[2013] FWC 6114

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

Timber Trade Industrial Association
(AM2012/21)

CFMEU—Forestry and Furnishing Products Division
(AM2012/64)

Timber Merchants Association
(AM2012/90)

Australian Furniture Association
(AM2012/96)

Mr James Daniel
(AM2012/284)

DEPUTY PRESIDENT GOOLEY

MELBOURNE, 4 SEPTEMBER 2013

Modern Awards Review 2012—Variation of the Timber Industry Award 2010.

[1] The Fair Work Commission (the 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 Timber Industry Award 1 (the Award) by the following organisations:

[3] Submissions were made by the parties in support of their applications and in opposition to other applications. In addition, the following organisations made submissions in support or in opposition to some of the applications:

[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.

Legislative provisions applicable to the 2012 Review

[5] The transitional review is being conducted under Item 6 of Schedule 5 to the Transitional Provisions Act. Item 6 provides:

[6] The legislative provisions applicable to the transitional review were considered in a decision relating to the Modern Awards Review 2012 given on 29 June 2012. 2 In that decision, the Full Bench dealt with various preliminary issues relating to the approach to be adopted in the review. In particular, and for the purposes of the present matters, I note and adopt the following conclusions in that decision:

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

Cashing out of personal leave

[8] Clause 34.4 of the Award provides as follows:

[9] This clause was not included in the Award made by the award modernisation Full Bench but was included as a result of an application to vary the Award made in 2010 by the CFMEU, with the support of the Timber Trade Industrial Association (TTIA) and the Timber Merchants Association (Vic) (TMA).

[10] The TMA sought a variation to clause 34.4(a) to include a new clause 34.4(a)(iii) as follows:

[11] The TMA submitted that the non-inclusion of such a provision was an oversight when the Award was varied by consent in 2010.

[12] The Australian Furniture Association (AFA) made an application in the same terms as the TMA.

[13] On 7 June 2013 the TTIA advised that it did not wish to pursue its proposed variation to this clause and it supported the applications made by the TMA and the AFA.

[14] While Business SA does not support the cashing out of personal leave, it supported the TTIA’s application on the basis that the predecessor awards provided for cashing out once a year. Business SA advised that it supported the wording proposed by the TTIA as opposed to that proposed by the TMA and the AFA. The Australian Industry Group (the Ai Group) supports the application as did Australian Business Industrial (ABI) and the Victorian Association of Forest Industries (VAFI).

[15] The CFMEU and AWU do not oppose the applications of the TMA and AFA.

[16] I accept the submissions that the failure to include a limitation on the number of times an employee can ask to cash out personal leave was an oversight and I am prepared to make the variation proposed by the AFA and TMA.

Annual leave for pieceworkers

[17] Clause 33.4 of the Award provides as follows:

[18] The TTIA seeks to add a new clause 33.4(d) to add the following:

[19] The TTIA sought to vary clause 33 of the Award to make it clear that annual leave for pieceworkers should be based on the employee’s minimum wage for the employee’s classification plus a loading of 25%.

[20] It was submitted that it is not clear how annual leave for pieceworkers is calculated.

[21] The CFMEU and AWU did not oppose the application in principle. The CFMEU proposed the following alternative clause:

[22] The CFMEU submitted that the concept of “standard weekly hours” is not defined in the Award and will lead to confusion.

[23] The Ai Group supported the TTIA application as did VAFI.

[24] I accept the submissions that it is not clear how the annual leave for pieceworkers is calculated. All parties are in agreement about the method of calculation of pieceworkers’ annual leave. They only disagree on the wording. I agree with the CFMEU that it is not appropriate to include in the Award an undefined concept namely standard weekly hours. The wording proposed by the CFMEU is clear and consistent with the method of calculation proposed by all parties. I will make the variation proposed by the CFMEU.

Ordinary hours of work—day workers

[25] Clause 27.2 of the Award provides for ordinary hours of work for day workers as follows:

[26] The TTIA seek to expand the span of hours from 6.30 am to 6.00 pm to 6.00 am to 6.00 pm.

[27] It was submitted that employees ask for an early start, particularly in hot weather. It was submitted that the variation would be consistent with other modern awards which provide for the span of hours to be varied by one hour at either end with the agreement of the majority of employees. It was submitted that other awards that apply to the employers permit an earlier start and that this creates some confusion. To support this submission, the TTIA relied on an email from an unnamed member that submitted it was an administrative hassle to individually track overtime for 6.00 am to 6.30 am.

[28] The CFMEU and AWU oppose the application. It was submitted that the TTIA had failed to show cogent reasons for the variations, having regard to the modern awards objective. Nor had it established that the variation was necessary to ensure that the Award operates effectively and without anomalies or technical problems arising out of the award modernisation process.

[29] It was submitted that the difficulty identified by the TTIA, that other awards which applied to employees in this industry contain different spread of hours, is no different to what applied prior to the award modernisation process. It was further submitted that no weight should be given to the email relied upon by the TTIA. It was submitted that the adoption of the TTIA proposal would reduce the safety net and is not justified by reference to administrative difficulty.

[30] The Ai Group supports the application as does VAFI.

[31] I am not prepared to make the variation sought by the TTIA. Apart from one anonymous email no evidence was called to support the variation. The Award includes the standard award flexibility clause. The award flexibility clause permits the employer and individual employees to vary arrangements for when work is performed. The TTIA submitted that the impetus for the proposed variation arises from employee requests to start early, yet the proposed draft clause imposes a wider span of hours on all employees without their agreement. The other awards referred to by the TTIA, such as the Manufacturing and Associated Industries and Occupations Award 2010 3, permits a variation to the span of hours but only with the agreement of a majority of employees or with an individual employee.

[32] I am not satisfied that the current clause is causing the Award to not achieve the modern awards objective or is operating ineffectively with anomalies and technical problems arising out of the award modernisation process. The TTIA has not provided any cogent reasons why the award modernisation Full Bench decision should be departed from.

Camping allowance

[33] Clause 21.7 of the Award provides for a camping allowance as follows:

[34] That allowance is treated as an expense-related allowance and is varied in accordance with the CPI increase applicable to private motoring. 4

[35] The CFMEU seek to delete those provisions and have the camping allowance treated as a wage related allowance and expressed as a percentage of the standard rate as follows:

[36] It was submitted that the camping allowance is a disability allowance as opposed to an expense-related allowance and therefore should be increased by reference to the national wage adjustment and not by reference to the CPI.

[37] To support this contention the CFMEU points to clauses 13.3(k) and (l) of the Award which provides for conditions that apply to fire fighting and provides for a camping allowance and for a camping facilities allowance:

[38] The CFMEU submitted that these clauses lend weight to a conclusion that the camping allowance in clause 21 is not an expense-related allowance but a wage-related allowance or disability allowance.

[39] The CFMEU pointed to the history of adjustment of the camping allowance in the Timber and Allied Industries Award 1999 5 (the 1999 Timber Award). The camping allowance in that award was adjusted in line with wage adjustments and not in line with the CPI. It submitted that the decision to treat the camping allowance as an expense-related allowance was an anomaly.

[40] The AWU supported the application.

[41] Business SA opposed the application and said it was not unusual for a camping allowance to be treated as an expense-related allowance. Both the Building and Construction General On-site Award 2010 6 and the Plumbing and Fire Sprinklers Award 20107 provide for a camping allowance which is a monetary figure and not a percentage of the standard rate. Both awards adjust the camping allowance in line with the CPI.

[42] It submitted that the CFMEU was seeking to revisit a matter that has already been considered by the award modernisation Full Bench and that there were no cogent reasons for revisiting the matter.

[43] The TMA and ABI neither supported nor opposed the application made by the CFMEU.

[44] The Ai Group submitted that the CFMEU’s proposal would see an increase in the camping allowance. Further, it submitted that the CFMEU put forward in its draft award to the award modernisation Full Bench a provision for a camping allowance at a flat dollar rate. That proposal was adopted in the exposure draft of the Award. While this was acknowledged by the CFMEU, the CFMEU now say that was a mistake. 8

[45] It submitted that the CFMEU has not provided any evidence to support its assertion that clause 21.7 is causing the Award to not achieve the modern awards objective or is operating ineffectively with anomalies and technical problems arising out of the award modernisation process. It submitted that the CFMEU has not provided any cogent reasons why the Full Bench decision should be departed from. Further, it was submitted that the variation was not necessary and is merely something which the CFMEU desires.

[46] VAFI does not oppose this application.

[47] I do not propose to make the variation sought by the CFMEU. I do not accept the submission that the camping allowance is not paid to cover the costs associated with camping. While clauses 13(k) and (l) of the Award go some way to supporting the CFMEU’s contentions their inclusion in the Award is not conclusive. It might be said that the camping allowance in clause 21.7 has both characteristics in that it is intended to reimburse employees for the cost of camping and to compensate employees for the disabilities associated with camping.

[48] There was insufficient evidence to support a finding that this was an error or oversight or that the Award is not achieving the modern awards objective or is operating other than effectively, without anomalies or technical problems arising from the award modernisation process.

Schedule C, clause 5.5(b)

[49] The CFMEU submitted that reference to clause “25—Payment of Wages” in this section is an error and the reference should be to clause “24—Higher Duties”.

[50] It was submitted that the clause was derived from the Furnishing Industry National Award 2003 9 (FINA) which cross-referenced the classification to the mixed functions clause. The CFMEU submitted that the comparable clause in the Award was clause 24, not clause 25. It was submitted the reference to clause 25 does not give effect to the intention that the employee receive a higher rate of pay. The current reference to the wages clause has no useful effect.

[51] Ai Group submitted that the reference to clause 25 was done consciously and therefore no technical problem worthy of rectification exists. It was submitted that the reference to clause 24 was included by the CFMEU in its draft awards dated 6 March and 26 March 2009. The exposure draft released in May 2009 included a reference to the higher duties clause but this reference was later replaced by the reference to clause 25. It was submitted that this indicates that the Commission turned its mind to the appropriate reference and decided to adopt what was originally suggested by the CFMEU. The Ai Group submitted that the CFMEU had not provided any cogent reasons why the Commission should depart from the decision of the award modernisation Full Bench.

[52] The difficulty with the Ai Group’s submission is that the reference to clause 25 makes no sense. If the Ai Group is correct, the clause in its current form simply states that the employee will be paid in accordance with the payment of wages clause. As all employees are paid in accordance with clause 25, the reference to clause 25 in Schedule C, clause 5.5(b) is unnecessary.

[53] It is clear on its face that the clause is intended to provide that a timber furniture production employee level 4A who performs 80% of the duties of a timber furniture tradesperson, but does not possess the necessary qualifications, will be paid a higher rate of pay. It is only if the reference to clause 24 is included does the clause make sense. It does not matter if the error was caused by a mistake of the CFMEU or the award modernisation Full Bench.

[54] I will make the variation proposed by the CFMEU as the current clause contains a technical error and it is appropriate as part of this review that technical errors are corrected.

Dirty work allowance

[55] The Award at clause 21.14 provides for the payment of a dirty work allowance as follows:

[56] The CFMEU proposed that the current provision be deleted and replaced with:

[57] It was submitted that the variation is necessary to correct an anomaly. It submitted that the clause is derived from the Pulp and Paper Industry—Production Award 1999 10 (PPIPA). It submitted that the FINA provided an hourly allowance which was the equivalent of 0.06% of the standard rate per hour worked.

[58] The CFMEU submitted that the PPIPA was not the appropriate benchmark and that the FINA should be used as the relevant benchmark. It was submitted that allowance in the PPIPA which was a work-related allowance had not been adjusted to give effect to the safety net adjustments since 1999. It was submitted that the award modernisation Full Bench simply picked up the amount in the PPIPA and did not make the appropriate adjustment. It submitted that the allowance in the FINA had been adjusted on each occasion the safety net adjustment had been made.

[59] It was further submitted that employees covered by the FINA are more likely to be award-reliant than employees covered by the PPIPA. An employee employed under the FINA prior to award modernisation would have been paid $2.89 per day for dirty work and is now paid $1.72 per day. If the variation is made the employee would now be paid $3.13 per day. It was submitted that this variation is necessary to ensure that the Award provides a fair and relevant safety net.

[60] It was also submitted, in the alternative, that if the PPIPA had been adjusted in line with the national wage decisions, at the time the Award was made, the allowance of $2.13 per day would have been paid, which would have been 0.33% of the standard rate.

[61] Business SA submitted that the current clause was included in the exposure draft published by the Commission on 22 May 2009. In the CFMEU’s response to the exposure draft, the CFMEU proposed in lieu of the percentage of the standard rate, a monetary amount of $1.62. In its second response the CFMEU proposed a dirty work allowance in identical terms to the exposure draft.

[62] It was submitted that prior to award modernisation the timber industry was regulated by a large number of industrial instruments. In this context, there is no evidence that the wording in the current clause is the result of an anomaly or technical error and it was submitted that the variation was not necessary to ensure that the Award meets the modern awards objective.

[63] The AWU supported the application. The TMA and ABI neither supported nor opposed the application. VAFI do not oppose the application.

[64] The Ai Group also pointed to the fact that the current clause reflects the provision proposed by the CFMEU at the time of making of a modern award. It submits that the CFMEU has not put forward any cogent reasons for the variation and has not established that the clause in its current form is causing the Award not to achieve the modern awards objective or is operating ineffectively with anomalies or technical problems arising from the Part 10A award modernisation process. It submitted that the variation is simply something desired by the CFMEU.

[65] It was not disputed by the opponents to this variation that the allowance picked up by the award modernisation Full Bench had not been adjusted since 1999 when the rate was set at $1.62.

[66] I accept the submissions of the CFMEU that the selection of an out of date allowance was an anomaly. I further accept that that amount should be adjusted in line with the national wage adjustments that occurred after that date. The CFMEU submitted that had the national wage adjustments been applied to this allowance, the rate would have been $2.13 per day at the time the Award was made and had that been the case the allowance would have been set out 0.33% of the standard rate.

[67] I do not accept the submissions of the CFMEU that the rate from the FINA was the appropriate rate because there were more award-dependent employees under that award than the PPIPA. I do accept that the minimum allowance should be set at the adjusted rate.

[68] I will therefore vary the Award to provide that the dirty work allowance is set at 0.33% of the standard rate.

Millwright allowance

[69] The Award at clause 21.9(a)(i) provides that a millwright is paid a tool allowance of $4.72 per week. The CFMEU propose that that amount be increased to $14.69.

[70] Mr Arturo Menon, an organiser with the CFMEU Forestry and Furnishing Products Division, gave evidence 11 that he was approached by members classified as millwrights asking why they were paid a lower tool allowance than maintenance contractors who came to the site to perform maintenance work during the shutdown. As a consequence, he visited a number of other mills and found that the millwrights have always been paid the lower tool allowance rate from the Award. It was his evidence that the work performed by a fitter and by a millwright is the same work except that the millwright has specialised skills relevant to working in a sawmill.

[71] Mr Bradley Coates, the District Secretary of the CFMEU—FFPD Greater Green Triangle District in South Australia and Western Victoria, gave evidence 12 that other enterprise agreements provide the tool allowance for maintenance workers at between $14.29 and $15.98.

[72] Mr Keith Payne, who is employed as a maintenance/millwright, gave evidence 13 that he is a qualified fitter machinist by trade and that his work involves fixing and maintaining the mill machinery. He supplied tools worth thousands of dollars.

[73] The CFMEU submitted that this variation would correct an anomaly arising from the award modernisation process. It also submits that the Award does not provide a fair or relevant safety net in relation to the tool allowance. It was submitted that the amount of the tool allowance was derived from the Western Australian Timber Workers Award. It submitted that that allowance had not been increased since 1995. Further it was submitted that it does not equate to the amount paid as a tool allowance to other trades people. It submits that a millwright is a qualified tradesperson and the tool allowance payable under the Manufacturing and Associated Industries and Operations Award 2010 14 is $14.69. It submitted that if the millwright is employed by a contractor, the millwright will receive a higher tool allowance than a directly employed millwright doing the same work. It submitted that an examination of tool allowances for mechanical trade people in other modern awards shows that $14.00 per week is generally considered to be an appropriate rate for a tool allowance.

[74] Business SA submitted that none of the grounds put forward by the CFMEU demonstrate that the tool allowance for millwrights is an anomaly arising out of the award modernisation process. The amount of $4.40 was included in the exposure draft and the CFMEU did not raise this as an issue at the time. It submitted that there was no evidence to demonstrate the variation is necessary to achieve the modern awards objective and it would lead to a substantial increase in costs for businesses.

[75] The Ai Group submitted that this provision was in the exposure draft and the CFMEU did not raise this issue at the time. The Ai Group submitted that the provisions in other awards are not relevant and the CFMEU’s reliance on consistency between awards in support of this variation is to be contrasted to its proposal to include in the Award a late payment penalty. The Ai Group submitted that the CFMEU have not established that there should be a departure from the position adopted by the award modernisation Full Bench.

[76] The AWU supported the application. The TMA and ABI neither support nor oppose the application.

[77] VAFI do not oppose the application.

[78] While there may be merit in the CFMEU’s argument that millwrights who are required to supply their own tools should be paid a tool allowance, at a level equivalent to that paid to other trades people, this review is not intended to be a merits review. While it was stated that the tool allowance derives from a Western Australian award the CFMEU did not provide any evidence that any predecessor awards provided for a tool allowance for millwrights at the level they now seek.

[79] The CFMEU has not satisfied me that I should depart from the decision of the award modernisation Full Bench.

Payment of wages

[80] Clause 25.2 of the Award provides for the method of payment of wages as follows:

[81] The CFMEU proposed to renumber this clause as 25.2(a) and insert a new clause 25.2(b) as follows:

[82] The CFMEU proposed to insert new clauses 25.7 and 25.8 as follows:

[83] The CFMEU submitted that clause 25.2 should provide for payment of wages by EFT by agreement and that wages should be paid no later than the close of business on the day wages were due. The CFMEU wants employers to pay a penalty if wages, paid by EFT, are paid late. EFT is an almost universal method of payment of wages in the industry. The CFMEU submitted that there was a history of late payment of wages. It was further submitted that given that award-dependant employees are low paid, the failure to pay wages on time can have a significant impact on employees.

[84] Mr Menon gave evidence 15 that in November 2012 and March 2013 some businesses failed to pay wages on the agreed day. This affected 100 members of the CFMEU working at five sites. As a consequence, two members had to pay late payment fees imposed by their financial institutions and for one member those fees totalled $150. It was acknowledged that the sites were covered by enterprise agreements, however as the agreements incorporated the Award provisions, they were still relevant. It was submitted that the employer refused to compensate employees because the late payment provisions in the Award do not apply to EFT. It was Mr Menon’s evidence that all the workplaces he organises are paid by EFT.

[85] Ms Jane Calvert, the Divisional President of the CFMEU Forestry and Furnishing Products Division, gave evidence 16 that she was aware of the late payment of wages in the industry and that these late payments were often within the employer’s control. For example, she was aware of an employer who terminated the employment of a large number of its payroll staff and hence the pays were not processed on time. She also was aware of breakdowns in the electronic payroll systems that resulted in pays being delayed.

[86] Because these employees live week to week, the late payment of wages means that employees are unable to purchase food and other necessary goods and services. The imposition of late payment penalties by financial institutions affects employees’ credit records. Ms Calvert said that the imposition of a late payment penalty provides an incentive to employers to pay wages on time.

[87] She contrasted the situation for award-reliant employees with employees covered by an enterprise agreement which provided for a late payment penalty. When it looked like the employer would pay wages late, the existence of the late payment penalty in the agreement meant the employer had payroll staff work extra hours to ensure the pay was not late.

[88] Ms Calvert said that payment by EFT is the predominant method of payment. She said that it is difficult to negotiate late payment penalty clauses in agreements because of the potential costs involved. It was her view that the removal of the late payment penalty from the Award made it more difficult to negotiate the inclusion of such clauses in agreements.

[89] Ms Gillian Finnegan, a delegate at a sawmill, gave evidence 17 that in February 2012 employees’ pays were not in their bank accounts on pay day. She contacted the payroll officer who said that a member of staff had failed to activate the pay. Later she was told that the non-payment was caused by a computer glitch. She said that the failure to pay wages meant she could not buy lunch or food for dinner. Other employees were not able to buy petrol to come to work and another could not buy themselves or their children’s lunch. Another employee did not have enough money in her account to pay her direct debits. This problem was worse when both partners worked for the company. It was her evidence that most of her fellow workers live week to week and do not have the savings to provide a buffer in these situations. The union negotiated with the company that anyone who had to pay a bank penalty as a result would be reimbursed.

[90] Mr Travis Lawson, an organiser with the CFMEU, gave evidence 18 about the incident described by Ms Finnegan. It was his evidence that one member was unable to pay his rent and was threatened with eviction. He says he deals with late payments about once a year. He gave evidence of Carter Holt Harvey not paying wages just before Christmas. He was told by the employer that the payroll EFT system had crashed and the money had not been transferred. The employer paid part wages to the employees to see them through Christmas. He said all his members are paid by EFT. He said employers were unwilling to negotiate late payment clauses in agreements.

[91] Mr Scott McLean, the CFMEU—FFPD District Secretary in Tasmania, gave evidence 19 that in 2005 the CFMEU applied to vary the 1999 Timber Award to make it clear that the late payment penalty applied to EFT and the award was varied in 2006. It was his evidence that in 2006 there were some examples of late payment of wages and that employers were required to pay the penalty. It was his evidence that in 2009 Gunns did not pay wages on time in the last pay before Christmas. He said that this occurred because a payroll supervisor had not returned to work in time from a function to process the wages. As a result, some workers were not paid until 3 January the next year. He had members who were not able to collect Christmas presents which were on lay-buy. As well, some members were unable to pay for their holidays and others had mortgage defaults and fees. The CFMEU was able to get some banks to provide emergency assistance but not for all employees. Gunns gave some employees partial cash payments but not all.

[92] It was his evidence that late payments on a much smaller scale occurred often. Because there is no penalty, it was submitted that there is no urgency on the employer’s part to rectify the problem. It was his evidence that employees in the industry work week to week and are all paid by EFT.

[93] These witnesses were not required for cross-examination.

[94] The CFMEU submitted that the inclusion of a late payment penalty in the Award will encourage enterprise bargaining. It also submits that the variations will give effect to the Commission’s obligation to consider the needs of the low paid. It was submitted that the variations will not disadvantage employers because employers will be able to avoid the penalty by ensuring that wages are paid on time. It also relies upon the decision of the Australian Industrial Relations Commission to insert such provisions into the 1999 Timber Award. It submitted that the factors which were relevant then are relevant now.

[95] It submitted that the predecessor award predominately provided for a late payment penalty and the failure to include such a provision in the Award is an anomaly.

[96] The AWU supported the application.

[97] The TTIA opposed the application. It submitted that there was insufficient evidence to justify the variation sought. It referred in particular to attachments to the CFMEU submissions which referenced incidents of late payment that occurred prior to the making of the Award. It was submitted that the variation sought would disadvantage employers by imposing extremely high penalties of up to 38 hours at overtime rates in the event of late payment of wages. These penalties, it submitted, were not sustainable. The TTIA submitted that the CFMEU had failed to produce cogent reasons for making the variations sought as part of the 2012 Review and had failed to provide evidence to satisfactorily discharge the onus of demonstrating that the Award is failing to meet the modern awards objective or is not operating effectively due to a technical problem or anomaly.

[98] Business SA submitted that it was an unnecessary administrative burden to require businesses to obtain their employees’ agreement to be paid by EFT.

[99] Further, the variation requires the payment of wages on a specified day of the week and introduces a penalty in the event of a late payment of wages. It was submitted that the proposed variations are outdated, over regulatory, conflict with flexible work practices and have a detrimental impact on businesses in terms of financial burden.

[100] It was submitted that the CFMEU sought to include these provisions during a modern award process and were unsuccessful. This is, therefore, an attempt to revisit a matter that has already been dealt with by the award modernisation Full Bench and there has not been any significant change in circumstances that would warrant a change to the payment of wages clause. Further it was submitted it would have a financial impact on employers.

[101] The TMA neither objects to nor supports the application as made by the CFMEU.

[102] The Ai Group submitted that the CFMEU proposed a similar clause during the award modernisation process. While acknowledging that the clause appears to be derived from sub-clause 26.5 in the 1999 Timber Award, it submitted that the clause does not represent an industry standard. It was submitted that the award modernisation Full Bench, in declining to include the CFMEU’s clause in the modern award, turned their mind to the issue and decided to reject the union’s proposal. The Ai Group submits that the evidence of the CFMEU refers to isolated incidents where, due to technical problems or otherwise, there was late payment of wages. It submitted that the number of occasions where this has occurred is insignificant and is not relevant to the consideration of whether the Award is meeting its objectives. It submitted that the CFMEU has failed to substantiate that the absence of the requirements that the employer pay a penalty for the late payment of wages is causing the Award to not achieve the modern awards objective or to operate ineffectively with anomalies and technical problems arising from the Part 10A award modernisation process.

[103] ABI opposes the CFMEU’s application. It submitted that the variation will create an onerous regulatory burden on employers and unduly penalise employers if payments are late. ABI is particularly concerned that late payments may arise through no fault of the employer and that the variation would have the effect of penalising the employer for the late payment and unduly hinder business in terms of employment costs and regulatory burden and so cannot meet the modern awards objective. It was submitted that this variation does not address a technicality or anomaly in the Award.

[104] VAFI opposes the variation which it says is an attempt to reintroduce to the Award a more prescriptive framework which was removed as part of the award modernisation process.

[105] I am not prepared to make the variation sought by the CFMEU. The time has long past where an employer should require the consent of employees before wages can be paid by EFT.

[106] Whilst I have sympathy for employees who do not receive their wages on time there is insufficient evidence before the Commission to indicate that this is a widespread problem.

[107] This CFMEU included a late payment penalty clause in its draft award provided to the award modernisation Full Bench. When the exposure draft was published by the award modernisation Full Bench, the CFMEU responded and specifically raised the issue of penalties for late payment of wages when wages were paid by EFT. These submissions were not adopted by the award modernisation Full Bench. In the context of this Review, I am not prepared to revisit this issue which was considered as part of the Part 10A award modernisation process as the CFMEU has not established that there are cogent reasons for doing so. It cannot be said that there has been a significant change in circumstances. The exclusion of the provision was not an error or oversight.

Unapprenticed juniors

[108] Mr James Daniel made an application in relation to unapprenticed juniors. He said further clarification is needed to indicate whether or not unapprenticed juniors are to be paid as a percentage of Level 2 base rate until 21 years is reached.

[109] Clause 17.7 of the Award provides that unapprenticed juniors are paid an increasing percentage of the Level 2 rate. Mr Daniel submitted that this was an anomaly as it provides that, regardless of skill level, an unapprenticed junior would remain at a percentage of the Level 2 relativity until they reach 21. The other anomaly is that a 20 year old unapprenticed junior is paid at 100% of the Level 2 base rate whereas a 21 year old can be employed at the Level 1 rate.

[110] Mr Daniel did not appear at the hearing of this matter nor did he make any submissions that the Award is not meeting the modern awards objective or the provision is an anomaly. Further, Mr Daniel did not provide details of any variation sought to the Award.

[111] The CFMEU submitted that the failure of Mr Daniel to identify the manner in which the alleged inconsistencies should be remedied meant the Commission, or other parties, were not able to assess the proposed variation. Further it was submitted that it is not clear that Mr Daniel has standing to make the application as the application does not demonstrate that Mr Daniel is an employee in the industry nor is it made on behalf of an employer in the industry.

[112] As no specific variation was proposed by Mr Daniel, his application to vary the modern award is dismissed.

Conclusion

[113] The variations will operate from the date of the decision.

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

ne signature and seal

DEPUTY PRESIDENT

Appearances:

R. Read for the CFMEU – Forestry and Furnishing Products Division.

E. Watt for Timber Merchants Association (Vic) and Australian Furniture Association.

B. Ferguson for Australian Industry Group.

J. Gilbert for Timber Trade Industrial Association.

Z. Angus for The Australian Workers Union.

S. West for Business SA.

A. Paterson for Australian Business Industrial.

Hearing details:

Melbourne.

2013:

11 June.

Printed by authority of the Commonwealth Government Printer

<Price code C, MA000071 PR540718>

 1   MA000071.

 2   [2012] FWAFB 5600.

 3   MA000010.

 4   See [2008] AIRCFB 1000 at [74] where the Full Bench explained how allowances would be adjusted.

 5   AP800937CRV.

 6   MA000020.

 7   MA000036.

 8   Transcript PN 33.

 9   AP825280CAV.

 10   AP792323.

 11   Exhibit CFMEU 3.

 12   Exhibit CFMEU 6.

 13   Exhibit CFMEU 4.

 14   MA000010.

 15   Exhibit CFMEU 3.

 16   Exhibit CFMEU 1.

 17   Exhibit CFMEU 2.

 18   Exhibit CFMEU 7.

 19   Exhibit CFMEU 5.