FWC 5736
FAIR WORK COMMISSION
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
Luxury Lodges of Australia Ltd and others
(AM2012/22; AM2012/97; AM2012/189; AM2012/204; AM2012/215; AM2012/254)
DEPUTY PRESIDENT SAMS
SYDNEY, 15 AUGUST 2013
Applications to vary the Hospitality Industry (General) Award 2010 - 2 yearly review of Modern Awards - review proceeds largely by consent - technical and clarification changes - substantive changes reserved until 4 yearly Award review - changes to part time employment rejected - determination made.
 This decision concerns various applications filed by the Australian Hotels Association (‘AHA’), Accommodation Association of Australia (‘AAA’), the Confederation of A.C.T. Industry t/as ACT & Region Chamber of Commerce (the ‘Chamber’), Luxury Lodges of Australia Ltd (‘Luxury Lodges’) and the Australian Services Union (‘ASU’) to vary the Hospitality Industry (General) Award 2010 (the ‘Award’). The applications were made pursuant to Schedule 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 (the ‘Commission’) is statutorily required to conduct after the first two years of all modern awards coming into effect (the ‘2012 Review’). The respondent to all the applications is United Voice (the ‘Union’).
 All of the applications were filed in March 2012 and certain aspects of them (notably in respect to penalty rates) were referred to a Full Bench of the Commission. The residual matters and some outstanding aspects of the Full Bench’s decision in the Modern Award Review 2012 - Penalty Rates  FWCFB 1635 were reallocated to me in March 2013 determination. The Full Bench said at para :
‘ The AHA seeks a variation to clause 33.2 to provide for overtime to be paid if the employee works in excess of their guaranteed number of hours or on either of their two nominated days off. This variation is directly related to matters that are currently before Deputy President Sams, and in particular, a variation to clauses 12.2-12.8 sought by the AHA to introduce flexible part-time arrangements into the award and an associated allowance. It is appropriate that the variation in respect of overtime be dealt with as part of those broader part-time employment matters and we remit it to Deputy President Sams for that purpose.’
 During the first few months of 2013, the Commission chaired a number of conferences with the parties and the parties engaged independently in detailed discussion in order to narrow the issues for determination by the Commission. Ultimately, certain of the applications were withdrawn and others were wholly or partially agreed by the Union or withdrawn on the basis that the issues would be revisited in the four yearly review of modern awards in 2014.
 On 20 April 2013, I issued directions for the filing and service of written submissions and any evidence to be relied upon in respects to all outstanding matters. However, when the applications were listed for hearing on 12 June 2013 a broadly consensual position was put between the Union and the AHA was proposed for approval by the Commission.
 However, at ‘the heel of the hunt’, Business SA (intervening) proposed alternative amendments to the Request for Unpaid Meal Break Clause (cl 31). The Chamber also proposed changes to this clause. I shall deal with these submissions later in this decision.
Relevant statutory context
 Schedule 5, Item 6 of the Transitional Act provides:
‘(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.
(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.
(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.
(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).’
 Provisions of the Fair Work Act 2009 (the Act) are also applicable and relevant to the 2012 Review. Sections 134 and 138 provide as follows:
What is the modern awards objective?
(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of FWA’s modern award powers, which are:
(a) FWA’s functions or powers under this Part; and
(b) FWA’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.
(1) Modern award minimum wages cannot be varied under this Part except as follows:
(a) modern award minimum wages can be varied if FWA is satisfied that the variation is justified by work value reasons (see subsections 156(3) and 157(2));
(b) modern award minimum wages can be varied under section 160 (which deals with variation to remove ambiguities or correct errors) or section 161 (which deals with variation on referral by the Australian Human Rights Commission).
Note 2: For the meanings of modern award minimum wages, and setting and varying such wages, see section 284.
(2) In exercising its powers under this Part to set, vary or revoke modern award minimum wages, FWA must take into account the rate of the national minimum wage as currently set in a national minimum wage order.
138 Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.
284 The minimum wages objective
What is the minimum wages objective?
(1) FWA must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.
When does the minimum wages objective apply?
(2) The minimum wages objective applies to the performance or exercise of:
(a) FWA’s functions or powers under this Part; and
(b) FWA’s functions or powers under Part 2-3, so far as they relate to setting, varying or revoking modern award minimum wages.
Meaning of modern award minimum wages
(3) Modern award minimum wages are the rates of minimum wages in modern awards, including:
(a) wage rates for junior employees, employees to whom training arrangements apply and employees with a disability; and
(b) casual loadings; and
(c) piece rates.
Meaning of setting and varying modern award minimum wages
(4) Setting modern award minimum wages is the initial setting of one or more new modern award minimum wages in a modern award, either in the award as originally made or by a later variation of the award. Varying modern award minimum wages is varying the current rate of one or more modern award minimum wages.”
The 2012 Award Review
 In June 2012, a Full Bench of the Commission handed down a decision in relation to the 2012 Review; See: Modern Awards Review 2012  FWAFB 5600. At paragraph 63 the Bench said:
‘ Under sub item 6(3) of Schedule 5, the Tribunal has a broad discretion to vary any of the modern awards in any way that it considers necessary to remedy any issues identified in the Review. However, sub item 6(4) provides that in making such a variation the Tribunal must take into account the modern award objective in s.134 of the FW Act, and, if varying modern award and minimum wages, the minimum wages objective in s.284.’
 The Bench also said:
‘ Two points about the historical context are particularly relevant. The first is that awards made as a result of the award modernisation process are now deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Provisions Act). Implicit in this is a legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. The second point to observe is that the considerations specified in the legislative test applied by the Tribunal in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective which now appears in s.136.
 Although the Tribunal is not, as a non-judicial body, bound by principles of stare decisis, as a matter of policy and sound administration it has generally followed previous Full Bench decisions relating to the issue to be determined, in the absence of cogent reasons for not doing so. In another context three members of the High Court observed in Nguyen v Nguyen:
‘When a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasion upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law: see Queensland v The Commonwealth (1977) 139 CLR 585 per Aickin J at 620 et seq.’
 While the Tribunal is not a court, the public interest considerations underlying these observations have been applied with similar, if not equal, force to appeal proceedings in the Tribunal. In Re Dalrymple Bay Coal Terminal Pty Ltd a Full Bench summarised the position in relation to single members sitting at first instance as follows:
‘There is not a developed system of stare decisis in this jurisdiction. However it is clearly desirable for members of the Commission sitting alone to adhere to Full Bench decisions which are relevant to the matter being determined. Such a policy aids consistent decision making which in turn provides the parties to Commission proceedings with greater certainty.’
 These policy considerations tell strongly against the proposition that the Review constitutes a ‘fresh assessment’ unencumbered by previous Tribunal authority.
 In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process, the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.”
 In relation to the application of s 138 of the Act to the 2012 Review, the Full Bench said:
‘ We are satisfied that s.138 is relevant to the Review. The section deals with the content of modern awards and for the reasons given at paragraph  of our decision it is a factor to be considered in any variation to a modern award arising from the Review. We also accept that the observations of Tracey J in SDAEA v NRA (No.2), as to the distinction between that which is ‘necessary’ and that which is merely desirable, albeit in a different context, are apposite to any consideration of s.138.
 While s.138 is relevant to the Review there is still the question of the extent of its impact and the circumstances in which it will have on an application to a variation determination. The supplementary submissions revealed a diversity of views about these issues. We are not persuaded that these issues have been the subject of sufficient debate at this stage. The precise impact of s.138 is a question best considered in the context of a particular application. We agree with the RCAV’s supplementary submission that ‘the nature of the evidence and the facts as found arising from that evidence will condition the exercise of power and the ultimate outcome required to be determined by the review.’’
 In a further statement the President indicated that:
‘Parties interested in a modern award are encouraged to discuss the applications relating to that award with a view to arriving at a consent position, or at least narrowing the issues in dispute.’
 The applications were listed for hearing on 12 June 2012. Mr N Swancott, appeared for the Union; Mr J Sweetman with Mr Evans appeared for the AHA and Mr H Wallgren appeared for Business SA. I note that the ASU had earlier advised the Commission that it did not intend to press its application (AM2012/97). Accordingly, that matter is discontinued. I also record that Luxury Lodges was represented by the AHA in respect to its application AM2012/22. The Commission also dismissed an application filed by Recruitment & Consulting Services Association (AM2012/63) for want of prosecution. Despite being notified of all proceedings, that entity had not appeared at any of the listings had not complied with the directions of the Commission.
 Mr Swancott advised that a number of matters in the AHA application AM2012/215 had been agreed with the Union and had been incorporated in a marked up version of the Award, which he tendered in the proceeding. He said that these revisions of the Award clarify the meaning and intent of the parties as to how a particular clause operates and there were no substantive alterations to any of the terms and conditions of the Award. A summary of the changes is as follows:
● definition of managerial staff (cl 3);
● definition of ordinary hourly rate and standard hourly rate (cl 3);
● clarification of termination of employment clause (cl 16);
● deletion of salary absorption clause in cl 20.2;
● rewording of vehicle allowance clause (cl 21.1(e));
● amendment to forklift allowance (cl 21.2(a);
● amendment to first aid allowance (cl 21.2.6);
● clarification of salary arrangements for managerial staff (now in cl 27)
● clarification of application of ordinary hours clause to full time and new part time employees (cl 29);
● revision of rostering provision (cl 30.1);
● clarification of employees’ breaks (cl 31);
● minimum entitlement for casual work on public holidays (cl 32.2(b));
● correction to loading in public holiday clauses (cl 32.2(c);
● deletion of duplicated rest break provisions (cl 45 and 46); and
● minor amendment in Schedule D in respect to managerial staff (cl 2.9).
 Mr Swancott said the only outstanding issue for the AHA was the part time employment provisions. He provided detailed submissions opposing the AHA’s and the Chamber’s positions. In summary, the Union believed there was insufficient evidence to justify the changes sought and that the proposals did not satisfy the test set by the Full Bench of the Commission in the 2012 Award Review decision. He also submitted that the AHA proposal would have the effect of limiting flexibility rather than enhancing it.
 Mr Evans for the AHA agreed with the changes to the Award identified by Mr Swancott in his submissions. Mr Evans reminded the Commission that the AHA’s application was in two sections - significant changes and correctional changes. Mr Evans said that the AHA was keen to pursue issues of the practical application of the part time provisions, such as allocation of overtime and changing hours for part time employees. The AHA had modified its earlier position and, despite detailed discussions with the Union, was unable to reach agreement.
 Mr Evans advised that the AHA had now decided not to press its application in this respect. Nevertheless, he put the Union and Commission on notice that these issues would be pursued in the four yearly review of Awards in 2014.
 Mr Evans indicated that the AHA was very pleased with the agreed changes on meal breaks which now meant that a meal break was not mandatory for a casual or part time shift up to six hours. This change recognised that not all part time workers want a meal break after five hours, but it will still apply if they do. Mr Evans put that all of the other changes outlined by Mr Swancott were agreed to by the AHA. He proposed that the Commission issue a determination based on the consolidated document tendered by the parties, He added that Luxury Lodges supported the AHA’s submissions.
 Mr Wallgren for Business SA, supported the technical variations proposed by the Union and AHA. However, he proposed a further simplification of cl 31 dealing with meal breaks. When Mr Swancott said the further change was unnecessary, Mr Wallgren agreed not to press it. However, later that day, Mr Wallgren, in correspondence to the Commission, proposed further simplification of cl 31.
 In a written submission, the Chamber claimed that variations should be made to the part time employment clause, particularly in relation to employment flexibility, documentation requirements and the ability for a part time employee to perform additional hours. It was argued that the changes sought were consistent with achieving the Modern Award objective and would ensure the Award operated effectively without anomalies or technical problems arising from the Part 10A Award Modernisation process.
 The submission relied on the comments of Watson VP in National Retail Association Ltd; Master Grocers Australia Limited; Australian Retailers Association; Jim Whittaker  FWA 5068, in which His Honour correctly identified the difference between variations outside the Award Review process and variations sought through the Review. The Review should approach proposed variations on a merits basis, without the significant hurdles applying to variations outside the review process. The submission proposed the following:
a. Removal of the prescriptiveness contained within sub clause 12.3 requiring the specification of the hours worked each day, which days of the week the employee will work and the actual starting and finishing times each day in writing.
b. The inclusion in sub clause 12.4 of the ability to verbally agree to a short term variation of employment hours; and
c. Application of overtime provisions for a part time employee under clause 12.7.
 The grounds for the changes were said to be:
a. The removal of the heavy regulatory burden currently imposed on hospitality employers and employees regarding variations and employment arrangements;
b. The improvement of the operation of the HIGA in line with modern day industry practices and technology applications;
c. The promotion of flexible work practices by allowing employers and employees to roster/schedule accordingly regarding the needs of the business peaks and troughs of trade and an employee work/life balance;
d. Ensuring hospitality employers are not discouraged or penalised for offering additional hours of work to part time employees if available;
e. The provision of part time employees with the opportunity to work additional hours in line with the employee work/life balance requirements; and
f. Ensuring the award modernisation process has occurred.
 In my view, the application of the Chamber should be dismissed. I make this finding for the following reasons:
There was no evidentiary foundation, let alone any persuasive evidence, which would justify the application being granted. I note that when the Chamber filed the application on 8 March 2012, it said: ‘Upon listing of this application by FWA, ACTCCI will file relevant witness statements and further particulars in support of the application.’ Despite my earlier directions, no witness statements were filed by the Chamber. Moreover, at no time during the various conferences with the parties was the Commission informed by the Chamber that it intended to rely on witness evidence in pressing its application.
The overwhelming consent position reached by the major parties to the Award, namely the AHA and the Union, is an important and relevant consideration as to whether the 2012 Review of this Award has satisfied the Modern Award objective. I note the parties have reserved their rights to pursue more substantive variations to the Award in the 2014 Award Review.
The timing, consideration and determination of these applications has been carefully and cautiously pursued by the parties resulting in the 2012 Review being completed in less than six months before the next review is to commence. I do not consider the Chamber’s position will be prejudiced by the short intervening period before the 2014 Award Review.
The Full Bench in its decision the 2012 Review Case said at paras  and :
‘ In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process, the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome.
 To summarise, we reject the proposition that the Review involves a fresh assessment of modern awards unencumbered by previous Tribunal authority. It seems to us that the Review is intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome. Having said that we do not propose to adopt a “high threshold” for the making of variation determinations in the Review, as proposed by the Australian Government and others.’
I am not satisfied that the Chamber has established cogent reasons, such as a significant change in circumstances, to justify the changes it seeks to the part time provisions of the Award. I note Mr Evans’ warm embrace for the amendments agreed to by the Union to the meal breaks provision as it applies to part time employees.
Since 2009, conditions relating to part time employment have been a major topic of contest in this Award and other Awards during the Award Modernisation process; The Full Bench of the Commission has been reluctant, in other proceedings, to endorse proposals similar to those advanced by the Chamber in this case. One cannot ignore this line of recent authority. I decline to do so.
 Finally, in respect to the further submission concerning simplification of cl 31 proposed by Business SA after the hearing on 12 June 2013, I do not consider that the joint proposal of the AHA and the Union in respect to cl 31 is unclear or unambiguous. Accordingly, I am not persuaded that the further suggestions of Business SA are necessary at this time.
 The Commission congratulates the parties for the time and effort which has been put into the 2012 Award Review process for this Award which has largely resulted in a consent position being reached. I shall publish a determination which will give effect to the changes contained within the consolidated Award document tendered in the proceeding. The changes therein shall apply, on and from, today’s date.
J Sweetman and T Evans of the Australian Hotels Association
H Wallgren and S West of Business SA
D Baramili, Solicitor, for Accommodation Association of Australia
L Izzo, Solicitor, for Australian Business Industrial and Restaurant and Catering Victoria
N Swancott with C Acev of United Voice
31 January, 12 March, 26 April, 12 June
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