[2013] FWC 3714 [Note: a correction has been issued to this document]

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

Motor Traders’ Association of New South Wales and others
(AM2012/53, AM2012/108, AM2012/205, AM2012/224, AM2012/247, AM2013/2)

Vehicle industry

DEPUTY PRESIDENT GOOLEY

MELBOURNE, 8 AUGUST 2013

Variation to the Vehicle Manufacturing, Repair, Services and Retail 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 modern awards, as soon as practicable after 1 January 2012 (the 2012 Review).

[2] Six applications were made to vary the Vehicle Manufacturing, Repair, Services and Retail Award 2010 1 (the Award):

[3] 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.

Legislative provisions applicable to the 2012 Review

[4] 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:

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

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

“134 The modern awards objective

Submissions received

[7] Written submissions were filed by each applicant to vary the Award. In addition, submissions were filed in opposition to some of the applications. The written submissions were supplemented in the hearings on 10 January 2013, 1 March 2013 and 18 April 2013.

[8] In addition, submissions were filed by Business SA and the Australian Federation of Employers and Industries.

[9] The content of submissions is addressed, in relation to each variation proposed, later in this decision.

Technical variations

[10] The majority of the variations proposed were of a technical nature and were aimed at correcting errors, omissions and ambiguities to ensure the appropriate interpretation of the Award. 3

[11] At the hearing of the applications, the applicants advised that they agreed with or did not oppose the following variations to the Award being made:

Date of operation

[12] The applicants sought retrospective operation of these variations. They proposed that the variations operate from 1 January 2010. The retrospective variations were opposed by the AMWU and SDA.

[13] I am satisfied that the variations should be made as technical corrections referable to Item 6(2)(b) of Part 2 of Schedule 5 to the Transitional Act. I therefore consider it appropriate that the variations be retrospective. However the variations will not operate so as to require any employee who has been paid any allowance or loading prior to the date of the decision to repay the monies paid if, as a result of these variations, he or she is not entitled to be paid the loading or allowance.

New classifications for Vehicle Industry RS&R Employees

[14] The AMWU proposed to vary the Award to insert a post trade classification into the Award at the AQF4/certificate 4 level for Vehicle Industry RS&R Employees.

[15] The variation is as follows:

An employee at this level is an employee who holds a Trade Certificate, Tradesperson’s Rights Certificate or equivalent, nationally accredited training at the Certificate III qualification (Level R6 at B.6) achieved through Australian apprenticeships arrangements as prescribed by the National Quality Council in the Australian Qualifications Framework Qualifications Issuance Policy.

In addition, the employee will hold a Certificate IV (AQF Level 4) automotive qualification from the National Automotive, Retail, Service and Repair Training Package qualifications:

An employee at this level is required by the employer, as the principal function of employment as determined by the employer, to perform technical duties above and beyond the skills of an employee at R6 to the level of their training, and will possess high level technical and theoretical knowledge and concepts of motor vehicle technology with in-depth knowledge and skill in some areas.

• High level communications skills that enable effective communication across the business and externally;

• Responsibility for own outputs and that of others where advice and direction is provided;

• Assistance in the mentoring of technical skills to service centre staff and apprentices; and

[16] Insert at clause 33.4 under weekly rate for R7 “792.50” and hourly rate “20.86”.

[17] The Award currently provides at clause 33.4 for wage group Level 1-8. There is currently no wage rate set for R7 or R8 and there are no descriptors for the classifications in Schedule B.

[18] In its decision publishing the Award the Full Bench of the Australian Industrial Relations Commission said as follows:

[19] As a result of discussions between the parties, agreement was reached between the Motor Traders Associations and the Victorian Automobile Chamber of Commerce (VACC) to jointly seek the inclusion of the post trade classification which aligns to several AQF Level 4 National Certificate training packages which have recently been developed by Automotive Skills Australia. At the hearing of this matter on 18 April 2013 the AIG and AFEI indicated that they did not oppose the variation.

[20] The inclusion of the additional descriptors and rate of pay for the classification was foreshadowed as part of the award modernisation process. The variation will ensure that the modern award provides a fair and relevant minimum safety net of terms and conditions.

[21] This variation will take effect from the date of the decision.

[22] The remaining proposed amendments were contested.

Tool Allowance

[23] Clause 19.4(b) of the Award provides as follows:

[24] The AIG proposed to delete clause 19.4(b) and insert the following:

[25] The variation was opposed by the AMWU.

[26] The AIG traced the history of the predecessor award, namely the Vehicle Industry Award 2000, which provided for the tool allowance to be paid to tradespersons who were required by the employer to provide their own hand tools.

[27] The AIG submitted it was not the intention of the parties to the award modernisation process or the Commission to extend the tool allowance previously paid to tradespeople who were required to provide their own tools to all employees irrespective of whether they were required to provide tools. The AIG submitted that there was an inadvertent drafting error.

[28] To support this submission the AIG provided a copy of the draft modern award provided to the Commission by the AMWU which had limited the payment of the tool allowance to tradespeople and apprentices.

[29] The AIG sought retrospective operation of the variation. They proposed that the variation operate from 1 January 2010.

[30] The AMWU submitted that even if it were accepted that there had been an error in the drafting of the award, “the error does not amount to an anomaly or technical problem arising from the Part 10A process for the purpose of sub-item 6(2) of Schedule 5 of the FW (TPCA) Act.”

[31] The AMWU further submitted that the AIG had not presented any evidence that the provision was not operating effectively or contains any anomaly or technical problem or that the clause is not achieving the modern award objective. It was submitted that, to rely on an alleged error made by the VACC during award modernisation, in the absence of any evidence that the provision is not meeting the modern award objective, or is operating ineffectively, would be an error at law.

[32] I do not accept the submissions of the AMWU. It is clear that the Award provision is anomalous as it provides for a tool allowance to be paid irrespective of whether employees are required to supply their own tools or not. It is payable to all employees covered by Section 2. The AMWU accepted this proposition 5 but proposed that this anomaly could be cured by making it clear that the allowance was payable to all employees who were required to provide their own tools.

[33] This submission was rejected by the AIG and other employer organisations on the grounds that it was not the intention of the parties to extend the payment of the tool allowance to non-trades employees.

[34] I accept the submissions of the AIG that the inclusion of this provision was an error.

[35] The award modernisation process commenced by treating the Vehicle Manufacturing Award separately to the Vehicle Repair Services Award.

[36] There was no evidence that any party to the award modernisation process proposed expanding the categories of employees who would be paid a tool allowance.

[37] In the exposure draft of the Award which combined the Vehicle Repair Services Award and the Vehicle Manufacturing Award the error identified by the AIG was first included.

[38] In its decision publishing the exposure draft the Full Bench of the Australian Industrial Relations Commission noted that the draft award did not markedly depart from the provisions of the existing pre-reform awards.

[39] There was nothing in that decision which suggested that the Full Bench was intending to expand the categories of employees who were entitled to the tool allowance. This is unsurprising as no party had made submissions or put forward draft awards that supported an expansion of the categories of employees who should be entitled to the tool allowance. While there may be some merit in the proposition that all employees required to provide their own tools should be paid an allowance there was no evidence before the Commission that employees other than tradespeople are required to provide their own tools. A consideration of the extension of the obligation to pay a tool allowance in these circumstances is best left to the 4 yearly review.

[40] I do not accept that the Commission is not able to correct an obvious error as part of the 2012 Review. However, if I am wrong, the Commission has the power under s.160 of the Fair Work Act 2009 (FW Act) to correct an error in a modern award.

[41] The AIG submitted that the variations should be retrospective. The Full Bench in its Modern Awards Review 2012 decision of 29 June 2012 said that it accepted “as a general principle, variation determinations arising out of the Review should operate prospectively, unless there are exceptional circumstances which warrant a retrospective operative date.” 6

[42] I am satisfied, given the error, that the variation should be retrospective to 1 January 2010. However, the retrospective order will not operate so as to require any employee who has been paid the tool allowance prior to the date of this decision to repay the monies paid if, as a result of this variation, he or she is not entitled to be paid the tool allowance.

Tow Truck Drivers

[43] The MTANSW proposes to vary clause 33.5(c) to insert after the word “week” the words “which will stand alone and not be subject to penalty additions”.

[44] It was submitted that the omission of these words was an error and that the predecessor award had a similar provision. It was submitted that it had been the intention of the parties to maintain the status quo on allowances. 7 It was submitted that the allowance had always been a flat amount paid to tow truck drivers and penalties were not paid on top of the allowance. The AMWU submitted that the MTANSW had not produced any evidence to support a finding that the provision is not meeting the modern award objective, is operating ineffectively or contains an anomaly or that there are technical problems arising from the Part 10A process. The AMWU did not however submit that the MTANSW submissions about the approach to be taken to allowances were wrong.

[45] The MTANSW submitted that, like the tool allowance, this variation should be retrospective.

[46] 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 to the Transitional Act. I therefore consider it appropriate that the variations be retrospective to 1 January 2010. However the variations will not operate so as to require any employee who has been paid any allowance or loading prior to the date of this decision to repay the monies paid if, as a result of this variation, he or she is not entitled to be paid the loading or allowance.

Payment of wages on termination

[47] ABI proposed to amend clause 24.4(a)(ii) by deleting the words “on the next working day” and inserting “within 2 business days after termination; or”. ABI filed a statement of Fiona Corbett, the National Manager Workplace Advice for NSW Business Chamber, who gave evidence based on enquiries made by members of her organisation and ABI. It was her evidence that the provision created difficulties for employers.

[48] ABI submitted that the current provision imposes an administrative and financial burden on employers because it requires the employer to process payments outside of their normal pay run. Further, it was submitted that many small businesses do not have staff available each day to prepare the wages and, in any event, the processing of wages by electronic funds transfer is likely to result in the payment not being available to the employee until the next working day. Further, it was submitted that the current provision was not always logistically able to be complied with. 8

[49] ABI submitted that these issues were particularly acute when the employment is terminated without notice, when the employee is at a remote location or when the calculations of the employee’s entitlement are complex. 9

[50] The AMWU submitted that ABI has shown no cogent reason for the proposed change nor produced any evidence of any relevant change in circumstances. At the hearing the AMWU advised that it did not vigorously oppose the change. 10

[51] Despite the SDA advising that they would support the two business day change 11 subsequently in the hearing the SDA submitted that no cogent reasons had been put forward to support the change. They were not aware of any issues arising from this clause.12

[52] The Award provides currently that monies must be paid either on the day of termination or by forwarding the wages to the employee on the next working day or at the employer’s place of business no later than 7 days after such termination. If the employee in this latter circumstance is required to attend to collect the wages he or she is paid an additional 4 hours of ordinary pay.

[53] I accept the submissions that in the case of abandonment of employment or dismissal without notice for serious and wilful misconduct it may not be possible for an employer to comply with these provisions particularly if the next working day is a Saturday, Sunday or public holiday. There is no evidence before the Commission that employers are not otherwise able to comply with the provision.

[54] The variation will ensure that the Award meets the modern awards objective.

[55] I therefore propose to vary clause 24.4 as follows to add after 24.4(a)(iii):

[56] This variation will operate from the date of the decision.

[57] Conclusion

[58] A Determination varying the Award to give effect to this decision will be issued with this decision.


DEPUTY PRESIDENT GOOLEY

Appearances:

L. Weber for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

J. Fox for the Shop, Distributive and Allied Employees Association.

A. Baumgartner for the Motor Traders’ Association in New South Wales, Western Australia and Queensland.

W. Chesterman and L. Yilmaz for Victorian Automobile Chamber of Commerce.

P. Eblan and M. Sheehan, M for The Motor Trade Association of South Australia.

S. West and H. Waldren for Business SA.

J. Wimalaratna for Australian Federation of Employers and Industry.

G. Vaccaro for The Australian Industry Group.

T. Verner and E. Baxter for Australian Business Industrial.

Hearing details:

2013.

Melbourne

10 January, 1 and 26 March and 18 April.

 1   MA000089.

 2   2012 FWAFB 5600.

 3   Submissions of the MTANSW dated 23 November 2012 at [1].

 4   [2009] AIRCFB 826 at [274].

 5   Transcript PN 229.

 6   [2012] FWAFB 5600 at [115].

 7   Transcript PN 312.

 8   Submissions of ABI dated 23 November 2012 at 5.4.

 9   Ibid.

 10   Transcript PN 345.

 11   Transcript PN 102.

 12   Transcript PN 325.

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