[2009] AIRCFB 922

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Workplace Relations Act 1996
s.576H—Commission may vary modern awards

Australian Municipal, Administrative, Clerical and Services Union





[1] This decision concerns an application by the Australian Municipal, Administrative, Clerical and Services Union (ASU) to vary the ClerksPrivate Sector Award 2010 1 by deleting cl.17 Exemption rate. The award in question is a modern award made during the priority stage of the award modernisation process being conducted by the Commission in accordance with Part 10A of the Workplace Relations Act 1996.

[2] The award is due to come into effect on 1 January 2010. From that date the award will replace a number of awards and Notional Agreements Preserving State Awards (NAPSAs) which currently apply to clerical employment across Australia.

[3] Clause 17 is in the following terms:

[4] The highest rate in the award is $740.00 per week. Therefore employees on at least $851.00 per week are exempt from the remaining award provisions.

[5] In handing down our decision in relation to this award on 19 December 2008 we said:

[6] On 2 May 2009 the Minister for Employment and Workplace Relations (the Minister) varied the award modernisation request to include the following new paragraph 2(f):

[7] In the Minister’s covering letter to the President regarding this variation she said:

[8] Exemption provisions are clauses expressed in a variety of ways which provide that certain clauses of the award do not apply to particular classes of employees. They are most common in instruments covering “white collar” employment. In some cases they are expressed to exclude the application of particular clauses of the award and in other cases they specify the particular clauses which do apply. The range of matters excluded varies but usually includes clauses dealing with hours of work and overtime. The class of employee to which the exemption provision applies is commonly defined by reference to a particular wage or salary level or a margin above the relevant classification rate. In some cases the right of an employer to remunerate above the exemption provision is not subject to employee agreement. In other cases agreement is required.

[9] The ASU submits that the effect of inserting an exemption provision into the Clerks—Private Sector Award 2010 is to exclude certain employees who are not high income employees from most award provisions.

[10] Employers submit that the exemption provision provides flexibility, particularly in relation to senior employees who tend to be employed to perform the duties of a role rather than the more traditional requirement of spending particular periods of time at work.

[11] In the Clerks (Breweries) Consolidated Award case a Full Bench of the Commission reviewed the nature of exemption provisions. The decision includes the following passage:

(footnotes omitted)

[12] The Australian Federation of Employers and Industries (AFEI) referred to Australian Bureau of Statistics (ABS) data indicating the following incidence of clerical employment throughout Australia: 4

[13] According to the AFEI, awards and NAPSAs which contain exemption provisions have application to two thirds of clerical employees nationally.

[14] Exemption provisions are contained in the common rule clerical NAPSAs applying in New South Wales, Queensland, Western Australia, Australian Capital Territory and Tasmania. In addition, annual salaries clauses which provide for the non-application of certain award provisions when annual salaries of a certain level are paid are contained in various other clerical instruments. A clause of one type or another is contained in the following current instruments:

    • Clerical and Administrative Employees in Permanent Building Societies (State) Award 9

    • Clerical and Administrative Employees Legal Industry (State) Award 10

    • Clerical and Administration Employees, Hire Cars and Taxis (State) Award 11


    • Clerical Employees’ Award- Permanent Building Societies- State 2003 12

    • Clerical Employees Award State 2002 13

    Western Australia

    • Permanent Building Societies (Administrative and Clerical Officers) Award 1975 14

    • Clerks (Timber) Award No. 61 of 1947 15

    • Clerks’ (Taxi Services) Award of 1970 16

    • Clerks (Commercial Radio and Television Broadcasters) Award of 1970 17

    • Clerks (Commercial, Social and Professional Services Award) No. 14 of 1972 18

    • Clerks’ (Credit and Finance Establishments) Award 19

    • Clerks’ (Hotels, Motels and Clubs) Award 1979 20

    • Clerks’ (Wholesale & Retail Establishments) Award No. 38 of 1947 21

    Australian Capital Territory

    • Clerks (A.C.T.) Award 1998 22


    • Clerical and Administrative Employees (Private Sector) Award 23

    Pre reform Awards

    • Clerks (Road Transport Industry) Award 2002 24

    • Clerical Industry – Shipping Officers Award 2003 25

    • Clerical and Administrative Staff – International Freight Forwarding and Customs Clearing Industry Award 2003 26

    • Clerical and Salaried Staffs’ (Agribusiness) Award 1999 27

[15] Although exemption provisions in many of the instruments were commonly inserted and maintained by consent, there has been some history of arbitration. In 1985 a Full Bench of the Commission overturned a decision to delete an exemption provision in the Business Equipment Industry (Technical Service) Award. Coldham J and Paine C said:

    “With all respect to this expression of view the existence of the exemption clause is not to be considered along with the maintenance of records and the benefit to the employer of being spared that obligation. The vital consideration in our view is the concept of a notional bargain made between the employer and the employee per medium of the exemption clause. If the exemption clause is removed the award provisions previously exempted thereby would commence to operate with respect to the previously exempt employee. In order to avoid double counting for the entitlement to payments hitherto precluded by the notional bargain questions of possible adjustment to the overaward salaries paid in this minimum rates award would need to be considered. It is not so much the exemption clause itself (and leastwise any benefits given thereby with respect to the recording of the industry since the inception of the award and the effect upon them if the exemption clause were deleted from the subject Award.

    … …

    Of course an award is a regulatory instrument but that is not to say that it is therefore designed to apply to and regulate the working conditions of the very people who are excluded by its terms from the operation of certain of its provisions. To cut out of the award the vital exemption provision is in our view calculated to put its operation in a state of imbalance. In this context we refer again to the notional bargain which the exemption clause permits and to the range of consequences generated by its deletion.

    Also, we find ourselves unable to associate with the statement that the exemption clause is an anachronism. To the extent that it forms a crucial part of the subject Award, and we consider that it does, it is no more out-of-date nor out of harmony with conditions in the industry where it operates than the award itself. It is the Award itself which must be considered. If the exemption clause is to go the whole subject of the Award must also be reviewed in concept.” 28

[16] In 1993 a Full Bench of the Industrial Relations Commission of New South Wales upheld an appeal against the deletion of the exemption rate from the Clerks’ (State) Award, one of the awards replaced by the modern award subject to the application before us. The Full Bench said:

    “The exemption clause has been demonstrated to have been a feature of this important award, other clerks’ awards and the federal clerks’ award over a significant number of years. Reviews are currently being conducted before Glynn J. as previously described. Whatever was intended by Glynn J. to be the effect of the proviso ordered in her judgment and set out previously, there is no doubt about the way in which the Clerks’ union saw the order apply, namely, that those clerks who were receiving salaries over and above the exemption rate would continue to receive those salaries as well as all of the overtime and other penalties from the moment that the exemption clause was no longer applied to them. The review of the award and the rates, classification and the structural changes necessary to bring this award to a modern instrument must involve a question whether there should or should not be an exemption clause in the award.

    The review of the award in the terms of the wage fixation principles must necessarily be impeded by the decision made by Glynn J. particularly with respect to the working out of that decision. If the correct working of the decision of Glynn J. was that suggested by Mr Gallagher, the wages actually paid would, by the effect of the order, be translated into award rates to which all the incidence of the award would apply. Such a result would by implication change at law the salary levels of those persons working overtime and receiving wages above the exemption level. The remarkable disparity between the actual rates paid under this award and the award rates has not been explained except in broad terms of market forces. An inference is available that the existence of the exemption clause within the award may well have increased the level of overaward payments. The whole clerks’ industry in the terms of the Clerks’ Award and the application of the award terms can only be properly dealt with in a comprehensive review and it was inappropriate to change the award fundamentally in the manner that Glynn J. did by removing the exemption clause in the case as a narrow issue.” 29

[17] The Queensland NAPSA, Clerical Employees Award State 2002, contains a clause whereby employees employed prior to October 2002 on a rate above the highest rate in the award at the time are exempt from a number of award provisions. The same employment arrangement is available for employees engaged after October 2002 if there is mutual agreement in writing.

[18] During the award simplification process a Full Bench of this Commission granted an application to delete the exemption clause in the Clerks (Breweries) Consolidated Award and permitted the parties to develop an alternative provision. The Bench said:

    “[45] Any notional bargain which the parties seek to include in the Award should have the following elements:

    • specify the rate of pay (ie either a flat amount or a percentage above the minimum rates prescribed in the Award);

    • identify a limited number of award clauses which do not apply to employees in receipt of the specified rate;

    • provide adequate protection for employees including an entitlement to a specified minimum number of days off per work cycle;

    • ensure that appropriate records are kept;

    • provide an overall obligation that an employee will receive no less under the annualised salary than they would have been entitled to if all award obligations had been met; and

    • provide a review mechanism whereby any employee may lodge a grievance with the Commission.” 30

[19] It is clear from this review of provisions and authorities that various tribunals including this Commission have identified an ongoing role for appropriately flexible employment arrangements for clerical employment which can involve the payment of additional or aggregate amounts instead of weekly payments of base rates plus overtime payments. There has been recognition that the terms of relevant instruments need to be looked at in their totality in order to formulate appropriate terms and alternative payment arrangements. There has been a trend towards such mechanisms being available by written agreement rather than unilaterally.


[20] We note that classifications and rates of pay in existing awards covering clerical employment vary markedly. In formulating the modern award we had regard to the totality of the provisions.

[21] Clerical employment occurs in most enterprises. In some cases, such as capital city corporate office work, significant overaward arrangements apply. In other areas, such as in small businesses in regional and country areas, overaward arrangements are not the norm. The minimum rates in the award need to be formulated for all situations. Clerical employees often play a key support role to more senior employees and management as well as providing an important interface with external customers and clients. The need for flexible working arrangements to meet the needs of the business is probably more important in the modern business world where operating hours no longer conform to a standard nine to five pattern. A number of modern awards reflect the need for flexible working hours in particular areas of employment by not providing for ordinary weekly hours and overtime arrangements.

[22] The New South Wales NAPSA, Clerical and Administrative Employees (State) Award, contains an exemption provision whereby employees who are paid a weekly wage in excess of 15% above the wage rate set for the highest grade in the award (equivalent to $845.14) are exempt from a number of award provisions. The exemption rate in the ClerksPrivate Sector Award 2010 is $851.00 per week.

[23] The dilemma faced by us in formulating the terms of the modern award is the widely divergent provisions in clerical instruments and in particular the existence of exemption or annual salaries provisions in clerical awards and NAPSAs in New South Wales, Queensland, Australian Capital Territory, Western Australia and Tasmania. Inserting or omitting an exemption provision will have an impact where the resultant provision is not consistent with the terms of the current instrument. We considered that adopting a provision which reflected the terms of the instrument applying widely in the largest state, where similar provisions of one sort or another apply in four of the six states and one of the two territories, was consistent with our approach in award modernisation of generally adopting appropriate minimum provisions applying to the critical mass of relevant employees.

[24] We also note the clear intent of the change to the Minister’s request and the submission made in her letter to the Commission regarding her view of the test to be applied and the incidence of exemption provisions in current instruments. In this connection we also consider that it is relevant that, for the first time, the legislation determines that an award will not apply to persons who reach a certain level of income.

[25] In all of the circumstances we consider that the exemption provision should be removed but that flexible working arrangements should be available with respect to clerical employment and that these should be subject to appropriate safeguards and processes to ensure that employees clearly understand and agree to any arrangements which may differ from base award entitlements. We propose to delete the exemption provision in cl.17. However, we propose to insert an annualised salaries clause. The wording of the clause is in line with clauses in some other modern awards. It provides for an alternative way to remunerate employees, safeguards against disadvantage and a formal process to establish and maintain the annualised salary arrangement. The clause will read as follows:

    “17. Annualised Salaries

    17.1 Annual salary instead of award provisions

    (a) An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award:

    (i) clause 16—Minimum weekly wages;

    (ii) clause 19—Allowances;

    (iii) clauses 27, 28 and 29—Overtime and penalty rates; and

    (iv) clause 30.3—Annual leave loading.

    (b) Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary.

    17.2 Annual salary not to disadvantage employees

    (a) The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).

    (b) The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.

    17.3 Base rate of pay for employees on annual salary arrangements

    For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in cl.16—Minimum weekly wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.”

[26] Given the incidence of arrangements under existing exemption and annualised salaries provisions in clerical NAPSAs we propose to insert a transitional provision to the effect that existing arrangements pursuant to an exemption or annualised salaries clause may continue to apply, instead of an arrangement under cl.17, until 30 June 2010.



 1   MA000002.

 2   [2008] AIRCFB 1000.

 3   Print S6443, 26 May 2000.

 4   ABS 6291.0.55.003 E-08 Feb Qtr 2009.

 5   AN120664.

 6   AN120130.

 7   AN120457.

 8   AN120676.

 9   AN120129.

 10   AN120675.

 11   AN120131.

 12   AN140069.

 13   AN140067.

 14   AN160244.

 15   AN160067.

 16   AN160079.

 17   AN160065.

 18   AN160066.

 19   AN160072.

 20   AN160075.

 21   AN160080.

 22   AP772208.

 23   AN170017.

 24   AP818787.

 25   AP826731.

 26   AP826032.

 27   AP772066.

 28   Print G1261, 18 December 1985 at p.3.

 29   Employers Fed of NSW & Ors v Federated Clerks Union, [1993] NSWIRComm 32 at p.20.

 30   Print S6443, 26 May 2000.

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