[2009] AIRCFB 865

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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

STATEMENT

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
(AM2008/24, 35, 41, 64-92 and AM2009/10)

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

MELBOURNE, 25 SEPTEMBER 2009

INTRODUCTION

[1] This statement concerns award modernisation and in particular the exposure drafts for Stage 4 modern awards. The statement should be read in conjunction with earlier statements and decisions but in particular the decisions relating to the making of the priority, Stage 2 and Stage 3 modern awards. 1

[2] The award modernisation process is being carried out pursuant to Part 10A of the Workplace Relations Act 1996 (WR Act), Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) and a request made by the Minister for Employment and Workplace Relations (the Minister) on 28 March 2008 pursuant to s.576C of the WR Act (the consolidated request). 2

[3] Stage 4 covers some 32 industries and industry sectors. With this statement we publish 29 draft awards and a further exposure draft of the national training wage schedule. The draft awards include an amended version of the Education Services (Teachers) Award 2010. 3 Proposals, submissions and other material in relation to the exposure drafts are to be lodged with the Commission by 16 October 2009. Lodgment can be by post, fax or email and all material lodged will be made available through the internet as soon as practicable. The Full Bench will sit to conduct consultations in relation to the Stage 4 draft awards from 26 to 30 October 2009 in Sydney and on Wednesday 4 November 2009 in Melbourne, with Thursday 5 November also being available if required. It is intended that so far as practicable contributions should be in written form. The public consultations are not an opportunity to restate what is contained in the written material. We should also stress that while some latitude will be permitted to file written material by way of reply or elaboration in connection with the public consultations, as a general rule material filed outside the published timetable is at risk of being disregarded. Before turning to the exposure drafts some general comments are necessary.

[4] The exposure drafts reflect a provisional or tentative view and changes may be made on the basis of the material and arguments advanced. In some cases also, the drafts may be incomplete or based on the draft advanced by a particular party or group of parties.

[5] The new exposure drafts all include the model transitional provisions namely, the model commencement and transitional clause and the model phasing schedule. 4 We shall decide whether to include the model phasing schedule in the final awards in light of the consultations. We also encourage parties to agree on transitional provisions where it is practicable to do so. There may also be cases in which special or additional transitional provisions are appropriate. Any proposals for such provisions should be in writing and filed in accordance with the timetable.

[6] A number of types of award provisions require some comment. As to coverage clauses, we note that the Transitional Act and the Fair Work (State Referral and, Other Consequential Amendments) Act 2009 (State Referral Act) amended the Fair Work Act 2009 (FW Act) to include provisions which do not commence to operate until 1 January 2010. Section 143(8) of the FW Act will be:

[7] Section 143(10) of the FW Act will be:

[8] Although the two provisions are not in operation, it is appropriate that modern awards are drafted to take account of the requirements contained in them. This is particularly appropriate as the terms of s.143(8) mimic, although in different statutory language, the terms of clause 2(e) of the consolidated request and s.143(10) reflects the terms of clause 4D of the consolidated request. Appropriate provisions will be included in the coverage clause of each modern award.

[9] On a related more general matter, the Stage 4 exposure drafts use the language of the FW Act and the Transitional Act rather than the terms of the WR Act. In a number of cases this language contrasts with the language used in the same context in the modern awards made in earlier stages. We intend that the language of the awards already made will be updated as part of the residual variations. 5

[10] We turn now to the question of part-time work. A variation to the consolidated request made on 26 August 2009 included the following new clause in the consolidated request:

[11] This variation was made after the Stage 4 pre-drafting consultations had concluded on 14 August 2009. Accordingly there has not been an adequate opportunity for all interested parties to comment on the significance of the variation in the context of Stage 4. Any submissions should be made in accordance with the Stage 4 timetable. We also mention that the Commission issued a statement on 10 September 2009 in which it was indicated that any interested party having the view that any modern award should be varied to give effect to clause 53 of the consolidated request should make an appropriate application. 6 We have taken the terms of clause 53 into account in drafting the part-time provision in the exposure draft of the Restaurant Industry Award 2010 and some other exposure drafts.

[12] There is a minor change to the model clause dealing with superannuation. The clause has been varied in each of the exposure drafts to include successor funds so as to avoid the need for an award variation where a fund ceases to exist and a successor fund takes over its operations.

[13] We turn now to the question of salary packaging or salary sacrifice. In its decision in relation to the priority modern awards, the Commission indicated that it would take a cautious approach to salary packaging. 7 The major parties involved in the consultations for health and welfare services (remainder) – social and community services, strongly supported salary packaging. It is clear that salary packaging provisions have been included in relevant awards in the area. However, we do not have a clear indication of the extent to which employees in the industry need or use the award provisions. Nor do we know the extent to which salary packaging provides a net benefit to employees. At this stage we have maintained the approach previously outlined and have not included a salary packaging provision in the relevant exposure draft. Although we are prepared to reconsider the position, we would not be inclined to include such provisions without more information about the incidence of salary packaging in the relevant industries and a more detailed explanation of the relative benefits for employers and employees. Submissions should also cover whether such a term can be included in a modern award and, if so, whether such a term would be consistent with the provision of a fair minimum safety net. We make some further comments in relation to salary packaging later in this statement in dealing with the exposure draft for the Social, Community, Home Care and Disability Services Industry Award 2010.

COMMENTS ON STAGE 4 EXPOSURE DRAFTS

[14] We turn now to the Stage 4 exposure drafts. Notwithstanding our earlier comments in relation to statutory terminology in the exposure drafts, on occasions we continue to use the language used by the parties in the consultations e.g. Notional Agreement Preserving State Award (NAPSA) and pre-reform award rather than award-based transitional instrument. 8

Accountancy practices

[15] We have decided not to publish an exposure draft for accounting practices. Regulation of this area through pre-reform awards and NAPSAs is very limited. Two matters arise for consideration, however. The first is that it would appear that the Miscellaneous Award 2010 will cover the businesses of accountants as this is not an industry covered by a modern award. The second and related consideration is the treatment of transitional provisions where regulation currently exists for accountants.

Animal care/veterinary services

[16] We now publish an exposure draft for veterinary services, the Veterinary Services Award 2010. There was a variety of submissions as to the shape and coverage of a proposed award. At this exposure draft stage we have adopted the view expressed by the Australian Veterinary Association (AVA) that any award should only cover private veterinary practices and take into consideration all persons who would be employed in a practice, including animal attendants, practice managers and vets.

[17] There was a large amount of agreement between the AVA and the Veterinary Nurses Council of Australia Inc as to the content of the proposed award. However one matter stands out for consideration and that relates to the classification definitions for persons other than veterinary surgeons. We were advised that a veterinary nurse has a certificate IV qualification and yet there was a proposal that such a person be classified and paid at the certificate III level. On its face this would be inappropriate but there may be a suitable explanation for the proposal. We have also provided for a practice manager classification. We intend that this classification be limited to very specific circumstances. It would not apply to a person performing ordinary clerical functions of ordering of supplies and/or making appointments. These functions may well fall within the classification roles of receptionist or similar.

[18] Given the concerns we have outlined we have not, at this stage, included classification definitions for persons other than veterinary surgeons. We invite further consideration of these matters.

Aquaculture

[19] We publish an exposure draft of the Aquaculture Industry Award 2010. The industry is currently subject to very limited regulation. There are three NAPSAs and the industry has not been subject to a federal award to date. Consequently, significant components of the industry would be subject to regulation for the first time in the event that a modern aquaculture industry award were to be made. The industry associations have made submissions that we should consider the industry as historically and traditionally award free and therefore no modern award should be made. We have not finally determined this question.

[20] Three options arise from the consultations. One is to make a modern award for the industry after having considered responses to the exposure draft. Another is to provide that the industry will be subject to the Miscellaneous Award 2010 currently under consideration as part of Stage 4. If the industry associations’ submissions were to be upheld in full the industry would be wholly award free. While we have decided to publish an exposure draft the other options have not been excluded.

[21] It is also relevant to note that only the Australian Workers’ Union (AWU) filed a draft award and the Commission did not therefore have the benefit of a draft award from the employers or industry associations for comparative drafting purposes. Given that we have yet to decide whether or not a modern award will be made and if so in what form, and that we will have regard to responses to the exposure draft, it would be of assistance to us if the employers and industry associations could give consideration to the form and contents of a modern aquaculture industry award which should be made in the event that we decide to make one.

Building services

[22] The main parties who participated in the consultation in this area were the Australian Industry Group (AiGroup), the Australian Federation of Employers and Industries (AFEI), the Liquor, Hospitality and Miscellaneous Union (LHMU), the AWU and a group of employers and associations in the car parking industry.

[23] AiGroup was the only body which submitted that there should be a building services industry award. It did not provide a draft however. AiGroup also proposed that the pest control industry could be encompassed within the coverage of the Manufacturing and Associated Industries and Occupations Award 2010 9 (Manufacturing Modern Award). Other parties opposed the making of a building services award and supported either or both a car parking industry award and a pest control industry award.

[24] We have decided to publish exposure drafts of a Car Parking Award 2010 and a Pest Control Industry Award 2010. Those employees who may be involved in the building services sector and who would not be covered by one of these proposed awards or others such as the Cleaning Services Award 2010 10 would appear to be few in number and could be covered by the Miscellaneous Award 2010.

[25] We have decided to adopt a three level classification structure in the draft Car Parking Award 2010 with rates which are based upon the present Victorian award. 11 We are not confident that the rates which were proposed by AFEI and the car parking employers are properly fixed minimum rates.

[26] The span of ordinary hours in the exposure draft is 7.00am to 7.00pm on each day of the week. There was general agreement among the parties that the industry requires ordinary hours to be worked seven days a week. We note that adoption of such a provision means that, in some areas, the working of ordinary hours on Saturday afternoon and Sunday will be introduced for the first time. The impact of this provision upon employees in those areas should be ameliorated by the model transitional provisions which are included in the exposure draft. We have adopted the standard casual loading of 25%.

[27] The draft Pest Control Industry Award 2010 contains a five level classification structure which is based upon the structure in the present Victorian award together with the adoption of a level for an inspector which is currently in the New South Wales NAPSA. 12 The wage rates are generally reflective of the current rates in those awards.

[28] Although the parties agreed that ordinary hours should be able to be worked on any day of the week as at present, the actual span of hours was in dispute. At this stage we have decided to adopt a span of 6.00am to 6.00pm. These hours reflect the current span in the majority of awards including those in Victoria and New South Wales.

[29] We have included a casual loading of 25%. We acknowledge that this is lower than the present rate in the Victorian award however it is higher than in any of the other awards in the sector.

Christmas Island and Cocos (Keeling) Islands

[30] The WR Act and the FW Act apply to the Indian Ocean Territories of Christmas Island and Cocos (Keeling) Islands except to the extent that the provisions of those Acts are modified by Regulations. 13 Neither the Workplace Relations Regulations 2006 nor the Fair Work Regulations 2009 exclude the Indian Ocean Territories from the award modernisation process under the WR Act. Accordingly, awards other than enterprise awards applicable to those Islands are subject to the current modernisation process.

[31] All awards applicable to employment on Cocos (Keeling) Islands are enterprise awards and do not require further consideration at this stage.

[32] There are three non-enterprise awards applying to employment on Christmas Island:

[33] The scope of the CIBCC Award is encompassed within the scope of the following modern awards:

[34] We will refer to these awards collectively as the “designated modern awards”.

[35] Apart from the CIBCC Award provisions for airfares and district allowance there is no reason for excluding Christmas Island from the operation of the designated modern awards. Consequently we will incorporate CIBCC Award provisions for airfares and district allowance into the designated modern awards, subject to what may arise in the consultations.

[36] We note that in 1993 the Commission created a nexus between the district allowance in the Christmas Island building and construction industry and the locality allowance paid to persons permanently domiciled on the island. 20 No reason has been shown to disturb that nexus and we will maintain it. In the recent past the amount of the allowance has been assessed and adjusted periodically by the Department of Employment and Workplace Relations and, more recently, the Department of Education, Employment and Workplace Relations (DEEWR). We will fix the amount as it currently stands subject to automatic adjustment in accordance with the periodic assessments issued by DEEWR or any other relevant successor authority. The designated modern awards will include the following Christmas Island specific provisions:

[37] The Redundancy Award was made by a Full Bench of the Commission in settlement of an industrial dispute on 6 July 1998. 21 The award applies to the Christmas Island Resort Pty Ltd and Christmas Island Laundry Pty Ltd, their employees and the Union of Christmas Island Workers (UCIW). The Christmas Island Resort commenced operation in 1983. The Redundancy Award was made at the time of the closure of the Christmas Island Resort. The award provides for three weeks pay for each year of service with pro-rata payment for each completed month of service, up to a maximum of 12 weeks pay. The redundancy entitlement is expressed to be in addition to any other contractual, statutory or other award entitlement. Clause 7 provides that the time for payment of the redundancy entitlement “shall … be within 10 days of the issue of this award.” Christmas Island Resort Pty Ltd has no employees. Christmas Island Laundry Pty Ltd has sold the laundry business to another corporate entity. Currently there are no employees engaged in the laundry business.

[38] The Australian Council of Trade Unions (ACTU) submitted that the Redundancy Award, insofar as it applies to the laundry business, be referred for modernisation in the dry cleaning and laundry services sector. It further submitted that the award be maintained in respect of Christmas Island Resort Pty Ltd. We have decided to defer further consideration of the Redundancy Award at this time.

[39] The Christmas Island Severance Pay Award 2002 22 (Severance Award) was first made by Mr JE Taylor, Arbitrator for Christmas Island, on 18 May 1981. It was made in settlement of a dispute between the UCIW, the Christmas Island Professional and Salaried Officer's Association and Christmas Island Police Association and the Minister for Home Affairs and Environment and The British Phosphate Commissioners. It was then binding on all parties to the dispute and expressed to be operative from “31 December 1981 and thereafter until superseded or revoked.” On 13 December 1995, the Minister for Environment, Sport and Territories was added as a party bound by the Severance Award.

[40] The Severance Award confers on employees covered by the award an entitlement to severance payments and certain other award benefits. The benefits conferred by and accrued under the award are in respect of a finite period of continuous employment on Christmas Island, namely the period of 21 years and three months between 1 October 1958 and 31 December 1979. In order to qualify for the benefits an employee had to be employed by one of the employers identified in cl.3 of the Severance Award as at 30 June 1981.

[41] The benefits conferred by the Severance Award do not become due and payable to an employee covered by the award until termination of employment. Clause 6(c) of the award makes provision for the amount of an entitlement of an employee whose employment had not terminated on 30 June 1981 to be credited to the Provident Account of the employee in the Provident Fund of the appropriate employer.

[42] The Severance Award was subject to review in 2002 under Item 51, Schedule 5 to the Workplace Relations and Other Legislation Amendment Act 1996. At the time of the review the Christmas Island Professional and Salaried Officer's Association had been deregistered. The Australian Federal Police Association, in response to a notice sent to the Christmas Island Police, advised that it had no interest in the award. A dispute as to whether Christmas Island Phosphates was respondent to the award by succession to, or transmission of the former business of, British Phosphate Commissioners was resolved when the UCIW conceded that there was no succession or transmission.

[43] In 2002 it was common ground that the Commonwealth had subsisting obligations under the Severance Award and that it should continue in operation to the extent that it applied to the Minister administering the Territory of Christmas Island and the British Phosphate Commissioners.

[44] The UCIW seeks to maintain the award because of subsisting employee entitlements under it. We also defer our consideration of the Severance Award.

Correctional facilities

[45] Historically, the operation of prisons and correctional facilities has been the exclusive preserve of government. In recent years there has been a move to the privatisation of the operation of prisons in some States. It would appear that that trend will continue and it is appropriate to make a modern award for this industry. The Commonwealth has a number of immigration detention centres which are operated by private contractors. The operation of such detention centres will need to find a home among the modern awards.  While there are points of distinction between correctional facilities and detention centres, there are sufficient similarities to make us inclined to include detention facilities within the scope of the modern award that covers correctional facilities. We publish a draft Corrections and Detention (Private Sector) Award 2010. The award will cover private sector employers who operate correctional facilities and detention centres, provide court security and prisoner/detainee transport. As we understand it, there are, at present, only three private sector employers who operate in this industry.

[46] Draft awards were submitted by the CPSU, the Community and Public Sector Union (CPSU) and Geo Group Australia Pty Ltd (formerly, Australian Correctional Management) (Geo Group).  Following the pre-drafting public consultations there have been private conferences between the key unions and the private sector employers.  We understand that progress has been made in those discussions and there is a good prospect that these parties will reach at least substantial agreement on the terms of a modern award for this industry. With some modification we have adopted the draft award prepared by Geo Group. By doing so we do not wish to undermine the effectiveness of the continuing discussions and we stress that we have not made any final decision in relation to matters on which the parties advanced competing drafts. The modifications we have made relate mostly to the coverage clause and to classifications and associated rates. We have also made some changes to standard clauses and maintained approaches that we have adopted in modern awards generally. We should also point out that material filed by the Geo Group and the CPSU on 22 September 2009 was received too late to be taken into account in the formulation of the draft.

[47] In the event that the parties do not reach agreement, we would of course be assisted by submissions that canvass the differences between the CPSU and Geo Group drafts and the relevant supporting arguments.

Diving services

[48] We have decided to produce two exposure drafts for the diving services industry. Given the vast disparity in the award terms and conditions currently applying between recreational diving services and industrial diving services, attempts to integrate those terms and conditions into a single document are likely to lead to unwanted confusion.

[49] The Professional Diving Industry (Recreational) Award 2010 exposure draft, subject to the inclusion of modern award standard provisions, largely reflects the terms of the Recreational Diving Industry Award 2001. 23 On the basis of submissions by both the Association of Marine Park Tourism Operators (AMPTO) and AFEI, a part-time work provision and an increased pay rate for diving instructor have been incorporated into the exposure draft.

[50] AMPTO and AFEI provided a joint draft award in which they included certain other amendments to current award terms and provisions. Those amendments have not been incorporated into the exposure draft at this stage, as they lack justification by way of submission.

[51] The Professional Diving Industry (Industrial) Award 2010 exposure draft, subject to the inclusion of modern award standard provisions, is largely reflective of the Professional Divers’ – Maritime Union of Australia Award 2002 24 and the draft modern award provided by the Maritime Union of Australia (the MUA), to the extent that the draft provided for industrial rather than recreational diving services. Certain restrictions in the current award relating to the utilisation of casual employees have not been included in the exposure draft for consistency with modern awards generally.

[52] The coverage provisions for both exposure drafts capture the position under existing federal awards as well as such coverage as may exist under relevant NAPSAs.

Dry cleaning and laundry services

[53] We publish an exposure draft of a Dry Cleaning and Laundry Industry Award 2010. The main parties who participated in the consultation were the LHMU, the AWU, the Textile, Clothing and Footwear Union of Australia (TCFUA) and the AFEI. Submissions were also received from Spotless Services Australia Limited, Alsco Pty Ltd, Business SA and a number of textile, rental and laundry associations.

[54] We have decided to create separate dry cleaning and laundry streams for wages, hours of work and classifications within the award. The wage rates in the dry cleaning stream are reflective of the present federal dry cleaning award 25 and indeed of most of the other awards in the sector. The wage rates in the laundry stream are based upon the Victorian award in that sector.26

[55] The employers submitted that there should be a broad span of ordinary hours of work covering each day of the week. At this stage we have decided to retain the spans as they presently exist in each sector.

[56] The classification descriptions are drawn from the existing awards. There may need to be some rationalisation of duplication between levels 3 and 4 laundry employees. We invite the parties to consider this issue. We have adopted the standard casual loading of 25%.

[57] We note that the TCFUA raised a number of issues where it submitted that employees presently covered by the Queensland NAPSA in the dry cleaning sector would be disadvantaged by a proposed modern award. 27 The model transitional provisions, which are included in the exposure draft, should ameliorate any potential disadvantage.

Educational services – preschool teachers

[58] The issue of appropriate award coverage for preschool teachers was raised when the Full Bench was considering educational services – other than universities, in Stage 3. The decision was made at that time to defer consideration of this issue until children’s services were being considered in Stage 4. This would enable all interested parties who might have a view to provide input to our deliberations.

[59] Currently the nature of award coverage for preschool teachers is variable. For the most part they have been covered by specific early education teachers’ awards and, to a limited extent, by awards covering other teachers. In other cases they are covered by awards which also cover other employees in the child care industry or other employees in preschools or kindergartens.

[60] There was strong support for the inclusion of preschool teachers in awards covering the “children’s services and early childhood education industry”. Equally there were strong arguments put that preschool teachers should be covered by an occupational award.

[61] After considering the submissions and the proposals advanced by the interested parties we have decided at this stage that it is more appropriate to include preschool teachers in an occupational award covering both primary and secondary school teachers. We have taken into consideration in reaching this view, the qualifications required by early childhood education teachers, their capacity to work in schools and preschools as well as childcare centres, the lack of any relationship between teaching and children’s services employees in terms of classification structures and the differences in conditions of employment.

[62] We understand that government policies will lead to an increase in the number of preschool teachers employed in childcare centres. It is, however, also likely that those policies will mean that access to early childhood education for children who are not in long day care will continue to be provided through preschools, kindergartens and preschool facilities attached to schools. The focus on the provision of early childhood education by university qualified teachers is appropriately reflected by their inclusion in an occupational award, the Educational Services (Teachers) Award 2010. 28

[63] We have drafted amendments to the Educational Services (Teachers) Award 2010 to reflect the inclusion of preschool teachers and we now release that exposure draft for comment.

Entertainment and broadcasting industry (other than racing)

[64] When publishing the Stage 3 modern awards we noted that we intended to make, in Stage 4, a Travelling Shows Award 2010. The exposure draft of this award is based on both the Theatrical Employees (Showmen’s Guild) Award 2002 29 and the draft submitted on behalf of the Showmen’s Guild. This proposed award, which has some unique provisions, is limited to those itinerant employers who operate amusements, rides and other related stands at the various shows and similar events that occur around Australia.

Firefighting services

[65] We publish a draft Fire Fighting Industry Award 2010. The award will have limited coverage. In States other than Victoria, and in the Territories, fire services are not “employers” within the meaning of s.6 of the WR Act. Nor are they “national system employers” within the meaning of the WR Act or the FW Act. In addition most, if not all, are covered by enterprise awards or enterprise NAPSAs. It follows that, as things presently stand, none of those fire services will be covered by a modern award for the fire fighting industry. We turn now to the situation of the fire services in Victoria.

[66] The Metropolitan Fire and Emergency Services Board (MFESB) and the Country Fire Authority (CFA) are the two employer respondents to the Victorian Firefighting Industry Employees Interim Award 2000 30 (Victorian Fire Award). It does not appear that that award can be regarded as an enterprise award because the MFESB and CFA are separate legal entities and their relationship is not such as to permit them to be treated as a single business within the meaning of s.322 of the WR Act. It would seem that the CFA will not be covered by a modern award for firefighting made as part of the current process and we have received no submission to the contrary.

[67] However, in United Firefighters' Union of Australia and Others v Metropolitan Fire and Emergency Services Board 31 a single judge of the Federal Court held that the MFESB is a constitutional corporation by virtue of its trading activities. No party sought to challenge that decision and there is no contrary authority. We have therefore proceeded on the basis that the MFESB, being a constitutional corporation, is covered by the award modernisation process under Part 10A of the WR Act and will not be covered by the State reference public sector award modernisation process provided for in Schedule 6A to the Transitional Act.

[68] Needless to say, the private sector firefighting industry in Australia is very small with only a few employers.  The most significant component of the private sector is the provision of contract firefighting services to the Department of Defence. In summary, the modern award will cover only private sector employers, which are very few in number, and the MFESB.

[69] With minor modifications, the Victorian Fire Award was declared a common rule in Victoria and, as such, covers private sector employers in the firefighting industry in Victoria. These include Transfield Services, which provides firefighting services to the Department of Defence at several defence facilities in Victoria. It is apparent that the MFESB accounts for a substantial majority of the employees who will be covered by a modern award for this industry. Transfield Services’ employees in Victoria, covered by the Victorian common rule, make up the bulk of the remainder.

[70] In these circumstances the exposure draft we have published, with some exceptions, generally reflects terms and conditions in the Victorian Fire Award and an associated award applying to administrative, engineering and support staff. It is not without some reservation that we have taken this approach in preparing the exposure draft. Some of the entitlements conferred by the Victorian Fire Award seem excessive when compared with award standards more generally, perhaps reflecting the fact that, while technically not an enterprise award, the Victorian Fire Award has many of the characteristics of a public sector enterprise award.

[71] One area requiring specific comment is the area of leave. We have excluded from the exposure draft a number of leave entitlements appearing in the Victorian Fire Award on the basis that they seem excessive or inappropriate as part of a minimum safety net. We will, of course, consider submissions in support of the partial or complete inclusion of those leave entitlements in the award that we finally make. In relation to pressing necessity leave, we note that we rejected a claim for the inclusion of this category of leave in the modern award for the black coal mining industry notwithstanding that it appeared in a pre-reform award applying generally in the industry and notwithstanding the consent of the industry parties to the maintenance of that form of leave.

[72] We have some concerns over the making of a modern award that applies many standards in the Victorian Fire Award to the private sector throughout Australia. On the other hand, given the very small size of the private sector in this industry when compared to the public sector, it may be inappropriate to set award standards in the private sector that are significantly lower than those generally prevailing in the public sector in awards that are not amenable to modernisation as part of the current process.

Funeral directing

[73] Award regulation in the funeral industry is constituted by three pre-reform awards and three NAPSAs, 32 each limited in their scope to a single State or Territory. The federal awards have application in Victoria, South Australia and the Australian Capital Territory.

[74] Draft awards have been filed by InvoCare Australia Pty Ltd (InvoCare), Australian Workplace Strategies on behalf of some employers in the industry, Clifford Gouldson Lawyers on behalf of four funeral directors associations, the Funeral and Allied Industries Union of New South Wales and the AWU.

[75] We have had regard to all submissions in developing an exposure draft award for the funeral industry. The AWU draft is based on the Funeral Industry Award 2003 33 which has application in Victoria. It is this award which forms the basis of the exposure draft.

[76] None of the existing awards or NAPSAs contain properly fixed minimum classification rates for funeral directing and coffin manufacturing. We have included a five level classification structure to apply to funeral directing and the manufacturing/assembling of coffins. At this stage we see no basis for the application of incremental payments. We note the submissions by InvoCare regarding funeral directing classification definitions and invite further comment from the parties.

[77] We are not persuaded to exclude coffin manufacturing and the transportation of the deceased from the award as submitted by the funeral directors associations. We note the history of regulation within the industry awards and NAPSAs and the specialist nature of these tasks.

[78] We have not included the definition of “ordinary pay” contained in the Funeral Industry Award 2003 and have rationalised a number of allowances, in particular an allowance for attendants has been omitted. We are uncertain of the contemporary role and function of attendants and would welcome any comment.

[79] The funeral directors associations, InvoCare and the AFEI submitted the industry should be regarded as seven day operation and there should be no requirement to pay penalty rates for funerals conducted on weekends. The prevailing standard and practice is a spread of hours over Monday to Friday and at this stage we see no compelling reason to alter this. We publish a draft Funeral Industry Award 2010.

Gardening services (remainder)

[80] We publish a draft Gardening and Landscaping Services Award 2010. Two parties submitted draft awards. The exposure draft is largely based on provisions from those drafts with some reliance on other pre-reform awards and NAPSAs in the industry. Provisions of the draft submitted by the AWU which were derived from the Sportsground Maintenance and Venue Presentation (Victoria) Award 2001 34 have generally not been adopted in the exposure draft, as the main coverage of that award was addressed in the Amusement, Events and Recreation Award 201035 (Amusement, Events and Recreation Modern Award) published in Stage 3. Additionally, the exposure draft does not contain provisions relating to that area of commercial landscaping within the coverage of the Building and Construction Modern Award. We are not convinced that the coverage of that award in relation to commercial landscaping should be disturbed. Nor do we think a specific award should be made for golf course greenkeepers as requested by the Golf Course Superintendents’ Association. We are of the view that there is adequate coverage provided by the Amusement, Events and Recreation Modern Award and this exposure draft.

Miscellaneous award

[81] We publish a draft Miscellaneous Award 2010. (We have renamed the General Award as the Miscellaneous Award to reflect the language of the Transitional Act.) While the coverage clause has been drafted to include employees not covered by any other modern award a number of qualifications are also required. For example, the exposure draft excludes employees in an industry covered by another modern award but who are not in one of the classifications in that modern award or who are specifically exempted from it. There are also provisions ensuring that the general award does not overlap with modern enterprise awards or state reference public sector awards. Proposals for a transitional clause applying to some employees in Catholic Church related employment have not been adopted at this stage but will be considered further during the consultations.

[82] The classification structure is very general with only four levels. The first level is set at the minimum wage and applies to employees with less than three months service. The second level covers an employee with more than three months service. The third level requires trade or trade equivalent qualifications. The fourth level is for a graduate employee.

[83] The draft provides for full-time, part-time and casual employees and has flexible working hours provisions. The minimum wage levels have been set having regard to minimum wages for lower skill, trades and graduate employees in other relevant modern awards. A range of generally applicable allowances is also included.

[84] It is unclear which employees will be covered by this award. It may be that it will have application in some areas of the workforce which have not been covered by awards before. Section 576L of the WR Act provides that the Commission may only include terms in modern awards to the extent that they constitute a fair minimum safety net. Because there is doubt about the existing conditions of employees who might be covered we have taken a cautious approach. We have included some provisions found in modern awards of wide application but not included others so as to reduce the risk of significant cost and employment effects.

[85] During the pre-drafting consultations the Shop, Distributive and Allied Employees Association (SDA) proposed that the Commission should make an award known as the Broken Hill Special Conditions Award 2010. The SDA pointed to two awards of the Industrial Relations Commission of New South Wales which apply to the Broken Hill area. The principal award is the Broken Hill Commerce and Industry Agreement Consent Award 2001. 36 The award contains a number of special conditions negotiated principally by the Barrier Industrial Council and the Broken Hill Chamber of Commerce and Industry. The SDA proposed that the special conditions should either be included in every modern award to apply in Broken Hill or, preferably, be included in a special modern award to apply as an adjunct to all modern awards for Broken Hill only. The three main special conditions are an additional week of annual leave, an allowance known as the Broken Hill allowance and a casual loading of 50% paid to employees in the manufacturing construction sector.

[86] Without detracting in any way from the special nature of industrial relations in Broken Hill and its almost unique place in our industrial history, we do not think that the SDA’s proposals should be accepted. There are many parts of Australia that could make a similar claim to special recognition. It would be contrary to the safety net requirement to include the results of bargaining in modern awards. We do not intend to adopt the proposal.

[87] The continued operation of district allowances in the Northern Territory and Western Australia has been addressed in earlier decisions and dealt with in a model provision included in all modern awards. 37 It would be possible to deal with the Broken Hill allowance in a similar way. Whether it would be appropriate to do so is a matter for further consideration.

Grain handling industry

[88] The industry of grain handling involves the storage, treatment and transportation of grain and similar bulk agricultural products from farms to manufacturing, retail or port destinations. The activities of employers in the industry primarily concern storage and treatment at regional locations and loading onto ships at bulk grain port facilities. The employers are covered by enterprise awards and enterprise NAPSAs. No industry award exists. The largest employer in the industry is Graincorp Operations Ltd which is covered by eight enterprise awards.

[89] Discussions during the consultations centred on the need for an award. The parties noted the broad scope of the Storage Services and Wholesale Award 2010 38 and the Stevedoring Industry Award 1999.39 The former would apply to the regional storage and handling. The latter would apply to port related activities including ship loading. Following the consultations all parties agreed that no award should be made. We agree with that course and will not publish an exposure draft for this industry.

Health and welfare services (remainder) – Ambulance services

[90] We publish an exposure draft of an Ambulance and Patient Transport Industry Award 2010. The written submissions made and the oral material presented during the pre-drafting consultations indicated a large degree of agreement between the majority of the private Non-Emergency Patient Transport (NEPT) providers in Victoria and the LHMU regarding the content of the proposed award. Both the NEPT providers and the LHMU based their draft awards on the federal Ambulance Services and Patient Transport Employees Award, Victoria 2002 40 (Victorian federal award). In all of the other states, either pre-reform enterprise awards or NAPSAs derived from state enterprise awards apply.

[91] The terms of the exposure draft reflect, in large part, the Victorian federal award which covers both emergency and non-emergency patient transport. The wage rates also reflect the Victorian federal award as proposed by the major parties. It has not been suggested that the adoption of these rates is inappropriate and we have taken account of the wage fixation history of the Victorian federal award.

[92] The modern award does not cover the Royal Flying Doctor Service as functions of that service are much broader than emergency and non-emergency patient transport and include such things as the provision of primary health care, communication and education assistance to people who are in rural, regional and remote Australia.

Health and welfare services (remainder) – Children’s services

[93] We publish a draft Children’s Services Award 2010. The classification structures for childcare employees have, in recent times, been the subject of work value assessments by the Commission and this is reflected in the exposure draft. The structure includes family day care co-ordinators. We recognise that these classifications may also be included in the exposure draft for the Social, Community, Home Care and Disability Services Industry Award 2010. Award coverage will depend on the industry of the employer.

[94] We have not included family day care workers in the draft award. The only award currently covering these workers is confined in its operation to the Australian Capital Territory. 41

Health and welfare services (remainder) – Fitness, lifestyle and leisure services

[95] We have decided to make an exposure draft called the Fitness Industry Award 2010. The draft award covers employers engaged in the operation or provision of fitness centres, fitness services or classes, group fitness organisations, weight loss/control centres, aquatic centres, aquatic services or classes, indoor sports centres, golf driving ranges, dance centres and martial arts centres and their employees in the classifications in the award. Given the coverage of the draft award, the Clerks—Private Sector Award 2010 42 (Clerks Modern Award) may need to be varied to provide that it does not cover employers and employees covered by the draft Fitness Industry Award 2010.

[96] We have not created an outdoor industry or outdoor activities, tour guides and lifeguards award as proposed by some parties. We note that we have already made an Amusement, Events and Recreation Modern Award. To the extent that award does not cover those who were to be covered by the proposed outdoor industry or outdoor activities, tour guides and lifeguards award they might be covered by the proposed Miscellaneous Award 2010 or further considered through an application to vary the Amusement, Events and Recreation Modern Award.

[97] The classification structure for the draft award was largely agreed between the LHMU and Fitness Australia. With respect to the areas of disagreement we have decided to provide for an introductory level employee at level 1 and a level 7 employee who is engaged in supervising, training and co-ordinating other employees as proposed by the LHMU. Swimming teacher and coach classifications have also been incorporated into the classification structure. The minimum wage rates attached to the classification structure reflect those advanced by Fitness Australia. An annual leave loading has also been provided for in the draft award.

[98] The draft award provides for a casual employee to be paid a 30% loading on Saturdays, Sundays and public holidays instead of other Saturday, Sunday and public holiday penalty rates and the ordinary hours of work and rostering provisions set out in the draft award are largely those advanced by Fitness Australia.

Health and welfare services (remainder) – Social and community services

[99] We publish an exposure draft of a Social, Community, Home Care and Disability Services Industry Award 2010. The exposure draft incorporates social and community services, home care, the provision of family day care schemes and disability services. For the reasons set out below, employment services has not been included in this exposure draft.

[100] A number of the parties suggested that there should be one modern award covering all four industry sectors. Others proposed that disability services and home care should be covered by separate awards. Further, there was also the view that there should be two social welfare awards – one to cover direct client care and the other to cover support services. We have decided that social and community services, home care, the provision of family day care schemes and disability services can all be dealt with in a social and community services framework. There does not seem to be any obvious advantage in taking a more fragmented approach.

[101] The classifications and wage rates we have adopted for the social and community services employees largely reflect the federal Social and Community Services (Queensland) Award 2001. 43 There are federal awards in this sector in all states except New South Wales, Tasmania and South Australia, where there are NAPSAs. The wage rates in the federal Australian Capital Territory, Western Australian and Queensland awards were reviewed as part of the award simplification process in 2002. They are all currently very similar. The New South Wales NAPSA provides for generally higher wage rates than the federal awards. The South Australian and Tasmanian NAPSA wage rates are generally lower than the federal awards. In adopting the federal Queensland award wage rates, we note that s.576(L) of the WR Act requires that modern awards provide a fair minimum safety net.

[102] Crisis accommodation employees have been integrated into the social and community services employee wage rate structure taking into account qualification levels. The wage rates and classification definitions reflect the federal Crisis Assistance Supported Housing (Queensland) Award 1999. 44

[103] The classification for family day care scheme employees do not include workers who provide family day care services in their home. The wage rates and definitions are derived from the federal Family Day Care Services Award, 1999. 45 The classification of family day care co-ordinator (family day care employee – level 4) and director of a family day care service (family day care employee – level 5), also appear in the Children’s Services Award 2010 exposure draft. Coverage will depend on the industry of the employer.

[104] Award coverage of disability services employees is currently spread over federal awards (Australian Capital Territory, Victoria and Northern Territory) and NAPSAs (New South Wales, Tasmania, South Australia and Queensland). Wage rates are largely comparable between the federal awards (the Australian Capital Territory award is slightly higher). The New South Wales NAPSA wage rates are again the highest rates. All of the other State NAPSAs contain generally lower rates. The classification structure and wage rates we have adopted largely reflect the federal Residential and Support Services (Victoria) Award 1999. 46

[105] Home care employees covered by the exposure draft provide care and support for aged persons or persons with a disability in their own home. The Aged Care Award 2010 47 also covers the provision of care for aged persons in their home. Whether this draft modern award or the Aged Care Award 2010 covers a particular employee will depend on the industry of the employer.

[106] The wage rates and classification definitions for home care employees are based on the federal Home and Community Care Award 2001. 48 The wage rate for a Certificate III qualified home care employee (grade 3) is the same rate as for a similarly qualified aged care employee (level 4) in the Aged Care Award 2010.

[107] There has been some rationalisation and integration of wage rate structures in the exposure draft. The parties are invited to comment on whether there should be further rationalisation across all or some of the remaining sectors (family day care, disability and home care services).

[108] We have not included provision for fixed term employment. It is available as a matter of contract and there does not appear to be any reason to include special provisions.

[109] We turn again to the question of salary packaging which we have already dealt with in the introduction to this statement. In its decision of 19 December 2008, the Commission said:

[110] While we maintain the views in this passage, as we have already indicated we are prepared to consider whether there are special circumstances relating to this particular industry which warrant a departure. We have already set out some of the matters which in our view need to be addressed. We should add that there are a number of options in terms of award provisions. If it were decided that salary packaging should not be maintained in the modern award it might be necessary to fashion transitional provisions to take account of the current arrangements. There would also be the possibility of reconsidering the matter in the two year review of modern awards. The views of the parties are invited on these questions also.

[111] Differing views were presented by the parties about whether employment services should be included in a broad social, community, home care, family day care schemes and disability services modern award or be covered by a separate award. The unions and some of the employer associations supported the inclusion of employment services in the broad award. The Group Training Association of Victoria (GTA) and the National Employment Services Association (NESA) sought a separate award for each of their respective areas of interest.

[112] We have decided to publish a draft Employment Services Industry Award 2010. It covers both the provision of labour market assistance programs and group training services. While we have not reached a final view on the matter, we do not think that the provision of labour market assistance programs or group training should be covered by the draft Social, Community, Home Care and Disability Services Industry Award 2010. Furthermore there appears to be some similarity between the operations of labour market assistance program providers and the operations of group training employers. The exposure draft is based on the terms of the two pre-reform awards – the Community Employment, Training and Support Services Award 1999 50 and the Group Training (Victoria) Award 1999.51 Apart from a Queensland NAPSA (the Group Training Organisations Award – State 2003),52 no other awards or NAPSAs were put forward by the parties as applicable. The draft awards proposed by NESA and the GTA were based on each of the respective federal awards.

[113] It is not clear to what extent the award should provide terms and conditions of employment for group training apprentices and trainees. More information is needed on the way in which apprentices and trainees are remunerated prior to initial placement and between placements.

[114] We have not included, at this stage, a provision regarding training preparation and associated non-training arrangements which limit the face-to-face training duties of full-time and part-time employees. There may be doubts as to whether such limits would be a modern award matter.

[115] For the reasons outlined in our comments regarding the exposure draft for the Social, Community, Home Care and Disability Services Industry Award 2010, we have not included a provision for fixed-term employees.

Health and welfare services (remainder) – Supported employment services

[116] We publish a draft of the Supported Employment Services Award 2010. Extensive consultation between the parties has resulted in agreement as to many aspects of the proposal although it remains necessary to comment upon several provisions.

[117] Clause 14A of the existing award Wage Assessment – employees with a disability of the Liquor, Hospitality and Miscellaneous Union Supported Employment Services Award 2005 53 (the LHMU Award) provides for a percentage of the rate of pay for the relevant grade to be paid to such an employee under the wage assessment tool approved for each supported employment service. Clause 14A.3 review of assessment provides for the varying circumstances under which such a wage assessment can be reviewed – including at the initiative of the employee. An additional provision proposed for the modern award would have the effect of putting wage assessments and the review of wage assessments, beyond the reach of the disputes procedure.

[118] Clause 10.2 of the LHMU Award provide as follows:

[119] It is our preliminary view that employees with a disability engaged under the modern award should also be able to raise the matter of their disputed rate of pay or classification level in the event such an issue is not resolved at the local level. We would be assisted by further argument as to why employees in this award ought not have access to such a mechanism.

[120] We have accepted the views expressed as to the limited application of the current dry cleaning allowance. The proposed cl.15.4 laundry allowance provides a reimbursement for laundry costs where it is agreed on the job that work required to be performed is of a dirty nature. This allowance acknowledges costs occasioned by dirty work requiring clothes to be washed as a result of the performance of unusually dirty or unusually offensive. This allowance should not to be confused with a disability allowance, sometimes found in awards, but not in this award.

[121] The award currently provides for superannuation contributions to be made for employees with a disability. Respondent employers contribute the greater of 3% of a disabled employees’ ordinary time earnings or $6.00 per week for an employee being paid less than 80% of the full award wage. These contribution rates have not been increased since 1993. It will be appreciated that disability services employers not currently bound by the LHMU award are required to contribute to disabled employees’ superannuation only when the $450 monthly earnings threshold is triggered. It is noteworthy that wages paid under the modern award, when adjusted for an individual’s assessed disability, will often be significantly lower than the minimum rates otherwise payable and that very many employees with disabilities are unable to attend to their duties for 38 hours weekly. Earnings will rarely be high and often quite low.

[122] National Disability Services agree to the 3% or $6.00 level of contribution applying generally in the modern award but do not accept that the contribution level should be adjusted as sought by the ACTU and LHMU. Australian Business Industrial and Chamber of Commerce and Industry Western Australia (CCIWA) oppose the existing superannuation entitlement being extended beyond those to whom it currently applies. The exposure draft retains a 3% or $6.00 per week obligation. We will be assisted by the parties’ views as to how this matter might be further addressed, both as a matter of principle and as to the actual operation of the provision – conscious that in its present form there may be a capacity for disadvantage. Similar issues may arise in the operation of the supported wage system in open employment.

Indigenous organisations and services

[123] The Commission received a range of submissions from indigenous organisations seeking to have awards made that were to apply only to those indigenous organisations and their employees. In its decision of 3 April 2009, the Commission referred consideration of possible distinct award coverage of indigenous organisations or services to Stage 4. It also appointed Commissioner Raffaelli to investigate the matters raised by the parties more fully. The Commissioner conducted on-site inspections in Victoria, New South Wales and the Northern Territory and a public consultation hearing in Melbourne.

[124] Subject to an exception we deal with later, on the basis of the material before us, including our consultation with the Commissioner, we have decided not to make a separate award covering indigenous organisations or services. We are conscious of many of the difficulties faced by such bodies including as to isolation and climate. Additionally, we were told that many of these organisations by necessity provide a range of services including varied commercial undertakings. It was said that a single award that caters to these unique circumstances is desirable. In our view, many of the features described apply equally in many non-indigenous areas where certain commercial and community organisations face the same difficulties. We believe that the modern awards that we are establishing for a range of industries will be equally appropriate to indigenous organisations and services.

[125] We have decided, however, that the operation of aboriginal community controlled health organisations should be regulated by a separate modern award. We are satisfied that the nature of health services that are delivered in a culturally appropriate way is sufficiently different to justify a separate award. The difference is not only about the way the services are established and controlled but is critically seen in the way that employees of the services operate. We accept that the aboriginal health worker within aboriginal community controlled health services is critical. No equivalent health care worker operates in what we might describe as mainstream services. We publish a draft Aboriginal Community Controlled Health Services Award 2010.

[126] In making the exposure draft we have largely adopted the draft provided by the National Aboriginal Community Controlled Health Organisation (NACCHO). One significant departure from NACCHO’s draft is that we have not included coverage of doctors, nurses or dentists. We have previously made a Medical Practitioners Award 2010 54 and a Nurses Award 201055 to comprehensively cover doctors and nurses. For reasons previously given, we consider that those occupations are best covered by the separate occupational awards already made. We have not to date made any award for dentists and the lack of any significant award coverage for the profession leads us to the conclusion that dentists should not be included in the draft award.

[127] We have also decided not to include the proposed clause, “Aboriginal self determination”. The clause may have the effect of restricting the legitimate industrial rights of employees. We have included only the standard dispute resolution provision.

[128] As to minimum weekly rates and classifications, we have included those rates and classification definitions currently provided in the Health Services Union of Australia (Aboriginal and Torres Strait Islander Health Services) Award 2002. 56 That is an interim arrangement pending further consideration. Similarly, our prescription of the standard rate may be revisited. We note that NACCHO proposes consulting with unions to develop agreed classification structures and rates. We urge the relevant parties to confer on these matters. We have decided not to make provision for apprentices and school-based apprentices as we are unaware that these employment categories are utilised.

[129] We were unsure of the meaning of the proposed cl.25.2(b) which is based on a current award provision. We have inserted in its stead a provision for overtime payments for work outside the span of hours. In relation to the personal/carer’s leave and compassionate leave clause we have maintained the standard provisions and not included matters going to evidence requirement and additional entitlements.

[130] Finally, we have not provided for public holidays additional to the National Employment Standards (NES) which is consistent with our approach in other awards.

Labour hire services

[131] The Commission has previously identified labour hire as an area in which further work may be needed prior to the end of award modernisation. In its decision of 19 December 2008, the Commission noted:

[132] In its statement of 29 June 2009, the Commission further noted:

[133] Employees of labour hire firms already fall within the coverage of modern awards with occupational operation, such as the Clerks Modern Award, the Manufacturing Modern Award and the Plumbing Modern Award. Other modern awards provide for partial coverage of employees of labour hire firms. The Mining Industry Award 2010 59(Mining Modern Award) for example, covers the provision of temporary labour services in the activities otherwise within the coverage of the award, by temporary labour personnel principally engaged to perform work at the relevant location. Similarly, the Hospitality Industry (General) Award 201060 (Hospitality Modern Award) includes contract cleaning undertaken by companies operating exclusively in the hospitality industry. Most modern awards, however, do not cover employees of labour hire firms.

[134] The options for providing modern award coverage for labour hire employers and their employees are:

[135] In its submissions of 24 July 2009 NESA proposed the making of an Employment Services Industry Award 2010, a proposition advanced in relation to both the industries not otherwise assigned – labour hire services and health and welfare services (remainder) – social and community services consultations. The proposal was advanced on the basis that some employment services firms operate labour hire businesses, in which they provide labour to other employers. The award proposed would cover only those employers who provide employment services and arrange labour hire and would not apply to persons they engage to perform work for other employers. NESA envisaged the continuation of the practice of paying such employees the going rate of pay where they are placed. Accordingly, the award proposed by NESA falls outside of the scope of the labour hire services industry and is more properly considered, as it has been in this statement, in the context of the social and community services industry.

[136] During the Stage 4 pre-drafting consultations no employer or employer organisation sought an award to cover persons engaged by labour hire companies to perform work for other employers. In fact, the ACTU, unions and employer organisations without exception opposed the making of a modern award for the labour hire industry. They submitted that the coverage of labour hire employees is more appropriately dealt with by the industry award which covers the industry in which such employees are placed. It was submitted that such awards already contain terms and conditions which take into account the circumstances of the employment and are likely to reflect the terms and conditions of employment applicable to the host organisations’ own employees. Similar considerations arise in relation to awards with occupational coverage.

[137] Business SA proposed the incorporation into all modern industry awards of a provision based on cl.4.1(f) of the Mining Modern Award, extending coverage to:

[138] However, there was little support for the insertion of this or any other model provision into all modern awards with industry coverage. The general view is that the variation of modern awards to extend their coverage to employees of labour hire firms should be considered on an award by award basis, where the particular circumstances of each industry can be properly considered.

[139] We have decided not to make a modern award for the labour hire industry, consistent with the general view of representatives of employers and employees. We think it is preferable that modern awards should be varied, where necessary, to extend their coverage to labour hire firms and their employees. This will result in a more consistent safety net as between direct and labour hire employees in the relevant industry.

[140] This could be done on an award by award basis by application to vary. This will allow the particular circumstances of the industry to be considered and give all interested parties the opportunity to express a view. Such applications might be made immediately, where there exists an evident need to extend the coverage of a modern award to labour hire employees, with a view to the award being varied before it has effect.

Legal services

[141] We publish an exposure draft of the Legal Services Award 2010. The award will cover employees up to and including articled clerks/graduates at law. We have not included classifications for lawyers admitted to practice. There is some award coverage for lawyers in the private sector but this is limited and does not appear, in our view, to satisfy the criteria necessary for the making of a modern award. It may be necessary for interested persons to give consideration to what if any transitional provisions may be needed for employees who are currently covered by an industrial instrument but will not be covered by the modern award.

Local government administration

[142] We publish a draft Local Government Industry Award 2010. The local government associations of New South Wales, Queensland, South Australia, Tasmania and Western Australia combined to present a single position before us. The Victorian Employers’ Chamber of Commerce and Industry (VECCI), representing local government employers in Victoria, initially presented a separate position. Eventually, the combined local government associations and VECCI (together, LGAs) reached an agreed position and proposed a single draft award, albeit with some areas where VECCI continues to press for different provisions. On the union side, the Australian Municipal, Administrative, Clerical and Services Union (ASU) is the main union with coverage of local government in Australia and the lead union for this industry. The ASU also proposed a draft award. No other party proposed a draft award.

[143] We shall refer to councils, local councils, county councils, municipal councils, shire councils or other local government bodies created under or regulated by local government legislation of a State or Territory as local government entities. Local government entities in Australia engage in a wide variety of activities in addition to those commonly associated with local government, ranging from the operation of child care centres and tourist facilities to quarrying.  It is common for local government entities to conduct particular activities through separate corporate vehicles.

[144] There are significant issues as to extent to which employers in the area of local government are amenable to coverage under a modern award made under Part 10A of the WR Act. Local government entities in Queensland and New South Wales have been decorporatised (although, in Queensland, the Brisbane City Council was excluded from that process) with the result that, in the absence of a referral of power that extends to local government, those entities do not fall within the WR Act or the FW Act. A modern award made as part of the current award modernisation process can have no application to local government entities in Queensland or New South Wales. In this context we note that in a letter to the Commission, dated 10 August 2009, DEEWR has indicated that, apart from Victoria which has already referred power, “all of the remaining States have indicated a desire at this stage to have their local government sector covered under the relevant State workplace relations system and that the Australian Government is considering the means by which it will implement their wishes.”

[145] We should also note that there is some uncertainty as to what, as a matter of law, constitutes a trading corporation within the meaning of s.51(xx) of the Constitution (constitutional trading corporation). In Australian Workers' Union of Employees, Queensland and Others v Etheridge Shire Council and Another 61 Spender J undertook a comprehensive review of the High Court authorities and concluded that the local government council in that case was not a constitutional trading corporation and was therefore unable to make a collective agreement under the WR Act. We note his Honour’s analysis was endorsed by the Full Court of the Federal Court in an appeal against a costs decision by Spender J in the same matter.62 Nevertheless, until the High Court considers the position some uncertainty will remain. We recognise that a different view may ultimately be taken by the High Court. On the current state of the authorities, however, a “typical” local council, at least, is not a constitutional trading corporation.

[146] As we have noted, it has been relatively common for local government entities to establish companies for the purpose of undertaking particular activities. Depending upon the nature of the activities undertaken by such companies, they may be constitutional trading corporations and therefore within the reach of the WR Act and the FW Act and amenable to coverage under a modern award made as part of the current award modernisation process.

[147] Because the award modernisation process under Part 10A of the WR Act only applies to constitutional trading corporations, we would not expect the modern award to have significant application. It will cover only a small proportion of local government employers nationally, being either local government entities that, because of their particular trading activities, are properly held to be constitutional trading corporations (which class probably does not include “typical” local councils) and perhaps some local government owned companies that are trading corporations. We should mention that any local government entities which are brought into the scope of the FW Act, as a result of a referral of power by a State pursuant to the State Referral Act, will be subject to the State reference public sector award modernisation process provided for in Schedule 6A of the Transitional Act rather than this award modernisation process.

[148] Despite the significant limitations on the potential coverage of the award, both the LGAs and the ASU were adamant that a modern award should be made for the industry of local government. They were also in firm agreement that local government should be treated as a single industry and that, subject to a small number of identified exceptions, all activities of local government should be within the coverage of a modern award for local government to the exclusion of other modern awards. They contend that activities carried out by corporations owned by local government entities should also be covered. We are inclined to accept that position and the coverage clause of the exposure draft has been drafted accordingly.

[149] As we have already noted, there were only two draft awards proposed in this industry: a draft proposed by the LGAs (including VECCI) and a draft proposed by the ASU. However, and without implying any criticism, we note that there were no detailed submissions from those parties directed at the relative merits of their respective positions where their drafts differ.  In circumstances where, as here, in relation to the content of a modern award there is effectively a common position on the employer side and, putting aside issues going to coverage, a single position on the union side, we would not wish to make a determination on the differing positions without the benefit of submissions on the merits of the competing cases. The exposure draft we have published largely adopts the draft proposed by the LGAs (albeit with some modification including, in particular, to the coverage clause). We have not, at this stage, attempted any modification to the classification structure or the allowances included in the LGAs’ draft. However, in adopting the substance of the LGA’s draft we should not be taken as expressing, even on a provisional basis, a preference for the position of the LGAs over the position of the ASU on particular issues. We make it clear that we are amenable to suggestions for change, including wholesale change, to the exposure draft.

[150] During the consultations an issue arose as to whether the provisions of the awards and NAPSAs applying in New South Wales and Queensland should be taken into consideration in drafting the award. The ASU and other unions argued that the decorporatisation of local government in New South Wales and Queensland meant that underlying awards in those States should be disregarded. The LGAs, on the other hand, noted the potential for those States to refer power in relation to local government in the future and argued that the underlying awards in those States should be taken into account. The parties sought a preliminary ruling on that issue. We conveyed to the parties that we were disinclined to make such a ruling without more detailed submissions going to the implications of adopting one of those alternatives as opposed to the other. Little in the way of additional submissions have been received. On balance, we think it appropriate to take some account of the Queensland and New South Wales awards, particularly where, in relation to a particular condition or entitlement, no clear standard emerges from a consideration of the awards and NAPSAs in the other States. After all, on the present state of the law, “typical” councils in the remaining States would seem not to be amenable to coverage under a modern award for local government made as part of the current process and local government owned corporations that are constitutional trading corporations will be amenable to coverage by such a modern award, irrespective of the fact that they may operate only in New South Wales or Queensland.

Mannequins and modelling industry

[151] We have prepared a draft Mannequins and Models Award 2010. Only the SDA put submissions on a proposed modern award. The exposure draft is drawn largely from the existing federal award with some amendments consistent with the approach we have adopted in other modern awards. 63

Maritime industry

[152] On 22 May 2009 we published a draft Seagoing Industry Award 2010. We subsequently adjourned consideration of the final award, on the application of various employers, pending a variation to the consolidated request. On 17 August 2009 the Minister varied the consolidated request by including the following provisions dealing with the maritime industry:

[153] We have received a large number of submissions in relation to this variation which in essence requires the extension of award coverage to vessels operating under permits issued pursuant to the Navigation Act 1912. The permit system is utilised by foreign-flagged vessels in the conduct of coastal cargo. Those vessels employ foreign nationals who are currently in receipt of wages and conditions different from those applying to Australian-flagged and licensed vessels which observe Australian awards.

[154] A large number of the submissions cautioned against any extension of award regulation to permit vessels on the basis that substantial costs will be imposed. Some of the submissions from shipping interests also opposed the regulation of foreign shipping because it was contrary to Australia’s international obligations including those well-established maritime customs of “right of innocent passage” and the “internal economy” rule. Other submissions accepted that some differentiation might be made between vessels which utilise permits but are clearly and regularly engaged in international trade and are only carrying domestic cargo as an incidental activity to foreign trade and those others which have previously been described as “serial participants in the Australian coasting trade”. The MUA’s position is that the modern award should apply uniformly to all vessels – licensed, permit or majority Australian crewed ships.

[155] Conscious of the variation to the consolidated request we have decided to divide the award into Part A and Part B. We have tentatively described Part A as applying to non-permit vessels, which are essentially the respondents to the existing award. Part B will apply to permit vessels.

[156] The specific provisions applicable to Part B vessels will also require substantial consideration. While we will be better informed by the further submissions of interested parties, including in the public consultations in October 2009, our preliminary view is that Part B conditions will need to pay due regard to conditions applying internationally, including what has been referred to as the ITF agreement. We also note that cll.28 to 35 of the consolidated request govern the manner in which modern award provisions can interact with the NES. Proposals which relate to the effect of the NES on crew covered by Part B of the modern award will need to be framed with those provisions in mind.

[157] We have made a number of alterations to the first exposure draft, in what will now be Part A. At the request of the parties we have included a definition of “day” to accommodate the nature of maritime work which may extend over several time zones. We were urged by the unions to insert the existing award provisions as to termination of employment. In our view, at least in respect of an officer with more than five years service and who is over 45 years of age, and where the vessel is decommissioned, the award provisions could operate to an employee’s detriment by comparison with the terms of the NES. We have decided to retain the standard provision, which was in the exposure draft.

[158] The unions opposed the inclusion of the national training wage schedule on the basis that specific industry arrangements already apply and are better suited. However, no details of these arrangements were provided and we therefore propose to retain the national training wage. Any proposal for an industry specific provision could be the subject of an application to vary the award

[159] We have decided to accept the submissions of the Australian Mines and Metal Association (AMMA) and the Australian Shipowners Association (ASA) and to delete the definitions of “chief integrated rating” and “integrated rating”. Those definitions seemed to equate those classifications with others which, while still used, are increasingly obsolete. We are aware that the chief integrated rating and integrated rating are classifications that have been developed in more recent times to encompass greater multi-skilling.

[160] Although AMMA/ASA urged us to include part-time employment provisions in the award, we note that such an employment type is not a feature of the existing award nor is it a feature of the industry more generally. We are not persuaded to insert such provisions at this time. AMMA/ASA also pressed for the insertion of the current award provisions which restrict the ability of an employee who has undergone paid study leave to resign in the twelve months following such leave. We do not consider that the modern award should regulate the manner in which an employee may or may not resign.

[161] At the request of all parties, we have decided to delete the classification definitions found in Schedule A of the exposure draft. We have done so on the basis that it is not practical to define classifications by reference to maritime orders as this provides insufficient differentiation between the classifications. We are satisfied that the classifications named in cl.13 are well understood in the industry and do not need further definition.

[162] AMMA/ASA expressed concern that the disturbance of sleep allowance at cl.14.3 did not include a provision that the assessment of a disturbance is to be made by an officer. We note such assessment is in the existing award and we have inserted an appropriate provision in the draft.

[163] Finally, AiGroup sought to exclude employers covered by the Manufacturing Modern Award from this award. We have acceded to that proposal in part and the draft excludes maintenance contractors covered by the Manufacturing Modern Award.

Real estate industry

[164] We publish an exposure draft of the Real Estate Industry Award 2010. Prior to the pre-exposure draft consultations one draft award (the real estate parties draft) was filed which was supported by a number of real estate employee and employer associations. The real estate employee associations are The Property Sales Association of Queensland, Union of Employees, The Real Estate Association of New South Wales and the Real Estate Salespersons’ Association of South Australia. The real estate employer associations are the Queensland Real Estate Industrial Organisation of Employers, the Real Estate Employers’ Federation of NSW, the Real Estate Employers’ Federation of South Australia, the Real Estate Employers’ Federation of Western Australia and the Real Estate Institute of Australia.

[165] The ACTU and ASU do not oppose the making of an award for this industry but submit that clerical and administrative classifications should not be included and should be covered by the Clerks Modern Award. AFEI supports the draft as does Agribusiness Employers Federation (AEF). However the AEF also made submissions about the Clerical and Salaried Staffs’ (Agribusiness) Award 1999 64 and real estate sales persons who have had their terms and conditions regulated by that award.

[166] The National Community Titles Institute Secretariat (NCTI) oppose the draft award extending as it does to strata management (however that function may be described throughout Australia). NCTI had not been part of any consultations with the associations referred to above and highlighted differences in the type and level of certification required of strata and community title managers to that of real estate salespersons. It did not attend the pre-exposure draft consultations so there was no opportunity to discuss the nature of any modern award coverage it submits is appropriate. Late submissions have also been filed by Strata Managers Institute (ACT) Incorporated, Strata Titles Institute of Western Australia (Inc), Community Titles Institute South Australia and the Institute of Strata Title Management Ltd. Each organisation is affiliated with NCTI and supports its submissions.

[167] Real estate industry specific awards exist in New South Wales, Queensland, South Australia and Tasmania. Clerical classifications are contained only in the awards in New South Wales and Tasmania. All of these awards are NAPSAs; there are no pre-reform awards. Other than the Victorian minimum wage order made for the property and business services sector, there has been no federal real estate specific regulation. There is however an Australian Pay and Classification Scale for real estate agents paid on a commission only basis (the commission only pay scale) which we refer to later. The Australian Capital Territory, Northern Territory, Victoria and Western Australia were described as award free but we take that to mean there are no real estate specific awards. Obviously employees like clerks would be covered by state common rule awards. Otherwise it seems that the Australian Fair Pay and Conditions Standard applies.

[168] The real estate parties draft contained numerous provisions said to be tailored to the needs of the real estate industry. It is, in several respects, different to other modern awards. Clearly the draft reflects the provisions in the existing NAPSAs. They contain, in the case of sales and property management employees, several classifications paid at the federal minimum wage or slightly above, limited overtime and almost no penalties rates.

[169] We have made a judgement as to those provisions we think are appropriate for this industry award. This exercise has been informed by the provisions of the existing awards and the fact that in the two Territories and in two States the employers and employees have been award free. We acknowledge the draft filed by the real estate parties reflects a consent position of associations representing a significant part of the industry and is the outcome of lengthy consultations (albeit, consultations about which others complain of not being asked to participate). Furthermore, to the extent that the draft covers sales and property management employees, there was no opposition to its content. However a number of provisions in the draft have not been included in the exposure draft. We refer to the more significant of them in the comments made about specific clauses.

[170] We refer first to the definitions clause. We have not included a number of definitions relating to the calculation of base and full rates of pay. For a non commission-only employee the minimum weekly rate in cl.14 will be the reference point for calculations. At this stage it is unclear if the definitions clause requires a full rate of pay to be included. The parties’ definition of base rate of pay for a commission-only employee seems to be based on reg.1.09 of the Fair Work Regulations 2009. That provides a formula for calculating the base rate of pay expressed as an hourly rate for an award or agreement free employee who is a pieceworker. Consistent with ss.16(2) and 18(2) of the FW Act and clause 45 of the consolidated request we have specified in cl.17 of the draft a base rate of pay and a full rate of pay.

[171] The definition of real estate industry includes strata management and accordingly the coverage of the award also includes that activity. We have considered the submissions of the NCTI and its affiliates, but we have nevertheless included strata management in the draft. On the submissions to date no case has been made out for a separate award and it is unclear what modern award coverage is said to be appropriate. We leave it to the parties to consider and discuss this issue. If strata management is to stay in the award it may be that some additional terms and conditions need be inserted for this sector.

[172] We have decided to exclude clerical classifications from the exposure draft. The current coverage of clerks in real estate specific awards is limited to the states of New South Wales and Tasmania. Our provisional view is that clerks should be covered by the Clerks Modern Award. We note, however, that although the wages and classifications in that award could probably accommodate clerks in the real estate industry the hours regime, particularly overtime and penalties, in the existing two clerks real estate awards are less beneficial to employees than the Clerks Modern Award. There may be a case for some specific or transitional provisions in that award to accommodate this.

[173] We refer next to cl.11 which deals with termination of employment. We have adopted the real estate parties’ draft provision but invite further submissions on how it will operate with respect to commission-only paid employees.

[174] Clause 14 deals with minimum weekly rates. For the purpose of this exposure draft we have left in the proposed rate for a property sales associate. It is the same as the federal minimum wage. We note that the classification description contains no suggestion this is an entry level position nor is there any limit on the amount of time an employee will remain on this rate. We have also not included the transitional clause for a property sales representative. While the rate in the draft award for this classification is $578.36, the proposed transitional provision would have the effect of allowing employers, other than in New South Wales, to pay the federal minimum wage until December 2014. The parties may wish to make further submissions about these matters.

[175] Clause 16 deals with commission-only paid employees. This method of remunerating certain employees is widespread in this industry. It is reflected in provisions in the relevant NAPSAs. It is also said to be commonplace throughout Australia. It is not necessary for the purposes of this statement to do other than note that the commission-only pay scale was made by the Australian Fair Pay Commission in August 2007. The real estate parties’ draft award goes beyond the types of sales employees to which the pay scale was limited. It extends to casual employees, employees undertaking sales transactions which do not involve an agency relationship and to commercial leasing transactions. On the submissions made thus far we have decided that a modern award may contain provisions accommodating this type of remuneration on the basis these employees are categorised as pieceworkers. We have excluded casuals but otherwise the clause extends to all employees in property sales classifications. Several safeguards about how this method of remuneration will operate have been included in cll.16 and 17. We have not put cll.17.5(a) and (d) as contained in the real estate parties’ draft in the exposure draft. It is not entirely clear what those clauses mean and how the superannuation calculation for a commission-only employee is to be made for the purposes of an employer’s contributions. We think it better this be left for the superannuation legislation to operate and for employers to comply with such provisions as may relate to an employee remunerated in this way rather than to provide for it in the modern award.

[176] We would be assisted if the parties would again consider the calculations for NES entitlements for these employees and, in doing so, the piecework provisions in the FW Act and the consolidated request. On a provisional basis we have accepted the parties’ submissions that it is open to them to agree to incorporate these entitlements into commission-only payments as and when they are made. As noted, a definition of base and full rate of pay has been put into cl.17 and submissions are invited about those provisions. We have also made it clear that any NES entitlements must be in addition to the minimum commission-only rate.

[177] We have not included an annualised wage and salary clause as was sought. Despite the parties’ agreement about the terms of this clause we cannot identify anything similar in any of the existing awards. It is difficult to understand why it is necessary in this award. It applies, we assume, only to employees on a weekly wage and they are entitled to few provisions that are of the type that are normally rolled up into an annualised salary.

[178] We have provided that ordinary hours may be averaged over a period of eight weeks. If the parties press for averaging over 12 months we require further submissions to explain why the real estate industry requires that period.

[179] We have made amendments to the annual leave clause and the parties are invited to make any further submission about the proposed clause they consider necessary. Throughout the exposure draft there are numerous transitional provisions. They reflect the fact that in some cases the relevant provision is to regulate employees and employers who are currently award free. In other cases, although there is an award, it does not provide for the entitlement in question or if it does it is at a lesser or different rate or method of calculation. These provisions are detailed and, although we have made some minor amendments, we have left them largely in the terms proposed. The existence of these provisions does however raise the question as to whether the model phasing schedule should be in this award. We have put it in the exposure draft but the parties should consider if having both the transitional provisions they have agreed in the award as well as the model phasing schedule is desirable.

[180] We have retained the parties’ schedule D (which is now schedule E) dealing with transitional provisions for written agreements.

Restaurant and Catering industry

[181] In this part of our statement, we refer to a number of pre-reform awards and NAPSAs. For ease of reference, and to avoid repetition, we will refer to them in abbreviated form, shown in the table below. As noted earlier we refer to the Hospitality Industry (General) Award 2010 as the Hospitality Modern Award.

Pre-reform award/NAPSA

Award code

    Abbreviation

Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998, The

AP783479CRV

    Federal Hospitality Award

Liquor and Accommodation Industry – Restaurants – Victoria - Award 1998

AP787213CRV

    Victorian Restaurant Award

Liquor and Allied Industries Catering, Cafe, Restaurant, Etc. (Australian Capital Territory) Award 1998

AP787016CRA

    ACT Award

Hotels, Motels, Wine Saloons, Catering, Accommodation, Clubs and Casino Employees (Northern Territory) Award 2002

AP812953CRN

    NT Award

Restaurants, &c., Employees (State) Award

AN120468

    NSW Restaurant Award

Restaurant, &C., Employees’ Retail Shops (State) Award

AN120467

    NSW Retail Shop Award

Cafe Restaurant and Catering Award – State (Excluding South-East Queensland) 2003.

AN140052

    Queensland non-SEQ Restaurant Award

Hospitality Industry – Restaurant, Catering and Allied Establishments Award – South-Eastern Division 2002

AN140144

    SEQ Restaurant Award

Cafes and Restaurants (South Australia) Award

AN150025

    SA Restaurant Award

Restaurant, Tearoom and Catering Workers’ Award, 1979

AN160276

    WA Restaurant Award

Restaurant Keepers Award

AN170086

    Tasmanian Restaurant Award

[182] On 28 May 2009 the Minister issued a variation to the consolidated request, which dealt specifically with the restaurant and catering industry. It varied the consolidated request by adding the following paragraph:

[183] The effect of the variation was summarised in the Australian Government’s submission of 24 July 2009 as:

[184] In its statement of 26 June 2009, concerning the proceedings arising out of the variation, the Commission said:

[185] In its Stage 4 submission of 24 July 2009 the Australian Government clarified the intention of the variation to the request in these terms:

“Scope of the modern award

[186] We also draw attention to a further variation to the consolidated request which was made on 26 August 2009. That variation dealt with part-time work and added the following new paragraph:

[187] We appreciate that Stage 4 submissions in respect of a restaurant and catering industry modern award closed on 24 July 2009, so that those with an interest in that award have not had an opportunity to address the 26 August variation in their submissions. However, all interested persons will have an opportunity to do so in their submissions concerning the exposure draft. It is against this background that we turn to the exposure draft for the Restaurant Industry Award 2010.

Scope of the award

[188] The 28 May 2009 variation to the consolidated request requires the Commission to create a modern award covering the restaurant and catering industry, separate from those sectors in the hospitality industry providing hotelier, accommodation or gaming services. The intent of that variation, as explained by the Government’s 24 July 2009 submissions, was to require the making of a modern award covering those restaurants and catering activities that are operated as part of a restaurant business. It follows that such an award should not cover restaurants which are operated as part of another business, such as a hotel or a catering operation.

[189] The coverage clause of the exposure draft has been developed to achieve that end. Dealing first with restaurants, the clause defines restaurant by reference to a restaurant within a restaurant business. The effect will be to include all restaurants other than those operated in or in connection with premises owned or operated by employers covered by the Hospitality Modern Award; the Registered and Licensed Clubs Award 2010 66 and the Fast Food Industry Award 2010.67 The coverage clause of the Hospitality Modern Award will be varied to exclude restaurants, save to the extent that restaurants are operated in or in connection with premises owned or operated by employers otherwise covered by that award. In relation to catering the coverage of the catering industry will be limited to catering by a restaurant business which is defined as the provision by a restaurant of catering services for any social or business function where such services are incidental to the major business of the restaurant. Otherwise the catering industry will continue to be covered by the Hospitality Modern Award. We have also included in the coverage clause in the exposure draft an exclusion for contract caterers, whose principal and substantial business activity is that of providing catering services and/or accommodation services on a contract or fee for service basis. In light of this general exclusion, it is unnecessary to include a specific exclusion in respect of airport catering or catering under contract to the Department of Defence. The coverage clause of the Hospitality Modern Award will be varied to exclude catering by a restaurant business.

[190] The scope clauses in the exposure draft and the Hospitality Modern Award, as it will be amended, are consistent with the intent of the first part of clause 27A of the consolidated request, as clarified by the Australian Government in its 24 July submission. It is also consistent with the scope of most existing awards and NAPSAs regulating restaurants, as set out in Attachment B of the 24 July 2009 submission of the LHMU.

[191] As indicated already, we have called the exposure draft the Restaurant Industry Award 2010. Although the award will cover catering activities that are operated as part of a restaurant business, the broader catering industry will remain covered by the Hospitality Modern Award and it would be misleading to include catering in the title.

[192] We will not republish the Hospitality Modern Award, as varied in light of the above. However, we now set out the variations we propose to make to the Hospitality Modern Award in order to allow those with an interest in that award to comment on the proposed variations in the post exposure draft consultations on the draft Restaurant Award 2010:

Content of the award

[193] We understand the 28 May 2009 variation to the consolidated request to require the Commission to make a modern award which takes account of the operational requirements of the restaurant and catering industry, including the labour intensive nature of the industry and the industry’s core trading times, particularly in considering the penalty rate and overtime regime. Our task is to establish a modern award with appropriate terms and conditions for the industry, having regard to the terms of the consolidated request as varied, and having regard to the content of relevant pre-reform awards and NAPSAs and the weight of coverage of those industrial instruments.

[194] The drafts submitted by Restaurant & Catering Australia (R&CA) and the LHMU both contained a number of standard provisions in modern awards. No comment is required in relation to such provisions. There are, however, major differences in the drafts in other respects which we now address.

Types of Employment

[195] The drafts submitted by R&CA and LHMU differ in three major respects.

[196] First, R&CA does not provide for agreement between an employer and a part-time employee in writing on a regular pattern of work, for written variations to the agreed pattern or for payment of overtime in excess of hours mutually arranged. The LHMU draft includes these provisions in the form in which they appear in the Hospitality Modern Award. The R&CA draft contains a requirement for a two hour minimum shift, rather than the minimum of three hours proposed in the LHMU draft.

[197] The requirement for agreement in writing on a regular pattern of work and variations thereto and the associated obligation with respect to overtime payments appear in all pre-reform awards applying to restaurants in Victoria and the Northern Territory and in the SEQ Restaurant Award. They do not appear in other State NAPSAs. The Tasmanian Restaurant Award and Queensland non-SEQ Restaurant Award provide a 10% loading for part-time employees.

[198] We have adopted the part-time provision in cl.13.3 of the Victorian Restaurant Award, but we have modified it in light of the requirement in clause 53 of the consolidated request (added on 26 August 2009) to ensure that the hours of work and associated overtime and penalty arrangements in the retail, pharmacy and any similar industries do not discourage employers from offering additional hours of work to part-time employees or from employing part-time employees rather than casual employees. Clause 12 of the exposure draft requires the pattern of part-time hours to be agreed, but cl.12.4 permits a variation to working hours by agreement, provided it is recorded. Clause 12.7 provides that overtime is payable for hours in excess of the agreed hours or the hours as varied under cl.12.4, subject to the general overtime provision in cl.30.1 of the exposure draft.

[199] The requirement for written evidence of any variation of hours is important to ensure that part-time employees are genuinely free to accept or decline either an ongoing variation of hours, or a one-off increase in hours on a particular occasion in light of operational circumstances. Absent such agreement the regular and predictable nature of part-time work and the capacity of part-time employees to enter into agreements for working arrangements which meet their family or other responsibilities would be at risk of severe compromise.

[200] We have reached this view on a provisional basis, conscious that parties have not had an adequate opportunity to address the 26 August 2009 variation to the consolidated request. That opportunity will be provided in the forthcoming consultations.

[201] We will also include the minimum engagement of three hours for part-time employees. That entitlement appears in all current restaurant instruments other than the SEQ Restaurant Award, which prescribes a two hour minimum, and the SA Delicatessens Award.

[202] Turning now to casual employment, the R&CA draft does not include any minimum period of engagement for casuals, nor a casual conversion clause. The LHMU draft includes both.

[203] There is a two hour minimum engagement in all current restaurant awards, save that a higher number of hours – three or four – is prescribed by SA Restaurant Award, the SA Delicatessens Award, the NSW Restaurant Award and the Queensland non-SEQ Restaurant Award. We have included a minimum engagement of two hours in the exposure draft.

[204] There is no casual conversion provision in current federal awards covering restaurants, the Queensland non-SEQ Restaurant Award, the SA Restaurant Award, the WA Restaurant Award or the Tasmanian Restaurant Award. There is such a provision in NAPSAs in other States and in the SEQ Restaurant Award. Having regard to the weight of current coverage, we have not included a casual conversion provision in the exposure draft.

[205] Finally in relation to types of employment, the LHMU has proposed general provisions dealing with non-wages matters concerning junior employees and apprentices. R&CA has included similar provisions in the wages clause in its draft. We have included the provisions in the types of employment clause of the exposure draft, in the form proposed by the LHMU, save that we have changed the reference in the provision dealing with the service of liquor by juniors from “on reaching 18 years” to “when the law permits” to accommodate different liquor licensing laws.

[206] We have included the requirement to pay adult wages to juniors engaged in the service of liquor by juniors in the exposure draft, reflecting Federal award provisions and the provisions of the two Queensland NAPSAs.

[207] We have included a 25% casual loading in the exposure draft. A casual loading at that level is common to existing pre-reform awards and most NAPSAs. The major exceptions are the NSW Restaurant Award and the SEQ Restaurant Award. The NSW Restaurant Award prescribes a higher aggregate loading for casuals, comprised of a 20% casual loading, together with an additional 1/12 (8.3%) loading in respect of annual leave. The SEQ Restaurant Award provides for a 50% casual loading Monday to Saturday. The transitional provisions contained in our 2 September 2009 decision will be required to deal with the reduction of the casual loading in each case.  69

Minimum wages and classification definitions

[208] The R&CA has proposed a limited number of classifications and minimum wages. Its draft provides only for cooking, waiting and bar staff. The LHMU has included classifications for clerical employees, storepersons, security staff and handypersons, consistent with the Victorian Restaurants Award.

[209] We have included the broader range of classifications proposed by the LHMU in the exposure draft. We think it is preferable that a modern restaurant award cover as broad a range of employees as practicable. The fact that the additional classifications appear in the Victorian Restaurants Award suggests that such classifications are utilised in restaurants. We note that additional classifications are also found in State NAPSAs. As an example the NSW Restaurants Award contains reference to storage and handyperson functions. We invite comment on the practical necessity for the inclusion of all of the non-food and beverage classifications in the award.

[210] We note that the minimum weekly rates in the exposure draft are common to the R&CA and the LHMU drafts as are the junior and apprentice rates (percentages) and all have been included in the draft. The apprentice and junior rates reflect the rates in the Hospitality Modern Award, which were determined having regard to the diversity of rates in relevant federal awards and NAPSAs. 70 That diversity is equally evident in relevant restaurant awards and NAPSAs. In our view, the same single sets of rates, which involve some increases and some reductions against particular awards and NAPSAs, is an appropriate outcome for the restaurant industry.

[211] We have also included the proficiency pay arrangements from the LHMU draft as they appear in the Victorian Restaurants Award. Some additional provisions in the LHMU draft have been included in the types of employment clause.

Allowances

[212] The R&CA and the LHMU drafts contained a number of common allowances:

[213] We have also included a split shift allowance proposed by the LHMU on the basis that such a provision is contained in the current Federal awards, the WA Restaurant Award and the Queensland non-SEQ Restaurant Award. There is a similar allowance, although for seasonal workers only, in the NSW Restaurant Award.

[214] We have included the common transitional provisions for district allowances in the Northern Territory and Western Australia in the exposure draft, given the application of the Northern Territory district allowance to employees covered by the NT Award and the application of the location allowances general order 71 to employees currently covered by the WA Restaurant Award.

[215] We have not included the specific allowances proposed by the R&CA in respect to travel and supervisory allowances for airport catering employees or a uniform/laundry allowance for catering employees as airport catering employees will not be covered by the award. Catering activities are included only to the extent that they are part of a restaurant business and employees will be entitled to the clothing, equipment and tools allowance in the exposure draft.

[216] We have not included the overnight stay allowance proposed by the R&CA but we invite further input in relation to the allowance.

Superannuation

[217] The R&CA did not include a superannuation provision in its draft. We think there should be a superannuation provision, given such clauses are contained within current awards and NAPSAs. We have included the clause proposed by the LHMU in the exposure draft, but expanded the list of funds to include those named in current awards and NAPSAs.

Payment of wages, annualised salary arrangements and higher duties

[218] The R&CA and the LHMU proposed slightly different provisions in relation to payment of wages, annualised salary arrangements and higher duties. We have included the payment of wages clause proposed by the LHMU in the exposure draft, in a modified form, incorporating some elements of the R&CA draft. We have also included the annualised salary arrangements clause proposed by the LHMU on the same basis. Provisions for annualised salary in current instruments are generally in those terms.

[219] With respect to higher duties provisions, the main difference between the proposals is that the LHMU proposal provides for payment at the higher rate for a full day where two or more hours is worked at the higher level whereas the R&CA clause provides for payment at the higher rate for the time worked at the higher classification. The LHMU provision is based on terms in the Victorian Restaurant Award, the ACT Award, the NT Award and the SEQ Restaurant Award. The clause proposed by the R&CA is based on the NSW Restaurant Award. The Queensland non-SEQ Restaurant Award, the SA Restaurant Award, the WA Restaurant Award and the Tasmanian Restaurant Award provide for payment at the higher rate for a full day after four hours work at the higher level. Existing regulation supports payment at the higher classification rate for a full day after working at that level for part of a day. We have adopted the provision from the Victorian Restaurant Award.

Hours of work

[220] The LHMU proposed an hours clause in the terms of that found in Victorian Restaurant Award. The R&CA clause is extremely brief, proposing little more than an average 38 hour week, over a period of up to 26 weeks, for full-time employees and incorporating other very limited provisions for part-time and casual employees from the employment types clause of the draft award.

[221] Provision for 38 ordinary hours, averaged over a four week period is common in existing instruments. The hours provision in the Victorian Restaurant Award is broadly reflective of the hours of work arrangements in federal awards and NAPSAs and has been included in the exposure draft. We have, however, simplified that provision to express the hours of work as an average of 38 hours per week over a period of no more than four weeks. The Victorian Restaurant Award contains detailed provisions as to the manner in which hours may be averaged and the manner in which the hours are to be fixed which we have not included. We have retained the spans and spreads of hours and associated matters.

[222] We have not included any provisions dealing with rostered days off (RDOs) in the exposure draft. We are unaware of the incidence of RDOs in the industry and the necessity, or otherwise, for the retention of these provisions. We invite further information on the question.

Overtime

[223] The LHMU proposed an overtime clause based on that found in the Victorian Restaurant Award. It includes a 50% overtime penalty for the first two hours of overtime worked Monday to Friday and double time thereafter, a 75% penalty for the first two hours of Saturday overtime and double time thereafter and a double time penalty for all Sunday overtime. The R&CA draft proposed an overtime provision based on work in excess of an average 38 hours per week, with a penalty of 25% for the first 8 hours overtime and 50% thereafter.

[224] We have included the LHMU proposal in the exposure draft. It is consistent with arrangements in current federal awards and NAPSAs. The calculation of overtime on a daily basis is common to all such instruments. No current instrument provides for overtime calculated by reference to hours in excess of an average 38 ordinary hours per week. The Monday to Friday overtime standard across current instruments is for time and a half for the first two hours and double time thereafter. Whilst time and a half applies for the first three hours in the two Queensland NAPSAs, the SA Restaurant Award and the ACT Award, the most common provision is for time and a half for the first 2 hours only. The Monday to Friday rates in current instruments are without exception time and a half for the first two or three hours and double time thereafter. No current instrument provides for the 25% and 50% penalties proposed by the R&CA.

[225] A Saturday overtime payment of a 75% penalty for the first two hours and double time thereafter is found in the Victorian Restaurant Award and the Tasmanian Restaurant Award. Federal awards applying in both Territories prescribe double time for all overtime on Saturday, as does the WA Restaurant Award. The NSW Restaurant award, both Queensland NAPSAs and the SA Restaurant Award provide for a 50% penalty for the initial overtime hours worked on Saturdays. A penalty of 75% for the first two hours of Saturday overtime and double time thereafter is an appropriate outcome when all of the relevant provisions are taken into account. Double time applies to overtime on Sundays and public holidays in Federal awards and NAPSAs, almost without exception.

[226] Both drafts included provision for time off instead of overtime payment by agreement. The LHMU draft provides for time off instead of overtime payment, calculated on the basis of the payment due. The R&CA draft, on the other hand, provides for time off on a time for time basis. Time off instead of overtime is calculated on the basis of payment due, rather than hour for hour worked, in all current awards and NAPSAs which provide for time off instead, except the NSW Restaurant Award and the SA Delicatessens Award. We have included the provision in the exposure draft on a payment due basis.

Penalty Rates

[227] There were major differences in the drafts submitted by the LHMU and the R&CA in relation to penalty payments, reflecting very different approaches. The relevant penalties are for work in ordinary hours outside the hours of 7.00am and 7.00pm Monday to Friday and on Saturdays, Sundays and public holidays, for full-time, part-time and casual employees.

[228] The LHMU based its draft on the Victorian Restaurant Award, which is also consistent with the Hospitality Modern Award. The R&CA draft was based in some respects on the NSW Restaurant Award but it relied primarily on the operational requirements of the industry and in particular the seven days a week operation of restaurants, predominantly at times directed to the provision of lunches and dinners.

[229] The penalty provisions advanced by the LHMU and the R&CA are summarised in the table below, and compared to the provisions in the Hospitality Modern Award, the Victorian Restaurant Award and the NSW Restaurant Award.

Penalty rates for working ordinary hours –full-time and part-time employees

Additional payment

 

R&CA draft

LHMU draft

Victorian Restaurant Award (1)

NSW Restaurant Award (2)

Saturday

0

25%

25%

25%

Sunday

50%

75%

75%

50%

Monday–Friday:

7pm–midnight

Midnight–7am

0

0

10%

15%

10% (3)

15% (3)

0

30% (4)

Public holiday

150%

150%

150%

150%

Penalty rates for working ordinary hours –casual employees

Additional payment (additional to 25% casual loading)

 

R&CA draft

LHMU draft

Victorian Restaurant Award (1)

NSW Restaurant Award (2)

Saturday

0

25%

25%

25%

Sunday

0

50%

50%

25%

Monday–Friday:

7pm–midnight

Midnight–7am

0

0

10%

15%

10%

15%

0

30% (4)

Public holiday

125%

150%

150%

125%

(1) AP787213CRV

(2) AN120468

(3) Expressed as dollar amount

(4) To 6.00am

[230] In its 24 July 2009 submissions, the LHMU provided a table of penalty provisions which we reproduce in the tables below in an edited form:

Award/NAPSA

7pm–midnight

Midnight–7am

Comment

Pre-reform Awards

Victorian Restaurant Award

$1.60 per hour

$2.30 per hour

  

ACT Award

$1.51 per hour

$2.22 per hour

  

NT Award

$1.77 per hour

$1.77 per hour

  

NAPSAs

WA Restaurant Award

$1.44 per hour

$1.44 per hour

If majority of hours are between midnight and 7am: $1.51 per hour

Tasmanian Restaurant Award

$1.42

$2.02

  

SA Restaurant Award

10%

Catering – after 11.30pm: double time

Before 6am: 10%

Catering – after 11.30pm: double time

  

SA Delicatessens Award

6pm–midnight: 10%

    

SEQ Restaurant Award

10pm–midnight:
$1.35 per hour

Midnight–6am:
$1.96 per hour

  

Queensland non-SEQ Restaurant Award

8pm–midnight

Non-casual: $3.65 per occasion

Midnight–6.00 am:

overtime rates

  

Award/NAPSA

7pm–midnight

Midnight–7am

Comment

NAPSAs

NSW Restaurant Award

Nil

30%

Clause 11.2 of the NSW Restaurant Award provides that where an employee works more than half of a regular shift between midnight and 6.00am the 30% penalty will apply for all time worked on that shift

 

Saturday

Sunday

Public holidays

 

Full-time

%

Casual

%

Full-time

%

Casual

%

Full-time

%

Casual

%

Pre-reform Awards

Victorian Restaurant Award

25

50

75

75

150

175

ACT Award

25

50

75

75

150

175

NT Award

50

75

75/100

75

150

150

 

Saturday

Sunday

Public holidays

 

Full-time

%

Casual

%

Full-time

%

Casual

%

Full-time

%

Casual

%

NAPSAs

WA Restaurant Award

50

50

50

50

150

125

Tasmanian Restaurant Award

25

50

75

75

150

150

SA Restaurant Award (2)

25/50

45/75

100

120

100

100

SA Delicatessens Award (2)

25/50

45/75

100

120

100

100

SEQ Restaurant Award

50

73

50

73

150

173

Queensland non-SEQ Restaurant Award

50

50 (4)

50

100

150

150

NSW Restaurant Award (3)

25

25

50

50

150

150

(1) Inclusive of casual loading

(2) Hours worked before noon/Hours worked after noon

(3) Plus 1/12th

(4) Monday to Saturday

[231] The R&CA draft accompanied a submission made on 24 July 2009. The R&CA’s approach is based on an overriding conviction that penalty payments should be minimal or non-existent during any periods when restaurants trade. The submission was filed before the Australian Government’s submission of the same date containing the clarification in paragraphs 10-12 of that submission which we have set out above. The penalty arrangements contained in the R&CA draft pay little regard to the penalty rate provisions in pre-reform awards and NAPSAs applying to restaurants and cafés. The proposal also ignores some penalties in the NSW Restaurant Award, determined by the Industrial Relations Commission of New South Wales, for full-time and casual employees for work on Saturday and between midnight and 6.00am and for casual employees for work on Sunday penalties for full-time and casual employees and Sunday penalties for casuals. 72 R&CA had relied upon the provisions of that award during the priority stage of the modernisation process.

[232] The R&CA’s approach is directed at substantially reducing or eliminating penalty payments provided for in existing instruments applying to the restaurant industry during times when restaurants are open. That approach ignores the inconvenience and disability associated with work at nights and on weekends – which are the basis for the prevailing provisions in pre-reform awards and NAPSAs. Nor does the R&CA approach take into account the significance of penalty payments in the take-home pay of employees in the restaurant industry. A modern restaurant award based on the penalty rates proposed by the R&CA would give the operational requirements of the restaurant and catering industry primacy over all of the other considerations which the Commission is required to take into account, including the needs of the low paid and the weight of regulation. A more balanced approach is required.

[233] There is considerable diversity in the penalty provisions across pre-reform federal awards and NAPSAs in the industry. For example, in relation to penalties for Saturday and Sunday work, the SEQ Restaurant Award, the Queensland non-SEQ Restaurant Award and the WA Restaurant Award all prescribe a 50% penalty for both days, whereas the Victorian Restaurant Award provides for different rates – 25% on Saturday and 75% on Sunday. The pattern of some penalty arrangements is more clear cut. Taking all of the provisions into account, and having some regard to the employment levels under the instruments, the weight of coverage supports the following provisions, which we have included in the exposure draft:

[234] The remaining issues raise matters requiring fine judgment. With respect to work by casuals on public holidays, there is a penalty of 175%, inclusive of the 25% casual loading, in the Victorian Restaurant Award, the ACT Award and the SEQ Restaurant Award. There is a loading of 150%, inclusive of the 25% casual loading, in the NSW Restaurant Award, the Queensland non-SEQ Restaurant Award, the NT Award and the Tasmanian Restaurant Award. The WA Restaurant Award and the SA Restaurant Award provide for a lesser payment to casuals on public holidays. We have decided to include a Sunday penalty of 150%, inclusive of the 25% casual loading, in the exposure draft, the same payment as applies to full-time employees for work on public holidays.

[235] In relation to work performed in ordinary time by full-time and part-time employees on Sunday, there is no critical mass for one provision or another or, in the terms of the Government submission, no clear national benchmark for penalties. A review of pre-reform awards and NAPSAs in the industry shows that penalty rates of 50% and 75% are common but having regard to the likely numbers of employees covered by the various instruments there is no basis to prefer one over the other. Taking into account the terms of clause 27A of the consolidated request, the fact that Sunday is a core trading time for much of the industry and the operational requirements of the industry in that regard, we have decided on a 50% penalty for Sunday work.

[236] We deal now with night work before midnight on Monday to Friday. There is no clear national benchmark emerging from the pre-reform awards and NAPSAs in the industry. A penalty in the order of 10% for work between 7.00pm and midnight is common to the Victorian Restaurant Award and most NAPSAs. There is a penalty of a similar quantum in both Queensland NAPSAs, but the penalty applies from time later than 7.00pm in each case. However, there is no penalty rate at all in the NSW Restaurant Award, which applies in the largest State. In this circumstance, bearing in mind the terms of clause 27A of the consolidated request and having regard to the fact that evenings constitute core trading times and the operational requirements of the industry in that regard, we have decided to adopt a penalty of 10% between the hours of 10pm and midnight.

Leave and public holidays

[237] We have included an annual leave provision in the terms proposed by the LHMU. It is more comprehensive in that it provides a right for employers to require the taking of leave with notice in the case of excessive accruals. Personal/carers leave and community service leave provisions proposed by the R&CA and the LHMU are in the same terms and have been included in the exposure draft. We have included the additional provisions for full-time workers in the exposure draft public holidays provision.

Industry specific provisions

[238] We have included the provision dealing with breakages and cashiering underings in the exposure draft.

[239] We have not included the seasonal workers provision proposed by the R&CA. Such a provision is not common in existing instruments, being found only in the NSW Restaurant Award.

Transitional provisions

[240] The LHMU proposed a range of transitional provisions, additional to those dealing with district allowances and accident pay. They have not been included in the exposure draft at this stage but will be considered before the final award is made.

Salt industry

[241] We publish the Salt Industry Award 2010 exposure draft. AMMA, the ACTU, the AWU and Construction, Forestry, Mining and Energy Union (CFMEU) all submitted that an industry award should be made. AiGroup submitted that no separate modern award is warranted and that the industry could be covered by the Food, Beverage and Tobacco Manufacturing Award 2010. 73 AMMA, the AWU and the CFMEU appeared at the pre-exposure draft consultations and each addressed the drafts which had been filed by AMMA and the AWU.

[242] We have decided there should be a Salt Industry Award. There are currently several salt industry awards. One is a pre-reform award 74 and four are NAPSAs.75 There are two enterprise NAPSAs but the only one referred to in submissions is the Dampier Salt Award 200476 (the Dampier Salt Award). There was no support for the AiGroup proposal as it appears that salt produced for human consumption accounts only for some 4-5% of production throughout Australia.

[243] We note the submissions that Australian companies are some of largest exporters of salt in the world. In excess of 90% of salt production is carried out in Western Australia and principally by two companies, Dampier Salt Ltd and Mitsui & Company Limited. Over 95% of the salt is exported. Cheetham Salt Ltd is the next largest producing around 8%. It is the main supplier to the domestic market for human consumption (which accounts for around 50% of its production) and the rest it exports. It seems to be a fact acknowledged by all parties that the majority of salt production both as to volume and location is in remote locations.

[244] In deciding on the provisions to go into this draft we have given consideration to the drafts filed by AMMA and the AWU and the provisions of the existing awards. Each of the parties, for one purpose or another, referred to the Dampier Salt Award. Although generally enterprise awards do not inform this process the fact that this award binds the largest producer of salt in Australia was acknowledged. We now refer to a number of clauses in the draft. We have included the definitions of afternoon shift and standard rate as sought by the AWU. There has been some recalculation of allowances expressed as a percentage and the parties should give consideration to them.

[245] In relation to coverage we have retained a reference to shipping but note it seems only to be mentioned expressly in the scope and classifications of the Dampier Salt Award. Submissions are invited about this clause.

[246] The classifications contained in the exposure draft are those agreed to by AMMA, the AWU and the CFMEU. The wages reflect the agreed percentage relativities set out in the AWU correspondence of 21 August 2009. We have not included an annualised salaries clause in the draft. One was sought by AMMA and opposed by the AWU and CFMEU. Annualised salary clauses are not in the existing pre-reform award or NAPSAs although we do note the total annual salary provision of the Dampier Salt Award. The parties should have further discussions about this issue.

[247] We have deleted the clause sought by AMMA which provided that the minimum weekly rates included compensation for aspects of the work including the location, salt or chemical particles in the air, dust, glare from bulk salt and heat. It justified this by noting the wage rates were at the higher end of the existing rates and some of them were said to compensate for some work related disabilities. We also note the AWU claim for a 4% industry allowance and its justification for that allowance. We think there may be a case for an industry allowance to compensate for all disabilities associated with this work and those allowances that are in existing awards but may not be appropriate for an industry wide modern industry award.

[248] We have not included an accident pay clause as sought by the AWU as we cannot identify any such provision currently in awards. We leave it to the unions to make any further submission about this provision.

[249] We turn next to hours of work. The parties’ drafts were well apart about hours and related matters. The considerations for the Full Bench have been informed by the existing provisions in relevant awards and clause 33AA of the consolidated request. That reads as follows;

[250] The existing awards (other than the Dampier Salt Award) do not provide for 12 hours shifts to be worked at the direction of the employer. The maximum hours for day workers range between eight and 10 hours per day and the majority provide that those hours are to be worked from Monday to Friday. There are fewer constraints on the days shiftworkers may be required to work but still eight hour shifts are provided for and, as a general rule, there is to be majority consent by affected employees to alter them. These provisions stand in contrast to the hours regime that is in fact being worked in the industry. In this respect we rely on the submissions of AMMA filed on 19 August 2009. This followed a request made in the pre- drafting consultations that it provide this evidence. To date it has not been challenged by the unions and we have relied on it. It shows that 12 hour shifts are being worked at numerous locations and work is undertaken on all days of the week.

[251] We have drafted the hours clause in the exposure draft having considered the above matters, the fact that the majority of salt production occurs in remote locations, and clause 33AA of the consolidated request. In doing so we have adopted the concept behind the compromise suggestion put forward by the AWU. It is now contained in cll.19.2 and 19.3.

State/Territory government administration

[252] We deal first with Territory government administration. The governments of the Australian Capital Territory and the Northern Territory take the view that employees involved in the administration of the Territories are covered by enterprise awards and are not part of the award modernisation process under Part 10A of the WR Act. No party suggested otherwise. We proceed on the assumption that no modern award should be made for employees in Territory administration.

[253] In order to assess whether to make a modern award for State government administration, and if so what the award should contain, it is necessary to summarise the effect of the relevant statutory provisions. The legislative regime established by Part 10A of the WR Act, the FW Act and the Transitional Act provides mainly for modern awards which cover constitutional corporations. State owned corporations which are trading or financial corporations are therefore potentially within the scope of the award modernisation process. 77 There are two relevant qualifications, however. The first is that some state-owned corporations may be covered by modern industry awards and therefore strictly do not require separate consideration. The second is that some may currently be covered by enterprise awards. Enterprise awards are not part of the award modernisation process at this stage.78 It follows that it is necessary to identify state owned corporations which are trading or financial corporations but which will not be covered by a modern industry award on 1 January 2010 and which are not covered by an enterprise award. Of course a question may arise of whether a particular public sector constitutional corporation which is capable of being covered by a modern industry award should nevertheless be covered by an award for state government administration and the view of the state concerned would need to be considered on such a question.

[254] We turn now to the possibility that some parts of state government administration will come into the federal jurisdiction through a reference of powers by one or more state governments. The State Referral Act gives the FW Act an extended operation in a state where there has been a referral of power by that state to the Commonwealth under s.51(xxxvii) of the Constitution. 79 The relevant provisions extend the meaning of national system employer and national system employee to include all employers and employees in a referring state subject to the terms of the reference of powers by that state.80 It is a matter for each state to determine the extent to which it will refer its powers to the national system. Clearly the reference can include employees in state government administration.81

[255] Schedule 6A of the Transitional Act, inserted by the State Referral Act, provides for the making of modern awards covering state reference public sector employers to be known as state reference public sector modern awards. That process, the state reference public sector award modernisation process, is to be undertaken by Fair Work Australia. It is separate to the process of award modernisation currently being conducted by the Commission under Part 10A of the WR Act. For example, from 1 January 2010 a modern award must be expressed not to cover employees covered by a state reference public sector modern award. 82

[256] Furthermore, it appears that the process of creating modern awards for State reference public sector employers is confined to employers who are not constitutional corporations. 83 This is because Schedule 6A of the Transitional Act only applies to employers which come into the national system through a State referral of power. Employers which are constitutional corporations are part of the award modernisation process under part 10A of the WR Act because they are national system employers within the ordinary meaning of that expression in the legislation.

[257] Thus it would seem that the current award modernisation process potentially applies to public sector employers which are constitutional corporations but which are not covered by an existing enterprise award or NAPSA. Such employers will be covered by the process regardless of whether the relevant state has referred any of its powers in relation to state employment. We can refer to this group as the residual state employers.

[258] Workforce Victoria, on behalf of the State of Victoria, and the CPSU, the main union in the public sector in Victoria, have agreed on an award. Both support the making of a modern award for state government administration to cover some of the residual state employers in Victoria and, indeed, some of the Victorian public sector constitutional corporations that would otherwise be covered by modern industry awards. On this approach many residual state employers would be covered by other modern awards.

[259] It appears to us that there are two difficulties with the proposal for a modern award to cover residual state employers. The first is that it is by no means clear which employers are constitutional corporations and would be covered by such an award. This means that the identification of relevant conditions is not straightforward. There is a second and more fundamental difficulty. Such a modern award, subject to any transitional provisions, would be required to operate in relation to such employers regardless of state boundaries. It would operate uniformly in all States and Territories in relation to residual state employers falling within its coverage clause, not just in Victoria. Given the uncertainty surrounding the conditions on which states other than Victoria may refer power to the Commonwealth, we are reluctant at this stage to make a modern award for state government administration by reference to prevailing public sector terms and conditions in Victoria. Other states may take a different view as to the contents of such a modern award. It is also relevant that the Commonwealth has indicated that there may be other legislative developments.

[260] We do not underestimate the importance of appropriate modern award coverage for residual state employers and their employees. In this regard, we understand that presently all employees who might be covered by a modern award applying to residual state employers in Victoria are covered by collective agreements. Delay in the making of such an award is unlikely to have a great deal of practical significance provided the situation is addressed in the first half of 2010.

[261] In all the circumstances we are inclined to think that no separate modern award for state government administration should be made as part of the current award modernisation process. After 1 January 2010 Fair Work Australia will have power to make modern awards on essentially the same basis as the Commission currently does. 84 Fair Work Australia can make a modern award for state government administration if and when it becomes necessary or appropriate to do so.

[262] We recognise that our analysis of the legislative provisions, and other matters bearing upon the provisional view expressed in the preceding paragraph, have not been dealt with in great detail in the consultations. We are open to further submissions about the effect of the relevant provisions. We are also prepared to reconsider our preliminary view that we should not make a modern award for state government administration as part of the current award modernisation process.

Water, sewerage and drainage services

[263] We publish a draft Water Industry Award 2010. For present purposes we proceed on the basis that the industry is concerned with the harvesting (including by desalination), transportation, storage, treatment and supply of water to commercial, residential and other consumers and the harvesting, transportation, storage, treatment and recycling of waste water, stormwater and sewerage. The submission from the combined LGAs contains a useful summary of how the water industry is constituted across Australia. Historically, it has been the preserve of government, most commonly local government. It appears that there is only one major private sector employer in the water industry in Australia. United Water International (UWI), a joint venture between several major multinational corporations, operates Adelaide’s water supply and performs services as a contractor to several other public sector water authorities.  UWI is covered by an enterprise award made to cover employees of the South Australian Water Corporation (SAWC) who transferred to UWI when it took over the operation of Adelaide’s water supply.  That award was based on a pre-reform award and two NAPSAs that applied to SAWC employees.

[264] The water industry is characterised by enterprise awards and NAPSAs that have a public sector history. There are only two non-enterprise awards in the list for water, sewerage and drainage attached to our statement of 29 June 2009, the Regional Water Authorities Award 1999 85 and the Rural Water Industry Award 200186 (the two Victorian awards). Between them, these two awards apply to seven employers in Victoria, all of which have a history rooted in local government.87 We note that a number of NAPSAs have been listed under state government administration that should probably have been listed under water, sewerage and drainage.88 This is an industry where some regard must be had to enterprise awards and NAPSAs.

[265] We have discussed the regime created by the State Referral Act in the context of state government administration. On the approach taken by the High Court in R v Trade Practices Tribunal; Ex parte St George County Council 89 it is probable that a typical water authority engaged in the commercial supply of water to consumers, including in States other than Victoria, will be a constitutional trading corporation. 

[266] As we noted in our consideration of local government, the LGAs and the ASU are unanimous in seeking a modern award for local government that encompasses all activities of local government, including activities in the water industry. We note that the Tasmanian Chamber of Commerce and Industry, on behalf of the four water and sewerage utilities in Tasmania, opposes this course and seeks a modern award for the water industry. As noted in our consideration of local government, we are inclined to accept the unanimous position of the LGAs and the ASU and include all activities of local government within the scope of the proposed Local Government Award 2010. We propose to exclude from the coverage of a modern award for the water industry any employer covered by the proposed Local Government Award 2010. We are also inclined to generally exclude contractors who are not operators of water industry facilities or infrastructure.

[267] The only parties to propose draft awards for this industry were the LGAs and the ASU. We note that, should the LGAs’ submissions be accepted, local governing entities and their corporations would be excluded from such an award in any event. Apart from submissions concerning coverage, we received no submission of substance on the content of a modern award for the water industry.

[268] Similar considerations to those that apply in relation to local government apply also in relation to this industry. Again, and without implying any criticism, there were no detailed submissions from the LGAs and the ASU directed at the relative merits of their respective positions where their drafts differ. The exposure draft is based on the draft proposed by the LGAs (albeit with some modification including, in particular, to the coverage clause). Again, this should not be seen as expressing a clear preference for the position of the LGAs over the position of the ASU where their respective drafts differ. As with our treatment of local government, where there are differences of substance we would be assisted by submissions that argue the merits of the respective positions and we make it clear that we are open to suggestions for change, including wholesale change, to the exposure draft.  As a broad generality, we will favour a position that can be demonstrated to reflect a prevailing standard in the relevant awards and NAPSAs. While we would attach somewhat greater weight to the standards in the two non-enterprise awards in this sector, given that all awards and NAPSAs outside Victoria are enterprise awards and NAPSAs we think it appropriate to have some regard to those enterprise awards and NAPSAs.

National Training Wage

[269] The draft of the national training wage schedule attached to our decision of 3 April 2009 90 has been amended to make it clear the schedule applies to the training packages listed in the appendix to the schedule and to relevant replacement training packages and to provide a default wage rate pending the allocation of training packages and their Australian Qualification Framework (AQF) certificate levels to a wage level.

[270] The draft has also been amended to allow an employer, with the agreement of a school-based trainee, to pay a loading instead of paid annual leave, paid personal/carer’s leave and paid absence on public holidays. The loading has been set at 25% having regard to the casual loading in most modern awards and the basis on which such a loading was established under the federal National Training Wage Award 2000 91 (federal NTW Award) Further, the second year wage rate for AQF Certificate Level IV traineeships covered by the schedule has been extended to cover subsequent years where the traineeship extends beyond two years and provision has been made for the year 11 wage rate for school-based traineeships to apply where a school-based traineeship commences before year 11.

[271] The weekly wage rates for school-based trainees have been deleted to avoid confusion about the operation of such traineeships. The hourly wage rates in the schedule for school-based trainees can be used to calculate their weekly wage rates. Provisions concerning the commencement of employment as a trainee have been removed from the draft given the existence of state and territory legislation affecting such matters. For similar reasons, provisions concerning the termination of traineeships have not been included in the schedule.

[272] We have also decided not to extend the coverage of the national training wage schedule beyond that of the federal NTW Award as part of award modernisation. As a result, the schedule does not cover state developed qualifications which have not been endorsed at the national level or other AQF level traineeships. And, no separate provision for trainees in Queensland has been included in the schedule.

[273] It has been considered unnecessary to extend the employment conditions in the schedule as sought by some. The employment conditions in the award to which the schedule is attached will apply unless varied by the schedule.

[274] A further exposure draft of the national training wage schedule is attached to this decision.

BY THE COMMISSION:

PRESIDENT

Attachment A to Full Bench Statement of 25 September 2009

List of Stage 4 Exposure Draft Modern Awards

Aboriginal Community Controlled Health Services Award 2010

Ambulance and Patient Transport Industry Award 2010

Aquaculture Industry Award 2010

Car Parking Award 2010

Children’s Services Award 2010

Corrections and Detention (Private Sector) Award 2010

Dry Cleaning and Laundry Industry Award 2010

Educational Services (Teachers) Award 2010 – amended to include preschool teachers in the children’s services and early childhood education industry.

Employment Services Industry Award 2010

Fire Fighting Industry Award 2010

Fitness Industry Award 2010

Funeral Industry Award 2010

Gardening and Landscaping Services Award 2010

Legal Services Award 2010

Local Government Industry Award 2010

Mannequins and Models Award 2010

Miscellaneous Award 2010

Pest Control Industry Award 2010

Professional Diving Industry (Industrial) Award 2010

Professional Diving Industry (Recreational) Award 2010

Real Estate Industry Award 2010

Restaurant Industry Award 2010

Salt Industry Award 2010

Seagoing Industry Award 2010

Social, Community, Home Care and Disability Services Industry Award 2010

Supported Employment Services Award 2010

Travelling Shows Award 2010

Veterinary Services Award 2010

Water Industry Award 2010

National Training Wage Schedule

 1   [2008] AIRCFB 1000, [2009] AIRCFB 345 and [2009] AIRCFB 826.

 2   Since that date the request has been varied on 7 occasions: 16 June and 18 December 2008, 2 May, 28 May, 1 July, 17 August and 26 August 2009.

 3   MA000077.

 4   [2009] AIRCFB 800.

 5   [2009] AIRCFB 645 at paras 4 and 5.

 6   [2009] AIRCFB 835 at para 12.

 7   [2008] AIRCFB 1000 at para 66.

 8   See item 2(5) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

 9   MA000010.

 10   MA000022.

 11   Car Parking (Victoria) Award 2004, AP836833CRV.

 12   Pest Control Industry (Victoria) Award 2000, AP792504 and Pest Control Industry (State) Award, AN120413.

 13   Workplace Relations Act 1996: ss.6, 11, 12 and 13 and Fair Work Act 2009: ss.12, 14, 31 and 32.

 14   AP834773CRC.

 15   AP774892.

 16   AP819154.

 17   MA000020.

 18   MA000025.

 19   MA000036.

 20   UCIW Christmas Island Infrastructure Rebuilding (Mainland and Domicile) Employees Award 1993, Print K7270.

 21   Print Q1672, 11 June 1998.

 22   AP819154.

 23   AP812348.

 24   AP814932.

 25   Dry Cleaning Industry Award 2000, AP779906.

 26   Laundry Industry (Victoria) Award 1998, AP787052CRV.

 27   Dry Cleaning and Dyeing Industry Award - Southern and Central Divisions 2004, AN140098.

 28   MA000077.

 29   AP816117.

 30   AP801881CRV.

 31   (1998) 83 FCR 346.

 32   Funeral Industry Award 2003, AP825425CRV, Funeral Industry Award (South Australia) 2003, AP827092 and A.C.T. Funeral Industry Award 2002, AP815104CRA, Funeral Industries (State) Award 2005, AN120221, Funeral Services Award – State 2002, AN140127 and Funeral Directors’ Assistant’s Award No. 18 of 1962, AN160136.

 33   AP825425CRV.

 34   AP812760CRV.

 35   MA000080.

 36   AN120088.

 37   [2008] AIRCFB 1000 at para 79 – 82.

 38   MA000084.

 39   AP796113.

 40   AP817765CRV.

 41   Family Day Care (Australian Capital Territory) Award 1999, AP781398.

 42   MA000002.

 43   AP808848.

 44   AP777903.

 45   AP812580.

 46   AP795711CRV.

 47   MA000018.

 48   AP806214CRV.

 49   [2008] AIRCFB 1000.

 50   AP772299CRV.

 51   AP783267.

 52   AN140139.

 53   AP841959.

 54   MA000031.

 55   MA000034.

 56   AP819920.

 57   [2008] AIRCFB 1000.

 58   [2009] AIRCFB 641.

 59   MA000011.

 60   MA000009.

 61   (2008) 171 FCR 102.

 62   Australian Workers' Union of Employees, Queensland v Etheridge Shire Council, [2009] FCAFC 95 at paras 6 and 7 per Ryan and Marshall JJ.

 63   Mannequins and Models Award 2000, AP808516.

 64   AP772066.

 65   [2009] AIRCFB 640.

 66   MA000058.

 67   MA000003.

 68   [2009] AIRCFB 826, at paragraphs 167 and 168.

 69   [2009] AIRCFB 800.

 70   [2008] AIRCFB 1000, at paragraphs 130-137.

 71   2009 WAIRC 00417.

 72   IRC 216 of 1995, 23 August 1996.

 73   MA000073.

 74   Salt Industry (Victoria ) Award 2001, AP812765.

 75   Engine Drivers’ Minerals Production (Salt) Industry Award 1970, AN160118, Minerals Production (Salt) Industry Award 1969, AN160215, Salt Industry Award, AN150136; Salt Industry Award – State 2002, AN140265 and Cargill Australia Limited – Salt Production and Processing Award 1988, AN160046.

 76   AN160096.

 77   s.6 of the Workplace Relations Act 1996 and s.14 of the Fair Work Act 2009.

 78   ss.576V(3) , 576C(1) of the Workplace Relations Act 1996 and clause 2(e) of the consolidated request.

 79   Division 2A of Parts 1-3 of the Fair Work Act 2009.

 80   ss.30C, 30D and 30H of the Fair Work Act 2009.

 81   s.30D(1)(a) of the Fair Work Act 2009

 82   s.143(10) of the Fair Work Act 2009

 83   See item 2A(4) of Schedule 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and s.30D of the Fair Work Act 2009

 84   See s.158 of the Fair Work Act 2009

 85   AP795612.

 86   AP806351.

 87   The Sydney Water and Australian Water Technologies P/L (Professional Engineers) Award 2000 (AP809077) is listed as a (pre-reform) enterprise award. This classification may be incorrect. There are two respondents which appear to be unrelated.

 88   South Australian Water Corporation Terms and Conditions of Employment Award 1999 (AN150154), Hobart Regional Water Board Staff Award (AN170044); Government Water Supply, Sewerage and Drainage Employees Award 1981 (AN160148) and Government Water Supply, Sewerage and Drainage Foreman's Award 1984 (AN160149).  Note also that the Parks Victoria Award 2002 (AP830825) appears also to have been misallocated as part of Water, Sewerage and Drainage and would appear to more properly belong in State Government Administration.

 89   (1974) 130 CLR 533.

 90   [2009] AIRCFB 345.

 91   AP790899CAN.




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