[2009] AIRCFB 966 |
|
DECISION |
Workplace Relations Act 1996
s.576H—Commission may vary modern awards
National Farmers’ Federation and the Australian Industry Group
(AM2009/25)
Horticulture Australia Council
(AM2009/29)
HORTICULTURE AWARD 2010
[MA000028]
JUSTICE GIUDICE, PRESIDENT |
MELBOURNE, 23 DECEMBER 2009 |
[1] This decision deals with two applications to vary the Horticulture Award 2010 1 (the modern award). The first is a joint application by the National Farmers’ Federation (NFF) and the Australian Industry Group (AiGroup). We shall refer to this as the joint application. The second application is by the Horticulture Australia Council (HAC). We shall refer to this as the HAC application. The joint application and the HAC application overlap and are dealt with together in this decision. The Australian Workers’ Union (AWU) and Australian Federation of Employers and Industries (AFEI) were the only other parties that expressed views about the variations sought.
[2] This decision should be read in conjunction with the award modernisation request made by the Minister for Employment and Workplace Relations (the Minister) on 28 March 2008 as subsequently varied (the consolidated request). We refer in particular to cll.43 to 45, which deal with pieceworkers and the National Employment Standards (NES) and cll.50 and 51, which deal with the horticulture industry, of the consolidated request. Those clauses are as follows:
“Piece workers
43. The NES apply to a piece worker.
44. The NES rely on modern awards to define a piece worker and set out rules relating to the payment of NES entitlements (based on ordinary hours of work) for a piece worker.
45. In modernising awards, the Commission must have regard to whether it is appropriate to include:
(a) a definition of piece worker in a modern award that applies to these types of employees (if an employee is employed on the basis of hours worked, it is not expected that such employees would be defined as piece workers); or
(b) a provision that would provide a calculation of payment, a payment rate, or a payment rule in relation to a piece worker employee with respect to paid leave or paid absence under the NES. For example, a method of making payment to a piece worker employee when that employee is absent on annual leave. Any provisions setting out a calculation payment must take into account the various methods by which a piece worker may be remunerated under the modern award, including by incentive payments or bonuses.
Horticulture Industry
50. The Commission should enable employers in the horticulture industry to continue to pay piece rates of pay to casual employees who pick produce, as opposed to a minimum rate of pay supplemented by an incentive based payment.
51. Where a modern award covers horticultural work, the Commission should:
[3] Clauses 43 to 45 were included in the original request but were altered by the Minister’s variation of 16 June 2008. Clauses 50 and 51, relating to the horticulture industry, were inserted in the consolidated request by way of a variation dated 26 August 2009, more than four months after the award was made.
The joint application
[4] The joint application seeks the following variations to the award:
“1. Insert into clause 3, Definitions and Interpretation, a new definition as follows:
Harvest Period means the period of time during which the employees of the particular employer are engaged principally in the harvesting, grading or packing of horticultural crops.
2. Vary clause 4.2(a) to include after the word “packing” and before the word “or” the following:
“storing, grading, forwarding”
3. Delete clause 10.4(d).
4. Delete clause 15 and replace with the following:
15. Pieceworkers
15.1 An employer and a full-time, part-time or casual employee may enter into an agreement for the employee to be paid a piecework rate. An employee on a piecework rate is a pieceworker.
15.2 The piecework rate fixed by agreement between the employer and the employee must enable the average competent employee to earn at least 12.5% more per hour than the minimum hourly rate prescribed in this award for the type of employment and the classification level of the employee. The piecework rate agreed is to be paid for all work performed in accordance with the piecework agreement.
15.3 The calculation of piecework rates in clause 15.2 for casual employees will include the casual loading prescribed in clause 10.4 (b).
15.4 An agreed piecework rate is paid instead of the minimum wages specified in clause 14 – minimum wages
15.5 The following clauses of this award do not apply to an employee on a piecework rate:
(a) Clause 22 – Ordinary hours of work and rostering; and
(b) Clause 24 – Overtime; and
(c) Clause 24.5 – Meal allowance.
15.6 The employer and the individual employee must have genuinely made the piecework agreement without coercion or duress.
15.7 The piecework agreement between the employer and the individual employee must be in writing and signed by the employer and the employee.
15.8 The employer must give the individual employee a copy of the piecework agreement and keep it as a time and wages record.
15.9 Nothing in this award guarantees an employee on a piecework rate will earn at least the minimum ordinary time weekly or hourly wage in this award for the type of employment and the classification level of the employee, as the employee’s earnings are contingent on their productivity.
15.10 For the purposes of the NES:
(a) The base rate of pay for a pieceworker is the base rate of pay as defined in the NES.
(b) The full rate of pay for a pieceworker is the full rate of pay as defined in the NES.
5. Delete clause 22 – Ordinary Hours of Work and rostering and replace with the following:
22. Ordinary hours of work and rostering
22.1 The ordinary hours of work for all full-time and part-time employees other than shift workers will not exceed 152 hours over a 4 week period provided that:
(a) The ordinary hours will be worked between Monday and Friday inclusive except by arrangement between the employer and the majority of employees in the section/s concerned that the ordinary hours will be worked between Monday and Saturday inclusive.
(b) The ordinary hours will be worked between 6.00am and 6.00pm except if varied by arrangement between the employer and the majority of the employees in the section/s concerned.
(c) The ordinary hours will not exceed 8 hours per day except by arrangement between the employer and the majority of employees in the section/s concerned that the ordinary hours should not exceed 12 hours on any day.
(d) All time worked by full-time and part-time employees in excess of the ordinary hours will be deemed overtime.
22.2 The ordinary hours of work for a shift worker, will not exceed 152 hours over a 4 week period provided that:
(a) The ordinary hours will be worked between Monday and Friday inclusive.
(b) For the purposes of this award:
(i) afternoon shift means any shift finishing after 6.00 pm and at or before midnight; and
(ii) night shift means any shift finishing after midnight and at or before 8.00 am.
(c) If an employee is directed to work on shifts the shift must not exceed 8 hours without the payment of overtime.
(d) Shift workers whilst on afternoon and night shifts will be paid 15% more than the ordinary rates for such shifts.
(e) Where shift work is adopted, shifts will, as far as practicable, rotate regularly where two shifts are worked one will be regarded as day shift and the second the afternoon or night shift. Where three shifts are worked they will be divided into day, afternoon and night shifts
(f) The employer has the right to decide before the commencement of such shift work which of the shifts will be the day shift and will notify each employee accordingly.
(g) The employer will keep a roster at the workplace that specifies the times which each shift will commence and finish and which shifts are deemed to be day shift.
(h) All time worked in excess of the ordinary hours will be deemed overtime.
6. Delete clauses 24 and replace with the following:
24.1 Time off in lieu of overtime
(a) An employee will be allowed time off duty, with pay for a period equal to the overtime worked. Such time allowed off duty will be given and taken within the succeeding three weeks unless the employer and employee mutually agree that it be taken at some other time; or
(b) In lieu of taking time off duty the employee may elect to be paid for the overtime worked provided that this election is made clear to the employer or the employer’s representative at the time that overtime is offered.
24.2 Payment of overtime
(a) The rate of pay for overtime will be 150% except for overtime worked on a Sunday.
(b) The rate of pay for overtime worked on a Sunday, except during harvest period will be 200%.
(c) Should employees be required to work on a Saturday and the majority of such employees elect not to work on the Saturday but rather on the Sunday then such work performed on that Sunday will be paid for at the rate prescribed for Saturday work.
(d) During harvest period, the first eight hours of overtime in a week may include five hours work on a Sunday at the rate of 150% but all Sunday work in excess of the eighth overtime hour worked in the week or in excess of five hours on a Sunday will be paid at the rate of 200%.
(e) All employees required to work on a Sunday will be paid for a minimum of three hours.”
The HAC application
[5] The HAC application seeks the following variations to the modern award:
“1. By deleting the definition of ‘Act’ in clause 3.1 and inserting in its place the following:
Act means the Fair Work Act 2009 (Cth)
2. By deleting the definition of ‘Commission’ in clause 3.1.
3. By inserting the following definition into clause 3.1:
harvest period means that period of time during which the employees of a particular employer are engaged principally in the harvesting, picking, dehydration, crystallisation, treating, storing, packaging/canning, grading, packing or despatching of any horticultural crops, including fruits or vegetables, as the case may be.
4. By deleting the definition of `NES' in clause 3.1 and inserting in its place the following:
NES means the National Employment Standards as contained in sections 59 to 131 of the Act.
5. By inserting the following definition into clause 3.1:
time critical period means the harvest period or any other period of time when the plant, crop, fruit or product must have a function performed to enable that plant, crop, fruit or product to remain a commercially viable product for the employer concerned. A time critical period is a period that cannot be reasonably predicted in advance by the employer and arises out of the inherent requirement to perform the function at that time.
6. By inserting the following definition into clause 3.1:
weekly employee means an employee engaged on a full-time or part-time basis under either clause 10.2 or 10.3 (and does not include full-time or part-time employees engaged as pieceworkers pursuant to clause 15).
7. By deleting clause 10.4(d) and inserting in its place the following:
(d) For the purpose of clause 15 - Pieceworkers, the calculation of piecework rates for a casual employee will be based on the hourly rate of pay for equivalent employees set out in clause 14, and will not be based on the loading prescribed by clause 10.4(b).
8. By inserting the following at the end of clause 10.4:
(e) Casual employees are not weekly employees for the purposes of this award.
9. By deleting clause 15 and inserting in its place the following:
15. Pieceworkers
15.1 A full-time, part-time or casual employee may be engaged as a pieceworker
15.2 Notwithstanding clause 14 or any other clause of this award (but subject to clause 10.4(d)), where an employee is engaged as a pieceworker, the employee will be paid at a piece rate of pay rather than a minimum hourly rate of pay.
15.3 The piece rate of pay paid to a pieceworker:
a. will be paid in lieu of the minimum hourly rate of pay for all hours worked by the employee; and
b. must enable the average pieceworker (at the enterprise concerned), working the ordinary hours prescribed by this award, to earn at least 12.5% more than the minimum hourly rate of pay for equivalent employees set out in clause 14.
15.4 For the purpose of the NES, the base rate of pay for a pieceworker is the base rate of pay as defined in the Act for an employee of equivalent classification, level and engagement to a particular pieceworker (who is not them self a pieceworker).
15.5 For the purpose of the NES, the full rate of pay for a pieceworker is the full rate of pay as defined in the Act for an employee of equivalent classification, level and engagement to a particular pieceworker (who is not them self a pieceworker).
10. By deleting clause 22 and inserting in its place the following:
22. Ordinary hours of work and rostering
22.1 The ordinary hours of work for weekly workers are an average of 38 per week but not exceeding 152 hours in 28 days.
22.2 Subject to this clause, the ordinary hours of work will not exceed ten hours on any day, provided that:
a. in any arrangement of ordinary working hours where the ordinary working hours are to exceed ten on any day, the arrangement of hours will be subject to the agreement of the employer and the majority of employees in the plant or section or sections concerned;
b. by arrangement between an employer and an employee, ordinary working hours greater than ten but not exceeding twelve on any day may be worked subject to:
i. the employer and employees concerned being guided by relevant Occupational Health and Safety provisions; and
ii. proper health monitoring procedures being introduced; and
iii. suitable roster arrangements being made.
22.3 Any work performed by weekly employees outside the ordinary hours must be paid for at overtime rates.
22.4 Agreement may be reached at the plant, section or individual level to:
a. work shorter hours each day; or
b. work shorter hours on one or more days; or
c. rostering days off on various days of the week so that each employee has one or more days off during that cycle.
11. By deleting clause 23.3 and inserting in its place the following:
23.3 Ten hour break after ceasing work for the day
a. An employee is entitled to a break of 10 hours between finishing a complete shift on one day and commencing work on the next day.
b. Overtime rates will be paid for work required to be performed where an employee has not had the 10 hour break referred to in clause 23.3(a) until such time as the employee is released and able to take the 10 hour break.
12. By deleting clause 24 and inserting in its place the following:
4. Overtime
24.1 Overtime will be adjusted as follows:
a. The employee will be allowed time off duty, with pay, for a period equal to the overtime worked; or
b. In lieu of taking time off duty, the employee may elect to be paid for the overtime worked providing this election is made clear to the employer or employer's representative at the time that overtime is offered.
24.2 Payment for working overtime
The rate of pay for overtime will be time and a half for the first three hours and double time thereafter, except during the time critical period (as defined in clause 3.1) when the rate of pay for all overtime will be time and a half.”
13. By deleting clause 28.3 and inserting in its place the following:
28.3 Public holiday rates of pay
All work (other than piecework) performed on public holidays will be paid for at the rate of double time, but by mutual consent it may be remunerated by time off in lieu.”
14. By deleting all references to ‘the Commission’ in clauses 9.2, 9.3, 9.4 and paragraphs B.6.1 and B.6.2 in Schedule A and inserting ‘Fair Work Australia’ in place of these references.”
Consideration
[6] The making of the modern award has involved rationalising the provisions of a number of awards and Notional Agreements Preserving State Awards (NAPSAs) containing an extremely diverse range of conditions. 2 The provisions of the modern award are generally in line with the relevant provisions of the Horticultural Industry (AWU) Award 2000,3 (Horticulture Award 2000) as it applies to what are referred to as the Schedule A respondents to that award.4
[7] The major contention advanced by each of the applicants is that variations are required with respect to the piecework and hours of work provisions to better reflect current regulation and to restore necessary flexibility.
[8] The AWU supported the joint application in all but two respects. First, it opposed any variation of the piecework provisions which would remove the requirement for a minimum payment for pieceworkers equivalent to the minimum wage for the ordinary hours actually worked. It also opposed the reduction of the piecework loading from 15% to 12.5%.
[9] The AWU opposed provisions sought by the HAC which, it contended, went beyond provisions generally applying in current instruments.
[10] The AFEI supported the HAC application.
[11] Clearly the applications must be considered in light of the terms of cll.50 and 51 of the consolidated request. Clause 50 states that the Commission should enable employers in the horticulture industry to continue to pay piece rates of pay to casual employees who pick produce, as opposed to a minimum rate of pay supplemented by an incentive based payment. Clause 51 states that the Commission should have regard to the perishable nature of the produce grown by particular sectors of the industry when setting hours of work and to provide for arrangements which accommodate seasonal demands and restrictions caused by weather. In a letter to the President of the Commission which accompanied the relevant variation to the consolidated request, the Minister referred to existing award arrangements in the industry. The following passage is relevant:
“I note that the majority of federal awards and NAPSAs in the horticulture sector have long provided for piece rates for casual employees, rather than the minimum wage and incentive payment system as included in the modern award made by the Commission.”
[12] The NFF and AiGoup contended that the principal award was the Horticulture Award 2000. That award has three schedules, designated A to C respectively. The schedules contain different conditions of employment. The award was made primarily by reference to the provisions applying to Schedule A respondents, 5 a position advanced in the consultations by the AWU. In these proceedings the AWU accepted that Schedules B and C have more extensive geographic and industrial application. It agreed with the NFF and AiGroup that it would be more appropriate if the modern award were to be based on the conditions in those schedules rather than the conditions in Schedule A. The HAC submitted that its application was based on the provisions in 11 instruments – two pre-reform awards and nine NAPSAs.
[13] There is no single existing instrument which could be said to apply generally in the industry. Further, it is necessary, when considering the various provisions, to have regard to the totality of the provisions in any particular instrument. There is no definitive information as to the application of the individual awards or NAPSAs. Whilst the provisions of all of the instruments are relevant to some degree, we think greatest weight should be given to the Horticulture Award 2000. That award is a major award. It operates, with respect to Schedule A, in Victoria, South Australia and New South Wales, with respect to Schedules B and C to named employers in Victoria and members of two Victorian employer associations, the Tasmanian Farmers and Graziers Association and the AiGroup.
[14] We will consider the applications in three broad categories – some terminological matters, hours of work and overtime provisions and piecework.
[15] In relation to terminology, we have accepted the variations proposed by the HAC to refer to Fair Work Australia and alter NES references to the Act. Such changes will be made as a matter of course in all modern awards.
[16] We will insert the definition of “harvest period” as proposed by the NFF and the AiGroup. We will also insert “storing, grading, forwarding” into the coverage clause. Neither variation was opposed by the AWU. We will also delete cl.10.4(d). The definition of “time critical period” proposed by the HAC is unnecessary in light of our decision, below, in relation to hours of work.
[17] In relation to hours of work and overtime provisions, there are two approaches before us. First, there are the provisions in the joint application which are not opposed by the AWU. Secondly, there are the provisions proposed by the HAC, which the AWU opposes. The AWU submitted that the provisions the HAC seeks go beyond what would be justified by the variation to the consolidated request, that the HAC is seeking to reargue issues already determined by the Full Bench and, contrary to the established approach to award modernisation, the HAC is cherry picking from the range of existing instruments. The NFF and AiGroup supported the AWU characterisation of the HAC proposals. They submitted that, while they would prefer greater flexibility, they have confined their application to the matters contained in the 26 August 2009 variation to the consolidated request. In our view the variation proposed by the HAC extends beyond the scope of the variation to the consolidated request. In the circumstances it would not be appropriate to reopen consideration of provisions which have only recently been decided upon. We add, although not strictly relevant, that the provisions sought do not appear to be consistent with the weight of current regulation. We will vary the hours of work provisions as proposed in the joint application.
[18] The piecework provisions proposed in the two applications are of similar effect except in two respects. Those issues are, first, whether pieceworkers should receive the casual loading and, secondly, whether there should be an award requirement that piece work arrangements should be genuinely made, without coercion or duress, and made in writing. In our view employees engaged on piecework should be entitled to the casual loading as compensation for the absence of service-related entitlements. Such a provision is appropriate in a safety net award. The additional safeguards relating to the making of a piecework agreement proposed in the joint application are necessary and will be included. We should add that neither provision is inconsistent with the terms of the consolidated request.
[19] As we have already indicated, there are two parts of the joint application relating to pieceworkers which the AWU opposes. The first relates to the guaranteed minimum payment which presently appears in the modern award. The second concerns the amount of the piecework loading.
[20] In relation to the first matter, the AWU submitted that the provision in cl.15.6 of the modern award that piecework employees receive a guaranteed minimum payment equal to the wage they would have earned for the hours actually worked should not be altered. We note, however, that there is no equivalent provision in the Horticulture Award 2000, or in any of the schedules to that award. As we have previously noted, that award is the main award in the industry and its provisions carry great weight. Furthermore, it appears to us that cl.15.6 is inconsistent with cl.50 of the consolidated request. We grant this part of the joint application.
[21] In relation to the second matter, the AWU submitted that the piecework loading should be retained at 15% while the joint application and the HAC application both sought a reduction to 12.5%. The AWU submitted that the variation to the consolidated request was directed at the character of the piecework arrangements in the modern award, rather than the level of the loading. It submitted that a loading of 15% is justified by the risk to the income of employees working under piecework arrangements.
[22] While the loading in the Horticulture Award 2000 is 12.5%, the piecework loading varies considerably across existing instruments. The variation is between no loading, in a NAPSA applying in the dried vine fruits industry in Western Australia, to 30% in a NAPSA applying in the tea industry in Queensland with a range of other loadings in between. The range of loadings in applicable pre-reform awards and NAPSAs was taken into account in determining that 15% was the appropriate loading. No material has been produced on this application which would lead us to vary that determination. In our view, maintenance of the loading at its current level is also consistent with the consolidated request, including the amendment.
[23] We have decided not to make any other alterations to the modern award, despite the material and submissions advanced by the HAC in support of its application. We are conscious of the requirements of award modernisation set out in the Workplace Relations Act 1996, the Fair Work Act 2009, the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, in particular the terms of item 2(5) of Schedule 3 to that Act, and the consolidated request. While the HAC advanced a significant amount of material concerning labour costs, that material has to be seen in the context of the overall approach to award modernisation. We reiterate what was said by the Full Bench in its 2 September 2009 decision concerning transitional provisions:
“[4] The consolidated request also provides that the process is not intended to disadvantage employees or increase costs for employers – objectives which are potentially competing. The content of the awards we have formulated is a combination of existing terms and conditions in relevant awards and existing community standards. In order to minimise disadvantage to employees and increases in costs for employers we have generally adopted terms and conditions which have wide application in the existing awards in the relevant industry or occupation. However the introduction of modern awards applying across the private sector in place of the variety of different provisions in the Federal and State awards inevitably means that some conditions will change in some States. Some wages and conditions will increase as a result of moving to the terms which apply elsewhere in the industry. Equally some existing award entitlements will not be reflected in the applicable modern award because they do not currently have general application.
[5] Various parties have pointed to the impact of modern award provisions. The parties largely addressed this matter on the basis of a comparison between existing and proposed award obligations rather than the impact of the modern award on actual terms and conditions. Even so, it is clear that some award conditions will increase, leading to cost increases, and others will decrease, leading to potential disadvantage for employees, depending upon the current award coverage. The creation of modern awards which will constitute the award elements of the safety net necessarily involves striking a balance as to appropriate safety net terms and conditions in light of diverse award arrangements that currently apply.” 6
[24] It also should be borne in mind that these proceedings have arisen largely as a result of variations to the consolidated request relating to piecework and to certain other conditions in the modern award. We regard those variations as justifying a review of conditions in the modern award which are specifically referred to in the variations or are involved by necessary implication, subject always to balancing the relevant considerations in the manner referred to in the passage we have set out above. In the absence of compelling reasons there is no justification for departing from the Commission’s general approach to the fixation of conditions or for reviewing other conditions at this time.
Conclusion
[25] We shall vary the modern award to give effect to the joint application save that the loading in cl.15.2 will be 15%. The award will also be varied to update reference to the Act, the NES and Fair Work Australia, where relevant.
BY THE COMMISSION:
PRESIDENT
1 MA000028.
2 [2009] AIRCFB 50, at para 30.
3 AP784867CRV.
4 [2009] AIRCFB 345, at para 60.
5 Ibid.
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