Note: An appeal pursuant to s.604 (C2013/4216) was lodged against this decision - refer to Full Bench decision dated 21 August 2013 [[2013] FWCFB 5551] for result of appeal.

[2013] FWC 2182

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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

Australian Medical Association and others
(AM2012/133 and others)

Health and welfare services

VICE PRESIDENT WATSON

SYDNEY, 15 APRIL 2013

Modern awards review - Health Professionals and Support Services Award 2010 - Junior Rates - Monthly Pay - Span of Hours - Shiftwork - Additional week of Annual Leave - Annualised Salaries - Classification Progression - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Sch 5, Item 6.

Introduction

[1] This decision concerns applications by the Australian Medical Association (AMA), Dr Patrick Sim, Australian Business Industrial (ABI), Australian Federation of Employers and Industries (AFEI), the Australian Dental Association (ADA), and Business SA to vary the Health Professionals and Support Services Award 2010 1 (the Award). The applications were made under Sch. 5, Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) as part of the review of all modern awards which the Fair Work Commission is required to conduct after the first two years of all modern awards coming into effect (the 2012 Review).

[2] At the hearing in Sydney on 26 and 28 November 2012, Mr L Izzo appeared on behalf of ABI, Ms K Barratt with Mr D Wilkinson appeared on behalf of the ADA, Ms F Hancock, of counsel, with Ms O Valarie appeared on behalf of the AMA, Mr A Doyle appeared on behalf of AFEI, Mr H Wallgren appeared on behalf of Business SA, Mr P Frazer appeared on behalf for Dr Patrick Sim, Ms L Hepworth with Ms L Fisher appeared on behalf of the Private Hospital Industry Employers Association (PHIEA), and Ms L Doust, of counsel, with Ms L Svendsen appeared on behalf of the HSU. Various written submissions were filed prior to and following the hearing of the matter.

The relevant legislation

[3] Sch. 5, Item 6 of the Transitional Act provides:

[4] Further provisions of the Act are also applicable and relevant to the 2012 Review. Section 134 provides as follows:

[5] Section 284 provides as follows:

[6] A joint position was advanced by ABI, AMA, ADA, AFEI, Dr Patrick Sim and Business SA (referred to jointly as the employers). That position was not supported by the PHIEA and was opposed by the HSU. A draft determination was tendered by the employers at the hearing of the matters. 2 The joint position sought variations to the following clauses of the Award:

[7] Further amendments were sought in respect of:

[8] I will deal with each of the proposed variations in turn.

Base rate for Junior Rate calculations - Clause 14.2

[9] Clause 14.2 is in the following terms:

[10] The employers seek to vary clause 14.2 by inserting the following words:

[11] The employers submit that the intention of the clause is to provide for all junior employees to be paid a percentage of the level 1 rate regardless of classification level under the Award. They submit that the proposed variation does not alter the effect of the clause. Rather, it provides clarity as to the appropriate level of payment for junior employees.

[12] The employers submit that the clause in its current form leads to an anomaly or technical difficulty in relation to the application of the clause. The AMA submits that difficulties have arisen in giving advice to members as to how long a junior employee could be employed. It submits this anomaly arises as a result of the interaction between clause 14.2 and Schedule B of the Award, in particular the following wording of Schedule B.1.1:

[13] The AMA submits that this wording in combination with the heading in clause 14.2 “% of level 1 rate” has led to confusion.

[14] The HSU submits that the employer proposal tendered at the hearing should not be considered as the proposed amendment was not previously raised. It submits that although the AMA in its amended application raised the issue of junior rates, it was in a different form to the variation now sought.

[15] The HSU further submits that the employers’ proposal creates a disincentive for junior employees to advance their skills, competencies and responsibilities.

[16] I am satisfied that the matter is a legitimate matter for consideration in the two year review and all parties have had an adequate opportunity to comment on the proposal. In my view the variation removes an ambiguity and specifies the base wage rate for the application of the junior rate calculations in a clearer manner than the current wording. I do not consider that the variation alters the meaning of the current clause. I will make the variation to the Award sought.

Frequency of Payment of Wages - Clause 20.1

[17] Clause 20.1 is in the following terms:

[18] The employers seek to vary the clause to enable an employer to change to a monthly pay cycle by giving affected employees one month’s written notice. ABI submits that the variation is sought to enable an employer to choose a pay cycle that best suits its operations in a context where its payroll system would need to accommodate more than one award. It submits that the cost to the employer needs to be considered against any hardship suffered by an employee in respect of a change to pay cycles. It submits that a diminishing reliance on cash in favour of other payment methods such as credit mean that a less frequent pay cycle is less likely to cause undue hardship and inconvenience to employees than it might have done in the past.

[19] ABI further submits that the proposed variation recognises flexibilities in relation to payroll systems such as administering payments into multiple accounts, payment of superannuation into elected superannuation funds, and administration of salary sacrifice arrangements and payroll deductions which are of benefit to both employers and employees. It further submits that a less frequent pay cycle would result in cost savings for an employer.

[20] The PHEIA supports the proposed variation in relation to health professionals, however it submits that support service employees working in lower paid positions may have difficulty budgeting if paid on a month to month basis. An alternative variation was proposed in the following terms:

[21] The HSU opposes the variation. It submits that flexibility in respect of pay cycles is available to employers where agreement is reached with employees or through enterprise bargaining. It submits that it is inappropriate for a monthly pay cycle to be imposed on employees who may be earning as little as $644.80 per week.

[22] There are clear operational advantages in enabling employers to move to a single monthly payroll run for all employees by the giving of notice to affected employees. The immediate change will have an impact on employees but thereafter the impact of the change is unlikely to be significant. There has clearly been a change in cash and payment practices across the community leading to increased viability of monthly pay. Because of the savings available to the employers I consider that the change has merit. However, in order to minimise the impact of changes on employees who will need to adjust to the immediate change in particular I consider that two months notice should be required to be given if an employer wishes to move unilaterally to monthly pay for its staff. I will make a modified variation to the award to reflect this conclusion.

Span of Hours - Clause 24

[23] Clause 24 is in the following terms:

[24] The employers seek to delete the clause and replace it with the following:

[25] The employers submit that the span of hours clause was not given substantive consideration by the Australian Industrial Relations Commission during the award modernisation process. It is submitted that anomalies have arisen as a result of the current drafting of the clause and the inadequacy of the definition of private practice contained within the Award.

[26] Evidence was led during the proceedings concerning advice obtained from the Fair Work Ombudsman in relation to the definition of a private medical practice. The Fair Work Ombudsman advised as follows:

[27] The employers submit that the proposal to remove the words private practice from clause 24 seeks to avoid anomalies arising from the inadequacy of the Award definition. They submit that the consolidation of clauses 24.1, 24.2 and 24.3(a) will lead to less uncertainty about which span of hours applies.

[28] In the alternative, if the employers’ proposal above is not accepted, it is submitted that a definition of private medical practice should be inserted into the Award. A proposed definition was submitted by Business SA and was modified during the proceedings to the following:

[29] The proposed definition is supported by ABI and the AFEI.

[30] The PHEIA generally support the submissions of the other employer representatives. The PHEIA proposes the insertion of a clause specific to private hospitals. The proposed clause is in the following terms:

[31] The PHEIA submit that the inclusion of the clause with removal to the reference to “day worker” would ensure employees working in a private hospital on weekends would receive an appropriate weekend penalty.

[32] The HSU submits that the span of hours provisions were considered by the Full Bench of the Australian Industrial Relations Commission during the award modernisation process. It submits that the clause was consciously adopted at that time. The HSU submits that clause 24.1 establishes the standard for practice within the industry and the clauses thereafter establish exceptions to that general position. It submits that this is apparent by reference to an extract from the decision of the Full Bench concerning the making of the Award:

[33] The HSU further submits that the employers have not made out a case for amending the span of hours and that the employers’ submissions have gone to the difficulty that arises in relation to the definition of private medical practice. It submits that the term private medical practice was not defined in any predecessor awards. It further submits that the insertion of a definition of private medical practice is a matter more appropriately dealt with during the four yearly review of modern awards.

[34] Although primarily sought to be justified by reference to uncertainty as to the meaning of “private” medical, dental and pathology practices, the variations sought also seek to rationalise the spans of hours for different types of operations. As changes in the spans are strongly opposed I consider that it would be preferable to address the issue of uncertainty by adding a definition of “private medical, dental and pathology practices” modified from the joint employer proposal. The issue of rationalising the different penalties involves a larger comparative exercise which is best addressed in the subsequent review of the Award. For the same reason I consider that the more substantive changes sought by the PHEIA should be considered at the four year review.

Shiftwork - Clause 29

[35] Clause 29 is in the following terms:

[36] The employers seek to vary the clause to read as follows:

[37] The employers’ proposal relates to its proposal concerning clause 24 above. It is submitted that the variation proposed in respect of clause 29 is directed at ensuring the clauses, as amended, are not inconsistent.

[38] The HSU submits that this proposal ought to be rejected. It submits that shift loadings are payable to compensate for working at unsociable hours. It submits that even if the employers proposal in relation to the span of hours is accepted the disadvantages such as difficulty obtaining reliable transport to and from work, disruption to sleep patterns, and disruption to family life would still arise and should still be compensated for by virtue of payment of shift loadings in the present form.

[39] As indicated above I do not believe that a sufficient basis exists to vary the span of hours in the Award at this time. Hence the justification of achieving consistency with respect to this variation does not apply. I dismiss this part of the application.

Quantum of Leave - Clause 31

[40] Clause 31.1(b) is in the following terms:

[41] The employers seek to amend the clause to read:

[42] The employers submit that this provision was not subject of consideration by the Full Bench during the award modernisation process. It is acknowledged that while the exposure draft of the Award included a clause that was in similar terms to the existing clause, there were no published reasons that related to the draft clause. The ADA made submissions in relation to the clause during the consideration of the transitional provisions. The employers submit that it cannot be said that this clause has been substantively considered during the award modernisation process.

[43] The employers submit that evidence led by the ADA witnesses during the proceedings establishes that dental practices are making a conscious decision not to open on Saturdays so as to avoid the operation of clause 31. It is submitted that the reduction of opening hours of dental practices is inconsistent with the modern awards objective, particularly s.134(f) and (h) of the Act.

[44] The PHEIA support the employers’ submissions in respect of this clause.

[45] The ADA’s primary position is that the clause should be varied by deleting clause 31.1(b) and replacing it with the following:

[46] The ADA submits that the obligation imposed by the clause has led to an increase in costs for dental practice employers. It led evidence that dental practices are not operating on Saturdays despite demand for them to do so due to the high costs imposed by the Award. It submits that the Award is not meeting the modern awards objective, in particular the need to promote flexible and efficient work practices and the efficient and productive performance of work.

[47] The ADA’s secondary position is that if the variation it proposes is not made, the Award should be varied as proposed by the employers.

[48] Dr Sim seeks to achieve a similar result to that sought by the employers jointly by way of a variation to the definition of shiftworker in clause 3.1.

[49] The HSU submits that the exposure draft of the Award contained an earlier version of the clause in which the qualifying condition for the additional week of annual leave was the performance of work of more than four ordinary hours on 10 or more weekends.

[50] The HSU submits that none of the evidence led by the ADA demonstrates incapacity of dental practices to pay. It submits that given the capacity of such employers to pay rates in excess of the Award minimum there is potential for bargaining to deliver flexibilities which might assist in dealing with any inconvenience resulting from the additional leave entitlements.

[51] I note that the definition of shiftworker in clause 31.1(b) in this Award is different to the common definition in modern awards and that it did not arise from a detailed consideration of alternative formulations and detailed arguments by the parties during the award modernisation process. Nor is it apparent that the wording reflected the pre-existing instruments applying to dental practices.

[52] The evidence of restrictions on operating hours of dental practices arising from the new obligations created by the clause is a matter of concern. It shows that the Award provision is impacting on the viability of operating on Saturdays despite the business desire and client wishes to access those services at those times.

[53] In my view the notion of an extra week of annual leave provided in the NES is intended to be a benefit provided to employees who generally satisfy a common test, although a case may exist for varying that test with respect to particular areas of employment. I am not satisfied that a case has been established in the past or in the present case for a different test to be adopted for this area of employment compared to other areas of employment covered by other modern awards. I will therefore make an order substituting the definition to that sought by the employers in the annual leave clause which is a common shiftworker definition in modern awards for the purposes of the extra weeks leave under the NES. There is no need to amend the definition of shiftworker for other purposes of the Award in clause 3.1.

Annualised Salaries

[54] Dr Sim proposed the inclusion of an annualised salaries clause in similar terms to the annualised salaries clauses in the Legal Services industry Award 2010 5 and the Hospitality Industry (General) Award 2010.6

[55] It was submitted that the majority of chiropractors are paid an annual salary with payments being significantly above Award levels and that support staff are paid by way of an annualised salary above the Award rate of pay. It was further submitted that significant difficulty has arisen in respect of remuneration for chiropractors who were previously award free and who are now covered by the Award.

[56] The HSU submits that the proposed variation is not appropriate to remedy an anomaly or technical difficulty. It further submits that insofar as the proposed amendment is advanced for the purpose of achieving the modern awards objective it is not supported by evidence.

[57] The HSU submits that the Award does not provide an impediment for an employer to employ someone on an annual salary basis. It submits the variation is not necessary.

[58] Annual salary clauses are contained in some awards. However, as the Commission has repeatedly made clear, it is not necessary for such a clause to be contained in the safety net award in order for an annual salary concept to be applied. For example a recent Full Bench said this: 7

[59] I am not satisfied that a sufficient case has been made out for the insertion of an annualised salaries clause as it appears that employment on the basis of annualised salaries is available without it, subject of course to the benefits exceeding the minimum entitlements of the Award.

Classification Progression - Schedule B

[60] The AMA seeks to vary the classification structure in the Award. The AMA submits that clarity is needed as to how long an employee can be kept at the level 1 classification. It submits that the three month restriction therein does not meet the modern awards objective to promote social inclusion through increased workforce participation. The AMA submits that the current definition inhibits employers from hiring junior staff as it is not financially viable to keep them employed beyond a period of three months, at which time an adult level 2 rate would apply.

[61] The AMA submits that the classification descriptor at B.1.1 of the Award should be amended to include the words underlined below:

[62] The AMA also seeks a variation to Schedule B.1.2 in relation to general clerks/typists. The AMA submits that an uncertainty arises due to the description of indicative roles, in relation to general clerks/typists. The description refers to a “General clerk/Typist(between 3 months and less than 1 years service)” . The AMA submits that this description makes it unclear how long an employee would remain at this level. It submits that as a result of this wording employees who perform very basic administrative tasks may be classified as level 3 after 12 months service. It submits that basic administration and reception duties should fall within level 2. The AMA proposes the insertion of the following words in Schedule B.1.2 to clarify the situation:

[63] The HSU did not oppose the AMA application with respect to levels 1 and 2 but submitted that beyond those levels no discounting should apply if an employee is employed to perform the tasks at that level.

[64] In my view the changes sought to Schedule B.1.1 and B.1.2 represent an appropriate clarification of the classification of employees who may be required to perform very basic duties on an ongoing basis. The confusion and anomalies arising from the current definitions will be substantially resolved by making the variations sought. I will issue a determination making these variations.

Other matters

[65] In addition to the variations proposed above, ABI seeks to vary the Award in relation to the cashing out of annual leave. This matter is subject to proceedings before a Full Bench of the Commission.

VICE PRESIDENT WATSON

Appearances:

L. Izzo for Australian Business Industrial

K Barratt with D Wilkinson for the Australian Dental Association

F Hancock, of counsel, with O Valaire for the Australian Medical Association

A Doyle for the Australian Federation of Employers and Industry

H Wallgren for Business SA

P Frazer for Dr Patrick Sim

L Hepworth and L Fisher for the Private Hospital Industry Employers Association

L Doust, of counsel, with L Svendsen for the Health Services Union

Hearing details:

2012.

Sydney.

26, 28 November.

Final written submissions:

HSU, 7 December 2012.

ABI on behalf of the joint employers, 14 December 2012

Business SA, 14 December 2012.

ADA, 14 December 2012.

Dr Patrick Sim, 13 December 2012

 1   MA000027.

 2   Exhibit I1.

 3   Exhibit I2, attachment RW1.

 4   [2009] AIRCFB 345.

 5   MA000116, clause 30.

 6   MA000009, clause 27.

 7   [2013] FWCFB 1228.

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<Price code C, MA000027  PR535561 >