[2007] AIRCFB 439

PR977234

 

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
Clause 29 of Schedule 6 and s.553(1) applications to vary awards
Clause 42 of Schedule 6 and s.113 references to Full Bench

Wages and Allowances Review 2006

Various industries

 
   

JUSTICE GIUDICE, PRESIDENT

 

VICE PRESIDENT LAWLER

 

SENIOR DEPUTY PRESIDENT MARSH

 

SENIOR DEPUTY PRESIDENT KAUFMAN

 

COMMISSIONER SIMMONDS

MELBOURNE, 30 MAY 2007

SUPPLEMENTARY DECISION

Wages & Allowances Review 2006 – transitional award issues in the Territories – whether follow the job loading and supervisor loadings in the building and construction industry are allowable transitional award matters – whether follow the job loading and supervisor loadings part of a basic periodic rate of pay – whether particular allowances are allowable pre-reform award matters – method of calculation of allowances.

[1] This decision deals with a number of unresolved issues which arise from the Wages and Allowances Review 2006 decision of 8 December 2006 (the December 2006 decision). 1 A list of the relevant applications is attached as Annexure A. We have grouped the issues under the following headings:

Transitional Award Issues

[2] We deal first with the applications to vary the Social and Community Services Industry – Community Services – Northern Territory Award 2002 [Transitional] and the Clerical and Administrative Employees (Northern Territory) Award 2000 [Transitional]. The principal issue is whether transitional awards have any operation in the Territories. In considering that issue it will be necessary to refer to a number of legislative provisions.

[3] As discussed in the December 2006 decision, the new award system is comprised of pre-reform awards and transitional awards. 2 Pre-reform awards apply to employers covered by federal awards prior to 27 March 2006 provided the employers are within the definition of employer in s.6(1) of the Workplace Relations Act 1996 (WR Act). Transitional awards apply to employers covered by federal awards prior to 27 March 2006 but who do not fall within the definition of employer in s.6(1).

[4] Clause 4 of Schedule 6 to the WR Act deals with transitional awards and indicates on whom they are binding. It provides, relevantly:

[5] The terms “excluded employer,” and “transitional employer” are defined in cl.2(1) of the Schedule to mean, respectively:

[6] It is useful to set out the definition of employer in s.6(1) again:

[7] The definition appears to be comprehensive in relation to the Territories. It covers an employer which is a constitutional corporation (paragraph (a)) and in addition a person or entity carrying on an activity in a Territory so far as the person or entity employs or usually employs a person in connection with that activity (paragraph (f)). It is to be inferred that an employer which is a corporation, but not a constitutional one, is covered by paragraph (f).

[8] The Australian Municipal, Administrative, Clerical and Services Union (ASU) emphasised the fact that paragraph (f) of the definition excludes an employer which carries on an activity in a Territory if the employer does not employ or usually employ a person in connection with that activity. On this basis it was contended that if an employer, not being a constitutional corporation, carried on an activity in a Territory and employed a person otherwise than in connection with that activity, that person would be covered by a transitional award in the Territory. This was advanced as a powerful reason for the existence of transitional awards in the Territories and for the maintenance of them.

[9] The contention is not persuasive. The term “activity”, while not defined in the WR Act, is clearly a general term of wide meaning. It is to be distinguished from other terms used in the WR Act, such as “industry”3 The mere performance of work by an employee for an employer would come within the description of work in connection with an activity carried on by that employer. Any person employed in a Territory must be employed in connection with an activity carried on by that person’s employer in that Territory. Looking at the question from another perspective, if a person is employed otherwise than in connection with an activity carried on in a Territory we cannot envisage a situation in which a Territory award would apply to him or her. This case provides an illustration of the point. The awards before us apply to clerical and administrative employees in the Northern Territory and community service workers in the Northern Territory. If an employee is not employed in connection with an activity carried on in the Northern Territory, the employee could not be covered by either of the awards. If an employee is employed in connection with an activity carried on elsewhere in Australia, other industrial instruments might or might not apply. It is not necessary that we address that situation.

[10] It follows that there can be no excluded employer in a Territory and, by the same reasoning, there can be no transitional employer in a Territory.

[11] The remaining question is whether the legislature intended, nevertheless, that there should be transitional awards in the Territories. There is no indication in the terms of the legislation of such an intention. While cl.4(1) of Schedule 6 provides that awards in force at 27 March 2006 continue in force after that date as transitional awards, that stipulation is expressed to be subject to the terms of the clause as a whole. Because cl.4(2), in conjunction with the definition of excluded employer, makes it clear that no employer could be bound by such an award in a Territory, we are driven to conclude that there are no transitional awards in the Territories. If we are wrong in that conclusion, we nevertheless see no purpose to be served by varying a transitional award in relation to the Territories.

[12] For these reasons we have decided to dismiss the applications which purport to vary the transitional awards described above.

Building and Construction Industry

[13] The first outstanding issue concerns the follow the job loading in cl.18.3.1 of the National Building and Construction Industry Award 2000 [Transitional]. 4 Clause 18 is entitled “Classifications and Wage Rates” and contains the classification structure, the wage rates and a number of wage related provisions. Clause 18.3 is entitled “Hourly Rate Calculation.” Where relevant it reads as follows:

[14] Clause 18.3.1 is a general provision which adjusts the hourly rates in a way which purports to take into account the loss of wages for employees in the industry during periods of unemployment.

[15] It was submitted by Master Builders Australia Inc. that the follow the job loading provided for in cl.18.3.1 is neither an allowable transitional award matter pursuant to cl.17 of Schedule 6 to the WR Act nor an allowable pre-reform award matter pursuant to s.513(1) of the WR Act. It also submitted that the loading does not form part of the basic periodic rate of pay for the purpose of s.178 of the WR Act. The Construction, Forestry, Mining and Energy Union (CFMEU) contended that the loading is an allowable transitional award matter and remains part of the transitional award. It also contended that the loading is an integral part of the rate of pay for employees covered by the pre-reform award and is not an allowable pre-reform award matter.

[16] The first question is whether cl.18.3.1 is an allowable transitional award matter. Clause 17(1) of Schedule 6 to the WR Act sets out the allowable transitional award matters. It includes the following paragraph:

[17] In construing this paragraph it is important that the statutory context be kept in mind. Clause 17 specifies the matters which can be dealt with in awards. The words of cl.17(1)(c) are general and no doubt the paragraph is intended to be applied without resort to legal niceties. It would be unduly technical to hold that the loading provision is not a rate of pay. While the hourly rate calculation takes into account the daily hire nature of work in the industry covered by the award and the inevitable gaps between periods of employment, it is no less a rate of pay for that. An additional consideration is that in material respects cl.17(1)(c) is in the same terms as s.89A(2)(c) of the Workplace Relations Act 1996 (pre-reform). It is relevant that during the 10 years of operation of that section the follow the job loading continued to be part of the award. We have no doubt that cl.18.3.1 prescribes an hourly rate of pay for the classifications involved.

[18] The second and related issue concerns the payments prescribed in cl.18.4 of the transitional award for leading hands. The leading hand provision is as follows:

[19] It can be seen that cl.18.4.2 adopts the same approach as cl.18.3.1. The practical effect is that the follow the job loading is also applied to leading hand rates. Consistent with our conclusion in relation to cl.18.3.1, we have decided that the rates for leading hands in cl.18.4.2 are also an allowable transitional award matter, pursuant to cl.17(1)(c) of Schedule 6.

[20] The loading remains a valid part of the transitional award. It follows that the wage rates in that award should be varied by the amounts in the December 2006 Decision.

[21] In relation to the application to vary the pre-reform award, a question which arises is whether the follow the job loading remains part of the award or has ceased to be so. The first possibility is that the loading provisions have become part of the Australian Pay and Classification Scales (APCSs) for which the Australian Fair Pay Commission (AFPC) is responsible. The AFPC has jurisdiction in relation to, relevantly, basic periodic rates of pay. A basic periodic rate of pay is defined in s.178 of the WR Act as follows:

[22] The CFMEU submitted that this Commission is unable to determine whether the follow the job loading is a component of the basic periodic rate of pay. It said that the matter must ultimately be determined in another jurisdiction. The submission cannot be fully accepted. While the Commission, not being a court, cannot make a binding legal declaration, it must nevertheless decide legal questions from time to time. For example, the Commission is often confronted with legal questions in the course of deciding whether it has jurisdiction, whether it can exercise particular powers or whether it can carry out particular functions. In this case, if the loading is part of the basic periodic rate of pay for employees covered by pre-reform awards this Commission has no power in relation to it so far as the pre-reform award is concerned. For that reason it is appropriate that we deal with the question.

[23] We deal first with the follow the job loading in cl.18.3.1. The loading is a method of calculation which applies almost without exception to tradespersons and labourers covered by the pre-reform award. (The exceptions are those referred to in the proviso to cl.18.3.1(b).) Whatever the derivation or purpose of the loading, it is now part of the relevant award hourly rates for all employees and for all purposes. As such it forms part of the basic periodic rate of pay.

[24] We add for completeness that our conclusion is consistent with the terms of s.181 of the WR Act. That section deals with, among other things, the determination of a basic periodic rate of pay. Section 181(2) reads where relevant :

[25] The fact that s.181 contemplates that a basic periodic rate of pay may be determined by reference to other provisions tends to negate any suggestion that, because of the manner in which it is calculated, the follow the job loading is not part of a basic periodic rate of pay.

[26] The leading hand rates in cl.18.4 also incorporate the follow the job loading. The clause prescribes rates for leading hands based on the number of employees they supervise. The provision is similar to cl.18.3.1. As such it determines basic periodic rates of pay for supervisors.

[27] We have considered the possibility that the leading hand rates should be characterised as allowances. The fact that they are calculated by adding various amounts to the rates of the employees under supervision might give some support to that characterisation. While the rates are not expressed as allowances that is not a persuasive consideration because it is necessary to look at the substance of the provision. The substance of this provision is a supervisory classification structure and rates based on the number of employees supervised and the rates of pay applying to those employees.

[28] It follows from these conclusions that cll.18.3.1 and 18.4 are part of the APCSs and not part of the pre-reform award.

[29] In the circumstances it is not necessary that we deal with the possible further question of whether cll.18.3.1 and 18.4 are allowances for the purposes of s.513(1)(h) of the WR Act.

[30] The parties should now be in a position to agree on the orders necessary to give effect to our decision in relation to the transitional award and the pre-reform award. An agreed draft should be filed as soon as practicable.

Television Industry

[31] There are two applications before us relating to the Television Industry Award 2000 – a pre-reform award. 5 There are two outstanding issues. The first concerns an objection raised on behalf of a number of the employer respondents to the award that certain payments are part of the APCSs and as such are not part of the pre-reform award and cannot be varied by the Commission. There are two such payments. They are described in the award as payable to technicians with a broadcast operator’s certificate of proficiency or equivalent, or a television operator’s certificate of proficiency or equivalent: cll.25.9.1 and 25.10.1 respectively. The provisions are as follows:

[32] We have set out the definition of a basic periodic rate of pay, found in s.178 of the WRA, earlier in these reasons. We were told by Mr. Feltham, appearing on behalf of CPSU, the Community and Public Sector Union (CPSU), that these are provisions for allowances based on skill or proficiency measured against objective criteria. Mr. Graham, on behalf of a number of respondents, submitted that the payments were part of the wage rates rather than allowances. He informed us that the payments were part of the wage rate for technicians until 2000 and even now are treated as part of the wage rate, being payable for all purposes.

[33] While it is a difficult issue, it appears on the limited material before us that the qualifications for the payments are in addition to the work requirements for the technician classification. Even if all technicians qualify for the payments, that would not necessarily indicate that the payments were part of the basic periodic rate of pay. The position of these payments might be contrasted with the position of the follow the job loading in the construction industry dealt with earlier in this decision. In that case the follow the job loading applies by definition to all hourly rates. In this case additional qualifications are prescribed as prerequisites. In our view the payments are not part of the basic periodic rate for technicians but are separate allowances. We think it ought to be said, however, that there are inherent difficulties in separating rates of pay from allowances. In many cases the concepts are capable of significant overlap, and indeed may be indistinguishable.

[34] Given that we have decided that the payments provided for in cll.25.9.2 and 25.10.2 are not part of the basic periodic rate of pay for technicians, another issue must be resolved. Mr. Graham submitted on behalf of his clients that the payments are not allowable pre-reform award matters. If this submission is correct then the Commission has no power to vary the payments. The allowable pre-reform award matters are prescribed in s.513(1) of the WR Act. The relevant provision is s.513(1)(h), which reads:

[35] The payments are not of a kind dealt with in paragraphs (i) or (iii) of the definition. We have concluded, however, that they are covered by paragraphs (ii). The payments are conditional upon the specified qualification being obtained. While one might expect more rigour in the definition of the qualifications, it cannot be said that all of the skills referred to are taken into account in the rates of pay prescribed for technicians.

[36] For these reasons we grant the CPSU application to vary the payments in cll. 25.9.2 and 25.10.2 of the pre-reform award.

[37] The remaining issue is the operative date for the variation to the pre-reform award. Mr Graham submitted that his clients had not been served with the application prior to 15 December 2006. We infer from Mr Graham’s correspondence that his clients were aware on or before 4 December 2006 that an application had been made to vary the award to reflect the AFPC’s wage-setting decision. We see no reason to depart from the operative date in the December 2006 decision, the first pay period on or after 1 December 2006. The reasons we then gave should prevail over Mr Graham’s submissions. The wage rates in the relevant APCSs were increased with effect from 1 December 2006 pursuant to the AFPC’s decision. Our decision, in the case of Mr Graham’s clients, simply adjusted allowances from a similar date.

[38] The award should be varied in accordance with the CPSU draft.

Local Government Industry Western Australia

[39] In two awards operating in local Government in Western Australia there is an unresolved issue relating to the method of calculating the increases in some allowances. The awards are the Local Government Officers (Western Australia) Award 1999 6 and the Municipal Employees (Western Australia) Award 1999.7 In each case the Western Australian Local Government Association has submitted that expense related allowances, that is allowances falling within s.513(1)(h)(i), should be varied by reference to the variation in the relevant APCSs arising from the AFPC’s wage-setting decision. The ASU and the Australian Chamber of Commerce and Industry Western Australia (ACCI WA) submitted that such allowances ought to continue to be adjusted by reference to movements in the Consumer Price Index. We see no reason to depart from the usual approach. Allowances which constitute a reimbursement of expenses ought to be adjusted by reference to price increases. We shall issue orders in terms of the drafts provided by the ASU.

Additional Matters

[40] There are a number of applications which can be dealt with briefly or which should be mentioned for the record only.

[41] There are no outstanding matters in the application to vary the Commercial Sales (Victoria) Award 1999 8 and an order will be issued in terms of the agreed draft.

[42] We have decided to dismiss the applications to vary the Community Services (Care-Aides-Silver Chain) Award 2002 [Transitional] 9 and the Community Services (Home Help-Silver Chain) Award 2002 [Transitional].10 There is only one employer respondent to these awards and it asserts without contradiction that it is a constitutional corporation.

[43] There are no outstanding matters in the application to vary the Clerical and Salaried Staff (Agribusiness) Award 199911 An order will be issued in terms of the agreed draft.

[44] The applications to vary the Transport Workers (Swan Transit) Award 2002 [Transitional] 12 and the Clerical Officers (Northern Territory Totalizator Administration Board) Award 2002 [Transitional]13 have been withdrawn.

[45] There are no outstanding issues concerning the application to vary the Electricity Industry (Western Power Corporation) Award 2000. 14 An order will be issued in accordance with the agreed position.

BY THE COMMISSION:

PRESIDENT

Appearances:

H Lewis for the Finance Sector Union.
J Nucifora for the Australian Municipal, Administrative, Clerical and Services Union
S Maxwell for the Construction, Forestry, Mining and Energy Union.
Mr. P Feltham for the Community and Public Sector Union, the CPSU.

Hearing details:

2007.
Melbourne.
9 May.

 1   PR002006.

 2   ibid, paras [4] to [7].

 3   See the definition of “industry” in s.4 of the WR Act .

 4   National Building and Construction Industry Award 2000 [Transitional], AT790741.

 5   Television Industry Award 2000, AP799021.

 6   Local Government Officers (Western Australia) Award 1999, AP787011.

 7   Municipal Employees (Western Australia) Award 1999, AP788039.

 8   Commercial Sales (Victoria) Award 1999, AP772623.

 9   Community Services (Care-Aides – Silver Chain) Award 2002 [Transitional], AT819451.

 10   Community Services (Home Help – Silver Chain) Award 2002 [Transitional], AT819398.

 11   Clerical and Salaried Staff (Agribusiness) Award 1999, AP772066.

 12   Transport Workers (Swan Transit) Award 2002 [Transitional], AT821223.

 13   Clerical Officers (Northern Territory Totalizator Administration Board) Award 2002 [Transitional]
AP772066.

 14   Electricity Industry (Western Power Corporation) Award 2000, AP781097.

ANNEXURE A:

(C2006/173)

National Building and Construction Industry Award 2000

AP790741

(C2006/174)

National Building and Construction Industry Award 2000[Transitional]

AT790741

(C2006/404)

Television Industry Award 2000

AP799021

(C2006/3885)

Television Industry Award 2000

AP799021

(C2006/237)

Community Services (Care Aides – Silver Chain) Award 2002 [Transitional]

AT819451

(C2006/243)

Community Services (Home Help – Silver Chain) Award 2002 [Transitional]

AT819398

(C2006/373)

Transport Workers (Swan Transit) Award 2002 [Transitional]

AT821223

(C2006/3355)

Clerical and Salaried Staffs’ (Agribusiness) Award 1999

AP772066

(C2006/3541)

Local Government Officers (Western Australia) Award 1999

AP787011

(C2006/3543)

Municipal Employees (Western Australia) award 1999

AP788039

(C2006/3565)

Electricity Industry (Western Power Corporation) Award 2000

AP781097

(C2006/3581)

Social and Community Services Industry – Community Services Workers– Northern Territory Award 2002 [Transitional]

AT817216

(C2006/3631)

Clerical and Administrative Employees (Northern Territory) Award 2000 [Transitional]

AT839196

(C2006/3739)

Commercial Sales (Victoria) Award 1999

AP772623

(C2006/3914)

Clerical Officers (Northern Territory Totalizator Administration Board) Award 2002 [Transitional]

AP772066

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