Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards - transitional provisions - applications for take-home pay orders.

[1] On 31 October 2014 we handed down a decision declining to grant an Australian Council of Trade Unions (ACTU) application to delete the sunset provisions in the transitional Accident Pay and District Allowance provisions in modern awards 1. Against that background, pending determination of substantive applications to vary awards to include provisions dealing with Accident Pay and District Allowance, the ACTU sought the making of pre-emptive interim take-home pay orders to avoid any reduction in pay when the provisions regarding Accident Pay and District Allowance cease to operate by virtue of the abovementioned sunset provisions.

[2] Also on 31 October 2014, the Full Bench dealt with programming issues related to the application for take-home pay orders, with directions for the filing of material issued and the hearing of the application set down for 21 November 2014. The matter was further heard on 8 December 2014 when a decision was reserved.

[3] The ACTU application relies on the following provision contained in modern awards.

“ 2. Commencement and transitional

2.1 This award commences on 1 January 2010.

2.2 The monetary obligations imposed on employers by this award may be absorbed into overaward payments. Nothing in this award requires an employer to maintain or increase any overaward payment.

2.3 This award contains transitional arrangements which specify when particular parts of the award come into effect. Some of the transitional arrangements are in clauses in the main part of the award. There are also transitional arrangements in Schedule A. The arrangements in Schedule A deal with:

● minimum wages and piecework rates
● casual or part-time loadings
● Saturday, Sunday, public holiday, evening or other penalties
● shift allowances/penalties.

2.4 Neither the making of this award nor the operation of any transitional arrangements is intended to result in a reduction in the take-home pay of employees covered by the award. On application by or on behalf of an employee who suffers a reduction in take-home pay as a result of the making of this award or the operation of any transitional arrangements, the Fair Work Commission may make any order it considers appropriate to remedy the situation.

2.5 The Fair Work Commission may review the transitional arrangements in this award and make a determination varying the award.

2.6 The Fair Work Commission may review the transitional arrangements:

(a) on its own initiative; or
(b) on application by an employer, employee, organisation or outworker entity covered by the modern award; or
(c) on application by an organisation that is entitled to represent the industrial interests of one or more employers or employees that are covered by the modern award; or
(d) in relation to outworker arrangements, on application by an organisation that is entitled to represent the industrial interests of one or more outworkers to whom the arrangements relate.”

[4] The ACTU’s application was supported by unions appearing in the matter and was opposed by employer groups.

[5] Given that the Accident Pay and District Allowance provisions in most modern awards will cease to operate on 31 December 2014 as a result of the operation of the sunset provisions, we consider that it is appropriate for the Full Bench to set out our decision prior to that date to provide clarity for both employees and employers.

[6] We have decided not to grant the ACTU application. While we are very mindful of the potential impact on employees, we are also concerned that any order to be made would need to have the necessary degree of clarity to enable employers to clearly understand their obligations and for employees to be able to enforce the order. Unfortunately, to date, the material before the Commission in this matter is characterised by a dearth of detail regarding the identity and number of employees who may be affected by the cessation of the operation of the Accident Pay and District Allowance provisions in modern awards by virtue of the operation of the sunset provisions.

[7] Further, we note that the above award provision provides that the Commission may, on application being made, make any order it considers appropriate to remedy the situation in circumstances where an employee suffers a reduction in take-home pay as a result of the making of the award or the operation of any transitional arrangements. The use of the terms ‘suffers’ and ‘remedy’ suggests that any order would only be made in circumstances where a reduction has taken effect, rather than pre-emptively as sought by the ACTU in its application.

[8] Beyond this, we would emphasise that our decision in no way precludes an individual employee or group of employees who may be affected by the cessation of the Accident Pay and District Allowance provisions and/or their representative(s) from making an application for a take home pay order in accordance with the above award provision and/or the relevant provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. Dealing with any such applications on a case by case basis will ensure that any ensuing order has the requisite degree of clarity for all parties.

[9] Finally, we observe that there is nothing in our decision which prevents discussions occurring at the workplace in circumstances where there is the potential for an employee’s take-home pay to be reduced as a result of the Accident Pay and District Allowance provisions ceasing to operate.

[10] We will publish the full reasons for our decision in due course.

SENIOR DEPUTY PRESIDENT

Appearances:

T. Clarke for Australian Council of Trade Unions.

S. Maxwell for Construction, Forestry, Mining and Energy Union - Construction Division.

M. Moretta for Shop, Distributive and Allied Employees Association - Victorian Branch.

B. Cagney for Shop, Distributive and Allied Employees Association - SA and NT Branch.

Ms. V. Wiles for Textile, Clothing and Footwear Union of Australia.

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

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

J. Knightly for Australian Municipal, Administrative, Clerical and Services Union.

I. Crawford for The Australian Workers’ Union.

N. Ward for Australian Chamber of Commerce and Industry, Australian Business Industrial, the NSW Business Chamber Ltd, Restaurant and Catering Australia, the Accommodation Association of Australia, Motor Inn Motels and Accommodation Association, Master Plumbers and Mechanical Services Association of Australia, Printing Industries Association of Australia, the Australian Federation of Employers and Industries, the Victorian Automotive Chamber of Commerce, Master Builders Australia.

M. Smith, N Street, R. Bhatt for The Australian Industry Group.

M. Adler for Housing Industry Australia.

S. McKinnon for National Farmers’ Federation.

Hearing details:

2014

Sydney

21 November

8 December

 1   [2014] FWCFB 7767

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