[2013] FWC 9805 [Note: An appeal pursuant to s.604 (C2014/2553) was lodged against this decision - refer to Full Bench decision dated 12 March 2014 [[2014] FWCFB 1573] for result of appeal.]


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 the first 2 years

Modern Awards Review 2012 - Road Transport and Distribution Award 2010
(AM2012/38 and others)

Road transport industry



Modern Awards Review 2012 - two year review of all modern awards - Road Transport and Distribution Award 2010.

[1] This decision concerns applications to vary the Road Transport and Distribution Award 2010 1 (the Award) as part of the two year review of all modern awards which the Fair Work Commission (Commission) is required to conduct under Schedule 5, item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act).

The applications

[2] Numerous applications to vary the Award were filed. The following applications were referred to me for consideration:

[3] The NUW and NatRoad applications were subsequently referred to Full Benches dealing with public holiday 2 and superannuation3 provisions in various modern awards. Part of the TWU’s application was referred to a Full Bench dealing with provisions relating to annual leave.4

[4] Unless I am referring to an individual party, I will hereafter refer to those organisations that represent the interests of employers as “the employers”.

The background to the applications

[5] These applications were listed for conference on numerous occasions 5 with an aim to narrowing the scope of the contested matters. The parties also held discussions independently of the Commission. Over the course of the conferences my chambers published five drafts of a proposed Award which incorporated variations that had been the subject of discussions in the preceding conferences. Each draft highlighted changes that I understood had been agreed, as well as the terms of the variations sought by a party or parties that were not agreed. A schedule identifying the parties pressing for particular variations and those opposing the variations was also distributed. Regrettably, for personal reasons there have been delays in the finalisation of these applications. Additionally, I had thought it useful to have the many conferences that were held believing that, although progress was slow, it was likely this approach would resolve all significant matters raised by the parties. That did not eventuate. This decision deals with all the variations that should be made to the Award, both those which were agreed and those that need to be the subject of a ruling by me. I should also note that in the conferences the parties agreed that in the event it was considered appropriate and upon a finding that there was an ambiguity or uncertainty, which may not be amenable to variation under item 6 of Schedule 5 then I would exercise powers under s.160 of the Fair Work Act 2009 (the Act).

[6] In the hearing before me the parties’ submissions were primarily directed to the terms of a draft of the Award dated 6 May 2013 as well as the current terms of the Award. I have attempted in this decision to make it clear which of these documents I am referring to. Generally, the numbering of the clause in issue is the same in both documents, and where it is not, I have indicated this.

[7] Directions were issued for the parties to file written submissions with respect to those clauses about which there were competing positions. The parties were advised that I would proceed on the basis that only those variations that were highlighted by my chambers and appeared in the 6 May draft were in contention. Those matters concerned the following clauses of the Award:

[8] Despite the advice given to the parties as to the matters that were to proceed to a hearing, the TWU advised at the commencement of the hearing, that it remained opposed to the proposed deletion of clause 16.1(f)(ii). 6 It relied on written submissions it had prepared in this regard and tendered at the hearing. It was not apparent to the employers, or myself, that the TWU intended to oppose this variation. It was understood the TWU had earlier conceded this subclause should be deleted. I gave the employers an opportunity to file written submissions in response. Submissions were filed by Ai Group, ABI and NatRoad.

[9] At the hearing Mr A Howell, of counsel, appeared on behalf of the TWU, Mr D Mujkic appeared on behalf of the NUW, Mr P Ryan appeared on behalf of ARTIO, Mr B Ferguson appeared on behalf of Ai Group, Ms Z Jenkins appeared on behalf of ABI, Mr A Spottiswood appeared on behalf of NatRoad, Ms K Murphy appeared on behalf of Followmont Transport Pty Ltd (Followmont) and Ms J Light appeared on behalf of the Australian Federation of Employers and Industry (AFEI).

[10] Written submissions were filed by each of the parties that appeared at the hearing and by Business SA. Followmont also filed a statutory declaration of Ms Belynda Howard, an Executive Manager of the company.

The legislative provisions

[11] Item 6 of Schedule 5 to the Transitional Act provides:

[12] Section 134 of the Act sets out the modern awards objective:

[13] All of the parties referred to comments about the approach to be taken to the conduct of the two year review made in the Modern Awards Review 2012 decision. 7 That Full Bench decision has been frequently cited and applied in various subsequent decisions.8 For the purposes of the matters before me, the following extracts are relevant:

[14] I turn now to deal with each of the variations that are sought.

Clause 3.1 - Definition of base rate of pay

[15] Ai Group seeks to insert a definition for “base rate of pay” in clause 3.1 of the Award. No opposition was raised to the insertion of the definition. It adopts the definition of “base rate of pay” in s.16 of the Act. I am satisfied the variation will make the Award easier to understand. It will be made.

Clause 3.1 - Definition of fatigue management rules/regulations

[16] The parties agree that a definition of “fatigue management rules/regulations” should be inserted in clause 3.1. Recognition of these requirements in this industry makes it appropriate for the Award to define this term. The variation should be made. The term will be defined as meaning “Commonwealth, State or Territory laws, controlling driving and working hours of heavy vehicle operators or fatigue management”.

Clause 12.5(d) - Casual employment and overtime rates

[17] Clause 12.5(c) of the Award states that a casual employee will be paid, on an hourly basis, 1/38th of the minimum weekly rate plus a loading of 25% for all ordinary hours of work. Clause 12.5(d) currently provides for a loading of 10% in addition to normal overtime rates for work performed by a casual employee outside of ordinary hours. Ai Group has made an application to vary clause 12.5(d) to make clear that a casual employee is not entitled to the 25% loading in addition to the 10% loading whilst working overtime. All of the parties consented to the variation sought and the terms in which it should be expressed. It was agreed by the parties that clarification of this matter was desirable. Additionally, during the conferences before me, the parties agreed that illustrative examples should be included that demonstrate how the casual loading under clause 12.5(d) is to be calculated. Specifically, the examples clarify that the casual loading and overtime penalty rate are not compounded. Ai Group’s application is granted and the examples as to how casual loading should be calculated will be inserted in clause 12.5(d). These variations will serve to make the Award easier to understand.

Clause 15.2 - Minimum wage rates - hourly rates

[18] Clause 15.2 of the Award sets out the minimum wage rates of pay for a full-time adult employee. For each classification, the rate is expressed as a minimum weekly amount. The parties sought to insert an additional column which states the minimum hourly rate for each classification. I am satisfied that an additional column, which states the minimum hourly rate, should be inserted into clause 15.2. The rates in that new column are to be 1/38th of the corresponding minimum weekly amount. This variation will make the Award easier to understand and, as a consequence, to apply.

Clause 16 – Allowances for part-time and casual employees

[19] Clause 16 sets out various allowances that are payable under the Award. Each allowance is expressed as a percentage of the standard rate per hour, per day or per week. Great Northern Removals made an application which seeks to specify that the allowance payable to a recognised furniture carter under the existing clause 16.1(b)(v) of the Award is payable to a part-time or casual employee on a pro rata basis.

[20] The parties agreed during the conferences before me to use this opportunity to insert a clause which clarifies that each of the allowances in clause 16 are payable to a part-time and casual employee on a pro rata basis and to outline how this is to be calculated. The following wording, which will be a new clause 16.1, was agreed by the parties:

[21] The above variation is granted. It will make the Award easier to understand in that it will aid the calculation of allowances payable under this clause. The existing clause 16.1 will be renumbered 16.2 and consequential renumbering will occur to all of the remaining subclauses.

Clause 16.1(a) - Leading hand allowance

[22] A leading hand allowance is provided for in the existing clause 16.1(a) of the Award, as set out below:

[23] In conferences before me it was proposed by the parties that the heading of the first column be varied to read “An employee appointed as a leading hand in charge of:”. This was consented to by all of the parties. This variation is to be made to the Award. It will make clearer the need for an appointment before an entitlement to the allowance arises.

Clause 16.1(b) - Miscellaneous allowances

[24] Clause 16.1(b) lists miscellaneous allowances that are payable under the Award. The following allowances are expressed as a percentage, varying between 0.28% and 0.46% of the standard rate “per day or part thereof”:

[25] The parties discussed some of the difficulties that arise from calculating these allowances. In particular, given the low percentages of the standard rate to be applied, the amount payable to a casual or part-time employee per hour is particularly small. It was agreed that the words “part thereof” should be deleted from clauses 16.1(b)(i), 16.1(b)(iv), 16.1(b)(x), and 16.1(b)(xi). I agree that it is appropriate for that variation to be made.

Clause 16.1(f) - Travelling allowance

[26] Clause 16.1(f) of the Award provides for a travelling allowance. It states:

[27] ARTIO applied to vary the second sentence of clause 16.1(f)(i) to make it clear that where an employer provides accommodation and meals, the allowance will not be payable. That variation was not opposed by the TWU and the employers generally agreed with the need for the variation. I have decided to grant the variation as it will make the clause easier to understand and apply.

[28] Over the course of the conferences before me, the employers also sought the deletion of clause 16.1(f)(ii). In the hearing it was the deletion of this subclause that the TWU opposed. It submits that the subclause provides for unexpected circumstances such as flooding or road closures whereby an employee cannot return to their depot. It submits the proposed wording will not cover these circumstances and to reduce an employee’s entitlement in this way calls for a fresh assessment of the allowance. The union argues that there was no specific application made by any of the parties to delete the subclause and no evidence has been called by the employers in support of their position.  9

[29] The employers submit that the variation should be granted as it will modernise the archaic language used in the clause 10 and is thus consistent with s.134(1)(g) of the modern awards objective.11 Ai Group in particular raised a number of aspects of the clause which serve to establish that it is unclear and uncertain. It notes that no party has been able to describe the meaning of and manner in which clause 16.1(f)(ii) operates. No party could point to any occasions when it has been used. It argues that the reference to “turn out” is obscure, that it is unclear what triggers the entitlement to the allowance or what is meant by the word “prevented” in the clause. It submits that the point from which the time taken to reach home should be measured is not known.

[30] I note that the TWU was unable to identify any occasion when the clause had been applied. Ai Group submitted this was significant and also noted that the TWU had not produced any evidence or submissions as to how the clause works or if it is currently applied anywhere in the industry. It submits I could not be satisfied that the clause has any work to do. 12

[31] NatRoad also pointed to the difficulty in ascertaining what “turn out” means and that none of its members recalled an occasion when the clause was used. 13

[32] Ai Group also submitted that the terms of the clause do not indicate or suggest that it is to apply when drivers experience delays due to road closures. It accepted that drivers will, from time to time, experience delays but then other provisions of the Award in respect to payment for time worked would apply. It also submitted that the clause is not necessary to achieve the modern awards objective and, consistent with s.138 of the Act, should be deleted.

[33] Ai Group submitted that in circumstances like a natural disaster an employer would be entitled to stand down an employee under s.524(1)(c) of the Act. It contends that clause 16.1(f)(ii) should be deleted as it is potentially contrary to that section of the Act and undermines the extent to which it can be considered an element of the relevant minimum safety net. 14

[34] I first refer briefly to the Ai Group submission about s.524. I am not currently persuaded by this submission although I do not at this stage need to deal with it in any detail. It is sufficient to say that it is not clear to me that an award term would not be able to deal with matters which relate to an employee’s entitlements and obligations in the event circumstances as set out in s.524 of the Act arise.

[35] If it was necessary for me to rule, I would be satisfied that the application made by ARTIO provides a vehicle for me to consider the deletion of this clause. In any event, I refer to the course the conferences took and my understanding, as well as that of the employers, prior to the hearing, that the terms of a new clause 16.1(f), were to be in full substitution for existing clauses 16.1(f)(i) and (ii) and this matter was agreed. In this circumstance, the employers did not consider any necessity to amend their applications to vary the Award to expressly delete the existing clause 16.1(f)(ii).

[36] I am satisfied clause 16.1(f)(ii) is uncertain and ambiguous and that it does not serve to make the Award simple and easy to understand. I have decided the clause should be deleted. In doing so however I make it clear that, in the event the TWU was able to identify the circumstances in which it was intended the clause would apply, and better express those circumstances and the entitlements of an employee, it should not be deprived of that opportunity. It may seek to do so in the context of the 4 yearly review. There may be some other manner in which it may wish to address any need for a provision dealing with what clause 16.1(f)(ii) may have been intended to compensate for. I give the TWU an opportunity to advise in writing what it may wish to do about this matter.

Clause 22.3 - Ordinary hours of work and fatigue management rules/regulations

[37] Clause 22.3 provides that ordinary hours of work must not exceed eight hours per day and must be worked continuously, except for meal breaks. Ai Group has made an application to add to this exception, breaks taken in accordance with fatigue management rules and regulations. It submits that such a provision ensures that ordinary hours can be structured so as to not conflict with legislation or regulations that address hours of work for heavy vehicle operators or fatigue management. 15 This variation was not in dispute between the parties and I have decided it should be granted.

Clause 22 - A new early morning start allowance

[38] The provisions of clauses 22.2 and 22.3 provide that ordinary hours are to be worked on any day, Monday to Friday, between 5.30 am and 6.30 pm. The clauses provide for the circumstances in which the days and spread of hours can be modified (for example, agreement with the majority of employees or agreement with an individual employee). Clause 22.4 of the Award provides that the times within which ordinary hours of work may be performed will not apply to certain activities in the industry. Those activities, set out in subclauses (a) to (d) are newspaper deliveries, meat deliveries and live poultry loading, transport and delivery from poultry farms to processing plants. In each of these cases it is where the delivery etc is for that sole purpose. The clause also applies to a driver employed at a fish, fruit or vegetable store. The final paragraph of the clause states:

[39] An application was made by Business SA to vary this part of the clause by inserting the words “for all time on duty between 12.01 am and 6.00 am” at the end of the paragraph above. Business SA submitted that the current clause 22.4 could be read as entitling an employee who commences work between 12.01 am and 6.00 am to a 30% penalty for all ordinary hours worked. 16 The proposed variation would make clear that the 30% allowance applied only to hours worked between the times specified. Subsequently, Business SA withdrew this part of its application. Other employer parties, however, pursued the introduction of an early morning start allowance of 12.5% of the applicable minimum hourly rate for all ordinary hours worked on that day and for this to apply to all employees under the Award. The proposed clause would be in addition to the existing clause 22.4 and, in effect, extend the span within which ordinary hours can be worked, and introduce an allowance to compensate the employee for an early start. The employer parties agreed, in principle, on the following proposed wording:

[40] Ai Group submits that it has become commonplace for employees to perform work during the early hours of the morning in many sectors of the industry. 17 Such hours are not contemplated as falling within ordinary hours under the current Award, which adversely impacts upon the flexibility available to employers. Specifically, it relied on the cost impact on employers and the limited extent to which an employee can be required to regularly work overtime. Where an employee is required to work a set number of ordinary hours a week, regular overtime may result in particularly long days which could conflict with safety considerations.18 ARTIO noted that the Transport Industry (State) Award (NSW)19 contained a 12.5% early morning start allowance.20

[41] All of the employer parties agreed that greater flexibility for employers is necessary and that this review is the appropriate occasion to revisit the hours clause. It was acknowledged by the employers that it may not be necessary to include the second paragraph of the proposed new clause as it merely states what would otherwise be the effect of the Award.

[42] The TWU opposed the application. It submitted that the issue of ordinary hours was considered by an Australian Industrial Relations Commission (AIRC) Full Bench when the Award was made. It relies on the following paragraph of the Full Bench’s decision:

[43] The TWU submitted that the application invites a fresh assessment of a matter clearly determined by the Full Bench and that the employers have failed to establish that there are cogent reasons in favour of departing from the AIRC’s decision or that the current Award is failing to achieve the modern awards objective. 22 Additionally, the TWU submits that the proposal is detrimental to employees. It removes the current constraint on ordinary hours commencing prior to 5.30 am (or 4.30 pm where there has been a vote of employees) and the entitlement to overtime that would otherwise apply.

[44] I here note that there was no submission about the extent to which parties have considered whether the existing facilitative provisions of the Award in clause 8 (which allow for agreement to be reached about clauses 22.2 and 22.3) may be used in a manner which suits both an employer and employee.

[45] I am not persuaded that the variation should be made. With one exception, I agree with the TWU’s submissions about this variation. The exception is that I do not agree with the TWU that the Full Bench’s reasons for decision indicate the matter of hours generally in the industry, as opposed to hours for oil industry employees, was in issue. I do agree with the TWU that a merit case needs to be established before adjusting hours and consequential overtime hours clauses which have operated for many years. I am not persuaded that as part of this two year review it has been established that the Award is failing to meet the modern awards objective.

[46] Despite my ruling in the previous paragraph, and the fact that I am not persuaded this significant variation is one appropriate to be made as part of the two year review, I think there is some real merit in considering the introduction of an early morning shift together with an appropriate loading for hours performed on such a shift. I note this is consistent with submissions made by the NUW. My understanding of the position of the TWU is that it has no objection, in principle, to an early morning shift allowance. If such a shift and an allowance was to be introduced, it would be reasonable to revisit the issue of whether to continue the exclusion and special provisions for the sectors of the transport industry that are referred to in the existing clause 22.4.

Clause 22.5(a)(iii) - Ordinary hours of work

[47] Clause 22.5(a) provides that ordinary hours of work may be worked by providing a rostered day off as follows:

[48] ARTIO applied to insert the following words at the end of clause 22.5(a)(iii):

[49] ARTIO seeks this variation as it would make clear that rostered days off can be paid out where it is agreed to by the employer and employee. There was no opposition raised regarding this variation and I have decided it should be granted. It will give additional flexibility to employers and employees in respect to the manner in which they decide to treat rostered days off.

Clause 24.1(d) - Definition of shiftwork

[50] Shiftwork is defined in clause 24.1(d) as “work extending for at least two weeks and performed either in daily recurrent periods, wholly or partly between the hours of 6.30 pm and 8.30 am or in regular rotating periods”. Clause 24.1 also contains a definition of a day shift as meaning a shift which commences at 5.30 am or later but finishes at or before 6.30 pm.

[51] ARTIO seeks to insert the following at the end of the definition of shiftwork:

[52] ARTIO submits that there is some ambiguity surrounding the distinction between an employee who works day shifts as compared to a day worker who works during the spread of ordinary hours. The variation proposed seeks to address that ambiguity. There was no opposition raised to this application. I am satisfied the variation will make the clause easier to understand and apply. The variation will be made.

Clause 26.1(b)(iii) – Regular meal breaks and fatigue management rules/regulations

[53] Clause 26.1(b) provides the minimum and maximum duration of a regular meal break and the timeframe within which it must be taken by reference to the commencement of ordinary hours. ARTIO seeks to insert a further requirement that the meal break under clause 26.1 must, where reasonable and practical, be taken to coincide with any requirement to take a break under fatigue management rules and regulations. ARTIO submits that such a variation removes ambiguity as to whether a meal break should be taken immediately before or after a fatigue management break. Further, ARTIO submits that the variation promotes productivity and efficiency. 23

[54] This matter was not disputed between the parties. I am persuaded that for the reasons given by ARTIO it is appropriate to grant the variation.

Clause 26.1(c) – Payment for a regular meal break that is not allowed

[55] Clause 26.1(c) makes provision for payment where a meal break is not allowed. It states:

[56] Over the course of discussions between the parties, the following wording was agreed upon by the employers:

[57] The employers submit that the current clause is ambiguous and should be simplified to make clear that the employee is entitled to double the minimum hourly rate for a meal break that is not allowed. It was submitted, for example, that the variation addresses “the need to ensure a simple, easy to understand, stable and sustainable modern award system”, as set out in s.134(1)(g) of the modern awards objective. 24

[58] The TWU proposed a similar amendment but preferred to use the words “applicable hourly rate” rather than “minimum hourly rate”.   The union expressed some concern that otherwise the clause may be interpreted as meaning that the employee is entitled only to double the lowest minimum rate under clause 15.2 of the Award (that is, the rate for a transport worker grade 1 employee). I should indicate that is not my reading of the clause proposed by the employers nor would it be a fair method in which to compensate an employee not able to take a meal break. The TWU did not press for its wording provided that I made the observation I have in this decision. The payment is to be referable to the hourly rate for the classification in which the employee is engaged. The variation proposed and agreed upon by the parties will be made.

Clause 26.2 - Overtime rest break

[59] Clause 26.2 provides for an overtime rest break before an employee commences overtime. It states:

[60] The applications made with respect to this clause were discussed at length during the conferences before me. The wording the employers propose is in these terms:

[61] The TWU proposed a not dissimilar clause but it differed in two important respects and these relate to the terms to be used in clauses (a) and (c). There are two main areas of dispute between the employers and the TWU. They are about the prescription of a minimum number of ordinary hours that are to be worked prior to any entitlement to an overtime rest break and, when a break is taken, the method of calculating the payment that is to be made, that is, either at ordinary time rates or at overtime rates. There are two other issues which are raised by the variations proposed by the employers and they concern the wording they suggest in their new clause 26.2 “Where it is anticipated ...” and “... as soon as reasonably practicable thereafter ...”. I deal with these later in this decision. I turn first to the issue of whether the variation should be made which would require an employee to have worked for at least seven ordinary hours before being allowed an overtime rest break. I do so noting that the current clause 26.2 in the Award prescribes no minimum ordinary hours which are to be first worked before the overtime rest break entitlement arises.

[62] Ai Group submits that the variation is necessary because the current clause is ambiguous as to whether an employee is entitled to the overtime rest break after working any number of hours, however short, within the span of ordinary hours. It was submitted that the purpose of the clause is to provide an additional rest break only after an employee has worked a substantial period of work in any one day. As the clause currently reads, and depending on the time hours are rostered, an entitlement to an overtime rest break can arise after an employee has worked only a very small amount of time.

[63] Followmont, a Queensland based transport company, submitted that the variation is necessary to meet the modern awards objective and to rectify an ambiguity and uncertainty under s.160 of the Act. Followmont relied on the evidence of Ms Belynda Howard, an Executive Manager of the company. Ms Howard said an issue had been raised by the Fair Work Ombudsman with Followmont regarding the correct interpretation of “ordinary hours” in clause 26.2. She said in her view the clause was ambiguous as to the number of ordinary hours that must be worked before the overtime rest break is taken.

[64] The TWU is opposed to the requirement that an employee must have worked at least seven ordinary hours before being entitled to an overtime rest break. It submitted that nothing has been identified by the employers to support the significant change sought. It points out that the proposal may deprive casual and part-time employees of an entitlement they currently have. They can each be engaged for a minimum of four hours and if they were then to be required to work overtime they are currently entitled to a rest break. The TWU submits that nothing had been identified by the employers that supports a finding there is any ambiguity in the clause. No merit case has been established to justify the variation. To now vary the clause in the manner sought calls for a fresh assessment of the entitlement. And, as to that, the TWU submits there is inadequate evidence to justify the variation. It submits that the evidence of one witness is of limited probative value, is narrow in scope and tells of the experience of only one employer in the industry. 25

[65] I am not persuaded a merit case has been established to warrant the introduction of the requirement for an employee to have worked seven ordinary hours prior to taking an overtime rest break. In this respect, I agree with the submissions of the TWU. Subject to some other aspects of the clause I refer to later I am not persuaded that the clause reflects any anomaly or uncertainty which has arisen from the Part 10A exercise. I am not persuaded the clause is ambiguous although I do accept that it could operate in the manner in which the employers submit is unsatisfactory, namely, it may give an entitlement to an employee to a break when that employee may have worked only a small number of hours. That is, however, the effect of a combination of the rostering of the hours the employee is to work, the minimum engagement of a casual or the agreed terms of engagement of a part-time employee.

[66] I turn to the next issue about this clause. This relates to the rate at which an overtime rest break is to be paid. The employers submit it should be at the ordinary time rate or, to use their words, the base rate of pay. The TWU submits it should be paid for as time worked, that is, at overtime rates. Both applications address an issue between the parties in this industry about the rate at which an overtime rest break is payable. The issue has been ventilated in proceedings in the Commission and in the Federal Court of Australia in the context of a dispute about the correct interpretation to be given to rest break provisions in an enterprise agreement.

[67] Ai Group submits that the current Award contains an anomaly or technical problem arising from the Part 10A award modernisation process. The Transport Workers Award 1998 26 contained an overtime rest break clause which stated:

[68] Ai Group submits that the omission from the modern award of the words underlined and the absence of any relevant remarks in the Full Bench decision regarding the making of the Award squarely places its application within the scope of the two year review as envisaged by item 6(2)(b) of Schedule 5 of the Transitional Act. Further, the current Award is not meeting the modern awards objective which requires, under s.134(1)(g), that the Award is simple and easy to understand. 27

[69] Ai Group submitted that there was no onus on the employers to show that there are cogent reasons to depart from the award modernisation decision, as this issue was not there considered in any detail. Nonetheless, it submits there are cogent reasons for making the variation given the recent litigation regarding the interpretation of this clause.

[70] Followmont supported the submissions of Ai Group. It submitted that neither the Award itself, common industry practice, nor the Full Bench decision making the Award supports the TWU’s submission that the break must be paid at overtime rates. It said that when the Award was made, no submissions seeking the payment of overtime rest breaks at overtime rates were made and thus the predecessor federal award is an appropriate indicator of the intended application of this clause. 28

[71] ARTIO agreed with the submissions of Ai Group and Followmont and also pointed to the Transport Workers Award 1983 29 which, at clause 21(b), contained similar wording to the Transport Workers Award 1998. It submitted that the words in clause 36.2.1 underlined above were inadvertently left out of the modern award and should be reinserted.30

[72] I should here note that the NUW advised at the hearing that it did not wish to press its opposition to any variations sought to clause 26.2. It withdrew its written submissions about this clause. 31

[73] The TWU submitted that there is no ambiguity arising from the language of the current clause and in doing so placed significant weight on a Full Bench decision of this Commission in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd 32 (Linfox). This decision was subsequently the subject of an application to the Federal Court for declarations about the correct construction of certain clauses of the enterprise agreement and for orders quashing the Full Bench decision.

[74] Linfox was an appeal against a single member decision made under s.739 of the Act. It related to the construction of the terms of an enterprise agreement that incorporated clauses from the Transport Workers Award 1998 and the Transport Industry (State) Award. It also contained clause 55 which provided that the existing practice of taking meal breaks during ordinary hours was to continue but had no express clause dealing with crib or overtime meal breaks. There was evidence before Commissioner Harrison that at some Linfox sites ordinary time rates were paid for overtime meal breaks and at some sites overtime rates were paid. At first instance, the Commissioner found that the breaks should be paid at ordinary time rates. The Commissioner observed that the pre-reform federal award specified that the overtime rest break was to be paid at ordinary time rates and that in the absence of any reference in the relevant instruments to the applicable rate, “it would be an error to ignore the history of the Award”. 33

[75] A Full Bench of the Commission quashed this decision on appeal. It accepted the TWU’s submission about the interpretation that should be placed on the terms of the enterprise agreement 34 and found that the absence in the modern award of the previous term about payment for breaks being at ordinary time rates supported the submission that the overtime rate is applicable.35 The Full Bench said that whatever may have been the past practice at different Linfox sites “the proper construction of Clause 55 is that crib breaks which occur after ordinary hours, and in overtime hours, are required to be paid at overtime rates”.36

[76] Linfox took the matter to the Federal Court. Its application was dismissed on jurisdictional grounds namely, that as the parties had agreed in the dispute settlement provision that any decision of a Full Bench on appeal would be binding on them, the Full Bench decision had finally determined the matter in dispute. The Court found that Linfox had not identified any relevant jurisdiction that the Court could exercise in relation to the Full Bench decision. 37 Justice Rares went on to make some additional remarks regarding the construction of the meal breaks provisions commenting that he did so as it had been fully argued before him.38 He summarised the TWU construction of the clauses and said:

[77] The TWU submits that I should find that the interpretation of clause 26.2 with respect to the relevant rate of pay is not ambiguous as it has been dealt with by the Full Bench decision. 39 It submits that Justice Rares’ conclusions are merely obiter observations.40 The union submits that should I find that the clause is ambiguous, the Full Bench decision is a persuasive precedent and on that basis I should make the variation sought by the TWU.

[78] Ai Group disagrees with the Full Bench’s interpretation of the clause. Firstly, it submits that the decision does not reconcile its finding that the break constitutes “work” with the language of clause 26.2 which says that the break must be taken “before commencing overtime work”. Secondly, if the break is considered “work”, clause 27.1 would dictate the applicable rate of pay. Clause 27.1 states that “all work done outside ordinary hours” is to be paid at the overtime rates specified. The overtime rest break cannot, however, be taken “before commencing overtime work” but also “outside ordinary hours”. Thirdly, the TWU’s submission before the Full Bench was inaccurate to the extent that it states that clause 26.2 concerns paid breaks that are taken “after the completion of ordinary hours”. This submission was adopted by the Full Bench however the Award makes no reference to the “completion” of ordinary hours. Rather, it provides for a break “after working ordinary hours”. It cannot be said that the break, prima facie, must be paid at overtime rates, as was submitted by the TWU. 41

[79] Ai Group also submitted that the relevance of the Full Bench decision is limited as the conclusions drawn are based, in part, on the specific practices at Linfox. In these proceedings I am charged with the role of not only interpreting the clause but also ensuring that the Award meets the modern awards objective and to make variations accordingly. It submitted that, in any event, I should be persuaded by the reasoning of Justice Rares. 42

[80] ARTIO submits that the Federal Court’s view is consistent with the wording of the 1983 and 1998 pre-reform federal awards and supports its submission that the relevant words were inadvertently omitted.

[81] I prefer the submissions of the employers to those of the TWU about this issue. I find that there is an anomaly or technical problem arsing out of the Part 10A process. In the alternative I find that there is an ambiguity or uncertainty about clause 26.2 and how it operates and I also find that the clause does not serve to ensure that the Award is simple and easy to understand.

[82] I should indicate that, with great respect to the Full Bench decision in Linfox, I prefer the reasoning of Justice Rares. It is appropriate that I also identify the fact that I was a member of the Full Bench which made the Award and, as a single member, I chaired the pre-exposure draft conferences. The omission of the words previously in clause 36.2.1 was an oversight. In any event, I am conscious of what I am here required to do, having found as I have in the previous paragraph. I am required to consider under item 6(3) of Schedule 5, how to remedy the issue I have identified. I have decided that the new clause 26.2(a) will provide that meal breaks will be paid for at the employee’s ordinary time rate of pay. I am conscious of the employers’ preference to use the term “base rate of pay” but unless agreed to by the TWU the variation will use the term “ordinary time rate of pay”.

[83] I next turn to the proposal to insert the words “where it is anticipated” at the commencement of the clause. Ai Group submitted that the current clause cannot be complied with where, due to the nature and vagaries of the industry, it cannot always be predicted whether an employee will be required to work overtime. 43 It was for this reason Ai Group sought to introduce these additional words. The other employer parties support this application.

[84] Neither the TWU nor the NUW addressed in any detail this aspect of the employers’ proposal.

[85] I have some difficulty with introducing the words proposed. I believe they raise more problems than they solve. It is unclear what is to occur when overtime is not anticipated but in fact, at the very end of ordinary hours, a decision is made about some overtime being needed. The current wording triggers the entitlement when the employee has been required to work overtime. That wording accommodates both the situation where the need for overtime may have been foreshadowed some time before as well as when it has arisen immediately prior to the overtime commencing. I am not persuaded the wording that has been proposed should be substituted for the existing wording. I have decided a variation in this respect is not justified.

[86] I turn to the employers’ proposal to insert the words “as soon as practicable” into clause 26.2. Ms Howard, a witness called by Followmont said that based on her experience, the insertion of the phrase “or as soon as practicable thereafter” was needed to provide for circumstances where an employee cannot take a break before commencing overtime work due to unforeseen circumstances such as traffic conditions.44 I agree with the employers’ submissions in relation to this part of the proposed variation. It is just not feasible in this industry for, say, a driver to stop work immediately upon the cessation of ordinary hours and, at that time, take a break. The insertion of these additional words will help to achieve the modern awards objective in ss.134(1)(d) and 134(1)(g).

[87] ARTIO has applied to insert in clause 26.2 a provision that the overtime rest break must be taken at a time to coincide with a break required under fatigue management rules or regulations. This application is made on the same basis as the application to vary clause 26.1(b)(iii). 45 This application was not opposed. I have decided to make this variation to clause 26.2.

[88] Ai Group also seeks to insert a provision in clause 26.2 as follows:

[89] I note that this clause is in the same terms as was clause 36.2.2 of the Transport Workers Award 1998.

[90] I accept such a clause is designed to afford the employer with greater flexibility, taking into account the vagaries of the transport industry and the difficulty in predicting the time at which a driver will finish work due to traffic and road conditions. 46 The TWU proposed a similar clause however it contained only the words up to and including “work in hand”.

[91] I have decided to adopt the TWU wording of this clause. In my opinion this variation as well as the variation referred to in paragraph [86] will go some way to also accommodate the concerns expressed by Followmont and all other employers that in this industry it will not always be practicable to take a break at the end of ordinary hours and before any overtime is commenced.

[92] Finally, I have decided that the heading to clause 26.2 should be varied. It should read “Meal breaks after ordinary hours and before overtime hours”. Although it is a little longer than might be desirable for a subheading, I trust it will make the clause easier to understand.

Clause 26.3(a) - Meal allowance

[93] Clause 26.3(a) provides for a meal allowance where an employee is required to work overtime for two or more hours. The parties sought to insert the words underlined into this clause:

[94] In light of my ruling in respect to clause 26.2 about inserting a reference to seven ordinary hours, I have decided to refuse to make this variation. I am not persuaded a meritorious case has been made out to warrant the variation.

Clause 26.4 - Breaks

[95] As a consequence of the variations the employers had proposed to clauses 26.1 and 26.2 they sought a consequential amendment to 26.4. In light of the rulings I have made about those clauses I have decided to not vary this clause.

Clause 28.2(g) – Public holiday penalty rates and casual loading

[96] Clause 28.2 prescribes payment for work performed on a public holiday. The penalty rates applicable to a casual employee on a public holiday are stipulated in clause 28.2(f). Clause 28.2(g) states:

[97] Clause 12.5(c) provides for a 25% casual loading for all ordinary hours worked. Clause 12.5(d) states that in addition to normal overtime rates, a casual employee is entitled to a 10% loading for work performed outside of ordinary hours.
[98] ARTIO has made an application to replace clause 28.2(g) with a new clause that states that a 10% loading will be applicable to casuals for work performed on public holidays. The final position pressed by the employers contains this wording and also includes examples of the methodology to be applied in calculating the penalty:

[99] ARTIO submits that the current clause is ambiguous as to whether a casual employee is entitled to a 10% loading under clause 12.5(c) or the 25% loading under clause 12.5(d) on a public holiday. It submits that work performed on a public holiday is akin to that performed during overtime. 47 ABI submitted that the variation is necessary to ensure that the Award can be easily understood.48

[100] The TWU opposed the application and submitted that a casual is entitled to the 25% loading in addition to public holiday penalty rates. 49

[101] The TWU submits that the present form of clause 28.2(g) was the result of a deliberate decision of an AIRC Full Bench when the Award was made. 50 The general interaction of casual loading and penalty rates was also determined when the award system was modernised.51 It submitted that in the absence of cogent reasons, which have not been established by the employers, those decisions should not be revisited.52

[102] The TWU argues that the employers have failed to establish that the Award is not achieving the modern awards objective or that there is an anomaly or technical problem that arose from the Part 10A award modernisation process.

[103] The union refutes ARTIO’s submission that the clause is ambiguous, as the words are not open to more than one meaning. Rather, it submits, the variation sought invites the Commission to revisit the decision of the Full Bench during the modernisation process and invites a fresh assessment of that determination.

[104] The NUW also opposed the application. It submits that clause 28.2 is not ambiguous. If it were intended that the 10% loading under clause 12.5(d) applied, this would have been made explicit. Further, the unions’ position is consistent with the provisions elsewhere in the Award whereby, for example, under clause 24.4 casual employees engaged in shiftwork are entitled to the 25% loading. 53 The NUW points to clause 42.7.2 of the Transport Workers Award 1998 which was in the same terms as the current Award and, like the TWU, made the submission that it cannot be argued that an anomaly or technical problem arose from the Part 10A process.

[105] I am not persuaded by the employers’ submissions that the loading payable to a casual in this clause should be 10%. I do not agree that the special provisions dealing with overtime loading of 10% are necessarily comparable when considering payment to a casual employee working on a public holiday. No adequate evidence or submissions have been made to persuade me that a casual should be denied the 25% loading.

[106] I am satisfied however that two amendments should be made which will make clause 28.2(f) and (g) easier to understand. I will amend clause 28.2(g) to make it clear that it relates to casual employees. I also intend to vary the reference in this clause to “clause 12.5” to instead read “clause 12.5(c)”.

Schedule C - Classification description for a grade 6 transport worker

[107] The TWU seeks to vary item 6 of Schedule C of the Award by inserting the underlined words into the classification description for a grade 6 transport worker:

axles and a GCM greater than 22.4 tonnes up to and including 53.4 tonnes.”

[108] In its application 54, the TWU submits that the change ensures consistency with the classification descriptions contained in the Road Transport (Long Distance Operations) Award 2010.55 No objection was raised to this proposed variation. I am satisfied that it should be granted.

[109] A draft determination that gives effect to this decision will be issued shortly. Parties will be given a period of 14 days to comment on the terms of the determination.



A Howell of counsel and T Walton for the TWU

D Mujkic for the NUW

P Ryan for ARTIO

B Ferguson for Ai Group

Z Jenkins for ABI

A Spottiswood for NatRoad

K Murphy for Followmont

J Light for AFEI

 1   MA000038.

 2   [2012] FWA 3514, Attachment E.

 3   [2012] FWA 5721.

 4   [2012] FWA 3514, Attachment D.

 5   25 July 2012, 4 September 2012, 20 September 2012, 25 October 2012, 1 February 2013 and 17 May 2013.

 6   PN254.

 7   [2012] FWAFB 5600.

 8   See for example Modern Awards Review 2012 - Penalty Rates [2013] FWCFB 1635, Modern Awards Review 2012 - Public Holidays [2013] FWCFB 2168 and Modern Awards Review 2013 - Apprentices, Trainees and Juniors [2013] FWCFB 5411.

 9   Exhibit TWU2.

 10   Exhibit ARTIO1.

 11   Exhibit AIG1.

 12   Ai Group submissions, dated 27 August 2013.

 13   NatRoad submissions, dated 8 September 2013.

 14   Ai Group submissions, dated 27 August 2013. Ai Group relies on the approach of the Full Bench in Modern Awards Review 2012 – Apprentices, Trainees and Juniors [2013] FWCFB 5411 at [415] – [417].

 15   Ai Group application, dated 8 March 2012.

 16   Business SA application, dated 8 March 2012.

 17   Exhibit AIG1.

 18   PN571 - PN574.

 19   AN120594.

 20   Exhibit ARTIO1.

 21   [2009] AIRCFB 345.

 22   Exhibit TWU2.

 23   ARTIO application, dated 7 March 2012.

 24   Business SA amended application, dated 20 September 2012.

 25   Exhibit TWU2.

 26   AP799474CNV

 27   Exhibit AIG1.

 28   PN318.

 29   AP799474CNV

 30   PN513 - 523.

 31   PN363 - 384.

 32   [2012] FWAFB 8958.

 33   [2012] FWC 4076 at [21].

 34   [2012] FWAFB 8958 at [19].

 35   Ibid at [26].

 36   Ibid at [20].

 37   [2013] FCA 659 at [39].

 38   Ibid at [40].

 39   Exhibit TWU2.

 40   PN333.

 41   Exhibit AIG1.

 42   PN546 - 547.

 43   Ai Group application, dated 8 March 2012 and PN559.

44 Exhibit Followmont3.

 45   ARTIO application, dated 7 March 2012.

 46   Ai Group application, dated 8 March 2012.

 47   Exhibit ARTIO1.

 48   PN581.

 49   Exhibit TWU1.

 50   [2009] AIRCFB 345 at [178].

 51   [2008] AIRCFB 1000 at [50].

 52   PN621.

 53   Exhibit NUW1.

 54   TWU application, dated 8 March 2012.

 55   MA000039.

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