[2010] FWAFB 7838 |
FAIR WORK AUSTRALIA |
DECISION |
Fair Work Act 2009
s.604—Appeal of decisions
JUSTICE GIUDICE, PRESIDENT |
MELBOURNE, 8 OCTOBER 2010 |
[1] There are two appeals for consideration. Both are against a decision made by Vice President Watson on 9 July 2010. 1 The first appeal is by the National Retail Association Limited (NRA). The second appeal is by Master Grocers Australia Limited (MGA). In order to explain the basis for the appeals it is necessary to refer to the nature of the proceedings before the Vice President.
[2] Relevantly there were three applications before the Vice President. Each sought to vary the minimum period of engagement for casual employees in the General Retail Industry Award 2010 2 (the modern retail award). The first was an application by the NRA. As amended, that application sought a minimum engagement of two hours, except that, in the case of secondary school students, the minimum engagement was to be 1.5 hours between 3:30pm and 6:00pm Monday to Friday. The second application was made by the Australian Retailers Association (ARA). After its amendment during the proceedings before the Vice President this application was identical to the NRA application. The third application was made by the MGA. It sought a minimum period of casual engagement of 2 hours.
[3] The Vice President dismissed all of the applications. The NRA and the MGA have appealed. While the ARA, the third applicant, did not appeal it appeared and made submissions in support of the appeals. It also proposed that we should vary the award to make special provision for the engagement of students after school on weekdays. We shall return to this proposal later in this decision. It is convenient to deal with the appeals together. The appeals are brought under s. 604 of the Fair Work Act 2009 (Fair Work Act). Section 604(1) provides that an appeal requires permission. Section 604(2) provides that without limiting when the tribunal may grant permission, the tribunal must grant permission if it is satisfied that it is in the public interest to do so.
[4] The Shop, Distributive and Allied Employees Association (SDA) opposed the appeals and submitted that we ought not grant permission to appeal.
[5] The applications before the Vice President were made pursuant to s.158 of the Fair Work Act. The power to vary a modern award is conferred by s.157(1) of the Fair Work Act. That section reads:
“157 FWA may vary etc. modern awards if necessary to achieve modern awards objective
(1) FWA may:
(a) make a determination varying a modern award, otherwise than to vary modern award minimum wages; or
(b) make a modern award; or
(c) make a determination revoking a modern award;
if FWA is satisfied that making the determination or modern award outside the system of 4 yearly reviews of modern awards is necessary to achieve the modern awards objective.
Note 1: FWA must be constituted by a Full Bench to make a modern award (see subsection 616(1)).
Note 2: Special criteria apply to changing coverage of modern awards or revoking modern awards (see sections 163 and 164).
Note 3: If FWA is setting modern award minimum wages, the minimum wages objective also applies (see section 284).”
[6] Section 156 requires Fair Work Australia to conduct a 4 yearly review of modern awards. It is not necessary to set that section out. Section 157(1), as can be seen, permits the tribunal to vary a modern award other than in the 4 yearly review if it is “satisfied” that the variation “is necessary to achieve the modern awards objective”. The modern awards objective is in s.134(a) of the Fair Work Act. It reads:
“134 The modern awards objective
What is the modern awards objective?
(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.”
[7] It is important to have regard to the context in which the terms of the modern retail award were formulated. It was made pursuant to the provisions of Part 10A of the Workplace Relations Act 1996 and commenced to operate on 1 January 2010. It replaced a large number of pre-existing State and federal awards. The minimum casual engagement provisions in those awards were not uniform. For the purposes of these appeals it is only necessary to refer to the provisions in the awards of general application in the industry. In Victoria the minimum casual engagement was 2 hours. In all other States and Territories the minimum casual engagement was 3 hours, with the following exceptions:
[8] In summary, prior to the making of the modern award the minimum casual engagement period in most of the awards of general application in the industry was three hours or more. A 2 hour minimum applied to casuals in Victoria, junior casuals in South Australia and students involved in trolley collection in Western Australia. It follows that for retail employees generally in Queensland, New South Wales, Tasmania, the Northern Territory and the Australian Capital Territory and most retail employees in South Australia and Western Australia the minimum casual engagement was at least three hours. This is the provision in the modern retail award.
[9] When the pre-existing regulation is considered, it can be appreciated that if the applications were granted there would be a change in the minimum casual engagement for the greater part of the industry throughout Australia.
[10] We turn now to the evidence which the applicants put before the Vice President. There were six witnesses called by the applicants, four employers and two employees.
[11] The first employer witness was the director and secretary of a supermarket in regional Victoria. The supermarket employs 33 staff comprised of two full time employees and 31 part-time and casual employees, 13 of whom are student casuals. Because the supermarket closes at 6.00pm on week days and school students cannot start work before 4.00pm the change in the minimum casual engagement from two hours to three hours has restricted the ability to employ school students during the week. Consequently there has been an increase in work for part-time employees. Students are still employed at the weekends and on stock work after the store has closed on Thursdays. The second employer witness was the human resources manager of a corporation which manages eight supermarkets based in regional areas of Victoria and one supermarket based in a regional town in Queensland. The stores in question trade until 8.00pm on weekdays. He testified that most student casuals work shifts of two or two and a half hours. He expressed the view that if school students worked three hour shifts their study time would be seriously affected and they would be forced to give up their jobs. He also suggested that some delivery work only required two hour shifts and longer shifts would be uneconomical. It is clear from the store trading hours that the stores in question are able to engage casual students for a minimum of three hours. The third employer witness was the manager and joint owner of a general store in regional Victoria. The store closes at 8.00pm on Thursdays and 6:30pm on the other weekdays. The store usually employs 15 casual school students per year. Most students commence work at 4.30pm or 4.45pm and work until 7.15pm. The witness testified that most junior casuals only want to work for two hours. She also testified that she cannot afford to pay for three hours work if the student does not work that long. Under cross-examination, however, the witness agreed that 17 of the 19 students currently employed as casuals work between 4.30pm and 7.30pm. The final employer witness was the owner/manager of a news agency located in an Adelaide suburban shopping centre. He testified that he was unable to provide shifts longer than one hour and 45 minutes for school students on four nights of the week because the agency closes at 5.30pm on those nights. As a result of the new award provision casual hours for students will be curtailed and the hours of part-time employees, or those of the witness or his wife, may increase.
[12] The two employee witnesses called on behalf of the applicants were both school students from regional Victoria and gave evidence about employment in the same local hardware store. The first student stated in written evidence that before 1 January 2010 she had worked two hour shifts after school. During cross-examination she agreed that she had in fact worked one and a half hour shifts. It is to be inferred from her evidence that her statement contained reference to two hour shifts because she was aware that the relevant award required a two hour minimum casual engagement. She indicated that she had lost her job because of the increase in the minimum period of engagement. She also gave evidence about a petition to the House of Representatives which had been prepared by her in conjunction with the store manager and a local Parliamentary candidate. She claimed that the petition had in excess of 1500 signatures. The second employee had worked after school for the same store on one and a half hour shifts for three years prior to 1 January 2010. He indicated that he was no longer working for the store because the store did not want to employ him on three hour shifts. He had signed the petition referred to by the previous witness. He gave evidence that the hardware store was adjacent to a supermarket which employed casual school students and did not close until 6.50pm. He applied for a job there but did not take the job because of a clash with his football commitments.
[13] Allowing for the necessary brevity of a summary, and noting some submissions of general principle, that is the material called in support of the applications. A number of observations are pertinent.
[14] No evidence was called in support of a reduction in the minimum period of engagement for casuals other than casual school students. It is hard to imagine a weaker evidentiary case for a general reduction in the minimum period of casual engagement. That deficiency is made more glaring by the applicants’ failure to address the substantial evidentiary case put against it by the SDA through its witnesses. That evidence included a substantial statement by a noted academic dealing with the significance of minimum engagement periods as a protection for vulnerable employees, the relationship between the minimum engagement and the time and expense of work-related travel, and the possibility that part-time employees might suffer reductions in hours if casuals could be employed on a two hour minimum. Other witnesses, including 6 union organisers and officials, gave evidence against the claim based on their knowledge of employment conditions in the industry throughout Australia. It is not necessary to detail that evidence. As we have indicated, it was unanswered.
[15] We have concluded that it was open to the Vice President on the evidence and other material before him to reject the claim as advanced by the applicants for a reduction in the minimum engagement for casual employees generally.
[16] When the evidence in support of a reduction in the minimum period of engagement for casual school students is examined, the position is not much better. Evidence was called from three employers in regional Victoria and one in a suburban shopping centre in South Australia. Two employee witnesses were called in relation to one store, which was also in regional Victoria. There was no evidence at all in relation to the rest of Australia. On the other hand there was a significant amount of contrary evidence from the union witnesses. Apart from the matters already mentioned there was material about the times at which student casuals work, the duration of their shifts and the likely effect of a reduction in the minimum engagement for students on the employment of students themselves and the employment of other types of employees.
[17] It is apparent that the Vice President had proper regard to the evidence. Two passages should be set out.
“[32] ... ... However it has become apparent that the change from two to three hours in some areas has led to less employment of school students after school because their availability to work during shop opening hours is often less than three hours. The impact on individuals in that situation is significant and has an impact on employment opportunities for youth in regional areas in particular. It also has an impact on the flexibilities available to employers and other employees. There was no evidence presented of any broader problems in Victoria caused by the reduction in minimum engagement periods for casuals other than school children.
......
[35] I acknowledge the particular impact on some individuals in Victoria. I also acknowledge the strength of arguments that it is desirable to provide youth with employment opportunities. It follows that award provisions which limit opportunities for youth employment should be avoided if possible. However the interests of fairness to employees generally must be considered and balanced against other objectives. For example, a general reduction in the minimum engagement period could mean that many casual employees are engaged for shorter periods and consequently receive less pay for each engagement even though the travel costs of attending work are unchanged.”
[18] These passages indicate that the Vice President took all of the relevant evidence and the statutory requirements into account. It should be mentioned also that in our view the circumstances before His Honour were such that no criticism can be made for balancing the interests of student casuals with the interests of fairness to employees generally. That is because there was no claim advanced before the Vice President which was directed exclusively to the position of student casuals. The applications were directed to the minimum engagement for all casuals. It was as though the applicants sought to rely upon the increase in minimum engagement for student casuals, particularly in Victoria, to persuade the Vice President to accept a much broader proposition relating to casuals generally. Whether that was the intention of the applicants or not, given the composite way in which the applications were put, it was open to consider the claims as they related to casuals generally and student casuals specifically as part of the one process of reasoning. The limited evidence of exclusion of student casuals from employment could quite properly be weighed against the potential disadvantage to many employees if the minimum engagement was reduced from three hours to two hours throughout Australia.
[19] It follows from this analysis that in our view there is no indication that the Vice President fell into error in dealing with the evidence. Based on our conclusions so far we would not grant permission to appeal. There are, however, two other matters which require separate consideration.
[20] We deal first with a question of statutory construction. The NRA submitted that the Vice President either misconstrued s.157(1) or wrongly applied the correct construction. It submitted that the Vice President took the approach that the tribunal should not vary a modern award outside the system of four yearly reviews unless there are “exceptional circumstances.” The following paragraph of the decision is relied on to support the submission:
“[16] The SDA submitted that the test in s 157 is a significant hurdle the applicants are required to overcome and that variations to awards outside the scheduled reviews of awards will be the exception. The SDA also drew my attention to the explanatory memorandum accompanying the Fair Work Bill which indicates that award variations outside the four yearly reviews will be permitted in “exceptional circumstances.” The SDA submitted that the requirement of being necessary to achieve the modern awards objective means something “indispensible or requisite” and that the applicants must establish that the modern awards objective cannot be achieved unless the variation is made. The other parties did not contest the thrust of these submissions. In my view the submissions reflect the legislative requirements. I adopt that general approach.”
[21] The paragraph commences by summarising the SDA’s submissions. The summary includes references to an award variation outside the 4 yearly review being the “exception”, to the use of the expression “exceptional circumstances” in one of the Parliamentary documents and to the requirement that any variation be “indispensable and requisite” for the achievement of the modern awards objective. His Honour then concluded that the submissions reflected the legislative requirements and said he adopted “that general approach”. This statement should be read in the context of other relevant parts of the decision. In the paragraph immediately preceding the one relied upon by the appellants the Vice President quoted the words of s.157(1) verbatim:
“[15] The legislative scheme provides that variations to awards are not generally available outside the scheduled reviews of awards. In the intervening period an applicant must satisfy FWA that a proposed variation “is necessary to achieve the modern awards objective.””
[22] It is also significant that the Vice President adopted the words of s.157(1) in setting out his conclusions later in the decision. 3 When seen in its full context, the use of the expression “that general approach” is not an indication that the Vice President had adopted the specific submissions advanced. Rather it is an indication of general agreement only.
[23] In our view synonyms such as exceptional, indispensable and requisite and the compound phrase “exceptional circumstances” are of limited value and their use is likely to lead to confusion. While synonyms might in some circumstances assist in the construction of statutes, they ought not to be substituted for the words that the legislature has used. The Vice President did not do so. Nor is there any indication that the Vice President misapplied the correct test. We reject the submission based on statutory construction. The decision is based squarely on proper evidentiary considerations rather than on too narrow a view of the discretion available to him under s.157(1).
[24] The second additional matter is the submission that the Vice President took irrelevant considerations into account in reaching his decision. The NRA submitted that the following matters, which the Vice President referred to, were in truth irrelevant to the application:
“I. The award modernisation process undertaken by the Australian Industrial Relations Commission (AIRC) and, in particular, the opportunity parties had previously been given to consider the provision subject to the variation application;
II. The absence of a change of circumstances since the award has been made; and
III. The general approach of the AIRC to “reflect the majority or critical mass of pre-existing provisions in national modern awards.””
[25] The passages upon which the NRA relied are as follows:
“[31] In my view the context of this application is significant. The Award minimum engagement period arose from lengthy award modernisation proceedings before a Full Bench of the AIRC. This matter was specifically addressed by a number of parties and every opportunity was available for all interested parties to make submissions in the matter. The three hour minimum was reflective of most of the award-based transitional instruments. That result was consistent with the general approach of the AIRC to reflect the majority or critical mass of pre-existing provisions in national modern awards.
... ...
[32] ... ... Since the award was made there has been no change in circumstances.”
[26] It should also be noted that earlier in his decision the Vice President had set out in some detail his findings concerning the history of the modernisation of the retail awards. Those findings also should be set out:
“[8] The Award subject to this application was made by a Full Bench of the Australian Industrial Relations Commission (AIRC) during stage one of the award modernisation process. The SDA proposed a three hour minimum engagement. A two hour minimum was proposed by some employer groups for junior casuals or by agreement with an employee. An exposure draft of the Award was published on 12 September 2008. The exposure draft provided for a minimum engagement of three hours for casual employees.
[9] Many submissions were made in response to the exposure draft and consultation hearings were conducted by the Full Bench. The Award published on 19 December 2008 retained the three hour minimum casual engagement in clause 13.4. It appears that a summary of previous award provisions on the AIRC website incorrectly recorded that the Shop, Distributive and Allied Employees Association - Victorian Shops Award had a three hour minimum engagement for casuals when the award minimum was in fact two hours.
[10] An application to temporarily preserve the two hour minimum engagement period for junior casuals was made as part of the proceedings regarding transitional provisions for modern awards. No preservation was made by the AIRC as a result of that application.”
[27] The Vice President was entitled, perhaps even required, to give consideration to the circumstances which had led to the 3 hour minimum engagement provision in the retail modern award. While the ultimate question was whether he was satisfied that the variation was necessary to achieve the modern awards objective, the positions taken by the parties and the Full Bench in the making of the award were not irrelevant to that question. Two of the matters to which the Full Bench was required to have regard in modernising awards were promoting high levels of employment and protecting the position of young people in the labour market. 4 The modern awards objective refers to a related matter, the need to promote social inclusion through increased workforce participation. There is sufficient similarity in the statutory context to render the earlier proceedings relevant. It was also open to consider whether there had been any change in circumstances since the Full Bench decision. We reject the submission that the Vice President took irrelevant matters into account.
[28] For the reasons given we do not think this is an appropriate case in which to grant permission to appeal. Nor, in light of those reasons, are we satisfied that it would be in the public interest to do so.
[29] Before concluding we return to the submission made by the ARA, which we referred to earlier, that we should make provision for student casuals to be engaged for less than three hours in specified circumstances. Although it is not necessary to set it out, it should be recorded that the ARA tendered a detailed proposal. No such proposal was ever put to the Vice President. For that reason it would not be appropriate to entertain it in an appeal from the Vice President’s decision, which we have found to be free from error. On the other hand, we cannot see any barrier to the ARA, or any other interested party, making an application to vary the award to deal specifically with the engagement of student casuals. The fate of any such application would of course depend upon the tribunal’s assessment, in the relevant statutory context, of the material and submissions advanced for and against it.
PRESIDENT
Appearances:
N. Tindley for National Retail Association Limited.
C. Issa for Master Grocers Australia Limited.
C. Gianatti for the Australian Retailers Association.
W. Friend of counsel with C. Dowling of counsel for the Shop, Distributive and Allied Employees Association.
D. Gregory for the Australian Chamber of Commerce and Industry.
J. Fetter with T Shipton for the Australian Council of Trade Unions.
Hearing details:
2010.
Melbourne.
August, 18.
2 MA000004.
3 Ibid paras 34 and 36.
4 Workplace Relations Act 1996 s.576B(2)(a) and (b).
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