[2009] AIRCFB 800

Download Word Document

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

DECISION

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

Award Modernisation

(AM2008/2–12, AM2008/13–24)

JUSTICE GIUDICE, PRESIDENT
VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT ACTON
COMMISSIONER SMITH






MELBOURNE, 2 SEPTEMBER 2009

INTRODUCTION

[1] This decision concerns award modernisation and, in particular, the transitional provisions to be included in the priority and Stage 2 modern awards.

[2] The Commission is conducting an award modernisation process pursuant to Part 10A of the Workplace Relations Act 1996 (the WR Act). The process is subject to a request from the Minister for Employment and Workplace Relations (the Minister) pursuant to s.576C of the WR Act. The Minister’s request was made on 28 March 2008 and has subsequently been varied on a number of occasions. For the purposes of this decision, we shall refer to the request as varied up to 17 August 2009 as the consolidated request. The consolidated request was further varied on 26 August 2009. Although parties have not had any opportunity to address us on the significance of that variation, our decision does not contain anything inconsistent with it. In considering what transitional provisions should apply the objects found in cll.1 and 2 of the consolidated request are of primary importance. Before dealing with the transitional provisions, however, it is appropriate to make some general comments about the approach we have adopted to the content and structure of modern awards.

[3] The consolidated request requires us to formulate awards which apply to corporations throughout Australia in the industry or occupation concerned, replacing many hundreds of federal and state awards containing a wide diversity of terms and conditions. In doing so we are to have regard to, among other things, the desirability of reducing the number of awards operating in the workplace relations system. We are required to complete the process by the end of this year so that the new system of bargaining can operate on the basis of the statutory elements of the safety net, the National Employment Standards (NES), and the terms of the applicable modern award. Clearly it is not possible to conduct a full reconsideration of all terms and conditions of employment in the course of this exercise. Rather, within the constraints of existing safety net award provisions, our approach has been to rationalise existing award provisions along logical industry and occupational lines.

[4] The consolidated request also provides that the process is not intended to disadvantage employees or increase costs for employers – objectives which are potentially competing. The content of the awards we have formulated is a combination of existing terms and conditions in relevant awards and existing community standards. In order to minimise disadvantage to employees and increases in costs for employers we have generally adopted terms and conditions which have wide application in the existing awards in the relevant industry or occupation. However the introduction of modern awards applying across the private sector in place of the variety of different provisions in the Federal and State awards inevitably means that some conditions will change in some States. Some wages and conditions will increase as a result of moving to the terms which apply elsewhere in the industry. Equally some existing award entitlements will not be reflected in the applicable modern award because they do not currently have general application.

[5] Various parties have pointed to the impact of modern award provisions. The parties largely addressed this matter on the basis of a comparison between existing and proposed award obligations rather than the impact of the modern award on actual terms and conditions. Even so, it is clear that some award conditions will increase, leading to cost increases, and others will decrease, leading to potential disadvantage for employees, depending upon the current award coverage. The creation of modern awards which will constitute the award elements of the safety net necessarily involves striking a balance as to appropriate safety net terms and conditions in light of diverse award arrangements that currently apply. It is in that context that the formulation of appropriate transitional provisions arises.

THE STATUTORY PROVISIONS

[6] In this part of the decision we refer to some of the more important statutory provisions relevant to our consideration of transitional provisions. Section 576A of the WR Act, which is identical to cl.1 of the consolidated request, sets out the object of Part 10A. Section 576C of the WR Act sets out a range of factors to which the Commission must have regard in carrying out the award modernisation process. Both sections are relevant. Section 576T of the WR Act makes provision for transitional provisions. It reads:

[7] It is apparent that s.576T requires that modern awards not include terms which apply by reference to State or Territory boundaries or which do not apply in all States and Territories. It provides, however, that such terms may be included in modern awards for a period of up to five years. In its decision of 3 April 2009 the Commission made the following observations about s.576T:

[8] We confirm those observations. It is also important that we indicate our view that the Commission’s power to make transitional provisions is not limited to the removal of differences in the conditions applying in the various States and Territories. If necessary, the Commission can make transitional provisions relating to other conditions which are not appropriate for a modern award.

[9] We refer next to Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). That Schedule provides for the continuation of the award modernisation process under Part 10A, despite the commencement of the Fair Work Act 2009 (the Fair Work Act) on 1 July 2009. Item 2(5) of the Schedule is important. It reads:

[10] A number of employer representatives, including the Australian Chamber of Commerce and Industry (ACCI), also drew our attention to s.103 of the WR Act. That section reads where relevant:

[11] To the extent that s.103 goes beyond the terms of item 2(5) of Schedule 5 to the Transitional Act its operation might be open to debate. Leaving that issue aside, the most relevant provisions in the current circumstances are those which the legislature has specifically enacted for award modernisation. Those are the provisions in Part 10A of the WR Act and item 2(5) of Schedule 5 to the Transitional Act. To these should be added the terms of cll.1 and 2 of the consolidated request, noting again that cl.1 reflects the terms of s.576A of the WR Act.

THE COMMISSION’S APPROACH

[12] In its decision of 3 April 2009 the Commission set out its general approach to transitional provisions in the following paragraphs:

[13] In our statement of 26 June 2009 we also said:

[14] We reiterate that we do not intend to consider proposals for substantive variations to the terms of modern awards in this decision. Any proposals to reconsider or to vary the terms of modern awards already made, whether on the basis of changed circumstances – such as more recent legislation or a variation to the consolidated request – should be the subject of an application to vary. In this way such proposals can be brought to the attention of all those with a potential interest and be properly considered.

[15] Because this is the first occasion on which the Commission has considered transitional provisions in detail, many parties made submissions which canvassed the implications for modern awards generally and for the employers and employees covered by them. The submissions dealt with matters of principle and process as well as industrial relations and economic considerations, including productivity and employment issues. We turn now to some of those submissions.

[16] A number of parties urged us to have regard to current economic conditions including the global recession and the impact of each modern award on the area covered by it. ACCI, for example, proposed that the Commission should use its powers under s.576E(4) of the WR Act and conduct external research to “provide some indication of the likely effect that a modern award (or basket of awards) will have on employers and the economy in general.”4 It was suggested that such research might be conducted by the Productivity Commission or an economic modelling advisory firm.

[17] The impact of award modernisation on particular sectors of the economy and upon the economy overall is a matter of great significance in the award modernisation process. While this decision is concerned mainly with the transitional arrangements rather than the substantive terms of modern awards, the economic environment is still an important consideration. Some parties suggested that in some industries the operation of modern awards, or some parts of them, should be delayed for periods of up to five years on economic grounds. On the material presented to us concerning the national and international economy it is clear that we should take a cautious approach where cost increases are in prospect. We have decided that any cost increases resulting from the introduction of modern awards should be spread over a lengthy period, as contemplated by s.576T of the WR Act, unless there is broad agreement that some other approach should be adopted in relation to a particular modern award. While this is our general approach there are some departures from it. We deal with the provisions to apply to each of the priority and Stage 2 modern awards later.

[18] It was also submitted that we should adopt a uniform approach to transitional provisions. Some parties suggested that we should adopt a set of general principles for the guidance of parties. Some also proposed model transitional clauses. While we have decided not to formulate general principles as such, we nevertheless see benefits in a uniform approach. It is inevitable that transitional provisions will involve a degree of mathematical complexity. It is clearly preferable to reduce the potential complexity by taking steps to ensure that so far as practicable transitional provisions should be of a similar kind. For these reasons we have decided to adopt model transitional provisions. Although we have decided not to introduce a statement of principles, the model provisions will serve a similar purpose. This should minimise the potential for confusion and promote consistency of outcomes. It is our intention that the model provisions be applied generally although some modern awards will require special provisions. While the model provisions can be departed from to meet the circumstances of a particular case, departures should be limited. We add that the adoption of model provisions will reduce the amount of regulation that might otherwise apply to the transition to modern awards. For convenience we shall deal with the model provisions under two headings: the model commencement and transitional clause and the phasing schedule. We shall deal with the provisions in that order.

The model commencement and transitional clause

[19] We deal first with the issue of absorption. There was a range of views on the issue. Most employer representatives took the view that any increases resulting from a modern award should be capable of absorption into existing overaward payments. The Australian Council of Trade Unions (ACTU) and most unions took a contrary view. They argued that overaward payments should be maintained in all circumstances. Modern awards are concerned with minimum wages and conditions and not with overaward payments. It would not be appropriate, even on a transitional basis, to require an employer to maintain overaward payments. We have decided to provide for absorption. Of course the payments specifically regulated in the transitional provisions are not to be regarded as overaward payments. Those payments are referable to pre-modernisation obligations in award- or agreement-based transitional instruments. The model provisions will include the following:

[20] We deal next with the possibility of reductions in take-home pay. The provisions of Part 3 of Schedule 5 to the Transitional Act are concerned with the maintenance of take-home pay. They deal with what happens when an employee suffers a reduction in take-home pay as a result of a modern award coming into operation. It is to be implied that the provisions do not apply to employees who commence employment after the modern award has come into operation. So while the provisions are concerned with what happens when the modern award comes into operation, they do not deal with the potential for reductions in take-home pay resulting from the operation of the transitional provisions. As will be seen, the model provisions permit a phased reduction in pre-modern award conditions if they were more beneficial for employees than the modern award. For that reason we think it is important to provide protection for new employees from reductions in take-home pay which otherwise might result from the operation of the transitional provisions. The model provision specifies that neither the making of the award nor the operation of the transitional provisions is intended to result in a reduction in take-home pay. It also indicates that Fair Work Australia may make an order to remedy a reduction in take-home pay. This provision will complement the power to make take-home pay orders in item 9 of Schedule 5 to the Transitional Act. The model provision reads:

[21] We turn now to the question of review of transitional arrangements. Item 7 of Schedule 5 to the Transitional Act provides:

[22] We have decided that the model commencement and transitional clause should contain a review term. Given the number and diversity of award matters to which the model provisions are capable of applying, it cannot be assumed that they satisfactorily deal with all of the issues which might arise during the transition period. The review terms will be in the following form:

Model phasing schedule

[23] We now deal with the provisions for phasing-in changes in entitlements resulting from the making of modern awards. We received many proposals in relation to the scope of such provisions. At one extreme it was suggested that every condition in every award-based transitional instrument should be identified and preserved or phased out in some way. That approach would lead to many pages of schedules to each award and would place an intolerable compliance burden on employers. We regard it as important to balance the need for phasing provisions against the desirability of confining the regulatory burden as much as possible. Unless the provisions are capable of being understood and applied without too much difficulty the modern award objective might be frustrated. We have decided to limit the number of matters which are governed by phasing provisions to the main matters affecting pay. Phasing provisions will necessarily be complex. By limiting the number of matters we hope to minimise complexity and reduce the scope for confusion.

[24] The matters we have decided to include in the model provisions relating to phasing are: minimum wages, including wages for junior employees, employees to whom training arrangements apply and employees with a disability, casual and part-time loadings, Saturday, Sunday, public holiday, evening and other penalties and shift allowances. A number of parties suggested that we should include transitional provisions relating to hours of work provisions. Proposals were advanced dealing with changes in the spread of ordinary hours, starting and finishing times and the number of hours of overtime required to be worked at certain rates. While these matters are capable of affecting the pay employees receive and the costs to employers, we have decided not to include phasing provisions in relation to them. There are three reasons. The first is that an employer normally has award rights to alter starting and finishing times and other elements of ordinary hours by giving notice to the employee concerned. Changes of this nature can obviously affect overtime and shift payments. Where such rights are exercised it would be difficult to quantify the effect of the modern award in that respect. Secondly, the award flexibility provision might be too difficult to apply if matters other than those we have chosen were to be subject to transitional arrangements. Thirdly, as we have already pointed out, the greater the number of matters which are subject to transitional provisions the greater the scope for complexity and confusion in the application of the provisions.

[25] It follows from our decision to limit transitional provisions relating to phasing to the main matters affecting pay that we have rejected various proposals to adopt an overall or aggregate approach to cost or to employee disadvantage. Those proposals would leave a wide field of discretion to employers and employees to ascertain the impact of the provision in particular cases. For that reason their operation would be uncertain and the obligations would be difficult to identify and enforce.

[26] We deal now with the nature of the phasing arrangements including the number of instalments and the period between instalments. Many employers favoured phasing-in of cost increases only. Under this approach any reductions in entitlements would apply immediately to new employees and the protection of entitlements of existing employees would be confined to take-home pay orders. In relation to cost increases, proposals ranged from complete deferral of increases for five years to phasing in over shorter periods. In contrast, the ACTU and various unions sought to regulate reductions in wages and conditions. Proposals ranged from complete deferral of reductions for five years to phasing down to the new wages and conditions over shorter periods. Neither the employer nor the union approach on its own is sustainable.

[27] In a different, but equally relevant, context the Australian Government submitted:

[28] We have decided that phasing should apply both to increases in the specified wages and conditions and reductions in those wages and conditions and in most cases will be in five equal instalments. We have decided to utilise five instalments because that number was the one most commonly selected by parties who supported phasing. It also appears to us to be simpler on the balance to divide differential amounts or percentages by five, yielding five amounts of 20%, than to utilise any other figure. We have also decided to provide for 12 months between instalments. This will spread the impact of changes over almost the whole of the five year period permitted by s.576T of the WR Act.

[29] A number of employers proposed that the introduction of new wages and conditions should be delayed for a period to enable employers to make necessary arrangements. This approach has merit. There should be adequate lead time to prepare for the operation of the modern awards after their finalisation. In this regard we note that the Stage 4 awards are not scheduled for publication until the end of 2009. There is another important consideration. As we have indicated, the phasing arrangements will not apply to all changes in minimum conditions. We consider it desirable that before phasing commences there be an opportunity for employers and employees to come to terms with the other changes which might have a significant impact. Yet another consideration is that Fair Work Australia is required to conduct an annual review of minimum wages in modern awards and any increase resulting from such review is to operate from 1 July in the year in question. There is some advantage in synchronising the operation of the phasing provisions with increases in minimum wages.

[30] We have decided that phasing should commence on 1 July 2010. The effect will be that where the phasing provisions are included in an award the pre-modern award conditions relating to minimum wages, casual and part-time loadings, Saturday, Sunday, public holiday, evening and other penalties and shift allowances will continue to apply until 1 July 2010 when the modern award obligations will commence. Despite the fact that the legislation contemplates the introduction of modern awards from 1 January 2010, a delay of six months in the implementation of the phasing arrangements is reasonable when the range and nature of the changes which will be required are properly taken into account. There will be a further four instalments on 1 July of each year concluding on 1 July 2014. Consistent with s.287 of the Fair Work Act, the changes in wages and conditions covered by the phasing arrangements will operate from the first pay period on or after 1 July in each year.

[31] We deal now with the coverage of the transitional provisions. It is desirable that all employers covered by the modern award in question should be bound by the same transitional provisions. So far as practicable, the same minimum obligations should apply to all employers and the same minimum entitlements should apply to all of the employer’s employees. Employers who are obliged by the transitional provisions to pay minimum wages, penalties or loadings higher than those in the modern award during the transition period might be at a significant disadvantage if employers were permitted to come into the industry after 1 January 2010 and operate under the modern award conditions. Such a situation might have serious consequences for competitiveness and perhaps also for employment. There are other examples indicating why there should be a degree of uniformity. The provisions will apply to three identifiable groups of employers. First, they will apply to employers covered by a transitional minimum wage instrument or an award-based transitional instrument immediately prior to 1 January 2010.6 Secondly, they will apply to employers which would have been covered by such an instrument but for the operation of an agreement-based transitional instrument.7 Thirdly, they will apply to employers which would have been covered by a transitional minimum wage instrument or an award-based transitional instrument had they been employers in the industry or of the occupations covered by the award immediately prior to 1 January 2010.

[32] Dealing now with minimum wages specifically, it is plain that in some cases minimum wages will have to be increased to reach the modern award standard and in others they will have to be reduced. The approach we have adopted will permit employers to phase-in increases in minimum wages over five years and will require them to phase-in reductions in wages over the same period. The phasing applies to the differential amount only and any increases resulting from a minimum wage review are to be included in minimum wages. We point out again, however, that the transitional provisions will operate subject to the requirement we have already mentioned above that employees do not suffer reductions in take-home pay.

[33] The phasing provisions concerning minimum wages are in the following form:

[34] These clauses provide for the phasing-in of increases and decreases in minimum wages in five equal instalments between the first full pay period on or after 1 July 2010 and the first full pay period on or after 1 July 2014. There is an important exception relating to situations in which existing wages are higher than modern award wages. We do not think it is necessary to provide for phasing down of the higher wages if the transitional amount is equal to or less than the amount of any increase resulting from the 2010 review of minimum wages. In those cases the transitional amount can be eliminated immediately and there will be no need for phasing.

[35] Some explanation is required of how the phasing provisions will apply to wages which are expressed as a percentage of adult minimum wages. To take the example of junior wages, which are expressed as a percentage of the adult minimum wage for the classification concerned, any increase or decrease in the percentage should operate immediately. The transitional amount can be calculated for each age level and classification by comparing the dollar amount derived from applying the pre-modern award junior percentage to the pre-modern award adult rate with the dollar amount derived from applying the modern award junior percentage to the modern award adult rate. Any increase arising from a review of minimum wages will be reflected in transitional junior rates when the adult rate is adjusted. Where rates for employees subject to training arrangements, apprentice rates for example, are expressed as a percentage of the adult rate a similar approach should be followed. Some submissions were made which suggest that current apprenticeships should be permitted to run to completion under pre-modern award wage arrangements. While this approach has the advantage of simplicity, problems are likely to arise if new apprentices receive different wage treatment. We have decided that apprentice wages should be covered by the model phasing-in arrangements unless there are special circumstances in a particular industry or occupation which warrant a different provision.

[36] Piecework rates are also covered by the phasing provisions. Where the piecework rate is derived from a formula contained in the modern award the transitional amount can be calculated by comparing the rate arising from the application of the formula to pre-modern award minimum wages and loadings with the rate arising from the application of the formula to the modern award minimum wages and loadings. Increases in the rate arising from a review of minimum wages will flow into piecework rates through the application of the formula.

[37] We have made specific reference to industry allowances. In some industries there are established industry allowances at the Federal and State award level. In most cases the modern award for that industry will also contain an industry allowance. Industry allowances will generally need to be taken into account when calculating differences in minimum wages for the purposes of phasing. It is our intention that, where relevant, industry allowances should be included for the purpose of calculating differences between pre-modern award and modern award minimum wages.

[38] It is clear that phasing provisions will be of particular importance for employers where the increases in minimum wages are the greatest. There will be many cases in which for most employers the increases in minimum wages flowing from the making of modern award will be quite small. We would expect that the necessity for detailed calculations in relation to some relatively small amounts might lead some employers to adopt a different approach. They might choose, for example, to move to the modern award rate before they are required to do so. That is a matter for employers provided the minimum wages required by the phasing provisions are observed.

[39] We now turn to loadings and penalty rates. As will be seen, we have adopted the same phasing arrangements as for minimum wages. The following model provisions will apply:

[40] These clauses provide for the phasing-in of increases and decreases in loadings and penalties in five equal instalments between the first pay period on or after 1 July 2010 and the first pay period on or after 1 July 2014. Not all of the penalties and loadings covered by the clauses will be relevant to every employer in every award. It will depend upon the level of the relevant pre-modern award penalties and loadings. We note that while we have included reference to part-time loadings, there are very few awards in which part-time loadings are relevant.

[41] There are some matters relevant to casual loadings which should be emphasised. The first is that we have included reference to the transitional default casual loading to cover cases in which employers were bound to apply that loading prior to 1 January 2010.8 The second concerns awards in which casual loadings are expressed as dollar figures rather than percentages. In those cases the model provisions may require modification to make it clear how increases and reductions respectively are to be phased-in. The third matter relevant to casual loadings relates to the effect of award-based transitional instruments requiring that casual employees be paid a loading of one twelfth in relation to annual leave. The NES provide for annual leave in Division 6 of Part 2-2 of the Fair Work Act. Casual employees are not entitled to annual leave under those provisions. It is our intention that if an employer was required to pay a one twelfth loading to casual employees prior to 1 January 2010, that should be taken into account in calculating the transitional percentage for the purpose of phasing-in. To take an example, where the casual rate payable under an award-based transitional instrument was 17.5% and a loading of one twelfth was also required, the base from which the transitional percentage is to be calculated is 25.3%. In such a case the transitional percentage is 0.3% and what appears to be an increase in the casual loading by operation of the modern award is in fact a slight reduction. It is of course a matter for employers how they deal with such a small amount, provided the transitional provisions are complied with.

[42] We also intend to provide for the situation in which a particular penalty or loading in the modern award did not have any equivalent in the relevant award-based transitional instrument. In such cases the penalty or loading should be phased-in in five equal instalments. The model provision reads:

[43] We note that it is a consequence of the phasing-in of lower minimum wages, loadings and penalties under the model provisions that different employees of the one employer may be engaged on different terms and conditions. An employee engaged after 1 July 2010, for example, may be entitled to lower minimum wages under the transitional provisions than an employee who was in employment prior to that date. The statutory provisions protecting employees from reductions in take-home pay will not prevent this situation from occurring. We think it is appropriate to point out, however, that the Fair Work Act prohibits an employer from taking adverse action against an employee because the employee is entitled to the benefit of a workplace law, instrument or order.9

[44] It is desirable that the phasing provisions should appear in a schedule at the end of the modern award concerned. In that way the provisions will be self-contained and can be omitted from the award when they no longer have any utility.

[45] The terms of the schedule will make it clear that the phasing arrangements deal with minimum obligations only. In some cases the employer may already be affording employees conditions which comply with the modern award. In other cases application of the phasing arrangements may lead to such small increases that employers may find it more attractive to move to the relevant modern award conditions in advance of their legal obligation to do so. There should be no obstacle to such a course. The model provisions will include the following:

[46] We deal now with the question of allowances. We have decided not to make model transitional provisions relating to allowances. The differences in the nature and application of allowances across the award system make it difficult to develop general rules. As we have already indicated, where industry allowances exist they will normally need to be taken into account in the phasing arrangements relating to minimum wages. We deal later with some issues related to allowances when considering whether special provisions are needed in particular awards. Where significant issues related to allowances remain unresolved, or unforseen problems arise, the review mechanism is available.

Application of the model provisions

[47] We have decided to include the model commencement and transitional clause, dealing with absorption, preservation of take-home pay and review, in all of the priority and Stage 2 awards. Where it is reasonably clear that phasing is necessary we shall also include the model phasing schedule.

[48] While we have developed the model phasing schedule we nevertheless intend to give effect to agreed arrangements wherever practicable. In some cases major parties have agreed explicitly or implicitly that no phasing provisions are required. In other cases there is agreement on a particular approach to implementation of the modern award which may involve phasing arrangements which differ from the model phasing schedule. It is appropriate to give employers, employees and their representatives an opportunity to consider their positions in light of this decision. We are prepared to include the phasing schedule in any other modern award on application. In the small number of awards where agreement has apparently already been reached on implementation, including phasing, we are prepared to implement the agreement if an appropriate application is made and supported. We also encourage parties involved with Stage 3 and 4 modern awards to reach agreement on transitional arrangements suitable to them.

[49] No doubt issues will arise from time to time concerning the application of the transitional provisions. These can be dealt with pursuant to the dispute resolution provision which is included in each modern award. There is no need for a separate dispute resolution provision.

Other matters

[50] The Queensland Department of Education and Training sought special transitional provisions in all modern awards which provide for apprentices. It submitted that the Commission should allow any existing apprenticeship provision in Queensland that is more favourable than the modern award to continue to operate in Queensland (only) until the end of 2014. The submission referred to a number of areas in which there are significant differences between the provisions of award-based transitional instruments applying in Queensland and those applying elsewhere. It was further submitted that during the transitional period there should be a review of apprenticeship rates and progression criteria either as part of the two year review of modern awards (required by item 6 of Schedule 5 to the Transitional Act) or otherwise.

[51] We have decided not to adopt this transitional proposal. It was not widely supported. We note that there are already a significant number of Federal awards operating in Queensland containing apprentice provisions which differ from the provisions in Queensland awards. We agree, however, that it would be desirable to develop a unified national system of training and employment conditions for apprentices. We note in this respect that Fair Work Australia is required to set national minimum wages for award/agreement free employees to whom training arrangements apply in either its first or second annual wage review.10 It is highly likely that this process will require a review of wages and conditions for apprentices nationally. We deal later with the position in a number of modern awards in which special transitional provisions have been sought in relation to apprentices.

[52] The ACTU has sought the inclusion of a supersession clause and a savings clause in each award. The Full Bench indicated in its decision of 19 December 2008 that supersession and the effect of the making of modern awards upon accrued rights would be dealt with in conjunction with the transitional provisions.11

[53] Dealing first with the issue of supersession, the legislature has made provision for supersession in item 29 of Schedule 3 to the Transitional Act. That item reads:

[54] This provision is complemented by item 7 of Schedule 3 to the Transitional Act, which protects and preserves accrued rights, liabilities and proceedings. It reads:

[55] In light of these provisions we do not think it is appropriate or necessary to include supersession provisions in the awards themselves. The statutory provisions should be adequate.

[56] We referred earlier to a proposal by ACCI that the Commission, in discharging its statutory functions in relation to award modernisation should conduct external research. To elaborate a little, it was submitted that we should commission research on “key economic indicators as a consequence of a modern award applying in a particular industry or sector.” This proposal was accompanied by a proposal that where appropriate the Commission should conduct an arbitration where an employer’s costs have increased. We think these proposals have some significant limitations.

[57] The proposal in relation to research is contained in the following paragraph from ACCI’s May 2009 submission:

[58] The initial and perhaps insurmountable difficulty is in deciding the circumstances in which research assistance should be sought. At one extreme every modern award which results in an increase in cost or inflexibility for one employer would be caught by the proposal. Secondly, the potential for the proposal to delay the completion of modernisation is apparently unlimited. The proposal also fails to acknowledge that modern awards impact differently upon employers depending upon the terms of pre-modern award coverage. Delay in implementation of increases in costs for some employers would equally result in delay in decreases in costs for other employers.

[59] We turn now to the question of possible arbitrations in relation to particular matters. It is said that some employers want a more robust process of hearings and arbitration, including oral and written evidence.

[60] The process of award modernisation is dealt with in the relevant statutory provisions and in the consolidated request. It is the Commission’s responsibility to establish the way in which the process will be conducted, to publish exposure drafts and then awards, with provision for consultation at each step along the way. The process does not include arbitration in the traditional sense. While the Commission makes every endeavour to ensure that all material submitted is taken into account, it is impossible to deal with all of it in written reasons for decision. Where employers (or any parties) are dissatisfied with the outcome there are statutory provisions for variation. There are also opportunities to raise matters in the context of a review of the operation of the modern award. For the purposes of any application to vary employers may seek to rely upon any relevant material including independently commissioned research. The grounds for such an application might include incapacity to pay and any other relevant ground. In relation to transitional provisions, with which this decision is directly concerned, the phasing arrangements we have included in the model schedule should provide an effective buffer against increases in costs in most cases. Nevertheless the model provisions also provide for a review. ACCI’s suggestion that we graft onto this process an additional procedure permitting formal arbitration does not take into account the nature of the process which the legislature has developed, the temporal constraints imposed by the 31 December 2009 deadline or the opportunities provided by the legislation for variation and review. There is an additional relevant matter. If modern awards are to apply nationally, as they must, it is inevitable that there will be changes in conditions of employment, in some case increases, in other decreases. No amount of economic analysis can alter that fact. While economic analysis can be very important, it must be seen in the context of the requirement that we develop national standard conditions in the modern award concerned.

[61] Parties other than ACCI have advanced similar proposals. Some of those proposals would require the Commission to review modern awards already made either on an economic or some other basis. As we indicated in our statement of 26 June 2009, referred to above, review or variation of the substantive terms of awards should be dealt with by an application to vary.

[62] The ACTU and a number of other parties drew our attention to the fact that in many areas employees will be moving to a new classification structure when the minimum wages in modern awards commence to operate. We have taken this into account in the design of the phasing provisions. The schedule operates by identifying the difference between the relevant pre-modern award minimum wage and the relevant modern award minimum wage. Unresolved translation problems may be dealt with by resort to the dispute resolution provisions or other provisions such as those which permit a review of the transitional arrangements. We are also aware that difficulties may arise in establishing the pre-modern award conditions. This might be so in some cases because the Australian Pay and Classification Scales have not been published. Issues of that kind can also be dealt with through the dispute resolution provisions.

SUPERANNUATION

[63] We turn now to deal with the model superannuation clause and in particular to the question of default funds. The model superannuation clause provides that the default fund may be one of a number of funds specified in the clause or any fund to which an employer was making contributions for the benefit of employees on 12 September 2008. Some suggestions were made that the relevant date should be 1 January 2010 rather than 12 September 2008. It was submitted that this would minimise uncertainty and costs of compliance for employers and minimise negative impacts for employees. These submissions raise some fundamental issues concerning default funds which go beyond transitional provisions.

[64] The Commission’s statement of 12 September 2008 contains the following passage:

[65] In its decision of 19 December 2008, the Commission, in commenting on the model superannuation clause, said:

[66] In our view the nomination of default funds should be made on some readily ascertainable basis and one which does not lead to any disruption. For that reason it was decided to provide for named default funds as the primary basis. The secondary basis was any fund to which the employer was making contributions before 12 September 2008. That date was chosen because it was the date on which the exposure drafts of the priority modern awards were published.

[67] A number of funds have since made applications to be included as named default funds on the basis that the fund was nominated as a default fund in an award-based transitional instrument relevant to the coverage of the modern award or on the basis that the representatives of the main parties covered by the award consent. In our view either basis would constitute a good reason for the fund being specified as a default fund in a modern award. Where such grounds exist an appropriate application could be made. We do not intend to deal with such applications, however, in this decision.14

[68] Returning now to the proposal that we should change the relevant date from 12 September 2008 to 1 January 2010, and assuming the proposal could be characterised as a transitional provision, we doubt whether such a variation would go the heart of the matter. Most funds voicing objection to the default fund provision did so on the basis that they are fundamentally opposed to any limitation on the ability of an employer to choose the default fund. Simply substituting one date for another would not remedy that complaint. Indeed, it might create a deal of disruption in the industry between the publication of this decision and 1 January 2010.

[69] The relevant legislation provides for default funds to be included in awards. Our present view is that we should continue to provide for default funds where there is a history of award regulation of superannuation in the industry or occupation the modern award covers. It should be emphasised, however, that, self-evidently, the default fund provision only operates where the employee does not nominate a fund. The superannuation legislation enshrines the right of an employee to choose the fund into which the employer should make contributions. Consistently with the legislation the award provision does not limit an employee’s right to nominate a fund. Nor does it limit the ability of superannuation funds which are not default funds to market their products to employees and employers. We have decided, on the basis of what has been put in the proceedings, not to alter the date of 12 September 2008.

PRIORITY INDUSTRIES/OCCUPATIONS

[70] We now deal with the transitional arrangements to be included in the priority and Stage 2 awards. Before doing so it is important to comment briefly on an issue of terminology. Previous statements and decisions have used the statutory language appearing in the WR Act. In particular, pre-modern award instruments have been referred to as pre-reform awards, Notional Agreements Preserving State Awards (NAPSAs) and so on. The Transitional Act employs a range of replacement terms such as award-based transitional instrument. We have adopted the terms introduced by the Transitional Act in the earlier part of this decision and in the model transitional provisions. In the part of the decision which follows we have generally used the earlier terminology, reflecting the language used in the submissions and proposals under consideration.

Catering industry, liquor & accommodation industry, restaurants

Hospitality Industry (General) Award 2010

[71] We deal first with the Hospitality Industry (General) Award 201015 (modern Hospitality Award). On 28 May 2009, the Minister varied the consolidated request so as to provide for a separate restaurant and catering industry award. On 26 June 2009 we published a statement including a program of further proceedings in relation to the proposed restaurant and catering industry award.16 In light of these developments it would be premature to finalise transitional provisions for the modern Hospitality Award. We will give further consideration to transitional provisions for that award and any other modern award or awards which might be made as a result of the proceedings at an appropriate time. We should indicate, however, that the model transitional provisions established by this decision will be the starting point.

Clothing industry (including footwear manufacturing), textile industry

Textile, Clothing, Footwear and Associated Industries Award 2010

[72] The Textile, Clothing and Footwear Union of Australia (TCFUA) provided a very detailed schedule which was designed to maintain every difference in every State in two ways. The first was to maintain State-based differentials for the full five year period and the second was to maintain other differences on a continuing basis. The Australian Industry Group (AiGroup) opposed the TCFUA approach but supported its general phasing concept as well as highlighting the availability of take-home pay orders. In addition, the TCFUA sought to maintain public holiday substitution by supplementing the NES.

[73] We do not consider that any departure from the model transitional provisions is warranted. The model commencement and transitional clause and the phasing schedule will be included in the award.

Coal mining industry

Black Coal Mining Industry Award 2010

[74] The Coal Mining Industry Employer Group, the Construction, Forestry, Mining and Energy Union (CFMEU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) agreed that there are no additional transitional provisions which need to be included in the Black Coal Mining Industry Award 2010.17 The award already contains some transitional provisions in Schedule C and the parties agreed no other provisions were required. The phasing schedule will not be included in this award.

Higher education industry

Higher Education Industry—General Staff —Award 2010

Higher Education Industry – Academic Staff – Award 2010

[75] The Group of Eight Universities (GO8) submitted that the introduction of the modern awards would have no practical effect. Whilst the GO8 accepted in theory that the modern award conditions could have some impact in enterprise negotiations, in practice there was “no likelihood of disadvantage or adverse impact upon employees in public universities.” The GO8 submitted that there should be no transitional provisions. Australian Higher Education Industrial Association (AHEIA) sought a phasing-in of the increase in the casual loading (from 23% to 25%) and a delay in the implementation of the provisions relating to fixed term employment. Bond University proposed that we should phase the introduction of the annual leave loading and delay the implementation of casual conversion and changes to hours of work.

[76] The CPSU sought to retain a number of conditions which apply in New South Wales in the Higher Education Industry—General Staff —Award 201018 (modern General Staff Award).

[77] The model commencement and transitional clause will be included in both awards. We have decided to include the phasing schedule in the modern General Staff Award, but restrict its operation to loadings and penalties. This will deal with some of the concerns raised by AHEIA and Bond University. We are not prepared to generally save the New South Wales provisions as sought by the CPSU, the Community and Public Sector Union (CPSU).

Metal & associated industries, glue & gelatine, rubber, plastic & cablemaking, vehicle manufacturing

Manufacturing and Associated Industries and Occupations Award 2010

[78] The model transitional provisions, including the phasing schedule, will be included in the Manufacturing and Associated Industries and Occupations Award 201019 (Manufacturing Modern Award).

[79] Both the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the CFMEU sought to preserve a number of conditions from awards and NAPSAs which the Manufacturing Modern Award replaces. We have previously indicated it is not practical to transition every pre-existing term of awards and NAPSAs relevant to the modern award. However, the phasing schedule does transition minimum wages, penalties and loadings that the unions sought to preserve.

[80] The AMWU urged us not to transition wages until the parties have settled the translation of existing classifications into the modern award classification structure. The phasing schedule concerning minimum wages should not detrimentally affect those discussions.

[81] The CFMEU asked us to include a new classification structure in the modern award for certain employees and to add specific tasks to the classification structure currently in the modern award. We think it preferable to allow the discussions between the parties on the translation of existing classifications into the modern award to continue. Parties can seek to vary the terms of a modern award. Similarly, the CFMEU’s proposal that certain parts of the glazing industry be included in the coverage clause of the Manufacturing Modern Award or the Joinery and Building Trades Award 201020 can be dealt with by an application to vary if necessary.

Mining industry

Mining Industry Award 2010

[82] The Australian Mines and Metals Association (AMMA) submitted that no transitional provisions should be placed into the Mining Industry Award 201021 (modern Mining Award) until its application to vary the award has been dealt with by the Commission. It submitted it will be unlikely there will be a need for transitional provisions. No union or employee representative made any submissions directed specifically to this award.

[83] We have decided to put the commencement and transitional clause into the modern Mining Award but delay consideration of whether the model phasing schedule should also be included. After we have dealt with AMMA’s application to vary the award the matter can be revisited.

Private sector clerical occupation

Clerks—Private Sector Award 2010

[84] Parties representing those covered by the Clerks—Private Sector Award 201022 proposed widely divergent approaches to transitional provisions, primarily to defer the implementation of the award. We do not consider that the long-term preservation of existing prescriptions is consistent with the award modernisation objective. Our transitional provisions are designed to minimise any employee disadvantage and the impact on labour costs, while providing for the implementation of the award within the five year transitional period. The model commencement and transitional clause and the phasing schedule will be included in the award.

Racing industry

[85] There are three awards in this industry: Horse and Greyhound Training Award 2010,23 Racing Clubs Events Award 201024 and Racing Industry Ground Maintenance Award 2010.25 We have decided to include the model provisions in all three awards. Because of the general lack of suggestions and submissions about transitional problems we do not expect the provisions to get much use.

[86] Two matters should be mentioned in relation to the Racing Clubs Event Award 2010. The first matter is that we have decided not to include any special transitional provisions in the award to deal with a change in the minimum period of engagement, primarily for the reasons we have already referred to in dealing with the model provisions. In overall terms, however, the cost impact of the change is unlikely to be significant. The second matter concerns minimum wages for casual liquor employees. Clause 14 of the award contains minimum wages expressed as dollar amounts. Clause 14.8 sets out the method by which increases in minimum wages should be reflected in those rates. It is clear that the rates are loaded to take account of the casual nature of employment and the times at which the work is performed. The model transitional provisions deal with minimum wages and penalties and loadings separately. No one suggested, however, that the rates for casual liquor employees would of themselves lead to increases in costs for employers. While noting the issue, in the circumstances we do not intend to make any special provision. The position can be revisited should it be necessary to do so.

Rail industry

Rail Industry Award 2010

[87] The Australian Municipal, Administrative, Clerical and Services Union (ASU), Association of Professional Engineers, Scientists and Managers, Australia (APESMA) and CFMEU each made submissions about transitional provisions that might be considered appropriate for the Rail Industry Award 2010.26 The ASU proposals are an example of what we described in our decision of 3 April 2009 as overly complicated provisions.27 They comprise a “cut and paste” from four federal pre-reform awards and the Queensland Rail Award – State 200328 which is an enterprise NAPSA. The CFMEU sought to preserve conditions from two New South Wales enterprise specific NAPSAs. It is not appropriate for us to include transitional clauses for provisions that are contained in any of the enterprise NAPSAs. The Rail Industry Award 2010 does not cover employers and employees bound by those enterprise NAPSAs.

[88] In its submission APESMA concedes that it is unlikely any professional employee in the rail industry is award dependent or likely to be adversely impacted by the modern award coming into operation. However, it submitted that it may be prudent to put in a transitional clause preserving certain employee entitlements currently in the Rail Professional Officers Award 2002,29 (the Professional Officers Award), a pre-reform award. These related to sick and bereavement leave, overtime and an emergency work allowance.

[89] We have not generally included provisions supplementing NES entitlements in the way sought by APESMA and are not persuaded to do so by way of any transitional provisions in this award. We are also not persuaded there is a need to insert any special transitional provision in respect to the overtime provisions that are in the Professional Officers Award. It is highly unlikely that the making of the modern award will have any practical impact on these employees. Finally, the emergency allowance applies only in New South Wales and provisions in the modern award will compensate an employee called out in comparable circumstances.

[90] The employers, Rail Corporation of New South Wales (Railcorp) and the Australian Rail Track Corporation (ARTC), made general submissions opposing any transitional provisions being placed in this award and specific submissions about the ASU proposals. The criticisms made about the ASU transitional provisions are valid. We do not intend to put the model phasing schedule into this award. It is not warranted or necessary. The model commencement and transitional clause will be included.

Retail industry

Fast Food Industry Award 2010

[91] Significant concern has been expressed by employers at the impact of Fast Food Industry Award 201030 on existing minimum obligations. The terms arise primarily from an existing federal award the content of which is derived from arbitrated decisions. However the current award does not apply to many employers covered by NAPSAs containing lesser terms and conditions or enterprise awards. In some States there will be a change in the level of the safety net and this will impact on labour costs if current actual terms correspond to the terms of the relevant NAPSA. We note the Minister’s recent submissions concerning the use of transitional arrangements to phase-in the impact of such changes. The model transitional provisions are designed to minimise the impact of the changes in a way proposed by many parties and the Minister.

General Retail Industry Award 2010

[92] Employers covered by this award contend that the award increases minimum obligations of employers in a number of respects and the increases should be delayed as long as possible. Little information was provided on the practical effect of the changes. Employers also seek variations to the award but have not made formal application for such changes at this stage. The Shop, Distributive and Allied Employees Association proposed that increases in obligations be phased-in over one year for penalties and three years for wages. We consider that in the light of the submissions of all parties, including the Minister, a longer period is appropriate. We will provide for the ability to absorb and a five year phasing-in period to soften the impact on labour costs.

Hair and Beauty Industry Award 2010

[93] There were few submissions of parties in relation to this award. The major concern appears to be potential increased labour costs. We consider that the model transitional provisions adequately address these concerns.

Pharmacy Industry Award 2010

[94] The existing Federal award31 and NAPSAs applying to this sector have differential terms and conditions. The requirement to adopt a uniform set of terms and conditions necessarily has an impact on some minimum obligations. We have had regard to the submissions of the parties regarding a delay in the changes to casual loadings in New South Wales and ordinary time penalty payments in Western Australia and Queensland. We have also had regard to the recent submissions of the Minister. The model transitional provisions we have developed will minimise the impact of the changes.

Security services

Security Services Industry Award 2010

[95] Australian Security Industry Association Limited (ASIAL) identified cost increases that it submitted may be associated with a number of provisions of the modern award. These include rates of pay, casual loadings, shift arrangements, Sunday penalties, additional overtime penalties and overtime penalties for part-time employees. The actual impact, however, will differ from employer to employer and between the states depending on the existing terms of underlying pre-reform awards or NAPSAs and the existence of enterprise agreements. ASIAL and the Liquor, Hospitality and Miscellaneous Union (LHMU) have agreed that all provisions, other than wage rates, should operate from 1 January 2010. Wage rate increases will be introduced in five equal annual instalments commencing on 1 January 2011. The terms of an agreed transitional clause are set out in supplementary submissions filed by the LHMU on 26 June 2009. We should indicate that we have given consideration to the proposal of Chubb Australasia (Chubb) concerning the phasing-in of any increase in the casual loading and when double time for overtime will operate. We have weighed those considerations with the agreed transitional proposal and believe to the extent there will be actual increases much of the impact for Chubb (bearing in mind its award and enterprise agreement coverage) would be accommodated by the agreed clause. However, as we have earlier indicated, we will give the parties to this award an opportunity to consider the model phasing schedule and whether, in light of those provisions, their agreed transitional provisions should be placed into this award or the model phasing schedule or part of it. Any additional submissions should be filed by 25 September 2009.

[96] There is an additional issue concerning certain allowances which the LHMU identified as being ones that should either be retained indefinitely in the main part of the award, or retained until 31 December 2014.

[97] We have considered the quantum of each allowance, the circumstance in which they were introduced into the existing awards and the disability or condition for which they are paid. We have decided that in the case of this industry award it is appropriate to provide for special transitional provisions dealing with these allowances. They will be identified in a schedule to the award and remain payable for the whole of the transitional period. The clause will cease to operate on 31 December 2014.

STAGE 2 INDUSTRIES/OCCUPATIONS

Agriculture group

Cotton Ginning Award 2010

[98] It was not suggested that any transitional provisions were necessary in the Cotton Ginning Award 2010.32 Nevertheless we have decided, out of an abundance of caution, to include the model provisions, including the phasing schedule.

Horticulture Award 2010

[99] A number of employer representatives including the Horticulture Australia Council, the National Farmers’ Federation (NFF) and the AiGroup submitted that the operation of the Horticulture Award 201033 should be delayed for two years pending the review of modern awards provided for in item 6 of Schedule 5 to the Transitional Act. They all expressed concern about the cost of implementing the award, particularly the provisions relating to piecework, casual loading, span of ordinary hours, overtime and penalty rates. It was suggested that, due to the wide range of provisions in award-based transitional instruments, two years will be needed to properly identify the effect of the new award and to develop proposals for variations. No union responded to those submissions, although the AWU did file a submission setting out its position in relation to transitional provisions generally.

[100] We note that since the Horticulture Award 2010 was made on 3 April 2009 the Minister varied the consolidated request on 2 May 2009. That variation amended cl.45(b) which relates to modern award provisions dealing with the calculation of pay for piecework employees while on leave.

[101] Given the scale of the cost increases referred to in the employers’ submissions, which at this stage at least have not been contradicted, we have concluded that a number of the modern award provisions may require re-examination. We mention in particular the piecework provisions and provisions relating to hours of work, overtime and penalties. Despite that conclusion it would not be appropriate to simply postpone the operation of the provisions for two years. The appropriate course is for one or more of the employer groups to lodge an application to vary the modern award. If that is done we will establish a program to determine the application before the end of the year.

[102] In the meantime we shall vary the award to include the model transitional provisions, including the phasing schedule. On any view, because of the existing diversity of award provisions, the model provisions will be needed.

Nursery Award 2010

[103] Nursery and Garden Industry Australia identified the casual loading, weekend penalty rates and the spread of ordinary hours as areas where costs would increase and sought continuation of the pre-modern award spread of hours for five years. It was also submitted that because nurseries in Victoria have been award free, the terms of the modern award should be phased in over the five year transition period in five equal instalments.

[104] For reasons we have given earlier we do not think it appropriate to apply transitional provisions to changes in the spread of ordinary hours, at least not in the absence of a consensus that should be done. We have decided to include the model provisions in the award, including the phasing schedule, without any variation. An additional matter raised concerning the wording of the higher duties provision can be dealt with as one of the residual variations.

Pastoral Award 2010

[105] The Pastoral Award 201034 substantially reflects the terms of the Pastoral Industry Award 1998.35 Nonetheless, employer organisations representing employers to whom the modern award will apply sought transitional provisions to deal with the impact of the modern award upon them. The NFF and the Western Australian Farmers Federation Industrial Association (WAFFIA) raised particular issues in respect of the dairy and grain industries in Queensland and the grain industry in Western Australia, arising from the application of the modern award to formerly award free employers. WAFFIA also contended that employers of farmhands, currently bound by the Western Australian Farm Employees' Award, 1985,36 would incur additional costs upon the application of the Pastoral Award 2010. The employer organisations submitted that the major award provisions requiring transitional provisions were a 5% increase in the casual loading, annual leave loading, wage increases as a result of the introduction of a classification structure and ordinary hours and overtime.

[106] The NFF and WAFFIA sought a transitional provision which would permit absorption or offsetting of higher modern award obligations against existing rates and the postponement of new higher classifications (and rates) at the FLH 6 – 8 in cl.28.1 of the modern award until 1 January 2015.

[107] The model commencement and transitional clause provides for the absorption of monetary increases arising from the making of the modern award into overaward payments. The model phasing schedule will also ameliorate the impact of any cost increases, including the impact of higher classification rates.

[108] The Pastoralist & Graziers Association, the NFF, the WAFFIA and the Western Australian Shearing Contractors Association (WASCA) sought a transitional provision for shearers and crutchers to ameliorate the impact of the removal of flexibilities currently available to employers under the Shearing Contractors' Award of Western Australia 200337 (Shearing Contractors’ Award). The flexibilities were said to include the capacity for teams to shear on whatever days of the week are required while maintaining award compliance, without additional costs. Transitional provisions were sought which would exempt shearing contractors in Western Australia from Part 7 of the Pastoral Award 2010 for a period of five years. In the alternative they sought transitional provisions which identify and exclude the operation in respect of Western Australian shearing contractors of the most problematic modern award provisions until 2015, permitting greater flexibility in hours arrangements in respect of shearers, crutchers and cooks. The hours of work provision was identified as the major relevant provision.

[109] We accept that the terms of the Pastoral Award 2010 are less flexible than the terms of the Shearing Contractors’ Award, particularly in relation to hours of work. It is nevertheless clear that Western Australian employers have had an advantage over most employers in the industry nationally and that shearers in Western Australia have been disadvantaged in relative terms. While we are not prepared to delay the operation of the totality of the conditions for shearing contractors and their employees in Western Australia, some relief beyond that provided by the model provisions is warranted. We intend to delay the implementation of the working hours provisions, except the requirement for a 38 hour week, until 1 July 2012. That transitional period should provide employers, employees and their representatives with an opportunity to assess the potential effect of the modern award on shearing contractors in Western Australia and to make application to vary the modern award, either on a further transitional basis or substantively, should that be necessary.

[110] The additional provision will broadly reflect the third alternative provision advanced in the joint submission of the WAFFIA and the WASCA. It follows that we have not accepted the primary position of the WAFFIA and the WASCA, which involved a delay in the operation of all of the new conditions for shearing contractors in Western Australia, save for the minimum wages provision. It is relevant to point out again, however, that the model transitional provisions will deal with some of the other cost increases arising from the modern award.

[111] The additional transitional provision will be in the following terms:

[112] In summary, we will vary the Pastoral Award 2010 to include:

Silviculture Award 2010

[113] The Silviculture Award 201038 was derived largely from the only industrial instrument specifically regulating the industry of silviculture, the Silviculture and Afforestation Award (Tas).39 The industry is largely award free outside of Tasmania. No submissions were put to us directly addressing transitional provisions in relation to the award. We will vary the award to include the model transitional provisions, including the phasing schedule.

Wool Storage, Sampling and Testing Award 2010

[114] The Wool Storage, Sampling and Testing Award 201040 reflects a substantially agreed position between the Agribusiness Employers’ Federation and the National Union of Workers,41 modified slightly to reflect post-exposure draft input from the Australian Wool Testing Authority.42 No proposals were put to us directly addressing transitional provisions for the award.

[115] We will vary the award to include the model transitional provisions including the phasing schedule.

Building, metal and civil construction group

Building and Construction General On-site Award 2010

[116] While a number of submissions were made relating to transitional provisions, other submissions went to the substance of the award. One submission of the latter kind related to two year residential apprenticeships available in Western Australia. As we have indicated previously, such matters should be addressed through an application to vary the award.

[117] The CFMEU submitted that where an employer had an obligation to pay employees higher wages or conditions than those contained in the modern award or the NES, the transitional provisions should require the employer to maintain the more beneficial wages and conditions for both existing and new employees. The AWU made a similar submission, at least with respect to existing employees. The conditions which the unions sought to preserve on a transitional basis were mainly drawn from NAPSAs and fall into several categories:

[118] With respect to the matters in (a), when making the modern award such matters were not appropriate for a safety net award to operate nationally. They relate to specific sites which are generally regulated by enterprise agreements. We do not think it necessary to preserve such conditions, even on a transitional basis. Take-home pay orders may be sought in the unlikely event that employees suffer a significant reduction in take-home pay. With respect to the matters in (b), the modern award provisions dealing with NES matters were made in a considered way, and generally apply to all modern awards. Although there is a case for supplementation in some areas, none of the matters raised justifies further supplementation, even on a transitional basis. Finally, with respect to the matters in (c), the modern award provisions relating to casual conversion and the simplified piecework provision were included as appropriate to a modern safety net award and should not be amended even on a transitional basis.

[119] There is no reason to include additional transitional provisions in this award. We will vary the award to include the model transitional provisions, including the phasing schedule.

Electrical, Electronic and Communications Contracting Award 2010

[120] The Electrical, Electronic and Communications Contracting Award 201044 already includes a transitional provision relating to adult apprenticeship arrangements in Queensland in cl.13.

[121] The CEPU, unsurprisingly, pointed to the reduction in minimum wages including some apprentices wages as against the current pre-reform award and NAPSAs. Against this the Australian Federation of Employers and Industries (AFEI) raised the issue of increased causal rates which would affect some employers. In our view, these matters will be accommodated through the model transitional provisions, including the phasing schedule, which we shall include in the modern award.

Joinery and Building Trades Award 2010

[122] The transitional issues raised in the consultations are adequately addressed through the model transitional provisions, including the phasing schedule, which we will include in the modern award.

Mobile Crane Hiring Award 2010

[123] The AWU and the CFMEU asked us to specifically preserve any more favourable current entitlement for existing employees and for any new employees. In particular they sought the preservation of pre-modern award wage rates, which are higher than the wages in the new classification structure.45 We think this concern is addressed by the model transitional provisions, including the phasing schedule, which we shall include in the modern award.

[124] The unions also sought to preserve State-based allowances and site-specific conditions. We remain of the view that it is not appropriate that such provisions be included in a safety net award to operate nationally, even on a transitional basis. Nor do we believe that it is appropriate to supplement the NES entitlements. The modern award provisions dealing with NES matters were made in a considered way and generally apply to all modern awards. Although there has been additional supplementation in some awards in relation to some matters, the case for supplementation in this award is not strong.

Plumbing and Fire Sprinklers Award 2010

[125] The National Plumbing Associations Alliance expressed concern in relation to potential cost increases for some employers arising from the higher casual loading, the new classification structure, shift work provisions and apprentice wages. The Master Plumbers and Mechanical Services Association of Australia, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Plumbing Division and the National Fire Industry Association (together referred to as the “Joint Parties”), in a joint submission, proposed:

[126] Each of these matters will be addressed by the model transitional provisions. They provide for the absorption of monetary increases arising from the making of the modern award into overaward payments and the phasing of cost increases. The phasing schedule will ameliorate the impact of any cost increases, including any impact of higher minimum wages.

[127] The Joint Parties also proposed transitional arrangements to absorb preserved wage amounts varying from 40 cents to $3 per week. In our view it is not necessary or appropriate to preserve such small monetary amounts through a transitional provision.

[128] The Joint Parties also pointed to differences between the modern award apprentice wage rates and those in the pre-reform award and some NAPSAs. The differences may be positive or negative depending upon the year of apprenticeship and the State concerned. The Joint Parties proposed a transitional arrangement to preserve respective existing year level take-home pay for ‘ongoing’ apprentices who will complete their apprenticeship under the modern award. For the reasons earlier expressed in relation to a general consideration of that proposition, we have decided against such an approach, in favour of the application of the phasing schedule.

[129] The Joint Parties raised a number of other matters, not in the nature of transitional matters, seeking the correction of typographical errors in the modern award and the re-ordering of clause 20.3(b) to provide clarity. We will consider such issues later along with other residual variations.

Cleaning services

Cleaning Services Award 2010

[130] The Building Services Contractors Association of Australia (BSCAA) and the Australian Cleaning Contractors Association (ACCA) made joint submissions in which they proposed a method of dealing with transitional issues. As we understand it the LHMU agreed with this approach. They provided detailed schedules which identify a range of hourly wages for various classifications and specify the way in which differences should be dealt with. The approach involves “saving” higher rates and specified allowances enjoyed by current employees and providing for the phasing-in of increases in wages, loadings and penalties over the full five year period. Provision is also made for the phasing-in of changes in hours of work provisions, particularly shift times, to cushion the increases in cost involved. BSCAA and ACCA proposed in the alternative that we should adopt a simpler provision which dealt with the same matters in less detail by adopting general principles.

[131] The Building Services Contractors Association of Australia, New South Wales Branch (BSCNSW) opposed this approach, particularly the use of savings provisions and relied upon the availability of take-home pay orders. It took the position that the award should not provide for any increase in labour costs at any time during the transitional period other than as a result of minimum wage reviews. It contended that even increases of that kind should not apply to employees engaged to perform work under ongoing contracts.

[132] AFEI and some individual employers drew attention to some of the increases in costs applying to employers in New South Wales covered by state award-based transitional instruments and argued for the longest delay possible under the transitional provisions before the modern award commences to operate. They also expressed opposition to the use of savings provisions.

[133] As we have already noted, the LHMU indicated agreement with the transitional proposals advanced by BSCAA and ACCA. It agreed also that the allowances identified by them should be preserved for the five year transitional period.

[134] It appears from the submission that there is general agreement to the transitional scheme proposed by ASCAA and ACCA but some significant employer opposition, particularly in New South Wales where some of the cost increases are significant. We think it is advisable to adopt one set of provisions to apply nationally. Any other approach is likely to increase the complexity of the provisions overall. We would be prepared to adopt the proposals which have been agreed by the BSCAA, ACCA and LHMU, but we think it is appropriate that all parties to the award have the opportunity to consider their position in light of the model transitional provisions flowing from this decision. Any additional submissions should be filed by 25 September 2009.

[135] In its submission of 31 July 2009 AFEI highlighted an issue concerning the calculation of rates of pay under the Cleaning and Building Services Contractors (State) Award46 (the NSW Award), an award-based transitional instrument applying in New South Wales. On AFEI’s calculations the rates in the NSW Award are higher than those on which the agreed BSCAA/ACCA and LHMU transitional provisions are based. While we note this difference of view, we do not intend to comment on the issue at this stage.

Financial services group

Banking, Finance and Insurance Award 2010

[136] Many submissions proposed changes to the Banking, Finance and Insurance Award 2010.47 Others proposed a deferral of its application in favour of the ongoing application of some terms of instruments that are more favourable in some respects to either employers or employees. In our view the phased implementation of the award through the model transitional clause appropriately addresses the competing positions of the parties and best achieves the objects of award modernisation.

Graphic arts group

Graphic Arts, Printing and Publishing Award 2010

[137] In relation to the Graphic Arts, Printing and Publishing Award 201048 (modern Graphic Arts Award), the AMWU sought no phasing-in of any increases in shift allowances or the casual loading, phasing of the casual conversion clause and retention of additional public holidays. They also sought certain redundancy, redeployment and relocation provisions and enhanced penalty rate provisions for work on a rostered day off for employees of regional daily newspaper offices.

[138] To the extent that these matters concern penalties and loadings, we see no sound basis for departing from the phasing approach in the phasing schedule. We consider that phasing of the casual conversion clause would create unacceptable complexity in the application of the award. The additional public holidays and redundancy provisions were sought prior to the making of the modern award and we decided not to include them. If a party seeks to vary the terms of a modern award, it may make an appropriate application. As to the redeployment and relocation provisions, as we indicated earlier, it is not practical to provide a transitional arrangement for every pre-modern award provision.

[139] We have decided to include the model transitional provisions, including the phasing schedule, in the modern Graphic Arts Award and that there should be no additional transitional provisions. We add that the typographical errors in the modern award highlighted by various parties will be dealt with, along with other residual variations, prior to 1 January 2010.

Health and welfare services (excluding social and community services)

Aged Care Award 2010

[140] The Australian Government stated its commitment to the long-term viability of the aged care sector and submitted that transitional provisions in the relevant modern awards were important to manage any change in labour costs. In this connection the Government encouraged the Commission to use the full five year transition period to accommodate any increases in labour costs. The Aged Care Industry Employers (ACIE) proposed extensive transitional provisions dealing with changes to both the direct wages cost structure as well as changes to conditions of employment in the various States. An extensive amount of work was undertaken to produce transitional provisions based on State differences. Similarly, a group of employers, referred to as the G10 Group, sought a full phasing of all changes in costs.

[141] The LHMU sought to delay the impact of any changes which reduce existing terms or conditions of employment particularly in Western Australia.

[142] Generally speaking, the phasing schedule adequately deals with the concerns raised by the Government and the employers by providing for an extended phasing period. One allowance requires particular attention. This is the nauseous allowance. It was submitted that where this has been introduced there needs to be time for employers to review work practices and, where necessary, to renegotiate cleaning/laundry contracts. The ACIE seek a period of between two to five years before the allowance is introduced.

[143] Some delay in the commencement of the allowance is justified to permit employers to consider whether they wish to change existing arrangements. We shall include a provision which exempts employers not already obliged to pay the nauseous allowance until 1 January 2011. In light of the model provisions we are not persuaded that a period longer than 12 months is necessary for employers to examine current practices. The allowance is not unknown in the sector and only applies if employees have to directly handle linen of an unusually dirty or offensive nature and not sealed in airtight containers.

Health Professionals and Support Services Award 2010

[144] The Private Hospital Employers sought to exclude the operation of the award until 31 December 2015. This view was supported by the Medical Imaging Employment Relations Group. Other employer interests represented by AFEI and Chamber of Commerce and Industry Western Australia (CCIWA) dealt with how transitional provisions should operate and opposed cost increases.

[145] The Australian Nursing Federation (ANF), Health Services Union and LHMU identified a number of provisions in the modern award which were inferior to previous industrial regulation. Extensive schedules were developed to maintain existing conditions.

[146] The Australian Dental Association expressed concerns about classifications which are more appropriately dealt with by way of an application to vary. However, it also raised the necessity to phase any alteration to penalty rates over a full five years.

[147] The Chiropractic Association of Australia made a late submission seeking removal from coverage of the award. Again, this is better progressed by way of application to vary.

[148] The Health Professionals and Support Services Award 201049 covers a large number of occupations and sectors. We have dealt with many of the issues raised in the earlier parts of this decision. Nevertheless, we believe that a cautious approach is necessary and we have decided to include all of the model provisions in the award.

Medical Practitioners Award 2010

[149] No interested party made any submission in relation to transitional provisions for medical practitioners. Having regard to the award we do not propose to include any model provisions in the award.

Nurses Award 2010

[150] Submissions by employers in relation to nurses came from the aged care sector and private hospitals. Concern was expressed at a number of changes to conditions or employment which it is said reduced flexibility. The ANF drew our attention to changes from the existing regulation to the new award. For the most part the ANF sought to challenge the employers’ view of the cost impact of the modern award.

[151] We have addressed many of the issues raised by the employers in the earlier part of this decision. The question is whether or not to include any or all of the model provisions in this award. In light of the submissions we will include all of the model provisions.

Information and communication technology group

[152] The awards in this group, the Telecommunication Services Award 2010,50 the Business Equipment Award 2010,51 the Contract Call Centres Award 201052 and the Market and Social Research Award 2010,53 generally follow existing federal instruments. In extending the application of the awards there is some impact on some existing minimum terms and conditions. From the submissions of the parties it appears that the impact is generally not significant. In our view the model transitional provision adequately addresses the matters raised by the parties.

Manufacturing group

Manufacturing and Associated Industries and Occupations Award 2010

[153] This award has already been dealt with under the heading of Metal and associated industries, etc in the priority awards section of this decision.

Private transport industry (road, non passenger)

[154] This part of our decision deals with the three modern awards made in Stage 2, the Road Transport and Distribution Award 201054 (RT&D Modern Award), Road Transport (Long Distance Operations) Award 201055 (RT Long Distance Modern Award) and the Transport (Cash in Transit) Award 2010.56

[155] No transport industry employer or employer association made any submissions about the need for transitional provisions in these awards. Neither the Transport Workers’ Union (TWU) nor any other union made any specific submission about clauses that may need to be inserted in any of these awards.

[156] AFEI made submissions primarily about increases it said would be occasioned by employers previously bound by a NAPSA being the Transport Industry Retail (State) Award 1999,57 an award made by the Industrial Relations Commission of New South Wales. Although asserting that there was a potential for higher costs there was no acknowledgment that minimum rates may be lower nor that award flexibility clauses may accommodate cases where transport is undertaken during retail industry working hours. Nonetheless we have considered all of the submissions.

[157] The Oil Industry Industrial Committee submitted that no transitional provisions were required. AiGroup submitted that its proposed standard clauses should be inserted in RT&D Modern Award and the RT Long Distance Modern Award. No further submission was made specifically addressing these industry awards.

[158] The major concern we have is in respect to the RT&D Modern Award and particularly the significance of the higher rates in some New South Wales NAPSAs. We have decided to put the model phasing schedule into this award. The model commencement and transitional clause will make clear the availability of take-home pay orders and the phasing up and down of wages clauses in the schedule is a compromise to deal with the majority of existing pre-reform and NAPSA rates that align with the modern award rates and those which are higher in New South Wales NAPSAs.

[159] The model phasing schedule will not be inserted into the other two private transport industry awards.

Quarrying industry

Quarrying Award 2010

[160] Boral ACM, the principal employer involved in the making of the Quarrying Award 2010, filed draft transitional provisions in December 2008. At the time these provisions were agreed to by the AWU. In these proceedings Boral ACM did not make any other proposals but contended that if the Commission adopted a “formula driven” approach regard should be had to the December 2008 proposals. Those proposals involved the maintenance of pre-modern award hours of work and shift provisions in specified States, and district allowances in Western Australia and Queensland, until 31 December 2015. The AWU did not make any submissions in relation to this award, although it did make a submission in relation to transitional provisions generally. In the circumstances we would be inclined to adopt the transitional provisions in the December 2008 proposal but consider that it is appropriate to give the parties an opportunity to consider their positions in light of the model transitional provisions we have decided upon. Any additional submissions in relation to this award should be filed by 25 September 2009.

Sanitary and garbage disposal services

Waste Management Award 2010

[161] The Waste Contractors and Recyclers Association of New South Wales (WCRA) indicated its concern about reductions in wages and conditions in New South Wales resulting from the implementation of the Waste Management Award 2010.58 This concern related to the commercial implications of the change, including the possibility of new contractors coming into the market with a cost advantage. Other transitional issues were raised. We have taken all of the WCRA submissions into account. We have decided to include the model transitional provisions, including the phasing schedule, in the award but not to make any special provisions.

[162] The Australian Road Transport Industrial Organisation (ARTIO) expressed concern that the classification structure in the modern award would require various jobs being performed outside of New South Wales to be reclassified and that this would lead to significant wage increases. It was contended that this would arise because the classification structure in the modern award is not compatible with the classification structure in the Transport Workers’ (Refuse, Recycling and Waste Management) Award 201059 (Federal Waste Award). As the Commission indicated in its 3 April 2009 decision, the modern award contains a wage structure based on the rates in the Federal Waste Award. The difficulty which has arisen apparently relates to the classification definitions rather than the structure itself. Representatives of ARTIO and WCRA have agreed to further discussions. Discussions with the TWU would also be desirable. If some modification to the classification definitions is necessary an application should be made to vary the modern award as soon as practicable to permit the issue to be properly considered well before 1 January 2010.

CONCLUSION

[163] We shall publish the modern awards which are affected by this decision as soon as practicable. In the case of some awards which we have identified above we shall not publish the varied award until parties have had a further opportunity to consider their positions and, if thought appropriate, to make further submissions. For ease of reference we have included the model transitional provisions as Appendix A to this decision.

BY THE COMMISSION:

PRESIDENT


1 [2009] AIRCFB 345.

2 ibid.

3 [2009] AIRCFB 645

4 See para 70 of ACCI Transitional Provisions submissions of May 2009.

5 Australian Government submission in relation to Stage 4, 24 July, 2009 at para 22.

6 The term “transitional minimum wage instrument” is defined in item 5(3) of Schedule 9 to the Transitional Act. The term “award-based transitional instrument” is defined in item 2(5) of Schedule 3 to the Transition Act.

7 The term “agreement-based transitional instrument” is defined in item 2(5) of Schedule 3 to the Transitional Act.

8 The term “transitional default casual loading” is defined in item 5(3)(d) of Schedule 9 to the Transitional Act.

9 See Fair Work Act 2009, ss.340 and 341

10 See Fair Work Act 2009, s.294(1)(b)(ii) and item 4 of Schedule 9 to the Transitional Act.

11 [2008] AIRCFB 1000 at para [33].

12 [2008] AIRCFB 717.

13 [2008] AIRCFB 1000.

14 [2009] AIRCFB 645 at paras [6] & [7].

15 MA000009.

16 [2009] AIRCFB 640.

17 MA000001.

18 MA000007.

19 MA000010.

20 MA000029.

21 MA000011.

22 MA000002.

23 MA000008.

24 MA000013.

25 MA000014.

26 MA000015.

27 [2009] AIRCFB 345 at para [25].

28 AN140246.

29 AP817162CRV.

30 MA000003.

31 Community Pharmacy Award 1998, AP773671.

32 MA000024.

33 MA000028.

34 MA000035.

35 AP792378CRV.

36 AN160126.

37 AN160289.

38 MA000040.

39 [2009] AIRCFB 345 at para [65].

40 MA000044.

41 [2009] AIRCFB 50 at para [25].

42 [2009] AIRCFB 345 at para [66].

43 AP790741CRV.

44 MA000025.

45 [2009] AIRCFB 345 at paras [127]-[133].

46 AN120123.

47 MA000019.

48 MA000026.

49 MA000027.

50 MA000041.

51 MA000021.

52 MA000023.

53 MA000030.

54 MA000038.

55 MA000039.

56 MA000042.

57 AN120618.

58 MA000043.

59 AP812785CNV.

Printed by authority of the Commonwealth Government Printer

<Price code G PR282009>



Appendix A to the Full Bench decision of 2 September 2009

Model Transitional Provisions

1. By renaming clause 2 as “Commencement and Transitional”.

2. By inserting the following in clause 2:

2.2 The monetary obligations imposed on employers by this award may be absorbed into overaward payments. Nothing in this award requires an employer to maintain or increase any overaward payment.

2.3 This award contains transitional arrangements which specify when particular parts of the award come into effect. [Where the phasing schedule is to be included in the award the following text to be added] Some of the transitional arrangements are in clauses in the main part of the award. There are also transitional arrangements in Schedule A. The arrangements in Schedule A deal with:

2.4 Neither the making of this award nor the operation of any transitional arrangements is intended to result in a reduction in the take-home pay of employees covered by the award. On application by or on behalf of an employee who suffers a reduction in take-home pay as a result of the making of this award or the operation of any transitional arrangements, Fair Work Australia may make any order it considers appropriate to remedy the situation.

2.5 Fair Work Australia may review the transitional arrangements in this award and make a determination varying the award.

2.6 Fair Work Australia may review the transitional arrangements:

3. By adding a new Schedule A to the award as follows:

SCHEDULE A—TRANSITIONAL PROVISIONS

A.1 General

A.1.1 The provisions of this schedule deal with minimum obligations only.

A.1.2 The provisions of this schedule are to be applied when there is a difference, in money or percentage terms, between a provision in a transitional minimum wage instrument (including the transitional default casual loading) or an award-based transitional instrument on the one hand and an equivalent provision in a modern award on the other.

A.2 Minimum wages – existing minimum wage lower

A.2.1 The following transitional arrangements apply to an employer which, immediately prior to 1 January 2010:

A.2.2 In this clause minimum wage includes:

A.2.3 Prior to the first full pay period on or after 1 July 2010 the employer must pay no less than the minimum wage in the relevant transitional minimum wage instrument and/or award-based transitional instrument for the classification concerned.

A.2.4 The difference between the minimum wage for the classification in this award and the minimum wage in clause A.2.3 is referred to as the transitional amount.

A.2.5 From the following dates the employer must pay no less than the minimum wage for the classification in this award minus the specified proportion of the transitional amount:

A.2.6 The employer must apply any increase in minimum wages in this award resulting from an annual wage review.

A.2.7 These provisions cease to operate from the beginning of the first full pay period on or after 1 July 2014.

A.3 Minimum wages – existing minimum wage higher

A.3.1 The following transitional arrangements apply to an employer which, immediately prior to 1 January 2010:

A.3.2 In this clause minimum wage includes:

A.3.3 Prior to the first full pay period on or after 1 July 2010 the employer must pay no less than the minimum wage in the relevant transitional minimum wage instrument and/or award-based transitional instrument for the classification concerned.

A.3.4 The difference between the minimum wage for the classification in this award and the minimum wage in clause A.3.3 is referred to as the transitional amount.

A.3.5 From the following dates the employer must pay no less than the minimum wage for the classification in this award plus the specified proportion of the transitional amount:

A.3.6 The employer must apply any increase in minimum wages in this award resulting from an annual wage review. If the transitional amount is equal to or less than any increase in minimum wages resulting from the 2010 annual wage review the transitional amount is to be set off against the increase and the other provisions of this clause will not apply.

A.3.7 These provisions cease to operate from the beginning of the first full pay period on or after 1 July 2014.

A.4 Loadings and penalty rates

A.5 Loadings and penalty rates – existing loading or penalty rate lower

A.5.1 The following transitional arrangements apply to an employer which, immediately prior to 1 January 2010:

A.5.2 Prior to the first full pay period on or after 1 July 2010 the employer must pay no less than the transitional default casual loading or the loading or penalty in the relevant award-based transitional instrument for the classification concerned.

A.5.3 The difference between the loading or penalty in this award and the rate in clause A.5.2 is referred to as the transitional percentage.

A.5.4 From the following dates the employer must pay no less than the loading or penalty in this award minus the specified proportion of the transitional percentage:

A.5.5 These provisions cease to operate from the beginning of the first full pay period on or after 1 July 2014.

A.6 Loadings and penalty rates – existing loading or penalty rate higher

A.6.1 The following transitional arrangements apply to an employer which, immediately prior to 1 January 2010:

A.6.2 Prior to the first full pay period on or after 1 July 2010 the employer must pay no less than the loading or penalty in the relevant award-based transitional instrument.

A.6.3 The difference between the loading or penalty in this award and the rate in clause A.6.2 is referred to as the transitional percentage.

A.6.4 From the following dates the employer must pay no less than the loading or penalty in this award plus the specified proportion of the transitional percentage:

A.6.5 These provisions cease to operate from the beginning of the first full pay period on or after 1 July 2014.

A.7 Loadings and penalty rates – no existing loading or penalty rate

A.7.1 The following transitional arrangements apply to an employer not covered by clause A.5 or A.6 in relation to a particular loading or penalty.

A.7.2 Prior to the first full pay period on or after 1 July 2010 the employer need not pay the loading or penalty in this award.

A.7.3 From the following dates the employer must pay no less than the following percentage of the loading or penalty:

A.7.4 These provisions cease to operate from the beginning of the first full pay period on or after 1 July 2014.