[2022] FWCFB 189
The attached document replaces the document previously issued with the above code on 17 October 2022.
The decision has been refiled to correct the information at footnote 38 by deleting [2020] FWCFB 5336 and inserting [2020] FWCFB 5636.
Modern Awards, Economics and Research Section
On behalf of the Associate to President Ross
Dated 19 October 2022
| [2022] FWCFB 189 |
| FAIR WORK COMMISSION |
STATEMENT |
Fair Work Act 2009
s.156—4 yearly review of modern awards
4 yearly review of modern awards
(AM2019/17)
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 17 OCTOBER 2022 |
4 yearly review of modern awards – finalisation of the 4 yearly review.
1. Introduction
[1] This Full Bench was constituted on 2 September 2019 1 to oversee the finalisation of the 4 yearly Review of modern awards (the Review). This Statement finalises the Review save for a small number of outstanding matters which are set out in the ‘next steps’ section of the statement.
[2] The Review commenced in early 2014 and was conducted in accordance with s.156 of the Fair Work Act 2009 (Cth) (FW Act).
[3] The Federal Court described the Commission’s task in the Review as:
‘The terms of s 156(2)(a) require the Commission to review all modern awards every four years. That is the task upon which the Commission was engaged. The statutory task is, in this context, not limited to focusing upon any posited variation as necessary to achieve the modern awards objective, as it is under s 157(1)(a). Rather, it is a review of the modern award as a whole. The review is at large, to ensure that the modern awards objective is being met: that the award, together with the National Employment Standards, provides a fair and relevant minimum safety net of terms and conditions. This is to be achieved by s 138 – terms may and must be included only to the extent necessary to achieve such an objective.’ 2
[4] On 12 December 2018, s.156 was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (the 4 Yearly Review Amending Act) with effect from 1 January 2018. Under the application and transitional provisions of the 4 Yearly Review Amending Act, a review of an award that commenced but was not completed before 1 January 2018 can continue under the terms of the repealed provisions.
[5] The Review was the first opportunity for the Commission to thoroughly consider the operation of modern awards since the award modernisation process commenced in 2008 in response to the request from the then Minister for Employment and Workplace Relations. 3
[6] Prior to the award modernisation process and the commencement of modern awards on 1 January 2010, there were some 3323 instruments (including State and federal awards) setting pay and conditions across the country. There are now 121 modern awards of general application. Substantially decreasing the number of awards has reduced the incidence of multiple modern awards applying in one enterprise and has made it easier to identify the modern award application to a particular enterprise or type of work. In research undertaken by the Commission in 2016, employee and employer organisation participants acknowledged that the modern award system was a ‘vast improvement’ on the previous system. 4
2. Review Process
[7] The conduct of the Review has been open and transparent. Materials considered in the Review have been published on the Commission’s website (with the exception of material subject to confidentiality orders). Interested parties registered to receive these materials through the Commission’s subscription services and were notified of the publication of any new material.
[8] Throughout the Review the Commission has:
• Dealt with approximately 256 individual matters including some 66 applications by industrial parties for substantive changes to particular modern awards
• Held over 1300 days of hearings, conferences and mentions
• Received submissions from thousands of parties, including employers, unions and individual employees
• Published over 25,000 documents (including submissions, witness statements, correspondence, notices of listings and transcript) on the Commission’s website.
• Issued over 700 Decisions and Statements.
• Sent over 1700 emails to subscribers.
[9] The Review was divided into 3 parts, an initial stage which dealt with preliminary issues, an award stage during which each award was reviewed and redrafted and a common issues stage.
[10] The preliminary issues stage dealt with the scope and nature of the Review. The 4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues decision was issued on 17 March 2014. 5 Paragraph [60] of that Decision set out 10 general observations about the Review.
3. Award stage
[11] During the award stage of the Review, awards were divided into 4 groups and each modern award was reviewed and redrafted.
[12] Simplifying the language and structure of modern awards has been a central focus of the Review.
[13] In a Statement 6 issued 16 September 2022 (September 2022 Statement), the Commission outlined the plain language project undertaken as part of the Review. The September 2022 Statement provides an outline of the Commission’s process to create a new modern awards structure which follows a more logical path and its efforts to improve accessibility across the awards system.
[14] Of the 121 modern awards, 3 remain to be restructured and renamed. These are:
• Aged Care Award 2010
• Children's Services Award 2010
• Social, Community, Home Care and Disability Services Industry Award 2010
[15] The September 2022 Statement indicated that in the absence of any award terms being identified for further plain language redrafting, the plain language project element of the Review would conclude with the finalisation of the 3 outstanding awards above and the resolution of issues relating to shutdown provisions.
[16] The Commission received one submission in response to the September 2022 Statement from the Australian Industry Group (Ai Group). 7 That submission related to the Social, Community, Home Care and Disability Services Industry Award 2010 and did not indicate that any further provisions in other awards required plain language redrafting.
[17] As such, as indicated in the September 2022 Statement, the plain language project element of the Review will conclude once the matters identified in that Statement have been resolved.
[18] Throughout the Review, the Commission has sought opportunities to further simplify modern awards. While opportunities have been taken and the accessibility of award terms improved, some of the proposals for simplification identified by the Commission have been opposed by the industrial parties for various reasons, including that particular terms in certain awards have a historical or contextual meaning which simplification may disturb. Despite this, the issue of award complexity is regularly raised in public commentary as a barrier to award compliance.
[19] The conclusion of the Review is an appropriate time to reflect on the issue of award complexity. The FWC will continue to be available to assist parties in addressing perceived complexity in modern award terms, upon request.
[20] We note at the outset that the nature of modern awards under the FW Act is quite different from the awards made under previous legislative regimes. 8 In times past awards were made in settlement of industrial disputes. The content of these instruments was determined by the constitutional and legislative limits of the tribunal’s jurisdiction, the matters put in issue by the parties (i.e. the ‘ambit’ of the dispute) and the policies of the tribunal as determined from time to time in wage fixing principles or test cases. An award generally only bound the employers, employer organisations and unions which had been parties to the industrial dispute that gave rise to the making of the award and were named as respondents.
[21] Modern awards are very different to awards of the past. They are not made to prevent or settle industrial disputes between particular parties. Rather, the purpose of modern awards, together with the National Employment Standards (NES) and national minimum wage orders, is to provide a safety net of fair, relevant and enforceable minimum terms and conditions of employment for national system employees (see FW Act ss.3(b) and 43(1)). They are, in effect, regulatory instruments that set minimum terms and conditions of employment for the employees to whom the modern award applies (see FW Act s.47).
[22] Modern awards do not include named respondents. Modern awards apply to, or cover, certain persons, organisations and entities (see FW Act ss.47 and 48), but these persons, organisations and entities are not ‘respondents’ to the modern award in the sense that there were named respondents to awards in the past. The nature of this shift is made clear by s.158 which sets out who may apply for a determination making, varying or revoking a modern award. Under previous legislative regimes, the named respondents to a particular award would automatically have the requisite standing to make such applications; that is no longer the case. 9
[23] The Review has led us to identify the following 3 areas of perceived award complexity:
• The length of modern awards
• The meaning of award terms
• The complexity of the entitlements themselves
(i) Length of modern awards
[24] The length of modern awards has been cited during the Review as a factor which adds complexity to modern awards. The FWC has added a number of provisions to awards to try and reduce the regulatory burden for award users including:
• hourly rates,
• schedules of calculated rates; and
• tables of facilitative provisions.
[25] Each of these additions has been made to clarify entitlements for award users. They also provide ready access to what are highly referenced award terms in a clear table format. Examples have also been included in awards. The 2014 exposure drafts incorporated a select number of examples to provide additional guidance to employers and employees as to the operation and interpretation of award provisions. The Full Bench in AM2014/1 noted that a number of parties had opposed the inclusion of examples, submitting that this did not advance the objective of making awards simple and easy to understand, or raising questions about their legal effect. 10 The Full Bench subsequently determined that the inclusion of relevant and accurate examples would make modern awards easier to understand and for that reason they would be included where appropriate.11
[26] The Commission also proposed including summaries of NES entitlements to assist awards users. To this end, the exposure drafts published at the commencement of the Review incorporated extracts and summaries of NES entitlements as well as notes to draw the reader’s attention to entitlements relating to annual leave, personal/carer’s leave, parental leave, community service leave, public holidays and redundancy. This was done to assist parties in understanding the interaction between the relevant award and the NES in a single document. The exposure drafts also included a new provision drawing attention to the requirements of the FW Act and the Fair Work Regulations 2009 {FW Regulations) in relation to pay slips.
[27] A common concern, particularly amongst employer organisations, was the inclusion of notes and references to the NES and other legislative provisions in the modern award, which is a legal instrument. 12 Ai Group raised concerns regarding the potential for summaries and notes to mislead the reader.13 The Housing Industry Association (HIA), Australian Federation of Employers and Industries (AFEI) and the Master Builders Association (MBA) all supported the removal of notes from the legal instrument in their oral submissions.14
[28] The MBA advanced a submission based on ‘competitive neutrality’:
‘3.4 Master Builders also raises the issue of competitive neutrality. Because of the variations between the NES and the modern award in respect of the matters discussed for example in paragraph 3.3 of this submission and in relation to specific matters such as a unique provision about annual leave in the Building and Construction General On-Site Award 2010, we produce a publication entitled National Employment Standards with notations for the Building and Construction General On-Site Award 2010 which we publish and sell to the industry. We would not want the accuracy of the detailed terms of this publication to be affected by the NES summaries or it thought by industry participants to be unnecessary to consult the detail of the NES in its original form or as published by Master Builders.’ 15
[29] Some unions also expressed concerns about notes in specific awards including the Australian Council of Trade Unions (ACTU) and the then Textile, Clothing and Footwear Union of Australia (TCFUA).16
[30] In the context of providing for ordinary hourly rates of pay to be included in schedules to awards, the Full Bench later determined that the exposure drafts would include a note which draws employers’ attention to their obligations under the FW Regulations regarding record keeping and payslips, including the requirements to separately identify allowances. 17
[31] The redrafting process has extended the length of some modern awards, as complex clauses are ‘unpacked’ into subclauses and expressed in plain language. The insertion of schedules of hourly rates and examples have also added to the length of some modern awards, while ensuring that information about minimum entitlements is provided in a simple and accessible form. However, the Commission’s view is that length per se does not increase complexity. To the contrary, the inclusion of appropriate examples and calculated rates provides assistance to award users.
(ii) Meaning of terms
[32] The meaning of particular award terms has also been raised as an issue of complexity throughout the Review. However, it has been the experience of the Commission that when attempts have been made to address this issue in various awards, they have become grounded in inertia.
[33] For example, in the 2014 exposure draft 18 for the Maritime Offshore Oil and Gas Award 2010, the Commission sought the assistance of stakeholders in the reworking of the term ‘victualling’ in clause 11.2(c)(iv) to replace it with a more easily understood term such as ‘food supplies’.
[34] The Australian Workers’ Union (AWU) and Maritime Union of Australia did not oppose the change. However, Australian Shipowners Association, Australian Institute of Marine and Power Engineers and Ai Group opposed any changes and submitted that the term ‘victualling’ is a settled and well understood term in the maritime industry and should remain unaltered. 19
[35] In a Report to the Full Bench in AM2014/77 dated 28 April 2015 20, Commissioner Bull stated that ‘[p]arties are comfortable with understanding the term victualling and agree that it should remain in the Exposure draft as is’.
[36] No change was made to the use of the term ‘victualling’ in the award.
(iii) Entitlements
[37] The range and scale of wage rates in the modern awards system, has also been identified as adding complexity for award users. The Commission sought to address this during the Review by:
• Identifying opportunities to further reduce the number of modern awards; and
• Creating a database of calculated wage rates which is available to the public.
[38] We note that complexity here may mean different things. It may mean that a particular entitlement is not expressed clearly and so is deemed to add to complexity. However, on occasion the criticism is directed at the substantive entitlement itself, rather than the way the entitlement is expressed or displayed in a modern award. The Commission has heard argument throughout the Review regarding removing or rationalising entitlements. These have been considered within the legislative framework and determined on the merits of each individual case.
Number of awards
[39] Prior to the commencement of modern awards on 1 January 2010 there were some 3323 instruments (including State and federal awards) setting pay and conditions across the country. There are now 121 modern awards of general application. 21
[40] At the start of the Review, the Commission published a Draft Guide to the Award Stage and proposed that parties, or the Commission, could suggest options for amalgamating existing modern awards ‘where the provisions [could] be merged without changing entitlements or obligations, and this [would lead] to fewer awards applying within an enterprise’. 22
[41] Research undertaken by staff of the Commission showed there was a degree of commonality in the provisions of a number of the following awards which may be examined to determine whether it would be appropriate to combine them: 23
Professional Diving Industry (Recreational) Award 2010 [MA000109] and
Marine Tourism and Charter Vessels Award 2010 [MA000093]
Pharmacy Industry Award 2010 [MA000012] and
General Retail Industry Award 2010 [MA000004]
Clerks—Private Sector Award 2010 [MA000002] and
Legal Services Award 2010 [MA000116]
[42] The Marine Tourism and Charter Vessels Award 2010 and the Professional Diving Industry (Recreational) Award 2010 were amalgamated into a single exposure draft which was published on 7 October 2014. However, the majority of interested parties did not support the amalgamation of the 2 awards. The AWU expressed no preference. 24
[43] AFEI and the Association of Marine Park Tourism Operators opposed the amalgamation of the 2 awards and submitted that the amalgamation demonstrates that in many respects the 2 awards are different and that the only commonality between the 2 awards was in respect of the model clauses. 25
[44] Given the absence of any support for the amalgamation of these awards the Commission did not pursue the proposal.
[45] Later, as part of the review of substantive claims in the Children’s Services Award 2010 (Children’s Services Award) and the Educational Services (Teachers) Award 2010 (Teachers Award) the Full Bench in AM2018/18 and AM2018/20 noted that during the course of proceedings a number of witnesses commented on the difficulty associated with referring to 2 awards. The Full Bench referred to the witness statement of Ms Paton who said:
‘Despite a long history in the child care industry, I find the Awards difficult to interpret and apply because they are not straightforward or written in plain English. I also do not think the Awards work together or consider all the other legislation that applies to the ECEC sector.’ 26
[46] The Full Bench also referred to the witness statement of Ms Viknarasah who said:
‘I often find that the Awards are not simple or easy to understand. I find it confusing and difficult to try to adhere with all the requirements placed on me by the Awards as well as keeping up with the legislation and regulations which I will mention below. I also find it inefficient that every centre has to read and understand two Awards, even though Teachers could easily be covered under the Children’s Services Award.’ 27
[47] In response, the Full Bench stated that it did not see a good reason as to why the operator of an ECEC centre should have to refer to 2 awards in order to determine the terms and conditions applicable to the employees at their centre and expressed the provisional view that the relevant part of the Teachers Award be transferred to the Children’s Services Award. 28
[48] The Independent Education Union (IEU) and all but one of the employer organisations did not support this proposal. 29
[49] Given the views expressed, the Full Bench decided not to press the transfer of parts of the Teachers Award to the Children’s Award, but went on to say that:
‘[…] there may be an alternative means of addressing this issue – namely by replicating the relevant wage rates from the Teachers Award in a schedule to the Children’s Award and by providing a cross reference to the other applicable clauses in the Teachers Award (with a hyperlink to those clauses). Such an approach would obviate the need for an ECEC employer to access two awards while retaining all relevant terms in the Teachers Award. […]. 30
[50] No party supported the alternative proposal. 31 The IEU advanced a different proposition and Community Connections Solutions Australia (CCSA) proposed that the issue be addressed by inserting a new clause 4.8 in the award. The IEU and CCSA proposals were the subject of discussion at a conference where a general consensus emerged to the effect that no variation be made to the Children’s Award.32 Given the views of the parties, the Full Bench did not proceed to vary the awards to address the coverage issue.
The modern awards pay database
[51] Although not strictly part of the Review, the Modern Awards Pay (MAP) database was developed as a result of the addition of calculated rates in most awards during the Review. The primary purpose of the database was to streamline the update to the modern award documents flowing from an annual wage review. The database contains the dollar values for the minimum rates of pay, allowances, overtime and penalty rates in all modern awards. The data for each modern award is divided into 5 spreadsheets:
• Awards
• Classifications
• wage-related allowances
• expense-related allowances
• penalty rates.
[52] The Commission has made data from the Modern awards pay database freely accessible to the public in order to give users an opportunity to explore other potential uses for the data. The Commission is currently developing an Application Programming Interface (API) that will enable software communication between the MAP database and other applications, such as workforce management software and payroll systems. Being able to communicate changes, updates and information through one information source via the API will enable payroll providers and software developers to more readily create award compliance solutions.
4. Common Issues
[53] Common issues were proposals for change across all or most modern awards and included:
• Abandonment of employment (AM2016/35)
• Annualised salaries (AM2016/13)
• Apprentice conditions (AM2014/192)
• Award flexibility/facilitative provisions (AM2014/300)
• Blood donor leave (AM2016/36)
• Casual employment (AM2014/197)
• Family and domestic violence clause (AM2015/1)
• Family friendly work arrangements (AM2015/2)
• Micro business schedule (AM2014/306) 33
• National training wage (AM2016/17)
• Overtime for casuals (AM2017/51)
• Part-time employment (AM2014/196)
• Part-day public holidays (AM2014/301)
[54] As a result of the common issue proceedings, the following award provisions have been inserted into all modern awards during the Review:
1. An entitlement to 5 days’ unpaid leave to deal with family and domestic violence. 34
2. A right to request conversion from casual employment to part-time or full-time employment. 35
3. A right to request flexible working arrangements in certain circumstances.
4. Three new provisions relating to annual leave which allow employers and employees to more effectively manage their leave; firstly, a term allowing employees to cash out annual leave; secondly a term which allows employees to apply for and take leave in advance of the entitlement to leave accruing and thirdly a provision which allows employers to direct employees to take leave in circumstances where they have an excessive leave balance. Template agreements for cashing out annual leave and taking annual leave in advance were included as schedules to each modern award.
5. The provisions about taking time off in lieu of payment for overtime (TOIL) were standardised in the 21 modern awards that had such a term prior to the Review. A TOIL term was also inserted in 92 other modern awards that did not previously provide this flexibility. A template agreement for TOIL was inserted as a schedule to each of the relevant modern awards.
[55] As set out at [1] above, this statement finalises the Review save for a small number of matters. These matters are set out below:
Overtime for casuals – tables of rates (AM2017/51)
[56] One of the common issues dealt with during the Review was the issue of overtime entitlements for casual employees. This common matter was allocated to a Full Bench for determination. Decisions in relation to this matter were issued in October 2019 36, August 202037 and October 202038. These Decisions resulted in the publication of 97 Determinations varying modern awards.
[57] In its October 2020 decision, the Full Bench indicated that the insertion of overtime rates tables for casual employees would be dealt with in due course. We have decided not to undertake this process as a part of the Review. Any interested party seeking the insertion of a table of rates for casual employees undertaking overtime may make an application to vary the relevant award to insert those rates.
Shutdown provisions (AM2016/15)
[58] This common issue matter deals with annual leave shutdown clauses in modern awards. The Full Bench dealing with this matter has issued a decision 39 expressing provisional views regarding the variation of some 78 modern awards. Draft variation determinations have been published. The Full Bench has provided the interested parties with an opportunity to file submissions and any evidence upon which they seek to rely, in response to the Full Bench’s provisional views and conclusions or concerning the terms of the draft determination.
Part-day public holidays (AM2014/301 and AM2019/17)
[59] This common issue matter deals with the review of the part-day public holiday schedules (Schedules) contained in 112 of the 121 modern awards. The Schedules were first made by a Full Bench in 2012 40 following the introduction of part-day public holidays from 7.00pm to midnight on Christmas Eve and New Year’s Eve in South Australia.41
[60] The Schedules were made on an interim basis and a Full Bench is reviewing their operation.
[61] The Full Bench dealing with this matter has issued a provisional view that the Schedules be deleted from all awards in which they currently appear on the basis that where any Schedule makes provision for a matter in a way which does not simply repeat or reflect the NES or another term of the award, such provision should be incorporated in the body of the award by way of an appropriate amendment. The Full Bench published draft Determinations outlining the proposed changes to each affected award.
[62] The Full Bench has provided the interested parties with an opportunity to file submissions regarding the provisional view and the terms of the draft Determination.
Supported Employment Services Award 2020 substantive claims (AM2014/286)
[63] The substantive matters in the Supported Employment Services Award 2020 remain before a Full Bench including the form of a new minimum wages assessment structure for employees covered by that award. Hearings in this matter were held on 15, 16, 17 and 18 August 2022. At the conclusion of the hearing the Full Bench indicated that further directions would be issued, including perhaps further submissions. Subject to those matters, the Full Bench reserved its decision.
[64] The remaining 4 Yearly Review matters set out above are expected to be finalised by the end of 2022.
[65] As set out earlier, the 4 yearly Review function was repealed with effect from 1 January 2018 meaning that there will be no more 4 yearly reviews. However, the Commission may still make, vary or revoke a modern award either on application or on its own motion.
[66] It is open to anyone with the requisite standing under s.158 of the FW Act to make an application to vary a modern award.
[67] The Review has required the Commission to consider a significant number of variations to modern awards and to accord procedural fairness to all interested parties prosecuting and responding to various claims. The Review has required significant input from Commission staff, stakeholder organisations and individuals. We thank all those who have contributed to the Review.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR746888>
2 CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123
3 The Transitional Review of modern awards completed in 2013 was narrower in scope than the 4 yearly review. See [2014] FWCFB 1788 at [19].
4 Multiple modern award coverage and the utility of majority clauses report, May 2016.
7 Ai Group, Submission,
8 National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [18].
9 See, for example, The Australian Industry Group re Manufacturing and Associated Industries and Occupations Award 2012 [2012] FWA 2556.
10 [2014] FWCFB 9412, [59]–[62].
11 [2014] FWCFB 9412, [63].
12 [2014] FWCFB 9412, [32].
13 [2014] FWCFB 9412, [32].
14 [2014] FWCFB 9412, [32].
15 Master Builders Australia submission, 17 November 2014.
16 [2014] FWCFB 9412, [33].
17 [2015] FWCFB 4658 at [55]–[57].
18 Exposure draft, Maritime Offshore Oil and Gas Award 2010, 23 September 2014.
19 See Maritime Offshore Oil and Gas Award 2010 summary of submissions, 17 November 2014.
20 Report to the Full Bench, 28 April 2015.
21 There are also 34 additional modern awards that are either State Reference Public Sector Modern Awards or Enterprise Modern Awards.
22 FWC Draft Guide to Award Stage, 17 April 2014, [63].
23 FWC Draft Guide to Award Stage, 17 April 2014, [64].
24 [2015] FWCFB 7236, [112].
25 See [2015] FWCFB 7236 at [110]–[116].
26 Witness statement of Katy Louise Paton, [79]; see [2020] FWCFB 3011, [557].
27 Witness statement of Karthika Viknarasah, [38]; see [2020] FWCFB 3011, [558].
28 [2020] FWCFB 3011, [559].
29 [2020] FWCFB 5176, [76].
30 [2020] FWCFB 5176, [78].
31 [2020] FWCFB 5531, [50].
32 [2020] FWCFB 5531, [55]–[56].
33 This matter was withdrawn.
34 Following the commencement of the Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 (Cth) the Commission decided to remove the model term and insert a reference to the new NES entitlement.
35 These clauses were subsequently adjusted after the FW Act was amended by the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021.
41 Statutes Amendment (Shop Trading and Holidays) Act 2012 (SA)