| [2022] FWCFB 46 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Telstra Corporation Limited
(AM2021/85)
Telecommunications services | |
DEPUTY PRESIDENT MASSON |
MELBOURNE, 26 MAY 2022 |
Application to vary the Telstra Award 2015 – award coverage – award flexibility – draft determination.
[1] On 9 December 2021 the Commission received an application from Telstra Corporation Limited (TCL) to vary the Telstra Award 2015 (Telstra Award). 1 The application is made pursuant to section 158 of the Fair Work Act 2009 (Cth) (Act).
[2] TCL seeks to vary the coverage of the Telstra Award (clause 3), clarify the operation of the casual employment clause (clause 10.3) and introduce flexibility arrangements to the hours of work and meal break provisions (clauses 19 and 21.1 respectively).
[3] For the reasons that follow, and having taken into account the considerations in sections 134(1)(a) to (h) and 168D insofar as they are relevant:
(a) We are satisfied for the purposes of section 157 of the Act that the variations proposed by TCL with respect to coverage (clause 3) and casual employment (clause 10.3) are necessary to achieve the modern awards objective.
(b) We have proposed additional safeguards in relation to the hours of work and meal break provisions (clauses 19 and 21.1 respectively).
[4] Interested parties are invited to file submissions in response to the draft variation determination which is at Annexure A.
[5] On 24 December 2021 a mention was convened and attended by TCL, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the Community and Public Sector Union (CPSU) and Professionals Australia.
[6] On the same day, a Statement and Directions2 were issued setting out the timetable agreed between the parties at the mention.
[7] In accordance with the directions, TCL filed a submission on 7 February 2022 which included a witness statement from TCL’s Executive, Transformation, Communications and People, Mr Darren Fewster (Fewster Statement). 3 On 1 March 2022 submissions in reply were received from the CEPU, CPSU and Professionals Australia.4 On 9 March 2022 TCL filed a supplementary witness statement of Mr Fewster, which amended the variation sought to the coverage of the Telstra Award (Supplementary Fewster Statement).5
[8] The matter was heard before a Full Bench on 10 March 2022. Following the hearing, further directions were issued to the parties concerning the filing of submissions addressing the amendment to the application.
[9] On 16 March 2022, the CEPU, CPSU and Professionals Australia advised the Commission that they did not oppose the amendment to the application and did not intend to provide further submissions. 6 On 18 March 2022, TCL advised the Commission that it did not intend to file further material in support of its application.
[10] TCL’s proposed variations to the Telstra Award are contained in an amended copy of the Telstra Award annexed to the Supplementary Fewster Statement. They can be summarised as follows:
• expanding the coverage in clause 3 of the Telstra Award to account for a corporate restructure;
• varying clause 10.3(b) of the Telstra Award concerning casual loadings, to clarify that the casual loading compensates for all entitlements under the award and the National Employment Standards (NES) from which casual employees are excluded;
• including a new clause 19.14 to enable agreement concerning a preferred hours arrangement at an employee’s request;
• including a new clause 19.15 to enable hours of work to be performed in multiple discrete periods in a day by agreement;
• varying clause 21 to introduce capacity to agree to ad hoc variations to unpaid meal breaks; and
• several consequential amendments to a number of other clauses to account for the above variations.
[11] The proposed variations are explained in further detail below.
[12] The powers of the Commission to make, vary and revoke modern awards are contained in Part 2-3 of the Act. Relevantly, Division 5 sets out limited circumstances in which the Commission can exercise modern award powers outside of annual wage and four yearly reviews. Division 7 contains additional provisions relating to modern enterprise awards.
[13] It is not in contest that the Telstra Award is a modern enterprise award. A modern enterprise award is a modern award that is expressed to relate to a single enterprise. 7 In the context of the Telstra Award, this is capable of being constituted both by a modern award that is expressed to cover only TCL as one employer (as is presently the case),8 or by two or more related bodies corporate that each carry on a single enterprise (as will be the case after the restructure).9
[14] Section 157(1) of the Act deals with the circumstances in which a modern award can be varied. It provides that the Commission may vary an award (other than in relation to modern award minimum wages) if it is satisfied that the variation is necessary to achieve the modern awards objective.
[15] The “modern awards objective,” expressed in section 134 of the Act, requires the Commission to ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net of terms and conditions, and must do so by reference to numerous mandatory considerations as follows:
“134 The modern awards objective
What is the modern awards objective?
(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(da) the need to provide additional remuneration for:
(i) employees working overtime; or
(ii) employees working unsocial, irregular or unpredictable hours; or
(iii) employees working on weekends or public holidays; or
(iv) employees working shifts; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:
(a) the FWC’s functions or powers under this Part; and
(b) the FWC’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.
Note: The FWC must also take into account the objects of this Act and any other applicable provisions. For example, if the FWC is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).”
[16] As earlier noted, Division 7 contains additional provisions relating to modern enterprise awards. Section 168B(1) of the Act contains the “modern enterprise awards objective.” This requires the Commission to recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. This objective applies to the Commission in the performance of its functions and powers under the Act insofar as they relate to modern enterprise awards. 10 The “modern enterprise award objective” is therefore taken to be included within the concept of the “modern awards objective.”11
[17] By section 157(3), the Commission may vary a modern award under clause 157 either on its own initiative, or as a result of an application by a person in accordance with section 158 of the Act.
[18] A modern award may be varied to reflect a change in the name of an employer. 12 Similarly, the Commission may vary a “named employer award” (which is defined to include “a modern award (including a modern enterprise award) that is expressed to cover one or more named employers”) to reflect a transfer of business from an old employer to a new employer.13
[19] Section 168D provides specific rules about changing coverage of modern enterprise awards. By section 168D(1), the Commission must not make a determination varying a modern enterprise award so as to extend the coverage of the modern enterprise award so that it ceases to be a modern enterprise award. A list of mandatory considerations for the Commission to consider when deciding whether to vary the coverage of a modern enterprise award are contained in section 168D(2) of the Act, which provides as follows:
“168D Rules about changing coverage of modern enterprise awards
…
(2) In deciding whether to make a determination varying the coverage of a modern enterprise award in some other way, the FWC must take into account the following:
(a) the circumstances that led to the making of the modern enterprise award;
(b) whether there is a modern award (other than the miscellaneous modern award or a modern enterprise award) that would, but for the modern enterprise award, cover the persons covered, or proposed to be covered, by the modern enterprise award;
(c) the content of the modern award referred to in paragraph (b);
(d) the terms and conditions of employment applying in the industry in which the persons covered, or proposed to be covered, by the modern award operate, and the extent to which those terms and conditions are reflected in the modern enterprise award;
(e) the extent to which the modern enterprise award provides enterprise-specific terms and conditions of employment;
(f) the likely impact on the persons covered, or proposed to be covered, by the modern enterprise award, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the variation, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g) the views of the persons covered, or proposed to be covered, by the modern enterprise award;
(h) any other matter prescribed by the regulations.”
[20] The application was lodged with the Commission by TCL on 9 December 2021. TCL has standing to make the application because, pursuant to section 158 of the Act, it is an employer that is covered by the Telstra Award. 14 Accordingly, the jurisdictional prerequisites for the making of an application for a determination varying a modern award under section 157 are satisfied.
[21] The variations sought by the application are summarised as follows.
Change to coverage
[22] On 12 November 2020, TCL announced a corporate restructure, which is subject to approval by TCL shareholders and the Federal Court of Australia by a scheme of arrangement. 15 Following completion of the restructure, anticipated in the second half of 2022, it is proposed that employees of TCL whose employment is covered by the Telstra Award will be employed by three separate, related entities carrying on the Telstra business: Telstra Limited, Telstra InfraCo Limited and Amplitel Pty Ltd.16
[23] As part of the restructure, the employment of most TCL employees will transfer into the entity operating the part of the Telstra business in which the employee works. 17 The transfer of assets and employees from TCL to Amplitel Pty Ltd has occurred. The transfer of assets and employees from TCL to Telstra Limited will occur when the scheme of arrangement is implemented. The remaining assets and employees will remain with TCL.18 While TCL will be renamed Telstra InfraCo Limited after the restructure is approved and implemented, the change is by name only and the Telstra Award will, as a matter of law and legal effect, cover Telstra InfraCo following the name change.19
[24] TCL therefore seeks to vary the coverage of the Telstra Award to include Amplitel Pty Ltd and Telstra Limited.
[25] Clause 4 of the Telstra Award concerns coverage. By clauses 4.1(a) and (b), the award covers “Telstra” and certain Telstra employees covered by the award. “Telstra” is defined in clause 3 as “Telstra Corporation Limited.” TCL’s amended application seeks to vary the clause 3 definition in the following way:
Telstra means Telstra Corporation Limited, Telstra Limited and Amplitel Pty Ltd
[26] TCL submits that the variation may be achieved in one of two ways.
[27] Firstly, the Commission may rely on a combination of the powers in sections 159(1)(a) and (c) of the Act to make variations that reflect, respectively, the change in name of the current employer covered by the Telstra Award and the transfer of business from the old employer to the new employers.
[28] TCL submits that each of these powers would be enlivened upon the existence of certain jurisdictional facts, which will be established upon the completion of the restructure. It is submitted that it is open to the Commission to satisfy itself in advance that it would be appropriate to make the determinations, and if satisfied, make the determinations shortly after the facts arise (noting that the power to make a determination under section 159(1)(c) that the Telstra Award cover Amplitel is already open, the transfer of employment of TCL employees to it having already occurred). 20
[29] Secondly, TCL submits that section 157 of the Act enables the Commission to make the variation on the basis that doing so is necessary to achieve the modern awards objective, in particular section 134(1)(g) of the Act.
[30] As the proposed variation relates to the coverage of the Telstra Award, the provisions of section 168D of the Act must be considered. TCL submits that the proposal to extend coverage is more accurately viewed as a correct specification of the constituent employing entities that make up the former enterprise covered by the Telstra Award after the restructure, and to whom the award would transfer in any event. With respect to the relevant matters in section 168D(2), it is submitted that the circumstances that led to making the Telstra Award (section 168D(2)(a)), the extent to which the modern enterprise award provides enterprise‑specific terms and conditions of employment (section 168D(2)(e)), and the likely impact on the persons covered (section 168D(2)(f)), favour the variation being ordered. 21
Casual clarification
[31] Clause 10.3(b) of the Telstra Award provides that the 25% casual loading is “in lieu of paid annual leave, paid personal leave, redundancy pay and notice of termination of employment.” However, it is submitted that this omits reference to certain entitlements extended to employees other than casual employees under the Telstra Award and the NES, namely (a) unpaid parental leave and the right to request flexible working arrangements, which are available only to certain casual employees, (b) paid compassionate leave, or (c) paid jury service leave. 22
[32] Accordingly, TCL seeks to vary clause 10.3(b) of the Telstra Award to make clear that the casual loading is paid in lieu of employment entitlements to which casual employees are not eligible under the Telstra Award and the NES.
[33] The proposed variation to 10.3(b) of the Telstra Award is as follows:
(b) A casual employee working ordinary time will be paid per hour 1/36.75 of the weekly wage prescribed by this award for work performed, plus a casual loading of 25% in lieu of entitlements from which casuals are excluded by the terms of this award and the NES paid annual leave, paid personal leave, redundancy pay and notice of termination of employment.
[34] TCL submits that the proposed variation simply and accurately states the basis for the entitlement, being to compensate casual employees for entitlements they do not receive by virtue of their non-permanent status. It is therefore said that the variation would achieve the objective of ensuring a simple, easy to understand, stable and sustainable modern award system consistent with section 134(1)(g) of the Act. TCL submits that the Commission should determine that the variation ought to be made on the basis that it is necessary to achieve the modern awards objective pursuant to section 157. 23
Preferred hours arrangement
[35] Clause 19 of the Telstra Award deals with hours of work and related matters. TCL seeks to insert clause 19.14 titled “Preferred hours arrangements” into the Telstra Award and make consequential amendments to several other clauses to account for this variation.
[36] TCL submits that the proposed amendments would provide TCL day workers with the ability to request to work outside of the ordinary span of hours (7.00am to 7.00pm, Monday to Friday) set out at clause 19.6 of the Telstra Award. TCL submits that a preferred hours arrangement would enable employees to work hours across a span from 6.00am to 11.00pm Monday to Sunday, providing employees with greater choice and flexibility in how they perform their work. 24
[37] TCL submits that the proposed clause would achieve TCL’s own objective to allow employees, where it suits them (and TCL), to achieve a personally cultivated balance between the performance of work and other life commitments. TCL submits that this would also achieve the modern awards objective, identifying section 134(1)(d) in respect of the need to promote flexible modern work practices.
Multiple discrete periods of work
[38] TCL seeks to insert clause 19.15 titled “Multiple discrete periods of work in a day” into the Telstra Award and make consequential amendments to a number of other clauses to account for this variation.
[39] TCL submits that proposed clause 19.15 would allow a shift worker to enter an arrangement enabling the performance of multiple discrete periods of work in a day, at their request. 25 The stated effect is that the requirement in proposed clause 19.9(a)26 that there be a minimum break of ten hours between shifts, would only apply to the last such period of work on a given day (as reflected in proposed clause 19.9(b)).27
[40] TCL submits that proposed clause 19.15 achieves the modern awards objective in a similar way to that which applies to day workers under its proposed clause 19.14, and that the protections are also similar, though the time for termination of the arrangement is three calendar months’ notice, or by agreement at any time (contrasted with four weeks’ notice in clause 19.14).
Ad-hoc meal break variations
[41] Clause 21 of the Telstra Award concerns breaks. It provides an entitlement to an unpaid meal break of between 30 minutes and one hour after no longer than five hours’ continuous work. TCL seeks to vary clause 21 to include a new clause 21.1 to enable the timing of unpaid breaks to be varied by agreement between the employee and TCL on an ad hoc basis. The proposed variation is as follows:
21. Breaks
21.1 The duration and timing of breaks may be varied by agreement between an employee and Telstra on an ad hoc basis only, subject to Telstra considering the health and safety of the employee and an employee receiving an unpaid meal break or breaks totalling at least 30 minutes.
21.21 In the absence of any agreement under clause 21.1, no employee will be required to work for more than five hours without a break for a meal which for day workers and shift workers will be unpaid and for a period of not less than 30 minutes and not more than 60 minutes.
21.32 Shiftworkers who are required by Telstra to remain in attendance during their scheduled meal break will be paid at the applicable ordinary rate of pay for that meal break.
[42] TCL submits that the proposed variation would suspend the requirement in clause 21.2 of the Telstra Award (as varied) that employees have a break after five hours of work, and that it be for not less than 30 minutes and not more than 60 minutes. 28
[43] TCL submits that this proposal achieves the modern awards objective by the appropriate facilitation of flexibility, providing employees with greater latitude to structure their work throughout the course of the day. 29
TCL position on flexibility arrangements
[44] TCL submits that each of the proposed flexibility variations (the preferred hours arrangements, the multiple discrete periods of work arrangements and the ad hoc meal break variations) are necessary to achieve the modern awards objective, and a number of considerations under section 134(1) of the Act apply. Chief among them the need to promote flexible modern work practices and the efficient and productive performance of work (section 134(1)(d)) and the need to promote greater social inclusion through increased workforce participation (section 134(1)(c)).
[45] As noted above, submissions in reply were received from the CPSU, CEPU and Professionals Australia on 1 March 2022. The unions do not oppose the application.
[46] The CPSU acknowledges that the variations sought to the casual employment clause, the proposed preferred hours arrangements clause, multiple discrete periods of work clause and ad hoc meal break variations were discussed between the TCL and CPSU and other unions.
[47] The Full Bench in Variation of awards on the initiative of the Commission 30 set out the following principles to be applied when considering whether a modern award should be varied pursuant to section 157(1) of the Act:
“[112] The Commission may make a determination varying a modern award if the Commission is satisfied the determination is necessary to achieve the modern awards objective. The modern awards objective is to ‘ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions,’ taking into account the particular considerations identified in ss.134(1)(a)–(h) (the s.134 considerations).
[113] The modern awards objective is very broadly expressed.31 It is a composite expression which requires that modern awards, together with the National Employment Standards (NES), provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in ss.134(1)(a)–(h).32 Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.33
[114] The obligation to take into account the s.134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process.34 No particular primacy is attached to any of the s.134 considerations35 and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.
[115] It is not necessary to make a finding that the award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award.36 Generally speaking, the s.134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.37 In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance.
[116] Section 138 of the Act emphasises the importance of the modern awards objective:
‘Section 138 Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.’
[117] What is ‘necessary’ to achieve the modern awards objective in a particular case is a value judgment, taking into account the s.134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence.38”
[48] Having regard to these matters, we turn now to consider each of the proposed variations.
[49] The Telstra Award presently covers TCL. Following the completion of the corporate restructure, it is proposed that employees of TCL whose employment is covered by the Telstra Award will be employed by one of three separate but related entities, each carrying on the Telstra business: Telstra Limited, Telstra InfraCo Limited (being the renamed TCL) and Amplitel Pty Ltd.
[50] TCL’s position is that it is in the interests of corporate, industrial, and administrative simplicity that the coverage term be varied to reflect TCL’s restructured arrangements.
[51] The evidence of Mr Fewster is that TCL has sought to apply a uniform safety net of awards and terms and conditions to employees performing essentially the same work. 39 To this end, TCL has already taken steps to expand the coverage of the Telstra Award to cover Amplitel Pty Ltd in relation to existing work, and approximately 70 employees have already transferred to it from TCL.40
[52] Against this background, the consideration at section 134(1)(g) of the Act is apposite. It emphasises the need to ensure a simple, easy to understand, stable and sustainable modern award system. An amendment to the coverage of the Telstra Award serves to identify the specific entities that the award covers and thereby mitigates the need for TCL to make a series of applications under Part 2-8 of the Act for orders that the Telstra Award covers identified groups of transferring and non-transferring employees of Amplitel Pty Ltd and Telstra Limited.
[53] Neither changing the name of TCL as a corporate entity, nor the transfer of employment of existing TCL employees to whom the Telstra Award applies to the proposed employing entities will alter the fact that the Telstra Award will continue to cover all employees whom it covers now, prior to the completion of the restructure. Making the order will also reduce the risk of uncertainty as to whether any new employees of the restructured entities would be covered by the Telstra Award (thereby potentially defeating the object of providing a single safety net of terms and conditions of employment).
[54] Having regard to these matters, we accept that TCL’s application to amend the coverage of the Telstra Award to identify the entities it covers is consistent with a simple and easy-to-understand system of modern awards (section 134(1)(g)). The variation also serves to ensure that the Telstra Award (together with the NES) provides a relevant safety net of terms and conditions (section 134(1)) by ensuring that through its coverage, the Telstra Award continues to reflect the tailored employment arrangements developed for the enterprise (section 168B(1)). These matters weigh in favour of making the variation sought.
[55] We do not regard the factors at section 134(1)(a) to (f) and section 134(h) to be relevant considerations in the present context, and the parties did not contend otherwise.
[56] Furthermore, the relevant considerations in section 168D(2) of the Act also favour the variation being ordered. We address these matters below, noting that in our view the considerations in sections 168D(2)(b) to (d) and section 168D(2)(h) are not relevant and the parties did not advance a different position.
Section 168D(2)(a): The circumstances that led to the making of the modern enterprise award
[57] The circumstances that led to the making of the modern enterprise award are addressed in the Fewster Statement. 41 In summary, TCL’s award regulation framework changed as a result of the award modernisation process. At the time the Act and related transitional legislation came into operation, TCL was covered by 11 enterprise awards made by the former Australian Industrial Relations Commission in the early 2000s. The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) contained a process for enterprise instruments such as TCL’s 11 awards to be modernised by the making of one or more “modern enterprise awards,” or otherwise terminated.
[58] While TCL opposed the making of a modern enterprise award, the position of the unions covered by the existing awards (including the CEPU, CPSU, APESMA (which became Professionals Australia), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Media, Entertainment and Arts Alliance) was that a new enterprise award should be made when consideration was given to the specific history of the various Telstra awards and the reasons for the current provisions.
[59] A decision of the Full Bench in Telstra Corporation Ltd v CEPU 42 determined that in light of a range of factors including the history of industrial regulation of TCL, the circumstances surrounding the making of the Telecommunications Services Award 2010 (as it then was) and the rates of pay in the TCL awards, a modern enterprise award should be made.
[60] The Telstra Award commenced operation on 9 February 2015. 43 It has remained substantively unchanged since that time. It was not reviewed as part of the four-yearly review of modern awards and has not been the subject of any other application for variation.
Section 168D(2)(e): The extent to which the modern enterprise award provides enterprise specific terms and conditions of employment
[61] The evidence demonstrates that the Telstra Award was made by the Commission following extensive discussions between TCL and the relevant unions. 44 The Full Bench in Telstra Corporation Ltd v CEPU45 observed that the terms of the proposed Telstra Award focussed on the organisational needs of the enterprise. The Full Bench drew specific attention to four matters:46
(a) The Telstra Award covers the entire TCL business with the exception of the retail business.
(b) The supplementation of an additional five days of personal/carer’s leave in addition to the NES entitlement, having regard to TCL’s history in the Australian Public Service.
(c) The ordinary hours of work which were maintained at 36.75 per week.
(d) Enterprise specific redundancy provisions, which supplement the NES.
Section 168D(2)(f): The likely impact on the persons covered, or proposed to be covered, by the modern enterprise award…of a decision to make, or not make, the variation, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons
[62] As earlier noted, the Telstra Award will continue to cover the employees currently covered despite TCL’s name change, and the transfer of employment of relevant TCL employees to the new employing entities. This is so by reason of the continuing employment obligations of TCL and the transfer of business provisions in Part 2-8 of the Act. In the circumstances described following the restructure, the Telstra Award will become a “transferable instrument” 47 and thereby continue to cover those employees even in the absence of the variation sought by TCL.
[63] No submissions were made addressing any impact a decision to make or not make the variation sought would have on the ongoing viability or competitiveness of the Telstra enterprise.
Section 168D(2)(g): the views of the persons covered, or proposed to be covered, by the modern enterprise award
[64] The Fewster Statement describes a series of constructive discussions between TCL and the relevant unions in the period between 4 June and 7 December 2021 regarding the proposed variations, the reasons for them and the proposed wording of the varied clauses. 48 Having regard to feedback provided by the unions, the proposed variations were amended and, in some cases, not pursued before the Commission.
[65] On 7 December 2021, the relevant unions informed TCL that the variation application was not opposed, subject to reserving their respective positions following receipt of the evidence and submissions filed in the support of the application.
[66] With respect to the relevant employees covered by the Telstra Award, the evidence discloses that TCL informed employees of its intention to apply to vary the Telstra Award on 4 June 2021. TCL notified its employees that:
(a) It wanted to take steps to introduce an increased level of flexibility into the Telstra Award to support greater choice and flexibility when it comes to where, when, and how employees work.
(b) The proposed changes would cover matters such as giving employees more flexibility to do split shifts, as well as to decide how they want to structure their workday and hours.
(c) It was looking at whether to introduce new job classifications to the roles covered by the Telstra Award to help maximise employment opportunities in the future. This variation was ultimately not pursued by TCL.49
[67] TCL responded to questions posed by relevant employees on its internal social media platform, as well as directly conferring with relevant employees. A log of questions posed, and the answers provided by TCL are in evidence before the Commission. 50
Finding as to change of coverage
[68] Together with the NES, the Telstra Award contains organisation specific, base terms and conditions of employment which are relevant to and tailored for TCL’s enterprise. The provisions were established following extensive consultation and having regard to the particular circumstances of the enterprise at the relevant time. The parties collectively favour the position adopted by TCL as to the altered coverage clause. We are satisfied, having regard to section 168D(1), that a determination varying the coverage of the Telstra Award in the manner proposed would not extend the coverage of the award such that it ceases to be a modern enterprise award. Rather, the variation sought to clause 3 serves to ensure that the express terms of the Telstra Award reflect TCL’s restructured arrangements.
[69] Having regard to the conclusions reached in respect of the relevant considerations in sections 134(1) and 168D of the Act, we are satisfied that the variation proposed to clause 3 Definitions and interpretation of the Telstra Award is necessary to achieve the modern awards objective.
[70] In these circumstances, we do not consider it necessary to rely upon sections 159(1)(a) and (c) of the Act to make variations that reflect the post-restructure change in name of the current employer covered by the Telstra Award and the transfer of business from the old employer to the new employers.
Casual clarification
[71] The variation proposed by TCL to clause 10.3(b) of the Telstra Award is said to clarify the basis for the entitlement of casual employees to a 25% casual loading.
[72] The current wording of clause 10.3(b) of the Telstra Award provides that the 25% loading is paid in lieu of paid annual leave, paid personal leave, redundancy pay and notice of termination of employment. However, this omits reference to other relevant entitlements that are extended to non-casual employees under the Telstra Award and the NES. It is therefore an incomplete list, which has the potential to mislead or confuse an employee covered by the Telstra Award as to the basis for the 25% casual loading.
[73] The variation proposed by TCL to clause 10.3(b) of the Telstra Award does not alter a casual employee’s entitlements. Rather, the variation seeks to make clear that the casual loading is also paid in lieu of employment entitlements to which casual employees are not eligible under the Telstra Award and the NES, such as unpaid parental leave and the right to request flexible working arrangements (which are available only to certain casual employees), paid compassionate leave and paid jury service leave. However, rather than list each of these entitlements, the proposed variation provides that the casual loading of 25% is paid in lieu of “entitlements from which casuals are excluded by the terms of this award and the NES.”
[74] We accept that the proposed variation clarifies the basis for the payment of the 25% casual loading, being to compensate casual employees for entitlements they do not receive on account of their non-permanent status. We are satisfied that the variation proposed would achieve the objective of ensuring a simple, easy to understand, stable and sustainable modern award system consistent with section 134(1)(g) of the Act. This weighs in favour of making the variation sought.
[75] We do not regard the balance of the section 134(1) considerations to be relevant to the variation proposed with respect to clause 10.3(b). Nor was an alternative position put by the parties.
[76] For the above reasons, taking into account the relevant considerations in section 134(1) of the Act, we find that the variation proposed to clause 10.3(b) of the Telstra Award is necessary to achieve the modern awards objective.
Flexibility provisions - general
[77] TCL seeks to introduce flexibility into the Telstra Award by way of variations to clauses 10.2, 19.2, 19.6, 19.7, 19.8 19.9, 19.14, 19.15, 20.4, 20.6 and 21.1. The evidence of Mr Fewster identifies that over the last decade, there has been an organisational focus on workplace flexibility at TCL. 51 In 2014, TCL adopted an “All Roles Flex” policy in each of its business units, pursuant to which flexibility is both “a practice and a mindset.”52
[78] The evidence discloses that in August 2021, TCL conducted a Telstra Employee Experience Pulse Survey (FY22 Q1 Pulse Survey) of its workforce. Approximately 80% of TCL’s employees responded to the flexibility questions posed. 53 The survey results identified the following:
(a) Over 15,000 TCL employees answered a question about whether they had requested or accessed any flexible working arrangements in the previous 18 months.
(b) Of those responses, over 49% of employees had accessed some form of flexible work arrangement.
(c) The most common arrangement was that employees had worked from a different location (almost 40%). Around 12% had changed their hours of work or workdays, and 3.64% had entered into a flexible leave arrangement. Despite this, only 1.4% of employees advised that they had a formal Individual Flexibility Agreement (IFA) in place.54
[79] Approximately 29% of employees who responded to the FY22 Q1 Pulse Survey referenced “flexible working” as contributing to the creation of a positive experience for them in the workplace now and said that it would continue to do so in the future. 55
[80] The working arrangements necessitated by the COVID-19 pandemic heightened TCL’s focus on flexible working. In August 2020, TCL conducted a “Telstra Employee Experience Pulse Survey” (FY21 Q1 Pulse Survey). There were 17,904 respondents in total who were asked, “When the COVID-19 related ‘working from home’ is no longer required, how many days a week would you like to work from home?” The average response disclosed a preference to work 3.1 days from home. The two most common reasons provided by employees for continuing to work from home in the FY21 Q1 Pulse Survey were (1) no commute time (84%) and (2) greater flexibility in terms of working hours (64%). 56
[81] Mr Fewster’s evidence is that the COVID-19 pandemic therefore accelerated TCL’s thinking about how and where work is performed “and put flexibility, adaptability and technology at the heart of the workplace.” 57 TCL’s Future Workplace Experience Roadmap58 underpins the changing needs of TCL’s business, and Mr Fewster says that flexibility and choice are at its core.
[82] We have considered TCL’s proposed flexibility variations against this background.
[83] The ordinary span of hours for day workers under the Telstra Award is between 7.00am to 7.00pm, Monday to Friday. The proposed variation to clause 19.6 would enable a day worker to perform ordinary hours between 6.00am and 11.00pm, Monday to Sunday.
[84] Proposed clause 19.14 of the Telstra Award contains various protective mechanisms for day workers who enter into a preferred hours arrangement. Of particular note:
(a) the clause only operates upon request by an employee (which need not be in writing), which the employer may decline at its discretion (clause 19.14(a));
(b) any preferred hours arrangement cannot result in an employee having less than two consecutive days off a week (clause 19.14(b));
(c) the common protections that apply to individual flexibility arrangements apply (clause 19.14(c)-(e)); and
(d) a preferred hours arrangement may be terminated by either party upon four weeks’ written notice or at any time by agreement (clause 19.14(j)). 59
[85] TCL accepts that preferred hours arrangements of this kind are notionally capable of being achieved pursuant to the “Award flexibility” mechanism in clause 7 of the Telstra Award. However, TCL’s position is that the requirement in clause 7 that the employee be better off overall at the time the agreement is made, than if it is not made (clause 7.4) is a rigid requirement which poses a difficulty for the flexibility aspirations of TCL and its employees 60 and frustrates the modern award objective.61
[86] TCL submits that it is often difficult to establish that an employee who enters a flexibility arrangement under clause 7 and who voluntarily forgoes monetary benefits in exchange for non-monetary benefits such as greater flexibility, is better off overall. TCL cites the consideration of this issue by the Full Bench during the Modern Awards Review 2012. 62
[87] In support of the proposed clause, TCL relies upon the evidence of Mr Fewster who states that the requirement to ensure employees are better off overall gives rise to compliance difficulties for TCL. In the context of making an individual flexibility arrangement under the Telstra Enterprise Agreement 2019-2021 and the Telstra Award, input is required from a range of internal subject matter experts before the arrangement can commence, which undermines the process, and can result in TCL declining an employee’s request for flexible working arrangements. 63
[88] Subject to the parties’ views in respect of the enhancement we propose herein, we accept that the proposed variation serves to promote flexible modern work practices and the efficient and productive performance of work (section 134(1)(d)). Further, while the focus of section 134(1)(c) is upon obtaining employment, 64 the broader notion of social inclusion is a matter than can be appropriately taken into account in our consideration of the legislative requirement to “provide a fair and relevant minimum safety net of terms and conditions” in section 134(1). To this end, greater flexibility in working arrangements with appropriate safeguards poses fewer barriers including for those with parental and caring responsibilities, and this is consistent with the need to promote greater social inclusion. Moreover, one of the objects of the Act is to promote social inclusion for all Australians by, among other things, ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through, relevantly, modern awards (object 3(b) of the Act). These matters weigh in favour of making the variation sought with one qualification. We consider that the protective mechanism that the clause only operates upon request by an employee, should be enhanced by requiring the employee request to be in writing.
[89] We turn now to the consideration at section 134(1)(da). This factor provides that the Commission must consider the need to provide additional remuneration for employees working, for instance, overtime or on weekends. The expression “additional remuneration” in the context of section 134(1)(da) means remuneration in addition to what employees would receive for working what are normally characterised as ordinary hours, that is reasonably predictable hours worked Monday to Friday within the prescribed spread of hours. Such additional remuneration could be provided by means of a penalty rate or loading paid in respect of, for example, work performed on weekends or public holidays. Alternatively, additional remuneration could be provided by other means such as a loaded hourly rate. 65
[90] TCL’s submission is that the need to provide additional remuneration is offset by the fact that employees will only perform ordinary hours of work outside the span of hours where they prefer to do so. TCL therefore urges us to regard section 134(1)(da) as a neutral consideration. While we accept that the arrangement is entered into only upon an employee’s request, the effect of making the variation sought is that the requirement to ensure an employee is better off overall under the arrangement as would be required under an IFA pursuant to clause 7, is circumvented.
[91] Section 134(1)(da) of the Act speaks of the “need” to provide additional remuneration for the performance of work on weekends or unsocial hours. However, as the Full Bench in 4 yearly review of modern awards – Penalty Rates 66 made clear, this passage does not “require” additional remuneration for working in the circumstances identified in section 134(1)(da)(i) to (iv). As the Full Bench observed:67
“[195] Section s.134(1)(da) is a relevant consideration, it is not a statutory directive that additional remuneration must be paid to employees working in the circumstances mentioned in paragraphs 134(1)(da)(i), (ii), (iii) or (iv). Section 134(1)(da) is a consideration which we are required to take into account. To take a matter into account means that the matter is a ‘relevant consideration’ in the Peko-Wallsend sense of matters which the decision maker is bound to take into account. As Wilcox J said in Nestle Australia Ltd v Federal Commissioner of Taxation:
‘To take a matter into account means to evaluate it and give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously disregarded as irrelevant.’
[196] Importantly, the requirement to take a matter into account does not mean that the matter is necessarily a determinative consideration. This is particularly so in the context of s.134 because s.134(1)(da) is one of a number of considerations which we are required to take into account. No particular primacy is attached to any of the s.134 considerations. The Commission’s task is to take into account the various considerations and ensure that the modern award provides a ‘fair and relevant minimum safety net’.”
(citations omitted)
[92] The assessment of section 134(1)(da) requires consideration of a range of matters, including: 68
(a) The impact of working at such times or on such days on the employees concerned (that is, the extent of the disutility). This includes an assessment of the impact of such work on employee health and work-life balance, taking into account the preferences of the employees for working at those times.
(b) The terms of the relevant modern award, in particular whether it already compensates employees for working at such times or on such days (e.g. through “loaded” minimum rates or the payment of an industry allowance which is intended to compensate employees for the requirement to work at such times or on such days).
(c) The extent to which working at such times or on such days is a feature of the industry regulated by the particular modern award.
[93] As to (a), there is no material before the Commission that speaks to the disutility of the performance of work by day workers outside the current ordinary span of hours of 7.00am to 7.00pm Monday to Friday. However, the entitlement to penalty rates is, in part, a recognition of the disutility of working outside standard hours. At the same time, the material before the Commission discloses that a significant proportion of TCL’s workforce have indicated a desire to choose to work different days, or alternative start and finish times to suit their personal and family circumstances. In relation to (b), the minimum wage rates in the Telstra Award do not already compensate employees for working outside the span of hours of 7.00am to 7.00pm Monday to Friday. We note that the Telstra Award makes provision for annualised salary arrangements, however such arrangements are not the focus of (b). In relation to (c), TCL’s Future Workplace Experience Roadmap 69 promotes “maximum flexibility,” but the span of ordinary hours for a day worker are presently to be worked Monday to Friday between 7.00am and 7.00pm. There is no evidence that performing work outside this span of hours is a feature of the industry.
[94] As is apparent from proposed clause 19.14(f) of the Telstra Award, where an employee performs ordinary hours of work pursuant to a preferred hours arrangement in accordance with proposed clause 19.6(b), such hours are worked without the payment of overtime. 70 Nor are penalty rates paid. However, the clause only operates upon request by an employee, which the employer may decline at its discretion (clause 19.14(a)). In the absence of a statutory directive that additional remuneration must be paid to employees working in the circumstances mentioned in paragraphs 134(1)(da)(i)-(iv), we are persuaded that the consideration at section 134(da) should be regarded as neutral.
[95] Finally, while the considerations in section 134(1)(a)-(h) of the Act inform the evaluation of what might constitute a “fair and relevant minimum safety net of terms and conditions,” they do not necessarily exhaust the matters which the Commission might consider to be relevant to that standard. 71 We regard TCL’s workplace culture and the views of its employees as an important consideration in the evaluative assessment of whether the Telstra Award provides a fair and relevant minimum safety net pursuant to section 134(1) of the Act.
[96] As observed by the Full Federal Court in Shop, Distributive and Allied Employees’ Association v Australian Industry Group: 72
“…many, perhaps all, of the s 134(1)(a)-(h) matters themselves permit, indeed require, consideration of “contemporary circumstances”; the range of “needs” and “impacts” these matters identify necessarily include needs and impacts assessed by reference to contemporary circumstances…
Thus, it is also the case that the “fair and relevant” safety net criteria which dictate the quality of any modern award embrace the concept of “fair and relevant” having regard to contemporary circumstances, that conception being within the subject matter, scope and purpose of the Fair Work Act.”
[97] As earlier noted, TCL’s has recognised the changing needs of its business through the Future Workplace Experience Roadmap. 73 The roadmap recognises the need to provide employees with “maximum flexibility, choice and leading technology” with the “equipment and connectivity to work productively from home…or wherever we are the most productive.”74 The evidence before the Commission demonstrates that there is a significant number of employees who would potentially be interested in performing their work pursuant to a preferred hours arrangement As noted at [80] of this decision, of the 17,904 TCL employees who responded to TCL’s FY21 Q1 Pulse Survey, 64% of employees who listed the reason of greater flexibility in terms of working hours as a reason why they would prefer to work from home some of the time.
[98] Further, of the 15,360 employees who responded to questions in the FY22 Q1 Pulse Survey (representing over 84% of TCL’s workforce), 47.8% of employees indicated that they would be interested in choosing the days they work and/or their start and finish times to accommodate personal or family circumstances. The evidence of Mr Fewster in this respect is instructive:
“Of the specific forms of arrangement the FY22 Q1 Pulse Survey asked about, 4,041 employees expressed an interest in varying start/finish times between 7:00 am and 7:00 pm, 3,162 expressed an interest in varying hours in another way to meet personal commitments, 1,793 expressed an interest in starting before 7:00 am so they could finish work earlier, 967 expressed an interest in working a weekend day instead of one or more weekdays, and 599 expressed an interest in finishing after 7:00 pm so as to start work later.” 75
[99] We regard the perspective of TCL and its employees, and the contemporary circumstances in which the Telstra Award operates, as relevant considerations 76 that weigh in favour of making the variation sought.
Provisional finding as to preferred hours arrangement
[100] The task before this Full Bench is to balance the various considerations and ensure that the Telstra Award provides a fair and relevant minimum safety net of terms and conditions. 77 We accept that the proposed variation concerning preferred hours arrangements at an employee’s request would facilitate flexible and modern arrangements that are relevant to TCL’s contemporary circumstances and which are tailored for its enterprise (section 168B(1)). With the qualification we propose at [88], the section 134(1) factors which we have given consideration to weigh in favour of making the determination.
[101] We do not regard the balance of the section 134 considerations to be relevant to the variation proposed. Nor was an alternative position put by the parties.
[102] We consider that the appropriate course is to allow the parties the opportunity to file submissions addressing our proposal at [88]. However, it is our provisional view that the variation proposed to clauses 19.6, 19.14 (and consequential amendments to clauses 10.2 and 20.4) of the Telstra Award, with the additional safeguard we have identified above at [88] is necessary to achieve the modern awards objective.
[103] The proposed variation to clause 19.15 of the Telstra Award would allow a shift worker to enter an arrangement whereby they can perform multiple discrete periods of work in a day, at their request.
[104] TCL’s position is that the form of the proposed clause gives due regard to past consideration of “split” or “broken” shift arrangements by the Full Bench during the 4 yearly review of the Social, Community, Home Care and Disability Services Industry Award 2010. 78 Specifically, we note that the proposed clause:
(a) relies not only on mutual agreement, but on the shift worker proposing the arrangement;
(b) incorporates a broken shift allowance based on the “standard rate;”
(c) requires that each segment of the split shift be of at least three hours’ duration (unless otherwise agreed, or one hour if the shift worker performs the work at home); and
(d) incorporates the procedural safeguards otherwise applicable to the making of an award flexibility agreement.
[105] Of the proposed clause, Mr Fewster states that TCL is mindful of the potential for split shifts to operate inequitably for employees. Accordingly, the model advanced by TCL requires a shift worker to propose the variation and provides a safeguard allowing for the shift worker to terminate arrangement. 79
[106] The performance of multiple discrete periods of work in a day at a shift worker’s request must be considered by reference to the expressed needs of TCL’s workforce. To remain a “fair and relevant” minimum safety net for TCL and the relevant employees, the Commission must assess these needs by reference to contemporary circumstances and the demand for employment flexibility.
[107] The evidence before the Commission discloses that of the shift worker employees who responded to the FY22 Q1 Pulse Survey on this topic, 35% indicated that they would welcome the opportunity to work split shift arrangements. 80
[108] TCL’s Flexible Working Policy 81 acknowledges that its employees have different personal circumstances and preferences. It provides the following:
“You told us you value working flexibly, and we want you to experience “hybrid” working – when, where, and how you work – in a way that enables you to be safe, empowered and engaged. So, what does that mean?
There is no one-size-fits-all, everyone has different personal circumstances and preferences. To support this, we believe all roles can flex in some way to deliver a great experience and outcomes for us and our customers.
So how can we support you? There are three simple steps:
1. Decide: how flexibility works best for you
2. Discuss: with your leader
3. Do it: put a plan in place to make it work
We commit to the following principles to guide decisions about flexible working:
• We are curious – we take the time to understand our flexibility needs and that of others so we can support each other to thrive
• We are diverse – we are all unique humans with diverse needs – we love that flexibility looks and feels different for all of us
• We trust each other – we trust each other to deliver outcomes no matter where, when, or how we choose to work
• We care – we show humanity and support one another to bring our whole selves to work in a way that best suits our needs.”
[109] TCL’s position is that the relevant section 134(1) considerations regarding proposed clause 19.15 are similar to those considered in respect of proposed clause 19.14 (preferred hours arrangement). The key difference in the protections proposed is that the arrangement to perform multiple discrete periods of work in a day may be terminated by either party giving the other three calendar months’ written notice, or by agreement at any time. This is to be contrasted with the provision of four weeks’ notice to terminate a preferred hours arrangement in proposed clause 19.14.
[110] Mr Fewster’s evidence is that the three-month termination period was the subject of lengthy discussions between TCL and the relevant unions. Mr Fewster explained that the extended notice period provides the shift worker and TCL with certainty and sufficient planning time. The additional time is considered necessary having regard to (a) the shift worker’s likely personal or family circumstances giving rise to the performance of work across split shifts and (b) operational reasons including TCL’s capacity to roster its shift workers eight to 12 weeks advance. 82 Further, it was noted that the arrangement to perform multiple discrete periods of work in a day may be terminated by agreement at any time.83
[111] For each day where a shift worker works their hours in multiple discrete periods, they will be paid an amount of 0.28% of the standard rate, capped at a maximum of 1.38% of the standard rate per week. This amounts to a daily rate of approximately $2.52, capped at a maximum of $12.41 per week. 84
[112] We are satisfied that the amount proposed to be paid to shift workers working their hours in multiple discrete periods pursuant to an agreement reached under proposed clause 19.15, while not significant, is adequate in the circumstances of the flexible working arrangements being at an employee’s request.
[113] We are however concerned at the length of the notice period at proposed sub-clause 19.15(f)(i) for terminating an agreement made pursuant to proposed clause 19.15. While agreement may be reached between TCL and an employee on a shorter period of notice pursuant to clause 19.15(f)(ii), absent such agreement, three calendar months’ notice of termination of an agreement by either TCL or an employee would be required.
[114] We understand that the period of three calendar months’ notice has been the subject of lengthy discussion between the parties. We also accept that the length of the notice period may seek to address the needs of both affected employees and TCL in the circumstance, for example, of TCL ensuring appropriate shift coverage is maintained. That said, there is insufficient material to persuade us that a notice period of three calendar months is necessary, particularly in circumstances where clause 19.5 of the Telstra Award presently confers upon TCL the right to vary a shift roster with one week’s notice. We are therefore not persuaded to make a variation determination in the terms sought. We would, however, be satisfied if the notice of termination of an agreement made under clause 19.15 were to be aligned with that provided for the termination of an agreement made under clause 19.14, being four weeks.
[115] Finally, consistent with the approach we propose in relation to proposed clause 19.14 (preferred hours arrangement), we believe an additional safeguard is required in respect of a request by an employee for an arrangement under proposed clause 19.15. The safeguards already provided under the clause should be enhanced by requiring that an employee’s request to enter into an arrangement under clause 19.15 be in writing.
[116] Consistent with our findings at [88] of this decision regarding preferred hours arrangements, we are satisfied for the purposes of section 134(1)(d) that the proposed variation, with the modifications described above at [114] and [115], serves to promote flexible modern work practices and the efficient and productive performance of work. Further, we accept Mr Fewster’s evidence that the proposal to introduce multiple discrete periods of work has the capacity to cater for school pick-ups and drop offs and thereby promotes greater social inclusion, which is relevant to the considerations at section 134(1) and object 3(b) of the Act. These matters reflect TCL’s contemporary circumstances and the flexibility opportunities identified in TCL’s Flexible Working Policy, which is relevant to section 168B(1). This weighs in favour of making the variation sought.
[117] We do not regard the balance of the section 134(1) considerations to be relevant to the variation proposed and nor did the parties contend otherwise.
[118] The parties are invited to file submissions addressing our proposed modifications at [114] and [115]. However, it is our provisional view that the variation proposed by clause 19.15 (and consequential amendments to clauses 19.2, 19.7, 19.8, 19.9 and 20.6 of the Telstra Award), with the additional safeguards we have identified at [114] and [115] is necessary to achieve the modern awards objective.
Ad-hoc meal break variations
[119] Clause 21 of the Telstra Award provides an entitlement to an unpaid meal break of between 30 minutes and one hour after no longer than five hours’ continuous work. TCL seeks to introduce a new clause 21.1 to enable the timing of unpaid breaks to be varied by agreement between the employee and TCL on an ad hoc basis.
[120] The evidence of Mr Fewster identifies two circumstances in which the requirement to observe an unpaid meal break within the requirements of clause 21 of the Telstra Award may be undesirable. Firstly, it is said that employees engaged in corporate functions such as HR may wish to defer an unpaid break to complete a work task. Secondly, employees working a six-hour shift may prefer to observe an unpaid break at the conclusion of the shift so as to finish early. 85
[121] TCL submits that this proposal achieves the modern awards objective by the appropriate facilitation of flexibility, enabling employees greater latitude to structure their work throughout the course of the day. 86 The arrangement is necessarily regarded as ad-hoc because the necessity for an employee to record a written request to vary their meal break on a given day is said to be unworkable. Further, such a variation by agreement is said to be consistent with arrangements contemplated in many modern awards without the overlay of protections otherwise available through proposed clauses 19.14 and 19.15.
[122] We accept that some additional flexibility in relation to the timing of an unpaid meal break has merit. However, we are concerned that the clause as drafted has the potential to result in employees working extended periods without a meal break, albeit by agreement, and subject to TCL considering the health and safety of an employee. Unlike other modern awards, the proposed variation would not compel the taking of a meal break within a specified period of time following commencement of work.
[123] Under the proposed variation, a daywork employee could theoretically work up to 7 hours and 40 minutes without a meal break and finish 30 minutes early in circumstances where their ordinary hours of work were 8 hours and 10 minutes per day pursuant to clause 19.2(b) of the Telstra Award. In the case of a shift worker, they would be theoretically able to work up to 9 hours and 30 minutes before taking a 30 minute meal break in circumstances where they were rostered to work a maximum 10 hour shift in accordance with clause 19.3 of the Telstra Award.
[124] We readily accept that the proposed variation is not directed to facilitate extreme meal break arrangements of the type identified immediately above. However, as presently drafted, the proposed clause would allow for such arrangements notwithstanding the requirement that TCL consider the employee’s health and safety in agreeing to a variation in the timing of the unpaid meal break. We are not persuaded on the material before us that the flexibility in meal break timing in the form proposed is necessary to achieve the modern awards objective.
[125] We do however accept that some additional flexibility in the timing of employees being able to take unpaid meal breaks would be desirable having regard to the views of both TCL and its employees as expressed in surveys. To that end, we propose a variation to the Telstra Award to allow employees to agree to vary the timing of their unpaid meal break subject to such varied meal break being taken with 6.5 hours of the commencement of ordinary hours of work. Such a change would ensure additional flexibility was available to both TCL and its employees to manage the circumstances highlighted by TCL in its material but would place a limit so as to ensure health and safety considerations are managed effectively.
[126] The parties are invited to address our proposal for additional protection at [125]. However, we express our provisional view that the proposed variation to clause 21, with the additional protection we have identified above at [125], would serve to promote flexible modern work practices and the efficient and productive performance of work (section 134(1)(d)) and would consequently achieve the modern awards objective.
[127] Having regard to the above matters and the conclusions reached, we are satisfied for the purposes of section 157 of the Act that the variations proposed by TCL with respect to coverage (clause 3) and casual employment (clause 10.3) are necessary to achieve the modern awards objective. In reaching this conclusion, we have taken into account the considerations in sections 134(1)(a) to (h) and 168D insofar as they are relevant.
[128] Interested parties are invited to respond to the modifications we have proposed at [88], [114], [115] and [125] of this decision before we express a concluded view as to whether the proposed variation of the Telstra Award to (a) enable agreement concerning a preferred hours arrangement at an employee’s request, (b) enable hours of work to be performed in multiple discrete periods in a day by agreement, and (c) introduce capacity to agree to ad hoc variations to unpaid meal breaks is necessary to achieve the modern awards objective.
[129] A copy of the draft variation determination is at Annexure A.
[130] Interested parties will have until 3PM (AEST) on Friday 10 June 2022 to file any submissions in response to the draft determination. Submissions must be sent electronically to the Presiding Member at chambers.masson.dp@fwc.gov.au.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR739906>
ANNEXURE A
| MA000123 PRXXXXXX |
| FAIR WORK COMMISSION |
DRAFT DETERMINATION |
Fair Work Act 2009
s.158—Application to vary or revoke a modern award
Telstra Corporation Limited
(AM2021/85)
TELSTRA AWARD 2015
[MA000123]
Telecommunications services | |
DEPUTY PRESIDENT MASSON |
MELBOURNE, XX MONTH 2022 |
Application to vary the Telstra Award 2015 - award varied.
A. Further to the decision issued by the Full Bench of the Fair Work Commission on XX Month 2022 [[2022] FWCFB XXXX] the above award is varied as follows:
1. By inserting the words “, Telstra Limited and Amplitel Pty Ltd” after the words “Telstra means Telstra Corporation Limited” appearing in clause 3.
2. By deleting the word “Overtime” at the beginning of clause 10.2(b) and inserting “Subject to clauses 19.14 and 19.15, overtime.”
3. By deleting the words “paid annual leave, paid personal leave, redundancy pay and notice of termination of employment.” appearing in clause 10.3(b) and inserting “entitlements from which casuals are excluded by the terms of this award and the NES.”
4. By inserting as a paragraph below clause 19.2(b) the following:
These hours may be worked continuously or, as agreed between Telstra and an employee, in multiple discrete periods throughout the course of a day.
5. By deleting clause 19.6 and inserting the following:
19.6 Span of ordinary hours for day work
(a) Subject to clause 19.6(b), the ordinary hours of work for a day worker will be worked between the following spread of hours:
Monday to Friday – 7.00 am to 7.00 pm.
(b) Where a day worker enters into a preferred hours arrangement under clause 19.14, the ordinary hours of work for a day worker can be worked between:
Monday to Sunday – 6.00 am to 11.00pm.
6. By deleting the paragraph at the beginning of clause 19.7 and inserting the following:
The ordinary hours for shiftworkers will be worked at the discretion of Telstra on any days of the week, Monday to Sunday, subject to clause 19.5 and the penalty rates in this clause. Where an employee has agreed to work multiple discrete periods of work in a day in accordance with clause 19.5, a reference to a “shift” in this subclause is a reference to each period, with penalties to apply to each period of work separately. The ordinary hours of work for shiftworkers will not exceed 36.75 hours per week, or an average of 36.75 hours over a cycle of shifts.
7. By deleting the word “Employees” wherever it appears in clause 19.8 and inserting “Shiftworkers.”
8. By deleting clause 19.9 and inserting the following:
19.9 Minimum break between shifts
(a) Wherever reasonably practicable, where an employee works a shift roster, shifts will be arranged so that there is a minimum break of ten hours, including reasonable travelling time, between the completion of work on one shift and the commencement of work on the next shift.
(b) Where an employee has agreed to be rostered for multiple discrete periods of work on the same day in accordance with clause 19.15:
(i) clause 19.9(a) will apply between the last such period of work and the commencement of work on the next shift; and
(ii) unless otherwise agreed, such periods of work will be arranged so that there is a minimum break of one hour, plus reasonable travelling time if applicable, between the completion of work in one such period and the commencement of work on the next.
9. By inserting clause 19.14 as follows:
19.14 Preferred hours arrangements
A day worker may enter into a preferred hours arrangement on the terms set out in this clause. Such an arrangement will not be a condition of employment with Telstra and can only be made after an employee has commenced employment with Telstra.
(a) A preferred hours arrangement may be entered into if an employee makes a request in writing to enter into such an arrangement and Telstra agrees. Telstra may decline such a request at Telstra's discretion.
(b) A preferred hours arrangement will include two consecutive days off each week, unless otherwise requested by an employee and agreed to by Telstra.
(c) The agreement between Telstra and the individual employee to enter a preferred hours arrangement must be in writing, name the parties to the agreement and be signed (or otherwise accepted in writing) by Telstra and the individual employee and, if the employee is under 18 years of age, the employee's parent or guardian.
(d) An agreement made under this clause must:
(i) be made genuinely without coercion or duress;
(ii) detail the preferred hours arrangement, including the days and hours when the individual employee will work; and
(iii) state the date that it commences and, if applicable, the end date.
(e) Telstra must give the individual employee a copy of the agreement and keep a copy of the agreement as a time and wages record.
(f) Where a preferred hours arrangement applies, an employee may work their ordinary hours in accordance with clause 19.6(b), without the payment of overtime as a result of working the preferred hours arrangement.
(g) A preferred hours arrangement is subject to the right of Telstra to reasonably give directions from time to time that an employee is required to work overtime or be available to work overtime outside of the employee's preferred hours arrangement.
Where this occurs, the employee will be entitled to overtime payments in accordance with clause 20.4 if clause 14 does not apply.
(h) An employee is not, by reason of working under a preferred hours arrangement, taken to be a shiftworker or entitled to shift loadings.
(i) A preferred hours arrangement may be varied as agreed in writing between the employee and Telstra. Any variation is subject to the requirements of clause 19.14(c)–(e) inclusive.
(j) A preferred hours arrangement may be terminated:
(i) by either the employee or Telstra giving the other party four weeks' written notice of the agreement's termination; or
(ii) as agreed between the employee and Telstra: at any time.
Once the arrangement is terminated, an employee's ordinary hours of work will be in accordance with 19.6(a).
10. By inserting clause 19.15 as follows:
19.15 Multiple discrete periods of work in a day
A shiftworker may enter into an arrangement where the employee performs multiple discrete periods of work in a day on the terms set out in this clause. Such an arrangement will not be a condition of employment with Telstra and can only be made after an employee has commenced employment with Telstra.
(a) An arrangement to perform multiple discrete periods of work in a day may be entered into if an employee makes a request in writing to enter into such an arrangement and Telstra agrees. Telstra may decline such a request at Telstra's discretion.
(b) The agreement between Telstra and the individual employee to perform multiple discrete periods of work in a day must be in writing, name the parties to the agreement and be signed (or otherwise accepted in writing) by Telstra and the individual employee and, if the employee is under 18 years of age, the employee's parent or guardian.
(c) An agreement made under this clause must:
(i) be made genuinely without coercion or duress;
(ii) detail the agreed arrangements, including details about how the employee will be rostered; and
(iii) state the date on which it commences and, if applicable, the end date.
(d) Telstra must give the individual employee a copy of the agreement and keep a copy of the agreement as a time and wages record.
(e) The arrangement to perform multiple discrete periods of work in a day may be varied as agreed in writing between the employee and Telstra. Any variation is subject to the requirements set out at clause 19.15(b)–(d) inclusive.
(f) The arrangement to perform multiple discrete periods of work in a day may be terminated:
(i) by either the employee or Telstra giving the other party four weeks’ written notice of the agreement's termination; or
(ii) as agreed between the employee and Telstra: at any time.
Once the arrangement ends, each shift will be worked continuously and in accordance with clause 19.7.
(g) Unless otherwise agreed, each discrete period of work on a day will be at least three hours in duration, except where the employee performs work from their home, in which case the minimum period will be one hour. The total duration of periods of work on a day will be in accordance with clause 19.3.
(h) Telstra may not roster an employee to work more than three such discrete periods in a day.
(i) For each day where the employee works their ordinary hours in multiple discrete periods under an agreement made in accordance with this clause, the employee will receive a payment of 0.28% of the standard rate, with the total of such payments capped at a maximum of 1.38% of the standard rate per week.
11. By deleting clause 20.4(b) and inserting the following:
(b) for work performed outside the span of ordinary hours (or the individual employee's ordinary hours prescribed under an agreed preferred hours arrangement in accordance with clause 19.14); or
12. By inserting clause 20.6(e) as follows:
(e) Where an employee has agreed to work multiple discrete periods of work in a day, this clause will only apply where an employee works overtime after the last such period on a day.
13. By renumbering clauses 21.1 and 21.2 as clauses 21.2 and 21.3.
14. By inserting a new clause 21.1 as follows:
21.1 The duration and timing of breaks may be varied by agreement between an employee and Telstra on an ad hoc basis only, subject to Telstra considering the health and safety of the employee and an employee receiving an unpaid meal break or breaks totalling at least 30 minutes within 6.5 hours of commencing work.
15. By deleting the word “No” at the beginning of clause 21.2 and inserting “In the absence of any agreement under clause 21.1, no.”
16. By updating the cross references accordingly.
B. This determination comes into effect on XX Month 2022. In accordance with section 165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after XX Month 2022.
DEPUTY PRESIDENT
1 MA000123.
3 Exhibit A1.
4 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, submission, 1 March 2022; Community and Public Sector Union, submission, 1 March 2022; Professionals Australia, submission, 1 March 2022.
5 Exhibit A2.
6 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, submission, 16 March 2022; Community and Public Sector Union, submission, 16 March 2022; Professionals Australia, submission, 16 March 2022.
7 Section 168A(2)(a) of the Act.
8 Section 168A(3)(a) of the Act.
9 Section 168A(5). This subsection provides that, for the purposes of section 168A(3), each of the related bodies corporate are taken to be one employer, and each of the single enterprises are taken to be one enterprise.
10 Section 168B(2) of the Act.
11 Section 168B(3) of the Act.
12 Section 159(1)(a) of the Act.
13 Section 159(1)(c). See also ss 12 and 312(2)(a) of the Act.
14 Section 158(1), Items 1 and 3 of the Act.
15 Witness statement of Mr Darren Fewster dated 7 February 2022 (Exhibit A1) at [42], [44]-[45].
16 Supplementary witness statement of Mr Darren Fewster dated 9 March 2022 (Exhibit A2) at [4]-[5].
17 Exhibit A1 at [46].
18 Exhibit A2 at [6].
19 Transcript of proceedings dated 10 March 2022 (Transcript) at [209].
20 Submissions of Telstra Corporation Limited dated 7 February 2022 (TCL submissions) at [19]-[21].
21 TCL submissions at [28].
22 Exhibit A1 at [113].
23 TCL submissions at [33].
24 TCL submissions at [40]-[41].
25 TCL’s position is that of shift workers who responded to its FY22 Q1 Pulse Survey on this topic, 35% indicated that they would welcome the opportunity to work “split shift” arrangements: see TCL submissions at [105].
26 Clause 19.9 of the Telstra Award in its current form.
27 TCL submissions at [48].
28 TCL submissions at [52].
29 TCL submissions at [53].
31 Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35].
32 (2017) 265 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [41]-[44].
33 [2018] FWCFB 3500 at [21]-[24].
34 Edwards v Giudice (1999) 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [56].
35 Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [33].
36 National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [105]-[106].
37 See National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [109]-[110]; albeit the Court was considering a different statutory context.
38 See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227.
39 Exhibit A1 at [50].
41 Exhibit A1 at [72]-[81].
42 (2012) 223 IR 36; [2012] FWAFB 5401.
43 Re Telstra Corporation Ltd [2015] FWCFB 95; TCL submissions at [3].
44 Exhibit A1 at [79]; Annexure CF-30 to Exhibit A1 at [2].
45 [2015] FWCFB 95 at [6].
46 Ibid at [7]-[10].
47 Sections 312(1)(c) and 312(2)(a) of the Act.
48 Exhibit A1 at [115]-[118].
49 Exhibit A1 at [119]-[120]; Exhibit DF-50 to Exhibit A1.
50 Annexure DF-51 to Exhibit A1.
51 Exhibit A1 at [82]-[89].
52 Ibid at [83].
53 Annexures DF-36 and DF-37 to Exhibit A1.
54 Ibid at [88].
55 Ibid at [89].
56 Exhibit A1 at [90]; Annexures DF-38 and DF-39 to Exhibit A1.
57 Exhibit A1 at [93].
58 Annexure DF-42 to Exhibit A1.
59 TCL submissions at [43].
60 TCL relies upon results from its FY22 Q1 Pulse Survey that a substantial portion of its workforce were interested in choosing to work alternative days, or alternative start and finish times: see TCL submissions at [42].
61 TCL submissions at [47].
62 Application by National Retail Association [2013] FWCFB 2170, at [126]-[136].
63 Exhibit A1 at [98]-[99].
64 4 yearly review of modern awards – Penalty Rates [2017] FWCFB 1001; 265 IR 1 at [179] and [1932].
65 Ibid at [192].
66 [2017] FWCFB 10001; 265 IR 1 at [188]-[203].
67 Ibid at [195]-[196].
68 Ibid at [45].
69 Annexure DF-42 to Exhibit A1.
70 Proposed clause 20.4 deals with when overtime is payable to employees performing work under an agreed preferred hours arrangement.
71 Shop, Distributive and Allied Employees’ Association v Australian Industry Group [2017] FCAFC 161 at [48]-[50]; (2017) 253 FCR 368.
72 [2017] FCAFC 161 at [51]; (2017) 253 FCR 368.
73 Annexure DF-42 to Exhibit A1.
74 Ibid.
75 Exhibit A1 at [97](b).
76 Shop, Distributive and Allied Employees’ Association v Australian Industry Group [2017] FCAFC 161 at [53]; (2017) 253 FCR 368.
77 4 yearly review of modern awards – Penalty Rates [2017] FWCFB 1001; 265 IR 1 at [163].
79 Exhibit A1 at [103].
80 Exhibit A1 at [105].
81 Annexure DF-31 to Exhibit A1.
82 Transcript at [70], [71], [73] and [75].
83 Proposed clause 19.15(f)(ii) of the Telstra Award.
84 See clauses 3 and 13.1(c) of the Telstra Award.
85 Exhibit A1 at [106]. Mr Fewster relies upon the results of TCL’s FY22 Q1 Pulse Survey as evidence that TCL’s employees see benefit in the ability to choose when to take a meal break.
86 TCL submissions at [53].