AIRCFB 717
Workplace Relations Act 1996
s.576E—Procedure for carrying out award modernisation process
Request from the Minister for Employment and Workplace Relations—28 March 2008
JUSTICE GIUDICE, PRESIDENT
MELBOURNE, 12 SEPTEMBER 2008
 This statement deals with award modernisation and in particular the exposure drafts of the priority modern awards. It should be read in conjunction with the Commission’s decision of 20 June 2008 (the June 2008 decision). 1 After some introductory comments this statement is divided into two main parts. The first part deals with a number of matters of general relevance. The second part deals with a number of matters which are relevant to particular exposure drafts.
 The award modernisation process was initiated by a request signed by the Minister for Employment and Workplace Relations on 28 March 2008 pursuant to s.576C(1) of the Workplace Relations Act 1996 (the Act). We shall refer to the request, as subsequently amended, as the Minister’s request. In the June 2008 decision the Commission, among other things, established a list of priority industries and occupations and laid down a timetable for the making of modern awards in relation to those industries and occupations. The dates for pre-drafting consultation in relation to those industries and occupations were subsequently altered in a statement issued on 22 July 2008. 2 The award modernisation timetable still provides that exposure drafts of the priority modern awards should be published by 12 September 2008.
 We publish exposure drafts of 14 modern awards with this statement. Written comments and other material in relation to the exposure drafts are to be lodged with the Commission by 10 October 2008. Comments can be lodged by post, fax or email. It would assist if comments could be directed to a specific clause in a particular draft where it is practicable to do so. We shall not require that materials be served on other participants in the process. All relevant material received by the Commission will be made available through the internet as soon as practicable after it has been received. 3 The Commission will sit in Sydney on 16, 17, 20, 21 and 22 October 2008 for final consultations in relation to the exposure drafts. The purpose of those consultations will be to permit discussion on matters arising from the written material already filed but not to repeat that material. The dates and times of the consultations will be confirmed in a Notice of Listing.
 As the Commission noted in the June 2008 decision, the Minister’s request and the relevant provisions of the Act require us to have regard to, among other things, the desirability of reducing the number of awards in the workplace relations system and minimising the number of awards applying to a particular employee or employer. While we accept that there are difficulties in implementing these objectives in some industries we have continued to focus on simplification and rationalisation of the award system in drafting the application clauses of the priority awards. While in some cases we have accepted, at least at this stage, that particular industries should not be grouped as originally suggested, in others the grouping is broader than some parties would prefer both as to industry coverage and the classifications of employees. We think it is desirable that parties see the exposure drafts and the conditions they contain and have the opportunity to make further suggestions and submissions. To take the retail industry as an example, we have included fast food and pharmacies in the draft scope of the industry at this stage. The parties concerned will have the opportunity to consider their positions in light of the terms of the whole draft and make further comments and proposals. We mention this matter again in commenting on some of the specific exposure drafts but we wish to make it clear that all views will be considered before the scope of each modern award is finalised.
 This section of the decision deals with a number of matters of general relevance to the exposure drafts. We do not deal with every potentially relevant matter, only those which appear to us to be the most significant at this stage. The comments are arranged by award subject matter.
 Each modern award will have an application clause indicating to whom it applies and on whom it is binding. Modern industry awards will be expressed, so far as practicable, to apply to an employer industry. Modern occupational awards will be expressed to apply to an employee occupation. In each case the modern award will be confined in its application to employees in classifications in the award and will not apply to an employee excluded from coverage by the Act. Each award will be expressed to bind employers and employees to whom it applies but will not bind an employer bound by an enterprise award in respect of an employee to whom the enterprise award applies.
 At this stage we have not listed employers to whom an award does not apply. Whether an award applies to a particular employer will depend, among other things, upon whether the employer is an employer within the meaning of the Act and whether the employer is bound by an enterprise award as defined in the Act. We have adopted the relevant definitions in each draft. We do not think it is desirable to embark on a series of cases to decide such questions as whether an employer is a constitutional corporation, whether an employer is bound by an enterprise award, etc. Such questions could in any event only be finally decided by a court.
 Many suggestions were made that we should make modern awards binding on particular organisations and other bodies. These submissions give rise to a number of important issues which will require further consideration before the priority modern awards are made. Section 576V(1) of the Act provides that a modern award is binding on, in particular, “organisations and eligible entities that it is expressed to bind.” When regard is had to the definitions of “organisation” and “eligible entity”, doubts arise as to the Commission’s capacity to make modern awards binding on bodies which are not registered organisations either of employers or employees. 4 Bodies which may not be capable of being bound include State branches of organisations, State registered unions and their branches, and other unincorporated entities. Whether it is desirable that bodies other than registered organisations be bound to modern awards is a separate question.
 A further question arises as to the basis for binding, or not binding, a particular organisation to a particular modern award. A number of matters are capable of being relevant including bare constitutional coverage of employers or employees to whom the modern award will apply, membership among employers or employees to whom the modern award will apply and the history of the organisation’s involvement with a relevant predecessor award. The matters to be taken into account will determine not only the organisations to be bound but also the organisations which will not be bound. Debate on these matters so far has been extremely limited.
 Another dimension to this question is that we cannot know at this stage what status the legislation will give to a party bound by a modern award. Legislation might confer rights of award enforcement, rights of entry to premises and/or bargaining rights. It is also unknown what if any formal role awards will have in relation to union rights of representation more generally. We add that based on our experience so far it seems that organisational coverage has a strong influence on views as to industry boundaries. In some cases proposals for modern awards reflect historical demarcations between employer and employee organisations rather than differences in the nature of work or the conditions with which the modern award should deal.
 On one view the preferable course is not to make modern awards binding on organisations at all. We think it is desirable to give interested parties the opportunity to make further suggestions and submissions on the matters we have raised before deciding this important question. Taking all of the matters into account we have not made the draft awards binding on organisations.
 We deal now with the description of industry in the draft application clauses. To a large extent the drafts reflect agreements reached by major award parties. While consent is obviously a very important consideration, more work can and should be done on a number of the draft application clauses. In saying this we do not intend to undervalue what has already been achieved. We do not underestimate the difficulties in moving to a simpler definition of industry. There is always a risk of unintended inclusions or omissions. It is to be hoped that further agreement might be reached which will make application clauses clearer and more accessible. We recognise that there is scope for refining application clauses as the award modernisation stages progress.
 In a number of cases maintenance trades classifications have been included in draft industry awards. This has the potential to minimise the number of awards applying to any one employer. The Metal, Engineering and Associated Industries Award 1998 5 (Metal Industry Award) and relevant Notional Agreements Preserving State Awards (NAPSAs) contain a very large number of allowances which potentially apply to employees performing maintenance work under those awards. In finally deciding whether to include maintenance trade classifications in modern industry awards questions will arise as to the type and amount of allowances appropriate to be included in those awards. We invite further comments in relation to the desirability of including maintenance classifications in the draft awards concerned and the appropriate allowances.
 Before leaving the way in which awards should apply two other matters should be mentioned. The first is that we have not included supersession clauses. While it might in due course be necessary to make some provision for supersession we do not think it is prudent to deal with that question until relevant statutory transitional provisions are available. The second matter, which is closely related, is that at this stage we do not consider it necessary to prescribe in each modern award the pre-reform awards and NAPSAs which the modern award replaces. Such information will be available administratively.
Rules for Avoiding Overlap
 Clause 9 of the Minister’s request refers to the desirability of avoiding overlap between awards and, in cases of overlap or potential overlap, the inclusion of clear rules to identify which award applies. 6 We have attempted to meet this objective in the manner in which the application clauses have been drafted. Modifications may be necessary, to clarify the operation of the provisions or to improve their efficacy, in light of comments on the drafts.
National Employment Standards
 As a general rule references to the National Employment Standards (NES) are brief but adequate. The terms of the Minister’s request make it clear that the NES and modern awards are separate sources of safety net conditions. 7 Wherever possible we have avoided making detailed reference to NES provisions or paraphrasing them. In particular we see no justification for replicating terms of the NES which are unaltered and operate of their own force. We deal with the NES again several times in considering particular conditions of employment.
 With one exception we have not found it necessary to modify the substance of the model award flexibility clause in any of the drafts. To put the intended operation of the clause beyond doubt we have included the words “Notwithstanding any other provision of this award” at the start of the model clause. The draft award flexibility clause in the exposure draft for the textile, clothing, footwear and associated industries contains some modifications directed to the nature of employment in that industry. They deal with translation and time for consideration of proposed agreements.
 We have decided to include award obligations upon employers to notify employees and their representatives of significant workplace change and to discuss the change. The draft clause is in similar form to the provision introduced by the Commission more than 20 years ago. We propose that the draft clause be a standard one in modern awards.
 The draft dispute resolution clause is designed to be simple, to emphasise the importance of resolution at the workplace, to encourage parties to agree on a process that suits them if the dispute reaches the Commission and, finally, to provide the Commission with the discretion and the power to ensure settlement of the dispute if the dispute is still unresolved. Generally we have not included reference to the dispute resolution provision in draft clauses dealing with particular conditions.
Types of Employment
 We have adopted a general standard of 25 per cent for the casual loading in the drafts. In some areas transitional arrangements may be necessary to cushion the impact of the change.
 We have not included temporary employment provisions in any of the drafts. Our provisional view is that the draft awards do not contain any obstacle to temporary employment.
Termination of Employment
 We have drafted a model termination of employment provision which adds to the NES in two respects. The draft clause contains provision for notice by employees and a job search leave entitlement.
 We have also drafted a model provision dealing with redundancy. The draft clause contains provisions dealing with transfer to lower paid duties, employees leaving during a notice period and a job search leave entitlement. In addition the draft clause includes severance pay, at reduced levels, for employees of small employers. That provision is designed to operate prospectively and would therefore not apply to periods of service prior to 1 January 2010.
 The minimum wages in the drafts include the increases in pay scales and minimum rates in transitional awards flowing from the most recent decision of the Australian Fair Pay Commission (AFPC) which is operative from October 2008. Minimum wages will require further adjustment should there be a general increase as expected in pay scales before 1 January 2010.
National Training Wage
 There is general agreement that the National Training Wage Award 2000 8 requires redrafting. We understand that discussions are likely between the peak representative bodies. It is our intention that in due course the redrafted national training wage provisions should be included as a schedule to each modern award if it is practical to do so.
Annualised Wage and Salary Arrangements
 A number of parties suggested that annualised wage and salary arrangements be included in modern awards. Such arrangements are provided for in the Act. 9 No substantial case was put for inclusion of these arrangements on a general basis and we have considered the situation award by award. We do not consider that such provisions should be included in modern awards as a matter of course. Where there are similar arrangements in a relevant pre-reform award or NAPSA, where there is a consensus, or where there is a case on the merits based on the nature of the industry or patterns of work the situation may be different. Most of the exposure drafts do not contain such arrangements.
 Clause 27 of the Minister’s request requires the Commission to include an appropriate method or formula for automatically adjusting relevant allowances when minimum wages are adjusted. We propose that all allowances, including those that relate to the reimbursement of expenses, should be expressed as a percentage of the key classification rate. Under this proposal the definition clause will identify the minimum wage for the key classification in the award and each allowance would be expressed as a percentage of that rate, called the standard rate.
 There is an unresolved issue concerning allowances variously described as district, locality or remote area. A number of pre-reform awards and NAPSAs contain such allowances. Questions arise about such allowances. They are by nature confined to particular locations. In that connection it is relevant that modern awards will apply throughout Australia. If it is appropriate that these allowances be included in modern awards, which is a matter for discussion, there must be a consistent and fair national basis for their fixation and adjustment. Without a rational system the inclusion of these allowances in modern awards could lead to inconsistency and consequent unfairness. We would welcome views and proposals on these questions. The allowances have not been included in the exposure drafts.
 We have drafted a model superannuation provision to be included in modern awards if those awards deal with superannuation. The clause will nominate a default fund or funds should an employee fail to exercise his or her right to nominate the fund to which employer contributions should be made. We do not think it is appropriate that the Commission conduct an independent appraisal of the investment performance of particular funds. Performance will vary from time to time and even long term historical averages may not be a reliable indicator of future performance. We are prepared to accept a fund or funds agreed by the parties, provided of course that the fund meets the relevant legislative requirements.
 It has not been practical to develop a single model clause for annual leave. While the drafts generally provide for the employer to require that arrears of annual leave be taken the drafts are not uniform. It is not appropriate to supplement the annual leave entitlements provided for in the NES unless it is necessary to maintain the safety net. 10 Depending upon the circumstances of the industry and the existing award arrangements provision may be required for a shift worker definition, annual close down, holiday pay, annual leave loading and payment on termination.
 A number of parties suggested that transitional provisions should not be included in the exposure drafts. We agree that the number and type of transitional provisions are better dealt with after consideration of the net impact on current terms and conditions flowing from each draft modern award. One possible approach is included in the draft retail award. We encourage further comment on whether transitional provisions are needed and if so the form they should take. The drafts do not generally include transitional provisions.
 A number of submissions were made as to the Commission’s power to include provision for accident pay in modern awards. This is a legal issue which requires further discussion. We think the matter is open to doubt and at this stage the drafts do not include accident pay provisions.
Stand down and anti-discrimination
 We have not included clauses dealing with stand downs in the exposure drafts because stand downs are provided for in ss.691A and 691B of the Act. Nor have we included anti-discrimination clauses as discrimination is the subject of legislative regulation elsewhere. Both of these matters can be further considered if necessary.
 The drafts provide for various schedules. Typically the schedules might include lengthy classification definitions, the supported wage system clause, the national training wage provision and a clause dealing with school-based apprentices. Where appropriate transitional provisions might also be dealt with in a schedule.
COMMENTS ON EXPOSURE DRAFTS
 This section of our decision makes comment on a number of matters relevant to the preparation of the exposure drafts, the consultation process and the finalisation of the priority modern awards. The exposure drafts are available on the Commission’s website in the Award Modernisation/Full Bench Proceedings page. The full list of exposure drafts is:
Coal Mining Industry
 There was a very large measure of agreement reached between the coal industry employers and the relevant unions. The coal industry employers and the Construction, Forestry, Mining and Energy Union (CFMEU) submitted draft awards that reflect that large measure of agreement. In the circumstances we have generally adopted agreed provisions.
 The draft application clause agreed between the CFMEU and the coal mining employers makes use of the description “black coal mining industry”. The draft included the following clause
“4.2 In this award “black coal mining industry” has the meaning applied by courts and industrial tribunals, including the former Coal Industry Tribunal.”
 We have decided not to include this clause because, from a legal perspective, it adds nothing and is apt to confuse or intimidate lay readers of the award. Our draft is based on the assumption that the Commission, its successor body or any Court will give the expression “black coal mining industry” the meaning applied by courts and industrial tribunals, including the former Coal Industry Tribunal, subject to any express inclusions or exclusions in the application clause of the coal mining award.
 The definition of black coal mining in the draft awards prepared by the CFMEU and the coal mining employers was accompanied by the following agreed note:
“(Note: see, for example, decision of the Coal Industry Tribunal in Australian Collieries Staff Association and NSW Combined Colliery Proprietors Association and Queensland Coal Owners Association – No.20 of 1980; 22 February 1982 (Print CR2997)).”
We have not included the note but accept that the decision referred to is relevant to the proper meaning of the expression “black coal mining industry.”
 No provision for casual employment has been included in the exposure draft, contrary to the proposal of the coal mining employers. There is no provision for casual employment in the key federal awards. An attempt to have casual employment included in the main federal award has previously been rejected by the Commission and that rejection was not disturbed on appeal. 11 In light of those decisions we do not consider it appropriate to make provision for casual employment in the draft. While it would be open to the employers to mount a case in the conventional way, it is not practical for that to occur as part of the award modernisation process.
 We have not included specific provision for temporary employment. As we have already indicated, it is our provisional view that the draft award does not contain any obstacle to temporary employment, either for a fixed term or for a specified task.
 The relevant unions and the coal mining employers developed agreed classification descriptions. However, in a number of instances those agreed descriptions are confined in their operation to a particular State or States. Our provisional view is that this is not permitted by s.576T(1) and that, accordingly, the agreed classification descriptions should not be included in the exposure draft. Given the level of cooperation and agreement between the parties, it is appropriate to give them a further opportunity to develop agreed classifications that do not apply to a particular State or States. We note that among the agreed portions of the classifications schedules are provisions that might more properly be incorporated into the main body of the award after any agreement is reached between the parties in relation to classifications. These include provisions specifying minimum wages and allowances and junior and apprentice rates.
Glue and Gelatine Industry
 We deal with this area in the draft manufacturing and associated industries and occupations modern award.
Higher Education Industry
 The parties have put considerable effort into seeking to reach common understanding and this has assisted our task. Submissions ranged from creating one award to two or more awards with splits between public and private universities.
 The exposure drafts are based upon two awards: one for academics and the other for general staff with no distinction between public and private universities. Production of the draft general staff award proved more challenging than production of the draft academics award. Terms and conditions of employment for general staff are far more disparate. The general staff award has been drafted on the basis that all employees of universities will be covered by its operation. This means that the definitions associated with the Higher Education Worker classification will need close examination. As we mentioned earlier, allowances will also need examination to identify relevance and impact.
 We have drafted a single award for the hospitality industry, although we have deferred consideration of whether licensed and registered clubs and off-shore island resorts should be included within the scope of that award. With those exceptions, which we address later, we have reached the provisional view that the nature of work in the hospitality industry and the terms and conditions of employment in federal awards and NAPSAs do not provide any insurmountable obstacle to the making of a single modern award, being a safety net, in the hospitality industry. There are some differences in the relevant awards’ terms and conditions, but they are not so great as to require the making of a series of separate modern awards for the various sectors of the industry. We are optimistic that the practical impact of changed safety net conditions for some employers and employees can be addressed through appropriate transitional arrangements.
 We have decided to defer consideration of award coverage for the licensed and registered clubs sector. It may be that the sector could be included in the proposed hospitality industry modern award, with or without some special conditions and/or appropriate transitional provisions. The different types of clubs within the sector, and the different activities undertaken by them, raise issues of potential overlap with events staged by clubs and grounds management and maintenance. This matter requires further consideration in Stage 3.
 Similarly, we have deferred consideration of the appropriate award coverage for off-shore island resorts of the type currently subject to the Off-Shore Island Resorts Award – State 2005 (Qld). 12 That award applies to 10 island resorts and contains some classifications and a range of conditions which are not included in the draft hospitality award. These resorts could be covered by a modern hospitality award, with suitable alternative or additional terms and conditions, by a modern award which replicates their existing award arrangements or by another modern industry award such as tourism. Further consideration of this matter, assisted by consultation, will occur in Stage 3.
 The Australian Hotels’ Association (AHA) proposed that the expression “appropriate level of training” in the classification definitions should include a reference to spa, beauty and golf resort employees in the leisure stream. We have not included this provision in the draft award but we invite further comment in the forthcoming consultations and we encourage the interested parties to further discuss the definitions to be included in the modern award.
 We have not included a classification for “Persons not otherwise provided for” in the draft award. Such a “classification” is not appropriate in a modern award for two reasons. First, where the application of awards is based on the industry of the employer and employees engaged within classifications in an award, such an all-encompassing “classification” might affect the application of the award in unintended ways and create uncertainty as to its application. Secondly, it is not clear what use, if any, is made of the “classification” in practice. If there is a practical purpose for such a “classification” there should be an appropriate classification description and a proper minimum wage for the classification.
 Some parties sought the inclusion of additional trades classifications for maintenance and repair work in order to provide full coverage of work undertaken in the industry. We have decided not to include classifications for trades other than cooking and waiting in the draft award. It is not clear, from the consultations, what type of maintenance trades work is undertaken by directly employed persons in the industry. Before including additional trades level classifications, to accommodate maintenance and repair work by directly employed persons, we would require additional information as to the type and extent of such work. Only then could a determination be made as to the type of trades, the classifications and the levels to be included and the additional terms and conditions that might be required for the relevant employees in the hospitality industry context.
 We have included the clerical structure from The Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 13 in the draft notwithstanding proposals by the Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Liquor, Hospitality and Miscellaneous Union (LHMU) that we should incorporate the full private sector clerical classification structure from the Clerical and Administrative Employees (Victoria) Award 1999.14 The expansion of the clerical classifications, which apply in most current hospitality industry awards, would need to be the subject of further consideration, with appropriate information as to the practical requirement, if any, for higher clerical classification levels in the hospitality industry. It may be that a transitional provision would be required in respect of some employees currently classified at a higher level, as might arise under Queensland NAPSAs.
 We have not included the classifications “Loading Bay Security Officer Wrest Point Casino” and “Security Officer Sheraton Brisbane Hotel” in the draft. Neither classification is defined in the existing federal award. As a matter of general principal, enterprise specific positions would not seem appropriate in a safety net award of general application. However, these classifications were not addressed in the consultations and we invite relevant comment in the exposure draft consultations.
Manufacturing and Associated Industries and Occupations
 Manufacturing and Associated Industries and Occupations incorporates the following priority industries – the glue and gelatine industry, the metal and associated industries, the rubber, plastic and cable making industry and the vehicle manufacturing industry.
 The exposure draft of the Manufacturing and Associated Industries and Occupations Award 2010 (the draft manufacturing award) applies to employers and employees currently covered by around 90 federal awards, common rule declarations and NAPSAs.
 The draft manufacturing award extends to numerous industries and occupations. The industries include the metal, engineering and associated industries, the rubber, plastic and cablemaking industry, the brass, copper and non-ferrous metals industry and the glue and gelatine industry. The occupations include maintenance employees, draughtspersons, production planners, technical workers, engine drivers and trainee engineers and scientists, where no other modern industry or occupation award applies to such employees.
 The draft manufacturing award substantially reflects the draft award prepared by the Australian Industry Group (Ai Group) and the union parties to the current Metal Industry Award. However, the opportunity has been taken to amalgamate the various parts of the draft award prepared by those parties, so that there are not separate parts for different occupations. Further, differing terms and conditions of employment between occupations have been rationalised as much as possible. An annualised salary arrangement clause has also been included for some supervisors with a view to clarifying the arrangements that can currently apply to such employees.
 Professional engineers and professional scientists are not included in the draft manufacturing award. They will be considered in Stage 3 of the award modernisation process. Provisions in the draft manufacturing award concerning classifications which have a nexus to professional engineers and professional scientists will need to be reviewed at that stage. Further, redrafted provisions of the Manufacturing and Associated Industries – Skills Development – Wages and Conditions Award 2004 15 will also need to be considered at an appropriate stage.
 A separate exposure draft award for the vehicle manufacturing industry, as sought by a number of parties, has not been prepared at this stage. The vehicle manufacturing industry will be further considered in Stage 3 of the award modernisation process along with the vehicle industry (repair, service and retail). The sugar industry will also be considered in Stage 3.
 The draft manufacturing award does not include a classification matrix showing how existing classifications translate to the proposed classification structure. That information is currently incomplete and it is considered such information might more usefully be made available through the Commission’s information channels, such as the Commission’s website and information line, rather than be part of a modern award.
 The application and coverage of this award was addressed in consultations by a number of parties. The exposure draft award for the mining industry reflects our current view as to the scope of activities that should be contained within the definition of the mining industry and those to be specifically excluded. There is one particular matter that we should identify. The application clause extends to exploration and prospecting activities. At a federal level these activities have been regulated in, for example, drilling and exploration awards. It will be necessary for the parties to give consideration to the development of additional classification groups to accommodate these employees. Additionally, we note that existing district, locality and remote allowances in awards are likely to be of particular significance to these employees. Those allowances are the subject of comment elsewhere in this decision.
 As to allowances generally it will be noted that the draft award contains a limited number only of the allowances that operate in the industry. We suspect that a number of those allowances are no longer relevant and many others have, in practice, been rolled up into a disability allowance of some type or reflected in wage rates. Consideration should be given by the parties to the rationalisation of allowances and how they might properly be dealt with in a modern mining industry award.
Private Sector Clerical Occupation
 An occupational award for clerical employees in the private sector is considered necessary for clerical employees not otherwise covered by a modern industry award. In the pre-drafting consultation process a number of parties foreshadowed coverage of clerks by various industry awards. We confirm the desirability of that approach. Modern industry awards should cover all award covered employees in that industry as far as practical so that the number of awards applying to an employer is minimised. The practicalities will need to be properly addressed when the scope of award coverage is considered in each industry. The parties may be assisted in that regard by the classification structure and conditions established by the draft Clerks—Private Sector Award 2010.
 For one reason or another, it appears inevitable that areas of clerical employment will not be covered by modern industry awards. The exposure draft is intended to cover that residual area of clerical employment. The precise scope of the award will not be finalised until the completion of the award modernisation exercise when the scope and application of all industry awards is known.
 Given the type of operation likely to be covered by this award when it comes into operation, primary regard has been given to the terms of awards and NAPSAs having common rule application in each State and Territory. Although there is some variation in the terms and conditions of those awards, there is nevertheless a large degree of uniformity. We have taken the opportunity to simplify the award terms as far as possible without significantly changing their current application.
 A five level classification structure currently in operation in South Australia is the basis for the classification structure in the draft award. Terms and conditions from existing federal awards are the primary basis for the remaining conditions. Consideration has been given to an annualised salary clause. As noted in the main body of this decision the need for such a clause has not been established at this stage.
 There are three exposure drafts for the racing industry. They are:
 It is clear that horse and greyhound training constitute a separate and identifiable industry and that a separate modern award is appropriate. Questions remain as to the number of awards which should apply to race clubs and the classifications to be included in the award or awards. There was no support of substance for the inclusion of maintenance trades classifications in either of the two awards and we have not included such classifications in the drafts.
 The draft Horse and Greyhound Training Award 2010 would apply to the industry of training thoroughbred, trotting and harness racehorses and racing greyhounds. Only thoroughbred horse trainers have been covered by a pre-reform award previously. The draft award in large part reflects the agreement between the main employer and union parties.
 The draft Racing Clubs Events Award 2010 would apply to racing clubs in relation to race meetings and other events staged at race courses. It would also apply to other employers and employees involved in the staging of race meetings. The classifications included in the draft cover attendants, race officials and kitchen, cooking and waiting staff. The loading and penalty arrangements have been aligned with those applying in the hospitality industry and are consistent with those in the draft Hospitality Industry (General) Award 2010. It is unclear whether, if kitchen, cooking and waiting staff are to be included, the apprenticeship provisions in that award should be also included. Likewise it is unclear what cooking classifications would be needed in the award.
 It is evident that racing clubs are part of a broader class of entertainment venues which includes various sporting clubs, showgrounds and other bodies that operate premises at which events of various kinds are conducted. Serious consideration might be given to extending the scope of this award to cover employers and employees involved in the staging of events at other locations once the award has been finalised.
 The draft Racing Industry Ground Maintenance Award 2010 covers the ground maintenance activities of racing clubs. It is an open question whether the award should be combined into the draft events award. Alternatively, consideration might be given to extending the award to ground maintenance at other sporting or related venues once the draft award has been finalised.
 The pre-reform awards in the industry predominantly reflect coverage of the employers and employees in this industry by awards each of which is limited to a classification, group or activity. There are, for example, awards that cover trades, locomotive drivers, salaried employees, professional employees and permanent way, workshops, maintenance and signalling employees. No party suggested there should be a number of modern awards for the rail industry reflecting these divisions. The unions, however, submitted that the classification structure contained in the Queensland Rail Award – State 2003, 16 an award operating as a NAPSA, should be adopted in a modern rail industry award. They also submitted that payments should be determined by reference to that award. We have not adopted that submission in the exposure draft. In its written submissions this award was described by the ASU as a “paid rates award”. It also noted that the wage rates in the award had been increased by “wage rates achieved via enterprise agreements.”17 Those considerations suggest it does not provide a sound basis for assessing minimum wages in a modern award. The unions’ submissions are also not supported by the employers nor Queensland Rail. We note that Queensland Rail made submissions separate to those made by the Rail Skills and Career Council (RSCC) but it was “broadly supportive” of the proposals of the RSCC.
 The exposure draft reflects what, in our opinion, may be the appropriate classifications and wage rates for a modern rail award. It identifies three classification streams consistent with the streams proposed by the RSCC. The draft contains an entry-level and, in the clerical/administrative/professional stream, an additional three levels. The parties should give consideration to developing classification definitions by reference to these streams. Generic classifications of employees should be identified. Those employees can then be placed within the appropriate stream and level. In this respect the proposal of the RSCC, contained in its draft award filed on 25 August 2008, provides a basis upon which the parties should confer. As the first level is now proposed to be an entry-level only, the indicative classifications in the RSCC levels should be adjusted upwards accordingly.
 Having considered the current levels in awards covering clerical/administrative/ professional employees, we think an extension of the proposed three levels to eight is appropriate. On a tentative basis we think the clerical/administrative range may straddle our proposed Levels 1 to 3, Senior Officers and Professionals Level 4 and upwards.
 In Schedule A of the draft there is a link to a list of existing classifications or positions within a range of pre-reform awards. Some only have a classification definition in those awards. The list is not exhaustive. There are many other positions and classifications in the awards and NAPSAs. It does however reflect the wide scope of classifications in this industry and provides a basis for the parties to discuss how they may be rationalised into generic classifications and then placed within the relevant streams and levels therein.
 The parties should, as a matter of urgency, discuss and develop these generic classifications and classification definitions and make submissions about these matters to the Full Bench. In at least the case of the technical/civil infrastructure stream assistance might be gained by reference to the classification definitions contained within the draft manufacturing award.
 The wages clause in the exposure draft is expressed by reference to minimum weekly wage rates. In the pre-drafting consultations the issue of the appropriate pay period was discussed. Historically, awards for clerical/administrative/professional grades have reflected payments by reference to annual salaries. Within a number of the passenger operations awards, rates are expressed by reference to fortnightly payments and, related to this matter, ordinary hours are expressed by reference to a fortnightly period. The ASU in particular indicated its desire for pay periods in awards to be expressed in a manner which would reflect its eligibility rule. As we understand it, its eligibility in the rail industry is referable to employees engaged on an annual salary. Additionally, it would appear that in Queensland there is a further consideration that relates to its coverage being expressed by reference to employees engaged on fortnightly remuneration.
 When the parties have developed an appropriate classification structure consideration should be given to whether any of the minimum pay rates may be better expressed by reference to fortnightly or monthly wages or annual salaries. Additionally, at that stage, there may be a need to revisit the manner in which ordinary hours are expressed and the period of time over which such ordinary hours may be expected to be worked together with an indication of the number of shifts within an identified period in which those hours should be worked.
 There is an outstanding issue as to whether it is appropriate for the award to identify a wage level in the clerical/administrative/professional stream above which employees would not be entitled to overtime and penalty rates. We note the proposal of RSCC that the salary which applied to a Senior Officer level 1 in the Railways Salaried Employees (Victoria) Award 2002 18 would be an appropriate cut-off point. It would appear, however, that that salary has not been adjusted since at least 2003. This matter should be the subject of further discussions between the parties and submissions to the Full Bench.
 We should refer now to the issue of allowances. The exposure draft contains a limited number of allowances. There are a vast number and range of allowances contained in pre-reform awards and NAPSAs. No party proposed a comprehensive allowances clause. At one extreme RSCC proposed a single allowance titled “Travel and Incidentals”. At the other extreme the unions proposed that, apart from certain identified allowances (some of which were not adequately described), it would be providing further calculations to reflect the existing range of allowances.
 Many of the allowances may no longer be relevant to the industry. Others may have been rationalised and reflected in disability or industry specific allowances, rolled up payments, or in the wage rates for relevant classifications. The parties, in their submissions to the Full Bench, should address the manner in which the allowances may be rationalised and properly reflected in a modern award. In this respect we should indicate that we are conscious of the specific allowances that relate to locomotive and train drivers by reference to passengers and/or freight. Awards reflect payment or compensation by reference to tonnages, distances driven and the crediting of hours. These matters need to be given particular consideration by the parties in relation to whether it is more appropriate that they are reflected in, for example, a percentage allowance for the relevant drivers.
 Awards in this industry also contain district, locality and remote allowances. Our draft does not contain those allowances for reasons we gave in an earlier part of this statement.
 Generally speaking the retail industry covers a broad range of activities. It includes supermarkets, recreation, clothing and department stores, motor vehicle and parts retailing, fuel retailing, specialised food retailing, pharmaceutical retailing and other store-based retailing. In the June 2008 decision we indicated that we would not consider motor vehicle retailing or real estate agencies at this priority stage but that we would otherwise consider award coverage in the retail industry.
 In the June 2008 decision we also said that we intended to include a broad range of awards in our consideration to maximise the potential for the rationalisation of award coverage. In the pre-drafting consultations various groups pressed for separate award coverage of parts of the retail sector or argued that their operations were not in the retail industry. It was generally contended that the disparate needs of different parts of the industry meant that a broad retail award would become unnecessarily complex and lead either to additional costs to employers or disadvantage to employees.
 The Shop, Distributive and Allied Employees Association (SDA) supported a single award for the retail sector and proposed a draft award which provided for comprehensive coverage of employees in the sector.
 It is readily apparent that there is an increasing overlap of goods sold and services provided in a variety of retail establishments. There is also a similarity of duties and skills required to be exercised in different types of establishments. In our view different skills and circumstances can be dealt with by different classifications in an award, such as is presently the case across awards. We have drafted a comprehensive retail award in an effort to give effect to the objectives of award modernisation as a whole.
 The draft Retail Industry Award 2010 covers the broad range of retail operations considered as part of this exercise, apart from specified exclusions of operations which are more sensibly covered by another modern industry award because the retail aspect is a small part of a different type of operation.
 The terms and conditions in the draft award have been set having regard to the disparate terms and conditions currently in awards and NAPSAs. Those instruments contain a variety of different obligations and entitlements. Differences exist between the rates and conditions in different States, different parts of the industry and even between different groups of employers within the same part of the industry.
 As already noted, transitional arrangements are best addressed having regard to the net impact of the draft award on current terms and conditions. A particular transitional provision has been suggested in the draft to assist in this consideration.
 We have incorporated key features of areas of employment from existing instruments including the classification structures from various sectors such as community pharmacies, clerical employment and hairdressing services.
 We have reflected existing award flexibilities in hours arrangements which exist in parts of the retail industry for operational reasons. In some cases they are of general application. In others there is a specific provision to give effect to a specific need. Where it is suggested that existing award flexibilities have been lost the party concerned may raise that matter in the forthcoming consultation process.
Rubber, Plastic and Cablemaking Industry
 We have dealt with this area in conjunction with the draft manufacturing award.
Security Services Industry
 A number of parties, including in particular the main employer party, argued in favour of an occupational award for security services. We remain to be persuaded that it is appropriate to make an occupational award covering security services. We are mindful of the desirability of minimising the number of awards applying to employers and are concerned at the impact of an occupational award on a large number of employers in unrelated industries who employ a small number of security staff. The exposure draft is for an industry award.
 We have endeavoured to draft an application clause that reflects the broad consensus between the parties as to activities that should be included and excluded from the scope of a security services award. We accept that traffic control should be included when it is incidental to or associated with the provision of security services.
 Having come to the provisional conclusion that there should be an industry award for security services we are not inclined to link classifications in the award to the holding of a security licence (as proposed by Australian Security Industry Association (ASIAL)) or the Australian Quality Training Framework (as proposed by the LHMU). Rather, we have included a specific clause dealing with licensing which is aimed at balancing the interests of employers and employees in connection with licensing issues.
 A particular issue in the consultations was whether crowd control functions should be included in the Level 1 classification. Crowd control work can be performed by Level 1 employees in all States and Territories apart from Victoria where it requires a Level 2 classification. We note that the exclusion of crowd control from the Level 1 classification in the main federal award in Victoria was based on a careful consideration of work value. 19 Balancing the findings in that decision with the position that obtains in the rest of Australia (and the cost impact on employers in extending the position in Victoria across Australia) we have provisionally included “basic” crowd control functions in the Level 1 classification descriptions.
 The exposure draft contains the wages rates in the main federal award in NSW, updated for the 2008 AFPC adjustment.
 We have provisionally accepted the position urged by ASIAL that employers should have the capacity to utilise rosters with 12 hour shifts. Accordingly, the hours of work and rostering clauses in the exposure draft are based on provisions of the main federal award in New South Wales.
Textile, Clothing and Footwear and Associated Industries
 This is a sector which is highly award reliant and where the constitution of the workforce is a relevant consideration.
 There has been little or no consultation between the parties and this was reflected in the approaches taken. It appeared, however, that there was no support for the maintenance of separate awards in the sectors. The exposure draft is for a single award covering all areas identified.
 In examining the wage rates in federal awards there is a level of consistency in them. We have used those federal rates which have been through the simplification process and identified the key classification of Level 4. Classification definitions require examination to ensure that they may be applied to all sectors. For example at the present time it appears that little guidance is given in relation to the fibre-making sector.
 Given the nature of the industry we have added a requirement to the model award flexibility clause for translation of proposals into a person’s first language so that any proposals are fully understood. In addition we have provided a period for consideration of any proposal under the clause.
 A key area in this exposure draft is the provisions in relation to outworkers. In this connection, the Victorian Government proposed a clause for inclusion into the award. This is a matter that it has raised with the parties and other Governments. We have included the proposed clause in the exposure draft as it may well represent a significant area of consensus.
 A review of allowances would be appropriate to ensure that they represent modern work practices.
Vehicle Manufacturing Industry
 As indicated already, this area will be considered further in Stage 3.
BY THE COMMISSION:
1  AIRCFB 550.
2  AIRCFB 708.
4 Sections 4(1) and 576U.
6 Consolidated version issued by the Minister for Employment and Workplace Relations on 16 June 2008.
7 See clauses 28 and following.
9 See s.576J(1)(f).
10 Consolidated request clause 32.
11 Print R4611, 16 July 1999 and Print S6142, 18 May 2000.
17 ASU submissions 1 August 2008 para 85.
19 AW796143CRV PR969655.
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