[2009] AIRCFB 927 |
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION |
DECISION |
Workplace Relations Act 1996
s.576E—Procedure for carrying out award modernisation process
Request from the Minister for Employment and Workplace Relations—28 March 2008
Award Modernisation
(AM2008/20)
JUSTICE GIUDICE, PRESIDENT |
|
[1] This decision concerns the transitional provisions to be included in the Cleaning Services Award 20101 (the cleaning modern award). On 2 September 2009 the Commission published its decision in relation to the transitional provisions to apply to the modern awards made in the priority stage and in Stage 2 of the award modernisation process.2 The Commission provided for a model commencement and transitional clause and a model phasing schedule. For reasons which we shall refer to, the Full Bench sought further submissions on the question of whether the model provisions should be included in the cleaning modern award. A number of submissions and proposals have been filed. We have considered all of the material and we are in a position to decide on the transitional provisions which should be included in the award.
[2] In order to place this decision in context, it is useful to set out the relevant passage from the Commission’s decision of 2 September 2009. It reads:
“[130] The Building Services Contractors Association of Australia (BSCAA) and the Australian Cleaning Contractors Association (ACCA) made joint submissions in which they proposed a method of dealing with transitional issues. As we understand it the LHMU agreed with this approach. They provided detailed schedules which identify a range of hourly wages for various classifications and specify the way in which differences should be dealt with. The approach involves “saving” higher rates and specified allowances enjoyed by current employees and providing for the phasing-in of increases in wages, loadings and penalties over the full five year period. Provision is also made for the phasing-in of changes in hours of work provisions, particularly shift times, to cushion the increases in cost involved. BSCAA and ACCA proposed in the alternative that we should adopt a simpler provision which dealt with the same matters in less detail by adopting general principles.
[131] The Building Services Contractors Association of Australia, New South Wales Branch (BSCNSW) opposed this approach, particularly the use of savings provisions and relied upon the availability of take-home pay orders. It took the position that the award should not provide for any increase in labour costs at any time during the transitional period other than as a result of minimum wage reviews. It contended that even increases of that kind should not apply to employees engaged to perform work under ongoing contracts.
[132] AFEI and some individual employers drew attention to some of the increases in costs applying to employers in New South Wales covered by state award-based transitional instruments and argued for the longest delay possible under the transitional provisions before the modern award commences to operate. They also expressed opposition to the use of savings provisions.
[133] As we have already noted, the LHMU indicated agreement with the transitional proposals advanced by BSCAA and ACCA. It agreed also that the allowances identified by them should be preserved for the five year transitional period.
[134] It appears from the submission that there is general agreement to the transitional scheme proposed by ASCAA and ACCA but some significant employer opposition, particularly in New South Wales where some of the cost increases are significant. We think it is advisable to adopt one set of provisions to apply nationally. Any other approach is likely to increase the complexity of the provisions overall. We would be prepared to adopt the proposals which have been agreed by the BSCAA, ACCA and LHMU, but we think it is appropriate that all parties to the award have the opportunity to consider their position in light of the model transitional provisions flowing from this decision. Any additional submissions should be filed by 25 September 2009.
[135] In its submission of 31 July 2009 AFEI highlighted an issue concerning the calculation of rates of pay under the Cleaning and Building Services Contractors (State) Award (the NSW Award) [AN120213], an award-based transitional instrument applying in New South Wales. On AFEI’s calculations the rates in the NSW Award are higher than those on which the agreed BSCAA/ACCA and LHMU transitional provisions are based. While we note this difference of view, we do not intend to comment on the issue at this stage.”3
[3] It can be seen that the Commission, after noting that agreement had been reached between representatives of a large number of employers and the principal union in the industry, indicated that it was disposed to implement the agreement but that it would not do so without giving those involved an opportunity to reconsider their positions and make further submissions.
[4] The agreed arrangements referred to involve phasing-in of increases in minimum wages, casual loadings and shift and weekend penalties in five equal instalments over the full five years of the transition period. The arrangements include the specification of award entitlements for each instalment. The arrangements do not include provision for phasing down where the current award entitlements are greater than the entitlements under the cleaning modern award. Instead, there is a requirement that higher award/penalty rates are maintained for all employees during the transition period.
[5] A number of submissions were received in response to the Commission’s decision of 2 September 2009. The Liquor, Hospitality and Miscellaneous Union (LHMU) indicated that it continued to support the transitional arrangements as originally agreed. The Building Services Contractors Association of Australia, representing its membership other than in New South Wales (BSCAA), also continued to support the transitional arrangements it had agreed upon (with the LHMU). It submitted, among other things that:
- the phasing down arrangements in the model phasing schedule were too complex by comparison with the savings provisions in the agreed arrangements and the latter should be preferred;
- the adoption of savings provisions would make resort to take-home pay orders unnecessary and would also provide greater protection for employees on a change of contractor;
- the specification of rates to apply to each instalment in a schedule would provide greater certainty and would assist in the tendering process;
- the agreed arrangements are consistent with the Commission’s model provisions in that they provide for the phasing-in of increases in rates and shift and weekend penalties in five instalments; and
- the agreed arrangements are better suited to the interests of the industry than the model provisions.
[6] In summary, BSCAA submitted that “the transitional arrangements (with the prescribed savings provisions and phased wage tables) contained in a Schedule to the Cleaning Services Award 2010 as previously submitted should be granted by the Commission.”
[7] The Australian Cleaning Contractors’ Association (ACCA), which had originally been a party to the agreed arrangements, indicated that it no longer supported those arrangements. It submitted that we should adopt the model transitional provisions on the basis that it is desirable that modern awards contain as many standard clauses as possible.
[8] The Australian Federation of Employers and Industries (AFEI) submitted that the model transitional provisions are too difficult to apply in New South Wales because the full-time, part-time and casual rates in the relevant award-based transitional instrument4 are expressed as all up hourly rates and it is not clear how those rates could be disaggregated in order to calculate transitional amounts and transitional percentages for minimum wages and penalties respectively. AFEI supported the agreed arrangements subject to two qualifications. The first qualification is that allowances other than district allowances already preserved by the cleaning modern award should not be covered by transitional provisions. The second qualification is that the provisions should not commence until 1 July 2010.
[9] The Building Services Contractors Association of Australia (NSW Division) (BSCAA(NSW)) supported the adoption of the model transitional provisions in their entirety.
[10] Two individual employers made submissions in support of the adoption of the model transitional provisions. Each also submitted in the alternative that if the agreed arrangements were adopted the operative date should be 1 July rather than 1 January 2010.
[11] We deal first with the model commencement and transitional clause. Nothing which has been submitted suggests that the model clause is inappropriate in the cleaning modern award. We shall include it.
[12] We deal next with the phasing provisions. There is still substantial support among employers and from the LHMU for the agreed arrangements. In particular, given the circumstances of the industry, it is agreed that detailed rate schedules are necessary.
[13] We think it is desirable, wherever practical, to implement arrangements which have widespread support. Although we are conscious that a number of employers, particularly in New South Wales, prefer the model phasing provisions, the agreed arrangements provide greater certainty in entitlements which we regard as a significant advantage given the nature of the industry. We note that the agreed arrangements provide for a “savings” approach rather than phasing-down in relation to modern award entitlements which are lower than those in award-based transitional instruments. Given the broad support for this approach we have decided to depart from the phasing-down element of the model phasing schedule in this instance. Although we have some sympathy for the argument that the commencement of the arrangements should be delayed until 1 July 2010, we think on balance it is undesirable to alter one element of the agreed arrangements which have been negotiated and advanced as a comprehensive package. We have therefore decided to adopt the agreed arrangements as proposed by the BSCAA, including the operative date of 1 January 2010.
[14] The order will be settled by Commissioner Whelan with recourse to the Full Bench if necessary.
BY THE COMMISSION:
PRESIDENT
1 MA000022.
3 Ibid.
4 Cleaning and Building Services Contractors (State) Award (NSW), AN120123.
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