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Fair Work Act 2009                                       1057717






s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective


Application by Australian Chamber of Commerce and Industry & The Australian Industry Group


Clerks—Private Sector Award 2010




9.40 AM, SATURDAY, 28 MARCH 2020


JUSTICE ROSS:  Good morning.  I am sorry about the short delay in getting underway.  Can I just go through the appearances?  I will read off who I expect on the line.  I just want to confirm that Bissett C is on the line?


COMMISSIONER BISSETT:  Yes.  I am thank you.


JUSTICE ROSS:  Thank you.  And I have Clancy DP with me.


The appearances by the parties, I have Mr Izzo, ABI on behalf of ACCI?


MR L IZZO:  Yes.


JUSTICE ROSS:  With Mr Ward, is that right?


MR N WARD:  The other way around, your Honour.


JUSTICE ROSS:  All right.  Mr Ward with Mr Izzo.  Sorry about Mr Ward.  I didn't mean to - -


MR WARD:  (indistinct)


JUSTICE ROSS:  Mr Rizzo from the ASU?


MR RIZZO:  Yes, your Honour.


JUSTICE ROSS:  Mr Clarke from the ACTU?


MR CLARKE:  Yes, your Honour.


JUSTICE ROSS:  Mr Williams on behalf of the Minister?


MR WILLIAMS:  Yes, your Honour.


JUSTICE ROSS:  Mr Smith on behalf of Ai Group.


MR SMITH:  Thank you, your Honour.


JUSTICE ROSS:  And do I have Mr Backlamb on the line as well?  No.  That's all right. I've got Mr Ward and Mr Izzo representing ACCI.


Can I briefly go through some procedural history?  We received the application on Thursday.  A revised draft variation determination was filed on Friday, but which did not materially alter the substance of the variations proposed.


On Thursday we issued a statement setting out the background to the application and expressing a number of provisional views and we invited - the same statement invited any interested party to file a written submission supporting or opposing the joint application and the provisional views set out in our statement.


Parties interested in attending the hearing by telephone were also invited to send an email to my chambers, providing their contact details.  The submissions and that expression of interest in attending the hearing were to be filed by 4 pm on Friday 27 March.


We received requests to attend the hearing by telephone from Mr Clarke, Mr Smith and the Minister.  They have all been granted, clearly.  We received written submissions from the Minister and a joint written submission filed by ACCI and Ai Group.


We've had the opportunity to read those submissions.  What I would propose to do is to hear from each of you as to whether there's a particular aspect of your submission that you wish to emphasise and we have just one or two questions.  I should have also mentioned that the application has the support of the Australian Council of Trade Unions and the Australian Services Union.


Can I go to you first, Mr Ward?  Then I will deal with Mr Smith.  Then Mr Rizzo, the ACTU, and then the Minister can respond to any of those submissions, as well as advancing what you wish to say, Mr Williams.  Mr Ward?


MR WARD:  Thank you ,your Honour.  Can your Honour hear me?


JUSTICE ROSS:  I can.  I might indicate - can each of you - it's fine hearing you, Mr Ward, just make sure that you speak directly in because we were having a little problem with muffling earlier.  Yes, Mr Ward.


MR WARD:  Thank you, your Honour.  Look, I tend to agree that given the nature of the application, I will deal with some small housekeeping matters first.  I do wish to talk then briefly to the application and then I will just comment on what I think are the three statutory considerations and I do want to make an observation on the record about the cooperation of Australian Services Union and the ACTU.


Can I just deal with a housekeeping matter?  There is one small typographical error in annexure A and it was filed at 2 o'clock on 27 March.  And if I can just deal with that, if the Commission can go to the proposed determination, and go to clause I.2.5(g)?


JUSTICE ROSS:  Yes.  We have that.


MR WARD:  Thank you, your Honour.  The third line currently says, "During the period schedule I is operation", the word "in" should be inserted between "is" and "operation".


JUSTICE ROSS:  Yes, "is in operation."


MR WARD:  Yes.


JUSTICE ROSS:  Just while we're on the variation determination, Clancy DP has a cross-referencing matter that he wishes to raise with you and it might be convenient to deal with that now.


DEPUTY PRESIDENT CLANCY:  Just in the same clause, that is clause I.2.5 at subparagraph (h)(iv), the text states:


The vote shall not take place until at least 24 hours after the requirements of clause I.2.5(g)(i),(ii) and (iii) have been met.


I believe it should be (h)?


MR WARD:  Yes, your Honour.  That's correct.




JUSTICE ROSS:  Thanks, Mr Ward.  Go on.


MR WARD:  Just very briefly, I will make a few observations about the application itself.  The application seeks to vary the (indistinct 9.46.38) sector modern awards in quite unusual times by introducing a variety of what might best be described as flexibilities.  I wish to talk very briefly to each of them.


The first flexibility in I.2.1 is similar to clauses that currently operate in the industrial sphere, but is broader.  In effect, it is a clause that ensures that an employee will do any work they can to help out in the current situation and it could in its operation avoid any debates about what might be described as "classified work".  In that sense, the clause should be seen as relatively uncontroversial.


JUSTICE ROSS:  Just before you leave that clause, I had clarified this with the direct parties earlier, but I think it's worth noting for the record that clause 19.7, higher duties allowance, will continue to operate on its own terms and apply to an employee as that section says, "when required to perform any of the duties in a classification higher than their usual classification for more than one day."


MR WARD:  Yes, your Honour.  That's correct.


JUSTICE ROSS:  All right.  Thank you.


MR WARD:  Clause I.2.2 seeks to address the issue of minimum engagement of part-time employees working from home.  It seeks to reduce the minimum engagement from three hours currently in the award to two.  In the context of an employee not having to commute to actually attend to work, this would be a very reasonable and, again, uncontroversial change.  And a similar change is proposed for casual employees working from home in clause I.2.3.


Clause I.2.4, introduces the ability for agreed flexibility in the span of hours when working from home and again this effectively acknowledges that an employee becomes more personally responsible for determining when they work, when they are in the home environment to produce the given output, rather than in the more traditional notion of office hours or business office hours.


Clause I.2.5 is potentially a more nominal clause in that it provides for the ability for full-time employees to, in effect, reduce their working hours in a week to what would normally be described as part-time hours or for part-time employees to reduce their hours below that which they currently operate.  The basis for the reduction is by way of a vote to change wholesale either the workplace or a section of the workplace to the new arrangement.


And in simple terms in the current environment, the clause is advanced on the understanding that for some employees some hours of work will ultimately be better than no hours of work and it will be matter in the (indistinct 9.50.26) for the employees and their employer to determine whether or not that is a matter which can assist both the employees staying at work and the (indistinct) functioning effectively in these incredibly unusual times.


I will come back to that clause in more detail when I deal with statutory issues.


JUSTICE ROSS:  Just while you are on that clause, can I take you to clause I.2.5(4)?  Do you have that?


MR WARD:  Just bear with me, your Honour.


JUSTICE ROSS:  That's all right.


MR WARD:  Could your Honour say the reference again?


JUSTICE ROSS:  It's I.2.5(e).


MR WARD:  The one commencing, "Nothing in schedule I"?




MR WARD:  Yes, your Honour.


JUSTICE ROSS:  So in relation to that, I note that the Clerks Award currently provides for changes in the hours of part-time employees by agreement in writing between the employer and the employee.  I think that's in clause 11.3.


MR WARD:  Yes.


JUSTICE ROSS:  And nor is there any - there's no current impediment on an employee reaching an agreement with their employer to move from full-time to part-time employment.  And as I saw this paragraph (e), It's really a statement making it clear that schedule I is not intended to prevent those existing or to impede those existing flexibilities.  Am I right about that?


MR WARD:  You are, your Honour, and the additional flexibility, of course, would be the ability of common law for an employer and employee to agree, for instance, to move from full-time to part-time.


JUSTICE ROSS:  Yes.  All right.  Thank you.  You were going on to annual leave?


MR WARD:  Thank you, your Honour.  Clause I.2.6 deals with the ability to direct the taking of leave, and I will come back to the statutory consideration related to that in a moment.  At this time, the more businesses can rely on their balance sheet (?) provisions rather than their cash flows, they will be in a better position to weather the current storm economically and also, as best as possible, continue to provide ongoing employment and hours of work to employees.


It is most likely in the current circumstances most employees would, in any event, agree to take leave, but this clause ensures that an employer has to deal with this directly, thus relying on their balance sheet provisions rather than for (indistinct) cash flows, which is a critical issue at this time for most businesses, as has been recognised by the government's various proposed methods to support business.


Clause I.2.7 deals with a close down, but the nature of the clause itself is reasonably well understood and uncontroversial in that most award - not all but most awards provide for an annual close down but the (indistinct) has leave to allow the notion of the annual close down to be applied at large and to operate in the context that the COVID 19 pandemic.  This would allow a situation to occur where a business was required to close itself down and it would then provide for the orderly taking and exhaustion of annual leave as part of that process.


And again, that would be an orderly process which should be commendable and, again, provide for the ability to rely on the balance sheet provisions rather than cash flows.  But in the circumstances, those are those are the variations that are advanced to the award.


They are unambiguously aligned not just to the nature of the pandemic, but also to the challenges currently confronting business and employees as the Commonwealth and state governments impose understandable restrictions on the operation of business owners directly or indirectly.  They are intended squarely to assist business remain viable, to stay open, to promote ongoing employment and as much as possible ongoing income.  And those are the variations sought.


There are potentially three statutory considerations for the Commission to bear in mind.  Those are section 134, section 93(3), and possibly a question may arise which would address as to the basis upon which a modern award can contain the machinery associated with the operation of the variation in clause I.2.5.  That is the process by which employees are informed prior to the vote to reduce working hours.


I will just quickly address those.  In relation to section 134, I don't want to say any more at this stage unless asked.  We rely on annexure B, which are the grounds to the application and for completeness, the version of annexure B filed at 2.16 electronically by Mr Izzo on the 26th of the 3rd.  We rely on our submissions filed on the 27th of the 3rd, and we also rely on the decision of the Full Bench in the Hospitality Award last week.


We believe that in circumstances that require (indistinct 9.57) are met and we have dealt with those effectively in the materials provided so far.


Clause I.2.6 does (indistinct) the consideration of section 93.3 of the Act in that it provides for the modern award to allow an employer to direct the taking of leave.  The question that arises here is simply whether or not that clause is reasonable in the context of section 93(3).  We would simply say this; in the circumstances of the COVID 19 pandemic, in the circumstances confronting employers and employees now and having included the safeguard of the requirement to consider employees' personal circumstances plus still provide one weeks' notice, we believe that on any basis the test for reasonableness has been met.


That then leaves us with the question of the basis for the inclusion of the machinery provisions in I.2.5(h)(i), (ii) and (iii).  We deal with, in our written submissions in paragraphs 8 to 17 and we rely on subsection 139(1)(j) or in the alternative section 142.  Can I just address that matter a little more than we have in the written submissions, subject to any questions.


It would seem to us that section 139(1)(j) is sufficiently broad enough to allow the clause to operate in an award.  The essential character of the provision in (h)(i), (ii) and (iii) is around ensuring in very unusual circumstances and in context with a quite unusual clause that an employee on very short notice understands what representation they might adopt to assist them either in understanding their rights or potentially to actually act for them in discussions with the employer.


And in that context, we believe that the provision in section 139(1)(j) which discusses consultation and representation and (indistinct 10.00.16) we believe that it is sufficiently broad enough to allow the Commission to include I.2.5(h)(i), (ii) and (iii).  Now, if there was anxiety about that from the Commission, then we would rely on our submissions in regard to section 142, which are set out in our submissions at paragraph 17.  But again, various features of the clause are (indistinct) people are being informed of an unusual clause in unusual circumstances and it is a necessity for expedition in undertaking the clause in terms of its enacting.  And in those circumstances unusual arrangements need to be considered for insuring people understand their rights and understand their rights to representation should they need it.  I will say no more about that unless asked.


Subject to an observation about the process, those are generally the submissions we wanted to make this morning. I do want to say on the record something about the cooperation of the Australian Services Union and the Australian Council of Trade Unions.


These are unambiguously times of great stress for both employees and employers and in many respects at a societal level this is a time for humility, courage and generosity of spirit.  And unambiguously the Australian Services Union and the Australian Council of Trade Unions have demonstrated those qualities in how they have engaged with my client and the Australian Industry Group, and in particular Mr Clarke - Mr Rizzo and Mr Clarke have embodies those qualities in discussions and I sincerely on behalf of my client thank them for doing that.


Are subject to any questions, those are the submissions we make.  We commend the application to the Commission and ask that the award be varied in the terms of the application.  If the Commission please.


JUSTICE ROSS:  Thank you, Mr Ward.  I have no questions.  Clancy DP?




JUSTICE ROSS:  Commissioner Bissett?




JUSTICE ROSS:  Thank you.  Can I go next to Mr Smith on behalf of Ai Group?


MR SMITH:  Yes.  Thank you, your Honour and Commissioner and Clancy DP.  The Australian Industry Group adopts the submissions made today by Mr Ward on behalf of ACCI.  We also rely on the detailed content of annexure B to the application and the joint Ai Group/ACCI submission that was filed yesterday.


We further rely on the decision in the Hospitality Award matter of earlier this week and the contents of the statement and provisional views expressed within it of yesterday's date.  If I could also add my comments about the cooperation of the other parties.  It has been a quite detailed process, the discussions that have taken place with the ASU and the ACTU and between ACCI and Ai Group.  There has been a lot of cooperation to work through some very difficult issues and I support the comments that Mr Ward has made and we would seek t have the award varied as soon as possible if the Commission pleases.


JUSTICE ROSS:  Thank you, Mr Smith.  Mr Rizzo can I go to you and then Mr Clarke or do you have a particular order in mind?


MR RIZZO:  I'm happy to go, your Honour.


JUSTICE ROSS:  All right.


MR RIZZO:  Thank you, your Honour and members of the Full Bench.  The ASU supports the submissions of the employer associations this morning.  They are very good submissions and we fully support them.  Whilst specifically we support the application and we support the application, your Honour, because I think we all know these are extraordinary times.  We do have a crisis and sometimes extraordinary times of crisis demand that we do things which are different to business as usual.


And the ASU and the ACTU have taken that approach and in the last week have cooperated with the employer associations in order to get an outcome which is before the Commission today.  We do have a crisis, your Honour.  Just yesterday we heard that Myer is shutting its doors for a while as well.  An iconic brand here in Victoria and nationally, and a typical place where the ASU would have clerical and administrative (indistinct) doing their job.


The crisis is not only here in Australia.  That Unfortunately, we have over 3,000 Australians affected (indistinct) and was we know, internationally the crisis is absolutely terrible. And it has no regard for (indistinct) privilege.  We've heard in the last 48 hours that Prime Minister Boris Johnson of England is infected.  Prince Charles of all people is infected.


So this thing is terrible.  In my traditional homeland of Italy the devastation is terrible.  7,000 people have died.  80,000 people are infected and the death toll and infection rate is increasing exponentially in the USA and Australia (indistinct)


So we have a unique set of circumstances, your Honour.  Unique in the sense that we have not experienced (indistinct) for at least a hundred years and therefore beyond all living memory.


We support the application, your Honour, and what we seek to achieve is flexibility for both employers and employees and the main aim, of course, is to save jobs and to make sure that hours and jobs are spread as much as possible and to keep people in work as much as possible.


We've seen the (indistinct) last week of (indistinct) here Australia where tens of thousands of people have either lost their jobs or been stood down et cetera.  So we are wanting to make things easier for our members, employees in general and for employers.


The schedule contemplates that access to take annual leave is more practical, that proving flexibility for people working from home, in working different hours to come to an agreement with their employers.  In the alternative, it provides (indistinct) employment if people do less hours or provides for employees and employers to contemplate training, professional development and study leave in order to act as an alternative to employment.


The schedule importantly (indistinct) a process for consultation with affected employees, especially when it comes to a reduction in hours.  The schedule deliberately says that 75 percent of (indistinct) employees must vote to approve any reduction in their hours.  This is a very important principle and (indistinct) is concerned and we are happy that it forms part of the - part of the schedule, your Honour.


Mr Ward has already referred to I.2.5(h) where employees can avail themselves of advice and information from the Australian Services Union.  The idea is that the sheet is provided with the ASU COVID 19 information sheet and this would assist employees, particularly where there is the issue of reduction in hours.


The ASU, as the Full Bench well knows is the main union in the sector.  We believe that this information sheet and the schedule as a whole is needed given the nature of this award.  It is an occupational award that covers over a million employees or workers in Australia.  There is virtually, your Honour, as you know a clerical admin officer in virtually every workplace in the country.  A lot of them prepare our pays each fortnight, for example; a very important function.


So these people are people who cooperate to perform the work which is vital to us.  Some of these workplaces, your Honour, may be small, where there may be a single person working in a place of a handful of people working in a particular site.  There are tens of thousands of workplaces across the country, but big and small, and (indistinct)  very, many industries.  So it's not a collective type of sector.  In fact, it's made up of disparate workplaces all across the country and in a sense at times (indistinct) in common.


So we believe that these types of employees who may be isolated or may be in small organisations and without access to information - we think it is important that these employees do have information provided to them from the ASU and can seek and gain any advice regarding any proposed change or a proposed change and the reduction of hours.


Your Honour and the Full Bench, the ASU (indistinct) fully support this.  We are responding to extraordinary times and the other reason, of course, why we support it is - the important point - is while it is for a short term, this does expire on 30 June 2020 and so that is a comfort to us and we will see what happens are that particular date, but the ASU commends the variations to the Full Bench and encourages it to (indistinct).  If your Honour, pleases.


JUSTICE ROSS:  Thank you, Mr Rizzo.  Mr Clarke?


MR CLARKE:  Yes. Thank you, your Honour.  I would like to put on record our appreciation for the Commission's willingness to accommodate the application expeditiously and also accommodate the (indistinct) for it in the draft determination.  The outcome that is being sought in this application (indistinct) negotiations to address in very unusual circumstances that places some considerable stress on our economy and on all participants in it.


We, the ACTU, have played a constructive role in those negotiations and adopt and echo the comments of Mr Ward about the cooperation and the spirit in which it's been undertaken by all the parties involve.  What the parties have managed to achieve through those negotiations is a consensual outcome consisting of a series of temporary and targeted messages that facilitate businesses and their employees being in the best position possible to adjust to those changed circumstances, while retaining the rates of pay for work performed.


I also echo the comments of Mr Rizzo.  This award is a significant award.  It's occupational coverage (indistinct) reach into most private sector industry (indistinct).  There is not an insignificant proportion of persons who perform work covered by this award.  As at the 2018 EBA survey, it (indistinct) 1.7 million people, which is 16 percent of those who are (indistinct) but many more rely upon its condition.  An award providing cover to about 20 per cent or more in (indistinct) scope would have been (indistinct).  So that's just over 280,000 employees (indistinct) who are paid under the award and many, many more obviously whose day-to-day working conditions are determined by the award.


A key part of the changed circumstances of this variation seems to be responsive to the mixed and mandatory and non-mandatory (indistinct) in practice in order to make working from home (indistinct) or a socially responsible thing to do where it's possible.


These variations hope to achieve an outcome where that can be possible and achievable in more workplaces and that is something that's going to be increasingly important for schooling, for before and after school hours care, which has become more disrupted.  This proposed variation is not only about working from home (indistinct) there are other adjustments that are facilitated through it, including the reduction in working hours and annual leave, close down directions and the capacity to prolong (indistinct) periods of proportionately reduced rates of pay where agreed.


In relation to the reductions to working hours that's (indistinct) at I.2.5, can I just state that we understand that demand (indistinct) fluctuation in working hours and not something which (indistinct) employees will be (indistinct) took many of them by surprise and we anticipate there will be questions about it.  And the provisions at subparagraph (h) will ensure that those employees have constant access to (indistinct) but they can participate in the voting process provided for in that provision in a fully informed way and so that that process can be conducted expeditiously.


The changed arrangements around annual leave are obviously designed to deal with a situation (indistinct) and no-on in the fairest way achievable.


We support the Commission adhering to the provisional view expressed in paragraph 24 of the statement on 26 March and issuing a determination as soon as practicable.  If the Commission pleases.


JUSTICE ROSS:  Thank you, Mr Clarke.  Mr Williams?


MR WILLIAMS:  Thank you, your Honour and thank you members of the Full Bench.  The Minister has taken advantage of the opportunity offered to the parties and to the Minister to make a written submission and that submission contains all of the (indistinct) wishes to make in support of the application.


The Minister has only additionally asked me to record today that he has (indistinct) his congratulations to the parties and the ACTU and his deep appreciation of the collaborative way in which they have responded in difficult circumstances to secure an outcome which will undoubtedly assist our community and our economy to withstand this crisis and emerge in the best possible way.


The Minster also thanks the Fair Work Commission and, in particular, the Full Bench today for the timely and practical way it has assisted the parties to reach this point and to respond (indistinct) such urgency to the application made.  And the Minister strongly supports it being granted.  Thank you, your Honour.


JUSTICE ROSS:  Thank you, Mr Williams.  Is there anything further from any party?


MR RIZZO:  Yes.  Mr Rizzo here.  I neglected to say that I (indistinct) to the award and I thank, obviously, the fantastic work that the Commission has done in assisting the parties in the last week as well, your Honour.


JUSTICE ROSS:  No problem. Thank you, Mr Rizzo.  Given the nature and the range of issues, we propose to adjourn and reserve our decision.  I don't want your anxiety level to go up by that.  I anticipate we will hand down the decision by 12 noon today or shortly thereafter.  Copies will be emailed to each of you and also posted on our web site.  If there's nothing further, thank you very much for your attendance.  I will adjourn the proceedings.

ADJOURNED INDEFINITELY                                                        [10.18 AM]