether there had been any recent work value assessments in respect of any of the relevant pre modern awards.
[9] The December 2019 Statement invited the ACTU to provide a written request for certain statistical information from the EEH survey it had foreshadowed and it did so in correspondence dated 19 December 2019. The Commission agreed to correspond with the Australian Bureau of Statistics (ABS) and a copy of that correspondence can be found here. In short, the corresponce requested that the ABS clarify:
• whether the ACTU’s treatment of casual loading is appropriate; and
• if a finer level of data can be analysed using data collected in the EEH survey but not available as part of the microdata.
[10] A copy of the ABS’s response is annexed to this statement under Annexure A. The ABS responded to the Commission that:
• it considers the treatment of casual loading a reasonable approach in identifying and adjusting for employees that receive casual loading; and
• it does not consider the data requested suitable for release.
[11] As at today’s date no applications or requests for assistance have been received by the Commission. The Commission does not propose to take any further steps in relation to this issue on its own iniative at this time. The offer of assistance to facilitate discussions remains open and interested parties may request such assistance by email to chambers.ross.j@fwc.gov.au.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR725312>
Annexure A
4 Ibid at para. 230.
5 Air Pilots Award 2010 (First officers and second pilots of Single engine UTBNI 1360 kg and Single engine 1360 kg-3359 kg are paid at the NMW (Schedule B.1.1). An aerial Application Pilot with less than 1000 hours of flying experience is also paid at the NMW (Schedule D.9.1). It is noted that there additions to salary in B.1.3, B.1.4 and D.9.5 which may mean that employees receive an amount greater than the NMW); Broadcasting, Recorded Entertainment and Cinemas Award 2010 (A Grade 1 employee is paid at the NMW (cl. 14.3). Clause 14.2(a) suggests that there may not be any employees paid at this rate under the award); Dry Cleaning and Laundry Industry Award 2010 (A Dry cleaning employee level 1 is paid at the NMW level (cl. 14.1(a)); Funeral Industry Award 2010 (A grade 1 employee is paid at the NMW level (cl. 14.1); Sugar Industry Award 2010 (The C14/L2-milling general operator is paid at the NMW level (cl. 40.1). The BT1 rate (cl. 42.1) applies to ‘new starters’ who undertake a 3 month probation period) and Travelling Shows Award 2010 (A Grade 1 employee is paid at the NMW).
6 [2019] FWCFB 3500 at [337] – [341]
8 The Cement and Lime Award 2010 has been amalgamated with the Quarrying Award 2010 to become the Cement, Lime and Quarrying Award 2020.
9 United Voice – 26 September 2019, Australian Federation of Air Pilots – 27 September 2019, ABI and NSWBC - 27 September 2019 and 19 November 2020, Australasian Meat Industry Employees Union – 27 September 2019, The Australian Workers’ Union – 27 September 2019, CFMMEU – Manufacturing Division – 27 September 2019, Australian Industry Group – 27 September 2019 and 11 November 2020, Australian Manufacturing Workers’ Union – 3 October 2019, AFEI – 18 November 2020
10 Transcript 8 October 2019
11 Transcript 29 November 2019
12 Correspondence dated 29 November 2019