[2013] FWC 1741

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FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

Electrical and Communications Association, Queensland Industrial Organisation of Employers and others
(AM2012/161 and others)

Electrical contracting industry

SENIOR DEPUTY PRESIDENT WATSON

MELBOURNE, 20 MARCH 2013

Modern Award Review 2012 - application to vary the Electrical, Electronic and Communications Contracting Award 2010.

[1] The Fair Work Commission (previously Fair Work Australia) is required by the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) to conduct a review of all modern awards, other than modern enterprise awards or State Reference Public Sector Awards, as soon as practicable after 1 January 2012 (the 2012 Review).

[2] Five applications were made to vary the Electrical, Electronic and Communications Contracting Award 2010 1 (the Electrical Contracting Award) in the 2012 Review:

[3] The application by ABI in AM2012/111 was withdrawn on 31 July 2012.

[4] This decision determines each of the variations sought, other than variations which are being dealt with by Full Benches constituted to deal with particular matters in the 2012 Review. The whole of AM2012/157 has been referred to the Apprentices, Trainees and Juniors Full Bench and is not determined within this decision.

[5] The amended application by ECA in AM2012/161 did not contain a specific variation in respect of apprentices.

Legislative provisions applicable to the 2012 Review

[6] The legislative provisions applicable to the 2012 Review were considered in a 29 June 2012 decision of a Full Bench, 2 which considered preliminary questions as to the approach to be taken in the 2012 Review. It is relied on for the purposes of this decision. The Full Bench found that:

[7] In relation to the scope of the 2012 review, the Full Bench summarised its conclusions as follows:

[8] The modern awards objective, which is significant within the 2012 Review, is as follows:

Submissions received

[9] Written submissions were filed by each applicant to vary the Electrical Contracting Award. The written submissions were supplemented in the hearings of 1 and 2 November 2012. The content of submissions are addressed, in relation to each variation proposed later in this decision. The submissions of ECA were also put on behalf of the Master Electricians Australia Ltd (MEA), which is part of the ECA Group of Companies.

Evidence

NECA

[10] NECA filed a witness statement of Ms J Astone, 19 Office Manager, A-Phase Electrical Pty Ltd (A-Phase). Ms Astone was required for and was subject to cross-examination in relation to her evidence.

[11] Her evidence was that:

ECA

[12] ECA, in its 20 August 2012 amended application, reported the results of a survey of members, directed to payroll officers and supervisory employees such as team leaders, leading hands and foremen. Both groups identified that the classifications and wages (including allowances) provisions, within the Electrical Contracting Award, created most difficulties and disputes. The reporting of the ECA survey did not specifically address the travel and expenses allowances, rostered days off, call-back and rest periods, overtime and the taking of annual leave; all of which are the subject of applications to vary the Electrical Contracting Award in these proceedings.

[13] ECA did, however, file a witness statement of Mr A Denning, Director of Neil T Fallon Services Pty Ltd (Fallon Services). “Neil T Fallon Services Pty Ltd is an electrical, plumbing and air-conditioning contractor, focussing on the domestic and small to medium service industry”. Mr Denning was not required for cross-examination. His evidence, concerning company supplied vehicles was that:

ABI

[14] ABI called evidence from Mr J Dwyer, Manager of Extrastaff Apprenticeships (Extrastaff) in support of the Ai Group application to vary clause 17.5 of the Electrical Contracting Award in respect of on-hire and group training companies. His evidence, from the perspective of group training companies, was that:

[15] Mr Dwyer’s evidence was that the impact of clause 17.5(a)(ii) and similarly clause 17.5(d) is that there are increased labour costs placed onto on-hire companies and group training companies, as compared to those employers that directly engage their employees.

CEPU

[16] The CEPU called evidence from a number of officials of the union, which went to various claims and reflected their experiences as an employee within the industry to some degree but largely their experience of the industry as a union official. They were:

Consideration

[17] In this section of the decision, I set out:

1. General submissions advanced by the parties and any relevant conclusions in relation to them; and

2. Specific submissions in relation to each variation sought and my decision in relation to them.

General submissions

[18] ECA has 1,885 members across Queensland of which 93% (or 1,771) are employers with 15 employees or less. In preparation for the 2012 Review, ECA undertook a survey of its members. It submitted that the survey showed that 70.5% of respondents utilised the Electrical Contracting Award only, and a further 17.9% utilised both the Electrical Contracting Award and common law contracts simultaneously.

[19] ECA submitted that within the survey members were asked questions concerning different users of the Electrical Contracting Award, and the ease or otherwise of using the Award, being asked to give an indication as to the difficulty that each group experienced in interpreting and following clauses of the Award. ECA submitted that overwhelmingly payroll officers and supervisory employees identified that clause 16–Classifications and minimum wages (including clause 17–Allowances), was the most difficult, demonstrating that the current application of allowances is confusing and extremely hard to administer for small to medium enterprises. It submitted that most respondents identified the travel and expenses allowance at clause 17.5 as the most misunderstood and confusing.

[20] ECA submitted that:

[21] ECA sought, through its application, changes to the Electrical Contracting Award to assist, the special circumstances of small and medium-sized businesses as per the objectives of the Fair Work Act 2009 (the Act). 20

[22] The CEPU submitted that the applications should be considered against the background that the provisions included in the Electrical Contracting Award were substantially agreed between the CEPU and NECA, subject to the determination of a lesser safety net than sought by the CEPU in respect of minimum wage rates or an industry allowance to compensate for reduced minimum rates. 21

[23] The CEPU submitted that many of the clauses that are now sought to be altered by NECA were initially supported by NECA and proffered by NECA through the parties’ draft supplied to the Australian Industrial Relations Commission (AIRC) - for example, NECA agreed to the fares and travel allowance where transport is provided, the rest break for call-back, and availability for duty and overtime clauses. The CEPU submitted that NECA put one thing to the Award Modernisation Full Bench and now in the interim review, after having the wage rate made significantly lower than what NECA itself proposed, is asking for even more cuts to the minimum wage safety net.

[24] The CEPU also relied on the approach reflected in the 2012 Review decision 22 of Senior Deputy President Kaufman in respect of the Contract Call Centres Award 2010:23

[25] The CEPU submitted that the evidence brought by the employer organisations in support of their claim did not meet the standards required, as reflected in a Full Bench decision 25 in respect of the ClerksPrivate Sector Award 2010.26 It submitted that “the union officials who gave evidence are of course experienced union officials who are active in the electrical contracting industry and with respect, we say that their evidence should be accorded the weight that it reflects”.27

[26] The CEPU submitted that the weight that could be given to the ECA survey is greatly diminished by the fact that:

(a) there is no indication of how or when the survey was conducted;

(b) there is no indication of how many employers responded to the survey;

[27] In my view, limited weight can be placed on the ECA survey. ECA provided no technical information in relation to its survey which would allow an assessment of the response rate or representativeness of the survey. As a result, it can only be considered as anecdotal. Further, the survey seemed to be focussed on difficulties in interpreting the Electrical Contracting Award and did not seem to address other considerations within the modern awards objective or the Act more generally. Finally, whilst the survey found that 36.2% responded that the Electrical Contracting Award actively discouraged them from employing additional staff, no indication was given of how, apart from interpretation difficulties, the Electrical Contracting Award discourages employment.

[28] NECA submitted that the majority of these businesses (95% plus) covered by the Electrical Contracting Award are small and medium-sized enterprises and the overwhelming majority are privately owned family businesses. It submitted that the majority of employees are trades people and apprentices and the industry is reliant on a high skills base and a requirement for mobility and flexibility.

[29] NECA submitted that, consistent with Schedule 5, Part 2, Item 6(2) of the Transitional Act, its application focuses on claims for flexible and modern work practices consistent with Item 6(2)(a) in addition to technical matters that require clarification and correction to satisfy the requirements of Item 6(2)(b).

[30] The CEPU submitted that the approach of the Fair Work Commission to the 2012 Review should be that reflected in the 29 June 2012 decision of the Full Bench, 28 considered above. As indicated above, I apply that approach.

[31] The CEPU submitted that the employer organisations have brought very little evidence upon which to base any of the proposed variations to the Electrical Contracting Award. The Ai Group has provided no evidentiary material upon which it seeks to rely and ECA has provided no evidence in relation to its own application concerning casual employment. The CEPU also submitted that NECA, who have applied for the largest number of variations, have filed only two witness statements concerning two small electrical contractors in one State, apparently covering only 23 employees.

[32] I agree that the evidence brought by employer organisations in support of their applications is limited. Against that, the CEPU has brought evidence of union officers experienced with the operation of the Electrical Contracting Award in that capacity.

Variations sought

[33] The variations sought are addressed in the order of the relevant clauses as they appear in the Electrical Contracting Award.

1. ECA application to amend definitions within clause 3—Definitions and interpretation

[34] ECA has applied to vary the definitions of:

[35] In its written submission of 21 September 2012, 31 ECA advised that following the “conciliation conference and correspondence received” from myself “and through discussion with the parties involved”, it would not proceed “with evidence or submissions in relation to this issue during the hearing”, acknowledging the “complexities of the issues involved in providing or changing such a schedule to clarify the current definitions”. ECA reserved its right to raise the matter in the current CEPU application in AM2012/157 before the Apprentices, Trainees and Juniors Full Bench should it be necessary to do so.

[36] It follows that it is not necessary to determine this element of the ECA application.

2. ECA application to vary clause 10.3(e)—Casual conversion to full-time or part-time employment - to extend the relevant period in respect of an employer with 15 or less employees

[37] In the hearing of 1 November 2012, ECA advised that it was not proceeding with this element of its application. 32 It follows that it is not necessary to determine this element of the ECA application.

3. NECA application to vary clause 12.2—Operation of State laws

[38] This variation simply updates the title of the relevant body or authority cited by replacing the reference to “National Training Framework Committee” with “National Skills Standards Council”. All submissions supported NECA’s application to amend clause 12.2(b) as a technical matter that requires correction to provide a correct reference to the current body.

[39] I am satisfied that the variation should be made as a technical correction referable to Item 6(2)(b) of Part 2 of Schedule 5 of the Transitional Act.

4. ECA application to add dollar amounts in respect of all work related allowances and disability allowances in clauses 17—Allowances and 26—Overtime

[40] When making the modern awards, the Award Modernisation Full Bench was required by clause 27 of the Minister’s Award Modernisation request to include “an appropriate method or formula for automatically adjusting relevant allowances when minimum wages are adjusted”, leading it to express work related/disability allowances “as a percentage of the key classification rate”. 33 That requirement is now reflected in s.149 of the Act, which states:

[41] As with the variation proposed by ECA in relation to the definition of transitional instruments, the issues arising from this variation application was discussed in conciliation and I advised ECA on 14 September 2012 that:

[42] In its written submission of 21 September 2012, 35 ECA advised that it would not proceed with this element of its amended application. It follows that it is not necessary to determine this element of the ECA application.

[43] The Commission will shortly publish on the Awards section of its website, tables of monetary rates of allowances in all modern awards as an administrative aid for award users. They will initially be published in draft form for comment.

5. NECA and the Ai Group applications to vary clauses 17.5(a)(ii)—Location of workshop or depot, 17.5(b)(i)—Motor vehicle allowance and clause 17.5(d)—Start and/or finish on job.

[44] Four variations within the applications concerned matters dealt with in clause 17.5—Travel and expenses of the Electrical Contracting Award, which provides:

[45] The four variations proposed are by the Ai Group and NECA.

[46] The Ai Group application seeks to delete clause 17.5(a)(ii). The Ai Group submitted that clause 17.5(a)(ii) was inserted into the Electrical Contracting Award Exposure Draft in error and then replicated in the making of the modern award. In addition, it submitted that the requirements of this provision are not practical and almost impossible to comply with for employers who are on-hire providers or group training companies.

[47] The NECA application seeks to delete clause 17.5(b)(i), re-number the following subclauses and delete the second sentence of clause 17.5(d)(i) which provides a cross reference to clause 17.5(b)(i). Clause 17.5(b) prescribes the payment of a per kilometre motor vehicle allowance as compensation for expenses where the employee, by agreement with their employer, uses their own motor vehicle in circumstances, as described in clauses 17.5(b)(i)–(iv). NECA seeks to remove the payment of the allowance in the circumstance set out in clause 17.5(b)(i):

[48] NECA submitted that the terms of this clause are confusing and irrelevant when read in conjunction with the terms expressed in clause 17.5(d)(i) which states:

[49] The NECA application also seeks to vary clause 17.5(d)(iii) to replace the current clause:

with the following:

[50] The reasoning advanced by NECA for this variation is that employees are already compensated by way of payment of a travel time allowance (clause 17.5(c)) and by way of free of charge transport provided at the employer’s cost.

[51] The Ai Group application proposes that clause 17.5(d)Start and/or finish on job be varied to insert a new clause 17.5(d)(v) as follows:

[52] The Ai Group submitted that clause 17.5(d) presents problems for on-hire providers and group training companies given that it requires the payment of specific allowances where an employee is required to travel to a job site which is not “the employer’s registered office or depot”. The proposed variation is said to align with the specific circumstances of on-hire and group training companies whilst maintaining the purpose of the allowance, which is to ensure that where an employee is required to commence work on a job site which is not the registered office or depot of the employer they receive financial compensation.

[53] Each application concerning clause 17.5 of the Electrical Contracting Award is dealt with in turn.

5.1 The Ai Group application to delete clause 17.5(a)(ii)—Location of workshop or depot

[54] The Ai Group submitted that clause 17.5(a)(ii) was inserted into the Electrical Contracting Award Exposure Draft in error and the error was then replicated in the making of the modern award. It submitted that whilst the Exposure Draft was said to reflect a joint NECA and CEPU draft of 1 December 2008, with some modification,36 that draft did not contain a provision equivalent to clause 17.5(a)(ii). The Ai Group submitted that the genesis of clause 17.5(a)(ii) appears to be found in an earlier draft of the award which was filed by the CEPU on 31 October 2008, which was not supported by submissions regarding its origins or appropriateness. The Ai Group submitted that the provision in the terms of clause 17.5(a)(ii) is not found in pre-modern award instruments. The Ai Group submitted that the inclusion of clause 17.5(a)(ii) reflects an error, of “a typographical or cross-referencing” nature37 and it is appropriate that this error should now be corrected as part of the 2012 Review process.

[55] In the alternative, the Ai Group also submitted that the requirements of clause 17.5(a)(ii) are not practical and almost impossible to comply with for employers who are on-hire providers or group training companies for several reasons:

[56] ABI supported the Ai Group application in respect of clause 17.5(a)(ii), submitting it is an anomaly or technical problem arising from the Part 10A award modernisation process, and falls squarely within the 2012 Review process and should be deleted. It submitted that the current prohibition against changing the location of the workshop or depot creates an inequity or inflexibility that is not in accordance with the modern awards objective.

[57] The CEPU opposed the deletion of clause 17.5(a)(ii), although it agreed that it could be appropriately reviewed to ensure that it does not contain irrelevant matters, is consistent with the remainder of clause 17.5 and is capable of being complied with by on-hire and group training employers. The CEPU consented to the removal of the absolute prohibition on the moving of the workshop, depot or registered office within clause 17.5(a)(ii), acknowledging that the current wording may create difficulties, for example, where an employer closed a particular depot or registered office.

Conclusion: in relation to the Ai Group’s application to delete clause 17.5(a)(ii)

[58] The Ai Group premised its submission that clause 17.5(a)(ii) was included in the Electrical Contracting Award in error on an analysis of the Exposure Draft, the award made in the same terms in respect of clause 17.5(a)(ii) and a joint NECA and CEPU draft filed on 28 November 2008 and a draft filed by the CEPU on 31 October 2008.

[59] The Ai Group noted the observations of the Award Modernisation Full Bench in publishing the Exposure Draft:

[60] The Ai Group submitted that clause 17.5(a)(ii) of the Exposure Draft was not in the terms contained in the joint NECA and CEPU draft of 28 November 2008 but reflected the first of two alternate formulations within a draft filed by the CEPU on 31 October 2008.

[61] That review of the history records the background to clause 17.5(a)(ii) within the Exposure Draft (and the Electrical Contracting Award) but it is incomplete.

[62] A fuller background can be appreciated by observing that:

The Full Bench continued:

[63] It is reasonable to conclude that clause 17.5(a)(ii) was not placed in the Exposure Draft and retained in the award in error, but rather it was included as a deliberate modification of the NECA and CEPU draft of 28 November 2008 to meet one of the concerns expressed by the Full Bench about some aspects of the joint draft which otherwise formed the basis for the Exposure Draft. Clause 17.5(a)(ii) was relevant to the basis of application of the start and/or finish on the job allowance, having regard to the earlier drafts (of both NECA and the CEPU) and provisions in pre-modern award instruments,40 reflecting the basis of the payment as compensating for excess travel times associated with on-site work. It is not surprising, given the concerns expressed by the Full Bench in relation to properly fixed minimum rates and, relevantly, the proper description of the basis of application of any additional payments and allowances that the Full Bench included the provision dealing with the location of the workshop and depot in the Exposure Draft when the Electrical Contracting Award was made.

[64] It may be noted that the provision was the subject of ongoing discussion between NECA and the CEPU at the time they each filed their 31 October 2008 drafts. The drafts provided various formulations of workshop or depot and either excess travelling time or an average excess travelling time payment, in relation to the commencement of work on-site. It was clear that the purpose of the allowance was to compensate excess travel when commencing work on-site. In context, the provision for the location of a workshop or depot was necessary for the purpose of giving effect to the allowance in compensation for travel associated with the commencement of work on-site. This background no doubt informed the Full Bench in seeking to formulate the payment in terms which described the basis of its application.

[65] I am not persuaded that clause 17.5(a)(ii) was included in the Electrical Contracting Award in error, nor that there is any proper basis for the wholesale deletion of the clause.

[66] No evidence has been advanced to suggest that requirements to specify a workshop or depot in clause 17.5(a)(ii) of the Electrical Contracting Award has caused problems within the industry generally which would support a conclusion that it is not meeting the modern awards objective generally. The only evidence brought related to labour hire and group training companies. That evidence, of Mr Dwyer, was limited to the group training companies. It does not support the deletion of clause 17.5(a)(ii) on a general basis, as is sought by the Ai Group in its primary claim. The particular considerations of the operation of the clause in respect of labour hire and group training companies raised by the Ai Group, and the related evidence, is a matter properly considered in relation to the more specific variation sought by the Ai Group to vary clause 17.5(d)Start and/or finish on job by inserting a new clause 17.5(d)(v) directed specifically to the circumstances of employers who supply on-hire employees or provide group training services for apprentices and/or trainees.

[67] The inclusion of a provision requiring the identification of the employer’s workshop or depot, for the purpose of the operation of the start and/or finish on the job allowance, provides certainty as to the operation of the allowance, consistent with its inclusion in some pre-modern award instruments. To remove uncertainty, clause 17.5(a)(ii) should include reference to the employer’s registered office. Whilst necessary upon the making of the modern award in 2010, the provision dealing with existing employees is now redundant and should be removed. Finally, the prohibition on change to a registered office, workshop or depot does not recognise the practical reality that an employer may change their registered office, workshop or depot from time to time. Some modification is required to meet the modern awards objective to provide clarity and to have regard to changing circumstances of employers, as was provided in pre-modern award instruments which contained a workshop or depot provision.41

[68] Accordingly, I am persuaded that clause 17.5(a)(ii) should be modified to better meet the modern awards objective to read:

[69] The final sentence of the varied clause removes the current prohibition on an employer changing the workshop or depot or registered office nominated for legitimate commercial reasons—for example, a requirement to relocate to larger or smaller premises. However, it contains a protection for employees to prevent their employer from nominating alternate premises proximate to particular on-site work, from time to time, in order to avoid obligations in respect of the start and/or finish on the job allowance or other award entitlements related to the premises.

5.2 The NECA application to delete clause 17.5(b)(i), renumber the following subclauses and delete the second sentence of clause 17.5(d)(i)

[70] In its submissions, NECA traced the history of the provision for a motor vehicle allowance in circumstances where an employee, by agreement with their employer, uses their own motor vehicle for the distance of the employee’s journey which is in excess of the distance of the journey between the employee’s home and their workshop or depot where the employee starts or finishes work at a job away from their workshop or depot (clause 17.5(b)(i)). That recent history concerned a NECA application to vary the Electrical Contracting Award in 2010 to remove the potential for double counting given the start and/or finish on the job allowance in clause 17.5(d). The substance of that argument was accepted and a variation was made to clause 17.5(d)(i) to clarify the entitlement to the start and/or finish on the job allowance by adding the words “Payment of this amount is instead of the provisions of clause 17.5(b)(i)”.

[71] In the decision approving that variation, I found:

[72] In support of the variation it now seeks, to delete clause 17.5(b)(i), and consequential variations, NECA submitted that subsequent to this decision, the provisions of clauses 17.5(d)(i) and 17.5(d)(ii) provide a comprehensive arrangement for compensation by way of allowance for employees starting and/or finishing on the job up to 50 kilometres from the employer’s registered office or depot and by way of allowance and paid travel time for distances greater than 50 kilometres, rendering clause 17.5(b)(i) superfluous and unnecessary, and conducive of uncertainty and ambiguity.

[73] The CEPU opposed the variation, submitting that the application by NECA leading to the decision referred to above, in AM2010/48, was to delete clause 17.5(b) or in the alternative vary clause 17.5(d)(i). It submitted that the renewed application to delete has already been dealt with by the Fair Work Commission in the s.158 proceedings initiated by NECA.

[74] The CEPU also submitted that the interaction between clauses 17.5(b)(i) and 17.5(d)(i) is entirely clear, with the current provisions being almost identical to that proposed by NECA in the alternative in the previous proceedings. It submitted that NECA has brought no evidence that the interaction of the two clauses is creating confusion for employers or employees covered by the Electrical Contracting Award.

[75] The CEPU rejected the proposition that clause 17.5(b)(i) has no work to do, submitting that it would still apply where a job site is situated further than 50 kilometres from the employer’s registered office or depot as in the circumstances described in clause 17.5(d)(ii) of the Electrical Contracting Award.

Conclusion: in relation to deleting clause 17.5(b)(i) and consequential variations

[76] NECA’s submission that clause 17.5(b)(i) of the Electrical Contracting Award is superfluous and unnecessary and conducive of uncertainty and ambiguity and is without foundation. The relationship between clauses 17.5(b)(i) and 17.5(d)(i) is clear. Clause 17.5(d)(i) applies instead of clause 17.5(b)(i) in circumstances where the job site is situated up to 50 kilometres from the employer’s registered office or depot(s). Clause 17.5(b)(i) has continuing application in respect of clause 17.5(d)(ii) of the Electrical Contracting Award in respect of travelling time when a distance in excess of 50 kilometres is travelled, plus payment for incidental expenses actually incurred.

[77] NECA has brought no evidence to suggest that clause 17.5(b)(i) is not achieving the modern awards objective. Nor has it established any cogent reasons for departing from the modern award made by the Award Modernisation Full Bench, as modified essentially in the terms proposed by NECA in 2010, in the alternative.

[78] The NECA application to delete clause 17.5(b)(i), with the consequential variations, is refused.

[79] However, there is an element of uncertainty and potential for double counting in relation to the entitlement to payment for incidental expenses actually incurred within clause 17.5(b)(ii) in circumstances where the entitlement to the motor vehicle allowance under clause 17.5(b)(i) arises. To remove that uncertainty, clause 17.5(d)(ii) will be varied, as follows:

5.3 The NECA application to vary clause 17.5(d) to replace the current clause 17.5(d)(iii)

[80] This variation is sought by NECA on “economic grounds”, with NECA submitting that it imposes a significant cost impost on those employers who supply vehicles for use by employees. NECA submitted that the proposed variation meets the modern awards objective stated in ss.134(1)(d), (f) and (h) of the Act, in that the obligation arising from the current clause 17.5(d)(iii) is inconsistent with:

[81] ECA supported the NECA application, submitting that clause 17.5(d)(iii) does not meet the objects set out in s.3 of the Act, particularly the acknowledgement of the special circumstances of small and medium-sized business. It submitted that in the circumstance as described in the current award, i.e. an employer provides travel, it is impossible to identify any expense that would be incurred by an employee where an employer offers to “provide transport free of charge”.

[82] The CEPU opposed the proposed deletion of clause 17.5(d)(iii) of the Electrical Contracting Award. It submitted that clause 17.5(d)(iii) was included in the NECA and CEPU joint parties’ draft in the award modernisation proceedings and the Exposure Draft, no party opposed the entitlement during the award modernisation proceedings and NECA have provided no cogent reason why the issue should be revisited at this time.

[83] The CEPU submitted that employees generally received a payment for travel time to the job site, including where transport was provided “free of charge” in other pre-modern electrical contracting instruments. For example see the:

[84] The CEPU submitted that clause 17.5(d) of the Electrical Contracting Award most closely resembles the fares and travelling clause that applied in Victoria under the National, Electrical, Electronic and Communications Contracting Industry Award 199848 (1998 Award) with that clause having a long history going back to when the first federal electrical contracting award was made: the Electrical Contracting Industry Award 1960.49 The CEPU traced the history of the clause, submitting that the original purpose of the clause was to compensate for the time taken in travelling to the job site. It submitted that notwithstanding the introduction of a clause that appears to also partly compensate for travel time, the fares and travel allowances applicable to starting or finishing on the job retained a component of reimbursement for time spent travelling, which remains evident on the face of the modern award.50

Conclusion: in relation to clause 17.5(d)(iii)

[85] The NECA case was advanced on first principles, on the basis of the cost arising to employers from clause 17.5(d)(iii) of the Electrical Contracting Award. The NECA case had little regard to the context of the 2012 Review and the 29 June 2012 decision of a Full Bench, 51 which considered preliminary questions as to the approach to be taken in the 2012 Review.

[86] Clause 17.5(d)(iii) was included in the Electrical Contracting Award by the Award Modernisation Full Bench in the context of the Award Modernisation Request, having regard to the drafts advanced by the parties, including the NECA and CEPU joint parties’ draft, the submissions of interested parties and the terms of the pre-modern award instruments applying in the industry. Clause 17.5(d)(iii) was included in the NECA and CEPU joint parties’ draft. No party opposed the entitlement during the award modernisation proceedings. The provision has provenance with a number of pre-modern award instruments. The history of the relevant provision within the 1998 Award suggests that a purpose of the clause is to compensate for the time taken in travelling to the job site, rather than simply to compensate employees for expenses incurred in undertaking such travel.

[87] Consideration of the NECA claim must proceed on the basis of implicit legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. There must be cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.

[88] The evidence of NECA and ECA in support of the proposed variation was limited. Ms Astone gave evidence that A-Phase requires its employees to drive the vehicle to its registered office to start and finish work in order to avoid the requirement to pay an allowance of $3.02 per day if the employee drives direct to a job site. Mr Denning gave evidence as to Fallon Services’ usage of company-supplied vehicles and the considerable cost of supplying and fitting out the vehicles. That limited evidence does not support the proposition that clause 17.5(d)(iii) does not achieve the modern awards objective, nor establish any cogent reason to alter the relevant terms of the Electrical Contracting Award.

[89] NECA has not established that clause 17.5(d)(iii) of the Electrical Contracting Award is not appropriate to the industry or not achieving the modern awards objective. NECA has established no cogent reason for altering the provision determined by the Award Modernisation Full Bench in the circumstances of the Electrical and Electronic Contracting Industry. This element of the NECA application is refused.

5.4 The Ai Group application to vary clause 17.5(d)—Start and/or finish on job to insert a new clause 17.5(d)(v)

[90] The insertion of a new clause 17.5(d)(v) in the award, as proposed by the Ai Group, is directed to allow an employer who supplies on-hire employees or provides group training services for apprentices and/or trainees to nominate the registered office or depot of the client/host where the person is placed for the purposes of the start and/or finish on the job allowance in clause 17.5(d) of the Electrical Contracting Award.

[91] The Ai Group application is made in the context that clause 4 of the Electrical Contracting Award (and most other modern awards) extends coverage to on-hire employers and their employees, and employers which provide group training services and their employees. The relevant clauses of the Electrical Contracting Award are as follows:

[92] In clause 3 of the Electrical Contracting Award on-hire is defined as “the on-hire of an employee by their employer to a client, where such employee works under the general guidance and instruction of the client or a representative of the client”.

[93] The inclusion of on-hire and group training employers, and their employees, performing work for a business in the industry of electrical contracting provided by electrical, electronics and communications contractors, arose late in the award modernisation process - in Stage 4. 52 That inclusion reflected the decision of the Award Modernisation Full Bench that, in most instances, modern awards should be varied, where necessary, to extend their coverage to labour hire firms and their employees, to provide a more consistent safety net as between direct and labour hire employees in the relevant industry. This occurred on an award by award basis to allow the particular circumstances of the industry to be considered and give all interested parties the opportunity to express a view.

[94] The Ai Group submitted that, consistent with Item 6(2)(a) of Part 2 of Schedule 5 of the Transitional Act, the variation is necessary to achieve the modern awards objective, because the award in its current terms as it applies to group training and labour hire employees is incapable of being complied with and therefore cannot meet the modern awards objective. 53 It submitted that the current terms of clause 17.5(d) are incapable of being complied with by on-hire and group training companies given that at the time of commencement of an employee the location or depot of the host employer may be unknown to the employer. The Ai Group further submitted that the prohibition on changing the location of the workshop or depot is fundamentally inconsistent with the nature of on-hire employment and also employment through a group training company.

[95] The Ai Group submitted that the variation would align with the specific circumstances of on-hire and group training companies and ensure that they are not at a commercial disadvantage to those electrical contracting companies that directly engage their employees as opposed to utilising either labour hire or group training companies, making it a variation that is necessary to achieve the modern awards objective by providing a “fair” safety net for all employers covered by the Electrical Contracting Award.

[96] NECA opposed this element of the Ai Group application on the basis that, it submitted, the variation would result in electrical contractors being placed in an uncompetitive position when compared with daily hire companies because it would remove payment of travel and fares for daily hire employees, but, not for employees of electrical contractors. It submitted that the clause, in its current terms, provides an anchoring point which provides equality and equity of all participants within the industry; the employees of electrical contractors, employees of on-hire companies, or indeed directly employed employees of a host employer.

[97] The CEPU opposed the Ai Group application to vary clause 17.5 of the Electrical Contracting Award. It submitted that no evidence has been brought to show the alleged impact on labour hire or group training organisations.

[98] The CEPU submitted that the purpose of the travel allowances is to compensate employees for travel expenses and travel time in an industry where employees may be regularly called upon to begin work at different locations and that on-hire employees and group training apprentices are no less deserving of such compensation. It submitted that the proposed variation would potentially create significant unfairness to employees and to electrical contractors who are not on-hire providers or group training organisations.

[99] The CEPU also submitted that enterprise agreements applying to labour hire firms working in the electrical contracting industry regularly use the employer’s registered office, rather than that of the host for fares and travel allowance. 54

Conclusion: in relation to the Ai Group’s application to vary clause 17.5 by adding a new clause 17.5(d)(v)

[100] The variation proposed represents a departure from the principle adopted by the Award Modernisation Full Bench that on-hire and group training employers would be covered as the employer of employees undertaking work within the relevant industry. This issue now raised by the Ai Group was not raised by it in dealing with the on-hire/group training issue in the award modernisation proceedings, notwithstanding the active role played by the Ai Group in relation to the issue and the opportunity afforded by the Full Bench through the award by award approach to allow the particular circumstances of the industry to be considered and give all interested parties the opportunity to express a view.

[101] The Ai Group submitted that the current terms of clause 17.5(d) are incapable of being complied with by on-hire and group training companies and the prohibition on changing the location of the workshop or depot is fundamentally inconsistent with the nature of on-hire/group training employment. The impracticality only arises if the employer depot, workshop or registered office is that of the client or host employer for the purposes of clause 17.5(d), rather than that of the on-hire/group training employer. At the time of entering an employment or training contract the on-hire/group training employer would know, having regard to the particular circumstances of the employee, at which of its premises the employee would be based. My decision in relation to the Ai Group claim in respect of clause 17.5(a)(ii) addresses the issue raised by the Ai Group as to the prohibition on changing the location of the workshop or depot.

[102] The impracticality is said by the Ai Group to arise from the proposition that the workshop or depot or registered office of the on-hire/group training employer is irrelevant in a practical and meaningful sense, once the group training apprentice has been placed with the host or client. 55 This proposition is supported by the evidence of Mr Dwyer.56 However, this is no different from electrical contractors covered by the Electrical Contracting Award, whose office, workshop or depot is irrelevant for the purpose of the actual undertaking of work.57 In either case, the premises of the employer is not the place at which work is generally undertaken, and in that sense has no practical relevance, but it is the anchor for determining an entitlement to the start and/or finish on the job allowance, which exists in recognition of the high incidence of work undertaken off-site in the industry. The fact that work is not usually undertaken at the workshop or depot or registered office of the employer, whether an electrical contractor or an on-hire/group training employer does not render the workshop, depot or office irrelevant to the requirement of an employee to commence or finish work on-site and the associated travel payment.

[103] Competing submissions were advanced in relation to competitive disadvantage or advantage between on-hire/group apprentice employers and other employers (electrical contractors) covered by the Electrical Contracting Award and financial disadvantage to employees associated with the Ai Group variation in submissions and evidence for and against the application. In fact, any impact on the financial cost to an employer under the Electrical Contracting Award, if varied, and any impact on the financial benefit to employees under the Electrical Contracting Award, if varied, would vary, depending on the particular circumstances of the application of clause 17.5 of the Electrical Contracting Award. Those impacts would depend on whether affected employees lived closer to or further from the on-hire/group training employer’s premises than the premises of the client/host employer, commencing work, in each case, at a particular on-site location. As noted by the Ai Group any financial impact, on the employer or particular employees, would involve “swings and roundabouts”. 58 The Ai Group application would create no universal detriment to, or advantage for, employees nor any universal competitive advantage or disadvantage for other electrical contractors covered by the Electrical Contracting Award. The impact on commercial advantage/disadvantage or personal advantage/cost to employees does not establish any basis in support of, or against, the variation. Given the statutory presumption that clause 17.5(d) is “consistent with the modern awards objective”,59 these considerations provide no basis for varying the award, as sought by the Ai Group.

[104] The major consideration, however, in determining this element of the Ai Group application is that the evidence before me does not support the proposition that on-hire and group training companies face major practical difficulties arising from clause 17.5 in its current terms or that its practical effect does not achieve the modern awards objective.

[105] ABI called evidence from Mr J Dwyer, in support of the Ai Group application to vary clause 17.5 of the Electrical Contracting Award in respect of on-hire and group training companies. Extrastaff was a relatively new employer, having operated for less than a year. Mr Dwyer’s evidence reflected his experience with Extrastaff over that time and his “experience as a general manager over a period of 14 years with various group training companies”. 60 His evidence reflects his experience generally - i.e. beyond electricians - as a generalist, rather than a specialist.61

[106] Mr Dwyer’s evidence was that:

[107] The CEPU called evidence from a number of its officials.

[108] The evidence of Mr Mier was that the Ai Group application would give labour hire companies the ability to send employees to their host employer and not receive any compensation for travel, creating a scenario where a labour hire employee is sent to a different address each week and receives no travel compensation whereas the people he/she is working alongside do receive compensation. His evidence was that group training schemes send apprentices to many different sites during the apprentice’s tenure and that the Ai Group application would take money off them. Mr Mier believed that the incidence of apprentices changing host employers was greater than suggested by the evidence of Mr Dwyer. Mr Mier’s experience, with the South West Group Training in Portland “was that the group training scheme rotated all the apprentices through various employers”. 71

[109] In his evidence, Mr McLaughlan cited examples of group training apprentices and labour hire employees who would be financially disadvantaged by the Ai Group variation, notwithstanding substantial travel requirements. 72

[110] Mr Doust’s evidence was that the issue in the Ai Group application “had not been raised” with him “as a concern in electrical contracting enterprise agreement negotiations” in which he has “participated in over the last 10 years”. 73

[111] Mr McKinley gave evidence that the variation proposed would allow employers to direct apprentices to travel substantial distances to work, without compensation, by nominating an alternate office or workshop. 74

[112] Mr Simpson gave evidence in relation to “a labour hire employee who lives in Brisbane, is recruited in Brisbane” but required to work at the Gold Coast, which would apply equally to apprentices who were employed by group training schemes. 75 His evidence was that the financial disadvantage to apprentices would mean that more apprentices would find themselves unable to afford to continue with their apprenticeship, exacerbating skill shortages.76 Mr Simpson challenged the evidence of Mr Dwyer in relation to the frequency of change in host employers of apprentices, recounting his experience that in Brisbane an apprentice “might have five, six, 10 host employers during the life of his or her apprenticeship”.77 His evidence was that the proposed variation would provide a commercial benefit and “unfair competitive advantage to group training schemes” and labour hire employers.78

[113] In respect of on-hire employers, neither the Ai Group or any other employer association brought any evidence. They brought no evidence to suggest that clause 17.5 in its current terms operates in a way which is inconsistent with the modern awards objective. The only evidence in this regard, limited as it is, is that of Mr Doust, and the evidence relied on by the CEPU that enterprise agreements applying to labour hire firms working in the electrical contracting industry regularly use the employer’s registered office, rather than that of the host for fares and travel allowance. This evidence is contrary to the proposition of the Ai Group that the operation of clause 17.5 of the Electrical Contracting Award causes practical problems for on-hire employers in respect of their coverage by the Electrical Contracting Award. There is no evidentiary basis to support the Ai Group variation in respect of on-hire employers.

[114] In respect of group training employers, the evidence brought by those supporting the variation was limited. The evidence of Mr Dwyer brought by ABI went to the nature of the relationship between group training companies, their apprentices/trainees and the nature of their registered offices.

[115] No specific evidence was brought to make good the general proposition 79 that the Electrical Contracting Award imposes higher relative costs on group training companies. It is not a proposition which could be held to generally apply. If the registered office or depot of the host employer where the employee is placed for the purposes of the start and/or finish on the job allowance, as permitted by the new clause 17.5(d)(v) proposed by the Ai Group, were closer to the employee’s home than the registered office of the group training employer, the group training employer would incur a greater cost under the Ai Group proposal than under the current clause 17.5. The impact of clause 17.5 of the competitive position of group training companies would vary, depending on the particular circumstances of the application of clause 17.5 of the Electrical Contracting Award.

[116] The evidence of Mr Dwyer does not demonstrate any practical effect on the operations, competitive position or commercial circumstances of group training employers, which would suggest that the clause in its current terms is not meeting the modern awards objective.

[117] In the absence of evidence of an impact on on-hire employers or group training employers covered by the Electrical Contracting Award which is inconsistent with the modern awards objective, there is no basis for varying the current terms of clause 17.5 of the Electrical Contracting Award. No cogent reason has been established for departing from the current terms of clause 17.5.

[118] For all of these reasons, the application by the Ai Group to vary clause 17.5 of the Electrical Contracting Award by adding a new clause 17.5(d)(v) in the terms proposed by it is refused.

6. NECA application to vary clause 17.7(b)—Adjustment of expense related allowances

[119] Clause 17.7 of the Electrical Contracting Award provides the mechanism to adjust expense related allowances by way of a relevant adjustment factor, specified in a table in clause 17.7(b). NECA submitted that a relevant adjustment factor for the “Living away allowance” has been omitted from the table in clause 17.7(b). NECA’s application seeks to correct this omission by including in clause 17.7(b) reference to the “Living away allowance” and its relevant adjustment factor - “Domestic holiday travel and accommodation sub-group”.

[120] All submissions supported NECA’s application to vary clause 17.7(b) to overcome the omission of the relevant adjustment factor for the “Living away allowance”.

[121] I am satisfied that the variation should be made as a technical correction referable to Item 6(2)(b) of Part 2 of Schedule 5 of the Transitional Act.

7. NECA application to insert a new clause 24.8(f)—Rostered day off

[122] Clause 24.8—Rostered day off, of the Electrical Contracting Award provides the ability for an employer to offer its employees the ability to be rostered on a 38 hour week in a manner to facilitate a RDO arrangement. NECA submitted that the current provisions surrounding the introduction and operation of a RDO are restrictive in that they only provide the ability for a substitution of a RDO in accordance with clause 24.8(d), which provides:

[123] NECA’s application is directed to the banking (or accrual) of up to a maximum of five rostered days off conditional upon the mutual agreement of the employer and employee, by adding a new clause 24.8(f) in the following terms:

[124] NECA submitted that the ability to accrue rostered days off has been a feature of State NAPSAs for many years:

[125] NECA also submitted that the ability to accrue rostered days off is also a feature of modern awards other than the Electrical Contracting Award:

[126] NECA submitted that the evidence of the union officials called indicated that some accrual beyond two days currently occurs and the concerns the unions expressed about RDO accrual were addressed in the protections within the new clause NECA proposes. NECA submitted that the controls around the accrual of RDOs it proposes, to a maximum of five, avoids disadvantage to employees.

[127] The Ai Group did not oppose NECA’s proposed variation to clause 24.8 to expressly provide for banking of RDOs subject to employee agreement but noted that clause 7—Award flexibility, within the Electrical Contracting Award, equally entitles an employer and employee to agree on the banking of RDOs, under clause 24.8(a) which allows “arrangements for when work is performed”.

[128] ECA supported the insertion of the proposed clause to ensure that there are “flexible modern award practices”. It relied on provisions in the Qld Award, the Electrical Trades (Security Alarms Industry) Award 1980 83 (WA) and three other modern awards.84

[129] The CEPU opposed NECA’s proposed variation to the RDO provisions in the Electrical Contracting Award, submitting that it is important in the industry that employees who work long hours have a regular break.

[130] The CEPU submitted that the banking of RDOs was not a feature of the majority of pre-modern award instruments that have been replaced by the Electrical Contracting Award, including the 1998 Award, the WA Award and the SA Award.

[131] The CEPU submitted that NECA did not include the banking of RDOs in the parties’ drafts that were submitted in the award modernisation proceedings before the Award Modernisation Full Bench, no provision for the banking of RDOs was included in the Exposure Draft for the Electrical Contracting Award, which adopted much, but not all, of the joint CEPU/NECA draft of 28 November 2008. 85 It submitted that no party made submissions at any stage to the award modernisation proceedings that the Electrical Contracting Award should include the banking of RDOs.

[132] Noting the Ai Group submission that an employer and an individual employee may agree to the banking of RDOs under clause 7—Award flexibility of the Electrical Contracting Award, the CEPU submitted that no other employer party has brought evidence that there have been problems utilising the award flexibility clause in the manner suggested by the Ai Group.

[133] The CEPU further submitted that, although NECA have suggested the variation would bring greater flexibilities for employees, NECA brought no evidence from an employee that such a flexibility is sought in the Electrical Contracting Award. The CEPU also submitted that there is no evidence of sufficient weight before the Fair Work Commission that the banking of RDOs will increase efficiency or productivity in the electrical contracting industry.

Conclusion: in relation to clause 24.8(f)

[134] The evidence of Ms Astone 86 was that A-Phase operates a 38 hour week, without a RDO system due to the inflexibility of the Electrical Contracting Award RDO options. This practice precedes the operation of the Electrical Contracting Award.87 The practice reflects discussions the company has had with its employees, who do not want to work the additional hours required to access a RDO; the employees are happy to, and agree to, work the 38 hour week.88 On Ms Astone’s evidence, A-Phase has had no experience with the operation of RDO provisions under the Electrical Contracting Award or previous awards. No attempt has been made by the company to utilise the award flexibility provision in clause 7 of the Electrical Contracting Award.89 It follows that Ms Astone’s evidence sheds no light on the practical operation of the RDO provision of the Electrical Contracting Award.

[135] The evidence of Mr Simpson was that the trend in enterprise bargaining in the industry is for employers to seek to reduce RDO accruals. 90 Mr McLaughlan’s evidence was that as “a general rule people take them on the month they fall due”.91

[136] Clause 24.8 was included in the Electrical Contracting Award by the Award Modernisation Full Bench, having regard to the RDO provisions operating in predecessor instruments applying in the industry and the submissions of the parties at the time. Neither NECA, nor any other party, has provided evidence or argument which establishes that the current RDO provision is not appropriate to the industry or offends the modern awards objective. No cogent reason has been advanced for departing from the previous Full Bench decision or altering the provision determined by the Award Modernisation Full Bench in the circumstances of the electrical contracting industry. This element of the NECA application is refused.

8. NECA application to insert a new clause 26.7—Call-back and rest period

[137] Clause 27.4(a) of the Electrical Contracting Award provides:

[138] The call-back provision, found in clause 26.5 of the Electrical Contracting Award, provides:

[139] Notwithstanding clause 27.4, which applies when overtime work is necessary, NECA submitted that clause 26.5 is silent on the question of the length of break between finishing the work recalled to perform and the commencement of the next shift.

[140] NECA submitted that, whilst the 10 hour break between shifts was a feature in the 1998 Award and in the NAPSAs, there is strong evidence that such a break arrangement was exempt under recall to work arrangements. In this regard, it cited:

[141] It also submitted that there was no requirement in the 1998 Award to provide a 10 hour break and/or overtime provisions to employees in Victoria and Tasmania who were working on “Availability for duty” (clause 22.11.2) arrangements.

[142] NECA proposed that a new clause 26.7 be inserted into the Electrical Contracting Award in the following terms:

[143] ECA supported the NECA proposal on the basis that the provision sought was consistent with its survey of members.

[144] The CEPU opposed the application by NECA to insert the proposed clause 26.7 into the Electrical Contracting Award. It submitted that the Electrical Contracting Award covers employees who work with electricity, which is inherently dangerous work. It submitted that fatigue is now widely recognised as a serious occupational health and safety risk and NECA’s application would have the effect of significantly reducing the time that employees called back or on availability duty have to rest.

[145] The CEPU submitted that the Electrical Contracting Award currently provides for a 10 hour rest break between shifts for all employees and there is no logical reason why that rest break is any less necessary for employees who are on call back or availability duty. It submitted that there is every reason to conclude that employees called back on an ad-hoc and unexpected basis might have more difficulty in ensuring an appropriate period of sleep during time not spent at work than an employee who is on a regular pattern of work. It submitted that the current provision is consistent with publically available research distributed by State health and safety bodies which shows that adults on average require between seven and eight hours sleep to function effectively, and that any sleep deficit will accumulate when they do not have sufficient sleep.

[146] The CEPU also submitted that variation of the award to accommodate the work practice proposed by the NECA variation should require the most compelling of evidence, whereas NECA have provided no evidence at all to support what is alleged to be “a significant cost impost and reduced flexibility”.

[147] The CEPU further submitted that the exception to the 10 hour rest break that NECA seeks to introduce is the “least” favourable to employees of all the pre-modern award instrument provisions and did not exist in electrical contracting pre-reform award instruments outside of South Australia.

[148] It submitted that the current wording in relation to call-back and availability duty appeared in both the AIRC’s Exposure Draft during award modernisation proceedings, and the joint CEPU/NECA draft, 93 and was not opposed by any party in the award modernisation proceedings. It submitted that no cogent reason has been made out to vary that provision.

[149] The CEPU submitted that the circumstances of this element of the NECA application are the same as those considered by Senior Deputy President Acton in respect of an application to vary the Joinery and Building Trades Award 2010 94 (Joinery Award) to reduce the 10 hour break under that award in respect of glass or glazing work in a call-back situation. Her Honour found:

Conclusion: in relation to clause 26.7

[150] There was extremely little evidence in relation to this element of NECA’s application. No evidence was given by Ms Astone is relation to the issue. Mr Mier acknowledged that there were instances of call-back without a 10 hour break under the 1998 Award. 96 Mr McLaughlan agreed that the 10 hour break was not applied for call-out and availability purposes, in certain circumstances.97 His evidence was that, the issue arose “mainly in the lift industry” and “fire protection” and is “virtually non-existent” in the rest of the industry.98 All of the union witnesses gave evidence as the dangers of working in the industry and the need for adequate rest.

[151] I am not persuaded to grant the variation to the call-back clause in the Electrical Contracting Award sought by NECA through the inclusion of a new clause 26.7. Clause 27.4 of the Electrical Contracting Award is clear in its terms and applies to the circumstances of working overtime on call-back. The current award provisions were included in the Exposure Draft of the Electrical Contracting Award, having regard to the provisions within pre-existing instruments, which contained varying prescriptions. No submissions were put against those provisions at the time. The provisions were contained in the joint CEPU/NECA draft. 99 The evidence about the actual effects of the call-back clause in the Electrical Contracting Award was extremely limited. NECA has not established cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, to support the variation it seeks.

[152] I am not satisfied that the variation is required or appropriate to achieve the modern awards objective to ensure that the Electrical Contracting Award is operating effectively.

9. NECA application to insert a new clause 26.8—Time in lieu of overtime

[153] Currently the Electrical Contracting Award does not provide for time off in lieu of payment for overtime. 100 This element of the NECA application seeks the insertion of a new clause,101 Time off in lieu of overtime, based on clause 27.5—Time off instead of overtime of the Clerks–Private Sector Award 2010102 which states:

[154] NECA submitted that the provision for time off instead of overtime reflects clause 19.11 of the NSW Award. It submitted that time off instead of overtime provisions appear in some form in 73 of the 122 modern awards made. It further submitted that it meets the modern awards objective stated in ss.134(1)(b), (c), (d), (f) and (h) of the Act because it increases flexibility for employers and the employees (in that it would alleviate fatigue 103 and improves “work/life balance”)104 and improves competitiveness.

[155] ECA supported the NECA proposal on the basis that the provision sought was consistent with its survey of members.

[156] The CEPU opposed the variation.

[157] The CEPU submitted that the issue was considered by the Award Modernisation Full Bench in the award modernisation proceedings that led to the making of the Electrical Contracting Award and has been appropriately dealt with in dealing with an ABI submission seeking time off instead of overtime. 105

[158] The CEPU also submitted that this matter was dealt with before. In particular the CEPU notes that in response to the Exposure Draft, ABI specifically sought time off in lieu to be introduced into the Electrical Contracting Award at paragraph 14 of its submission of 13 February 2009. 106

[159] The CEPU also submitted that NECA, having supported the current provision in the joint CEPU/NECA party draft of 28 November 2008, has now changed its mind.

[160] The CEPU further submitted that the current provision appropriately reflected the circumstances of the industry, with time off instead of overtime not being provided for under any of the pre-modern electrical contracting instruments that the Electrical Contracting Award has replaced, except for clause 19.11 of the NSW Award.

[161] The CEPU further submitted “that the 48 modern awards” that do not provide for time off in lieu of overtime include significant awards covering trades employees. 107 It further submitted that some of the modern awards which provide for time off instead of overtime do so on the basis of one hour of time off for “each hour of overtime” plus a period of time equivalent to the overtime penalty incurred108 and that clause 26.3 of the Electrical Power Industry Award 2010109 – an award with close links to the Electrical Contracting Award - allows time off in lieu of overtime in only a limited number of circumstances, and then requires the equivalent time worked to be given off – and the remainder of the payment due to be paid.

[162] The CEPU further submitted that the limited evidence brought by NECA - that of Ms Astone - does not support the necessity of time off instead of overtime being introduced into the Electrical Contracting Award. It submitted that the evidence does not meet the required “imperative for action” concerning the necessity of including a term in a modern award referred to by Justice Tracey 110 and endorsed by the 2012 Review Full Bench.111 Further, to the extent that an employee seeks time off instead of overtime, an employee and an employer would be able to come to an individual flexibility arrangement prescribing overtime rates and when work is performed under clause 7–Award flexibility of the Electrical Contracting Award.

[163] The CEPU further submitted that NECA’s application attempts to revisit matters determined by the Award Modernisation Full Bench during the award modernisation proceedings (and supported at the time by NECA) without any cogent reason to revisit those matters and should be rejected.

Conclusion: in relation to clause 26.8

[164] The fact that a majority of modern awards provide for time off instead of overtime, in various formulations, does not lend support to the NECA variation. Each modern award has been made having regard to the particular circumstances of the industry, including the relevant provisions applying within the pre-modern awards within the industry.

[165] The only evidence brought in respect of this variation was that of Ms Astone 112 to the effect that an ability to offer time off in lieu of overtime “may assist” employees in their “work/life balance” and assist the operations of A-Phase.

[166] The matters in issue were considered and determined by the Award Modernisation Full Bench in making the Electrical Contracting Award, with ABI seeking a time off instead of overtime provision at the time. The Award Modernisation Bench considered the provisions in State and Federal awards then operating, none of which contained provisions for time off instead of overtime, other than the NSW Award. Consideration of the NECA claim must proceed on the basis of the implicit legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. 113 There must be cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome. The evidence of Ms Astone brought by NECA does not establish any cogent reason for displacing the presumption that the Electrical Contracting Award meets the modern awards objective, particularly in light of the pre-modern award provisions applying in the industry.

[167] Where an employer and an employee might both wish for the employee to take time off instead of overtime to meet the genuine individual needs of the employer and the individual employee, appropriate arrangements can be agreed under clause 7—Award flexibility of the Electrical Contracting Award, subject to the requirements therein in respect of flexibility arrangements. This element of the NECA application is refused.

10. NECA application to vary clause 28.4—Taking of annual leave during close-downs etc.

[168] Clause 28.4 of the Electrical Contracting Award is as follows:

[169] The provision in respect of annual close-down provides the employer with the right to institute a Christmas–New Year close-down and requires employees to take annual leave (or unpaid leave if they have insufficient annual leave accruals) for the duration of the close-down. The right provided by the clause constitutes a departure from the general provision for the taking of annual leave provided for in the National Employment Standards (NES) 114 during a period agreed between an employee and his or her employer, subject to the employer not “unreasonably refusing to agree to a request by the employee to take paid annual leave”. That departure, through the modern award, is authorised within the NES in s.93(3) of the Act, which permits inclusion in a modern award of terms “requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable”. A note to s.94(5) of the Act provides:

[170] The annual close-down provision encroaches upon the more favourable rights of employees otherwise available under the NES, providing the employer with discretion to institute a close-down and require employees to take annual leave for the duration of the close-down. The discretion afforded to an employer is qualified in clause 28.4 of the Electrical Contracting Award by a requirement on the employer to give employees two months’ written notice of the closedown and requirement to take annual leave and a minimum (two weeks) and maximum (four weeks) duration of the closedown. These qualifications are directed to protecting the interests of employees by limiting the amount of leave an employer can require the employee to take, by requiring adequate notice of the requirement to take leave and by requiring a minimum period of leave at that time. The notice and minimum period requirements are directed to ensuring employees have a reasonable opportunity to effectively utilise the taking of annual leave they are required to take.

[171] The NECA application to vary clause 28.4 of the Electrical Contracting Award is directed entirely to reducing the qualifications on the employer’s right to require an employee to take annual leave by:

[172] NECA submitted that the two months written notice is excessive for today’s businesses and should be amended to one month. It also considered that the minimum period of the close-down period of two weeks be varied to a minimum period of one week. It submitted that the provisions to be found in modern awards surrounding annual close-downs in terms of the period of notice required of employers and the minimum period of close-down permitted are many and varied, citing provisions found in nine other modern awards. NECA supports its application on the basis that each industry should be considered individually on the basis of industry needs. The variety of provisions in other modern awards was said by NECA to constitute evidence in support of its application, based on the requirements of the industry.

[173] NECA further submitted that the variation, if granted, would provide employers within the electrical contracting industry with greater flexibility with regards to work practices whilst not removing or diminishing the ability of employees to access annual leave during a Christmas–New Year close-down period and would assist employees who do not have sufficient leave credits to enable paid leave during a close-down period. It submitted that the proposed variation meets the modern awards objective stated in ss.134(1)(d), (f) and (h) of the Act.

[174] The CEPU’s primary submission is that NECA have brought insufficient evidence to show that the Electrical Contracting Award is not meeting the modern awards objective with respect to the annual close-down. Further, NECA have brought insufficient evidence to suggest that the Electrical Contracting Award “must” be varied for the Award to meet the modern awards objective in the manner proposed as part of the 2012 Review.

[175] The CEPU also submitted that the terms of the annual close-down provision was a matter before the Full Bench in the award modernisation proceedings that led to the making of the Electrical Contracting Award and has been appropriately dealt with. It noted that in response to the Exposure Draft, at paragraph 12 of its submission of 13 February 2009, 115 NECA proposed a clause 28.4 which required an employer to give not less than four weeks’ notice of its intention to close-down and a requirement that “if the employer closes down the enterprise in two separate periods, one of the periods must be for a period of at least 14 consecutive days including non-working days”. It submitted that ABI also proposed a period of a month’s notice and proposed no minimum or maximum duration.

[176] It further submitted that, although the matter does not appear to be expressly addressed in the decision of the Award Modernisation Full Bench in making the Electrical Contracting Award, annual close-downs were specifically addressed in an earlier decision of the Award Modernisation Full Bench in relation to general issues and standard clauses on 19 December 2008, determining:

[177] On this basis the CEPU submitted that the issue now raised was before the Award Modernisation Full Bench and was appropriately determined, in accordance with the earlier decision of the Award Modernisation Full Bench, at the time of the making of the Electrical Contracting Award. It submitted that clause 28.4 is not identical to any of the clauses in the pre-modern award instruments, and therefore was clearly redrafted as part of the balancing of obligations and entitlements in the creation of the Electrical Contracting Award and that the employer parties are seeking to re-visit an issue dealt with in the award modernisation process.

[178] The CEPU submitted that most of the pre-modern award instruments that were replaced by the Electrical Contracting Award had notice periods regarding employers directing employees to take leave over a Christmas–New Year close-down. The notice periods varied, although all States except NSW and WA had notice periods of two months. The 1998 Award, which applied in three States, provided at clause 24.15.1 for two months notice. The period of close-down similarly varied, although it is notable that the main Federal award, the 1998 Award, and the Qld Award, had minimum close-down periods of four weeks if taken in one period, double that in the Electrical Contracting Award.

[179] The CEPU submitted that the provision of periods of notice of at least but not less than two months is contained in a number of other modern awards including the Building On-site Award (clause 38.3); the Joinery Award (clause 32.7); and the Fire Sprinklers Award (clause 34.3). It submitted that there is very little in the small amount of evidence proposed to be relied upon by NECA to suggest that employers in the electrical contracting industry should be required to provide less notice than employers covered by awards such as the Building On-site Award, the Joinery Award and the Fire Sprinklers Award.

[180] The CEPU further submits that the minimum period of notice and close-down provided for in the Electrical Contracting Award is reflected in bargaining outcomes in many enterprise agreements.

Conclusion: in relation to clause 28.4

[181] This element of the NECA application was advanced on the basis of added flexibility for employers but paid no regard to the impact of shorter notice and a more limited minimum period of leave employees could be required to take, or their ability to effectively utilise the leave. It proceeded with scant regard to the 29 June 2012 decision of the Full Bench which dealt with preliminary matters, and rejected the proposition that the 2012 Review should proceed on the basis of a fresh assessment of modern awards unencumbered by previous Fair Work Commission authority.

[182] The matters in issue were considered and determined by the Award Modernisation Full Bench in making the Electrical Contracting Award. Consideration of the NECA claim must proceed on the basis of the implicit legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. There must be cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.

[183] NECA argued that the two matters it seeks to vary do not reflect the circumstances of the electrical contracting industry. It provides no evidence of any change in circumstance or other cogent reason why the Electrical Contracting Award made on 1 January 2010 no longer reflects the circumstances of the industry.

[184] Whilst NECA argued that the variety of provisions in other modern awards constitutes evidence in support of its application, based on the requirements of the industry, that variety of arrangements simply reflects the approach of the Award Modernisation Full Bench in its 19 December 2008 decision 117 of identifying an industry standard for annual close-down in respect of each modern award.

[185] A consideration of the industrial instruments operating prior to the making of the Electrical Contracting Award supports a clear finding that clause 28.4 of the Electrical Contracting Award did reflect the industry standard in the electrical contracting industry.

[186] The evidence in the current matter does not support a finding that clause 28.4 of the Electrical Contracting Award does not reflect industry circumstances. The evidence of Ms Astone 118 was that her company “generally has a Christmas shut-down”, with difficulties for the company and its employees due to inflexibility in relation to the lead time119 with the company being unable to re-engage employees during the close-down if orders are obtained and employees are being required to take leave during the shut-down. Her evidence was that the average lead time for a job was “30 days a month”.120 Requests by employees with inadequate leave accruals to return to work earlier cannot be accommodated.121 Ms Astone gave evidence that the shut-down period changed from year to year,122 with award requirements being met, including prior to the making of the Electrical Contracting Award, a requirement for a four week close-down, subject to a two months notice period.123 Mr Doust, in his evidence, accepted that builders/principal contractors will effectively have control over a Christmas shut-down which would affect subcontractors who work under that builder or principal contractor.124 That evidence, in itself, being limited to one small employer in the industry does not establish that clause 28.4 of the Electrical Contracting Award is not meeting the current needs of the industry.

[187] Against that evidence:

[188] The evidence as a whole does not support the NECA contention that clause 28.4 does not reflect the circumstances of the industry.

[189] NECA submitted that the evidence of Ms Astone and the CEPU officials demonstrated that “it’s not a case that all employees in the industry request or desire or want leave at the Christmas closedown period” 131 and some employees may not have a sufficient leave credit to obtain paid annual leave at the time of a close-down. Such evidence, considered by itself, supports the removal of the right of employers to institute a close-down and compulsory leave as much as it supports a reduction in the minimum close-down period.

[190] In summary, NECA has not established that the notice period and minimum close-down period clause in clause 28.4 of the Electrical Contracting Award are not appropriate to the industry or not achieving the modern awards objective. NECA has established no good reason for altering the provision determined by the Award Modernisation Full Bench in the circumstances of the electrical contracting industry. The NECA submission did not address, let alone establish any cogent reasons for doing so. This element of the NECA application is refused.

Conclusion

[191] The Electrical Contracting Award will be varied as follows:

1. By deleting the words “National Training Framework Committee” appearing in clause 12.2(b) and inserting “National Skills Standards Council”.

2. By deleting clause 17.5(a)(ii)—Location of workshop or depot and inserting the following:

4. By inserting at the end of the table appearing in clause 17.7(b) the following:

[192] The determination [PR535020] giving effect to this decision will come into operation on the first full pay period commencing on or after 20 March 2013.

SENIOR DEPUTY PRESIDENT

Appearances:

A Kentish and R De-La Cuadra for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

K McCosh for the National Electrical Contractors Association.

M Mead for the Australian Industry Group.

A Paterson for the Australian Business Industrial.

J O’Dwyer for the Electrical and Communications Association.

Hearing details:

2012.

Sydney:

November 1 and 2.

 1   MA000025.

 2   [2012] FWAFB 5600.

 3   [2012] FWAFB 5600, at para 5.

 4   [2012] FWAFB 5600, at para 19.

 5   [2012] FWAFB 5600, at para 23.

 6   [2012] FWAFB 5600, at para 25.

 7   [2012] FWAFB 5600, at paras 33-34.

 8   [2012] FWAFB 5600, at para 38.

 9   [2012] FWAFB 5600, at para 48.

 10   [2012] FWAFB 5600, at para 84.

 11   [2012] FWAFB 5600, at para 85.

 12   [2012] FWAFB 5600, at paras 86 and 88.

 13   [2012] FWAFB 5600, at paras 89-90.

 14   [2012] FWAFB 5600, at para 91.

 15   [2012] FWAFB 5600, at para 94.

 16   [2012] FWAFB 5600, at para 103.

 17   [2012] FWAFB 5600, at para 115.

 18   [2012] FWAFB 5600, at paras 99-100.

 19   Exhibit NECA1.

 20   Section.3(g) of the Fair Work Act 2009, although it says “acknowledging the special circumstances of small and medium-sized businesses” rather than “assisting” the special circumstances of small and medium-sized businesses.

 21   Transcript, at paras 1919-1929, referencing [2009] AIRCFB 50 at para 45 and [2009] AIRCFB 345 at paras 95-96.

 22   [2012] FWA 9025.

 23   MA000023.

 24   [2012] FWA 9025 at para 38.

 25   [2012] FWAFB 6913.

 26   MA000002.

 27   Transcript, at para 1966.

 28   [2012] FWAFB 5600.

 29   http://www.fwc.gov.au/documents/awardmod/review/AM2012161_corr_FWA.pdf.

 30   See also glossary at http://www.fairwork.gov.au/resources/glossary/pages/default.aspx.

 31   ECA written submissions at paras 20-23.

 32   Transcript, at para 155.

 33   [2008] AIRCFB 717, at para 27 and [2008] AIRCFB 1000, at para 74.

 34   http://www.fwc.gov.au/documents/awardmod/review/AM2012161_corr_FWA.pdf.

 35   ECA written submissions at paras 18-19.

36 [2009] AIRCFB 50, at para 45.

37 Transcript, at para 1634.

38 [2009] AIRCFB 50, at para 45.

39 [2009] AIRCFB 50, at para 46. See also para 49 and [2009] AIRCFB 345, at paras 95-97.

40 For example, clause 4.1.2 of the Electrical, Electronic and Communications Contracting Industry (State) Award (NSW AN120191).

41 For example, clause 4.1.2 of the Electrical, Electronic and Communications Contracting Industry (State) Award (NSW AN120191).

 42   [2010] FWA 4410, at para 52.

 43   AN140103.

 44   AN160108.

 45   AN150050.

 46   AN120191.

 47   AP819377.

 48   AW791396.

 49   (1960) 94 CAR 897.

 50   For example, in clause 17.5(d)(ii) of the Electrical, Electronic and Communications Contracting Award 2010.

 51   [2012] FWAFB 5600.

 52   [2009] AIRCFB 865 at paras 136-140, [2009] AIRCFB 925 and [2009] AIRCFB 945, at paras 105-126.

 53   Transcript, at para 1626.

 54   For example: SKILLED Group Ltd Labour Hire ETU Union Collective Agreement 2010-2014 (AE888394); Alton Personnel Pty. Ltd. Labour Hire ETU Union Collective Agreement 2010-2014 (AE895521); Engineering & Maintenance Solutions Pty Ltd Labour Hire ETU Union Collective Enterprise Agreement 2010-2014 (AE889927); Chelgrave Contracting Australia Pty. Ltd. Labour Hire ETU Union Collective Agreement 2010-2014 (AE888880); Concept Engineering (Aust) Pty. Ltd. Labour Hire ETU Union Collective Agreement 2010-2014 (AE888852).

 55   Transcript, at para 1956.

 56   Transcript, at para 1562.

 57   Exhibit FF3, at para 10 and Transcript, at paras 486-490, 955 and 1180.

 58   Transcript, at paras 1725, 1736 and 2181.

 59   [2012] FWAFB 5600, at para 85.

 60   Transcript, at para 1544.

 61   Transcript, at para 1607-1608.

 62   Exhibit ABI1, at paras 8-9.

 63   Transcript, at paras 1580-1581.

 64   Transcript, at paras 1590 and 1593.

 65   Exhibit ABI1, at para 13.

 66   Exhibit ABI1, at para 14.

 67   Transcript, at para 1541.

 68   Transcript, at paras 1545-1546.

 69   Transcript, at para 1561.

 70   Transcript, at para 1566.

 71   Transcript, at para 567.

 72   Exhibit CEPU4, at paras 14-16 and Transcript, at paras 963-965.

 73   Exhibit CEPU5, at para 18.

 74   Exhibit CEPU6, at paras 10-11.

 75   Exhibit CEPU7, at paras 32-35.

 76   Exhibit CEPU7, at paras 36-38.

 77   Transcript, at paras 1372-1375.

 78   Exhibit CEPU7, at paras 34 and 39.

 79   Exhibit ABI1, at para 14.

 80   AP819355. Note: 1987 award was varied by replacing all clauses etc and became AP819355 - Communications, Electronic and Security Industries (Northern Territory) Award 2002.

 81   MA000020.

 82   MA000036.

 83   AN160109.

 84   The Building and Construction General On-site Award 2010, the Joinery and Building Trades Award 2010 and the Plumbing and Fire Sprinklers Award 2010.

 85   [2009] AIRCFB 50, at para 45.

 86   Exhibit NECA1.

 87   Transcript, at para 454.

 88   Transcript, at para 455.

 89   Transcript, at para 459.

 90   Transcript, at para 1401.

 91   Transcript, at para 913.

 92   Transcript, at para 1824.

 93   http://www.airc.gov.au/awardmod/fullbench/industries/awardmoddocument.cfm?award=building&document=Draft.

 94   MA000029.

 95   [2010] FWA 8752, at paras 42-43.

 96   Transcript, at para 736.

 97   Transcript, at para 939.

 98   Transcript, at para 945.

 99   http://www.airc.gov.au/awardmod/fullbench/industries/awardmoddocument.cfm?award=building&document=Draft.

 100   Clause 26.1 of the Electrical, Electronic and Communications Contracting Award 2010.

 101   Proposed as clause 26.8, presuming that its application to insert a new clause 26.7 in respect of call-out and rest periods is successful.

 102   MA000002.

 103   Transcript, at para 1843.

 104   Transcript, at para 1844.

 105   Para 14 of ABI submission of 13 February 2009; http://www.airc.gov.au/awardmod/fullbench/industries/awardmoddocument.cfm?award=building&document=Submissions.

 106   The submission can be downloaded at: http://www.airc.gov.au/awardmod/fullbench/industries/awardmoddocument.cfm?award=building&document=Submissions.

 107   See for example the Building and Construction General On-Site Award 2010, the Joinery and Building Trades Award 2010 and the Plumbing and Fire Sprinklers Award 2010.

 108   See for example clause 28 of the Nurses Award 2010 [MA000034] and clause 26 of the Higher Education Industry – General Staff – Award 2010 [MA000007].

 109   MA000088.

 110   Shop, Distributive and Allied Employees Association v National Retail Association (No 2) [2012] FCA 480.

 111   [2012] FWAFB 5600.

 112   Exhibit NECA1.

 113   [2012] FWAFB 5600, at para 85.

 114   Section 88 of the Fair Work Act 2009.

 115   The NECA submission can be downloaded on the AIRC website at: http://www.airc.gov.au/awardmod/fullbench/industries/awardmoddocument.cfm?award=building&document=Submissions.

 116   [2008] AIRCFB 1000.

 117   [2008] AIRCFB 1000.

 118   Exhibit NECA1.

 119   Exhibit NECA1, at para 8.

 120   Transcript, at para 396.

 121   Exhibit NECA1, at para 10.

 122   Transcript, at para 465.

 123   Transcript, at para 481.

 124   Transcript, at para 1039.

 125   Exhibit CEPU3, at para 9.

 126   Exhibit CEPU5, at para 9.

 127   Transcript, at para 1305.

 128   Exhibit CEPU7 at para 25 and Transcript, at para 1509.

 129   AE884508.

 130   See [2011] FWAFB 6684, at para 10.

 131   Transcript, at para 1849.

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