[2014] FWC 1592

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

National Retail Association
(AM2012/240)

FAST FOOD INDUSTRY AWARD 2010 [MA000003] Fast food industry
COMMISSIONER BULL	SYDNEY, 17 MARCH 2014

Modern Awards Review 2012 – Fast Food Industry Award 2010 - Amendment to Travel Allowance clause - Delivery drivers.

Background

[1] This application is made pursuant to Schedule 5 - Modern Awards (Other than Modern Enterprise Awards and State Reference Public Sector Modern Awards), Part 2, Item 6 Review of all modern awards (other than modern enterprise awards and state reference public sector modern awards) after first 2 years of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) as part of the review of all modern awards.

[2] The purpose of the Transitional Review is to ensure that after two years of their operation, modern awards are meeting the modern award objective and are operating effectively without anomalies or technical problems.

[3] Item 6, of Schedule 5 of the Transitional Act states at (2):

(2) In the review, FWC must consider whether the modern awards:

(a) achieve the modern awards objective; and

(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.

(my emphasis)

[4] The modern award objective is found at s.134 of the Fair Work Act 2009 (the FW Act) and is expressed as follows:

134 The modern awards objective

What is the modern awards objective?

134 (1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da) the need to provide additional remuneration for:

(i) employees working overtime; or

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(iv) employees working shifts; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

When does the modern awards objective apply?

134(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:

(a) the FWC’s functions or powers under this Part; and

(b) the FWC’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.

[5] On 17 November 2011, the previous President, Justice Giudice, issued a statement [[2011] FWA 7975] calling for applications to be made to vary modern awards as part of the Transitional Review.

[6] The legislative basis for the exercise of the Commission’s power to vary modern awards is found in s.157(1) of the FW Act. The power is discretionary in nature, its exercise conditioned upon the Commission being satisfied that the variation is “necessary” in order “to achieve the modern awards objective.” 1

[7] From the applications received to vary various modern awards a number of common issues were identified, as well as issues which were limited to particular modern awards.

[8] On 8 March 2012, the National Retail Association (NRA) applied to vary the Fast Food Industry Award 2010 (the Award). In that application the NRA proposed a number of variations to the Award, some of which have already been dealt with by way of a Full Bench.

[9] Applications that did not raise common issues were allocated to a single member of the Commission. This application sought to include a piece rate payment for delivery drivers with the existing transport allowance not applying to delivery drivers. The matter was allocated to my Chambers on 3 September 2013.

[10] On 18 October 2013, representatives from the Shop, Distributive and Allied Employees Association (SDA) and Domino’s Pizza Enterprise Ltd (Domino’s Pizza) met with the Commission to discuss progress of the application in respect to varying clause 19.6 - Transport Allowance, of the Award relating to travel allowance for delivery drivers.

[11] The Commission was advised that an agreed position had been reached between the interested parties and that the NRA would file an amended application.

[12] On 20 December 2013, the NRA sent correspondence to the Commission proposing a variation to the transport allowance paid to delivery drivers in the fast food industry. The piece rate proposal was no longer sought.

[13] Attached to the NRA’s correspondence was advice from the SDA and Domino’s Pizza consenting to the variation as sought by the NRA.

[14] On 5 February 2014, the Commission issued Directions that the NRA, SDA and Employee Relations Strategies Pty Ltd (representing Domino’s Pizza) file submissions in relation to the proposed variation and inviting any other interested parties to file submissions by 20 February 2014.

[15] Submissions were duly received from the NRA, SDA and Domino’s Pizza. No other interested party filed submissions or objections to the proposed variation. As such, the application proceeds by consent.

[16] All submissions received were uploaded to the Modern Award 2012 website and notified to subscribers.

Conclusion

[17] The existing provision in respect of a transport allowance is found in the Allowances clause at sub clause 19.6 of the Award:

19.6 Transport allowance

Where an employer requests an employee to use their own motor vehicle in the performance of their duties such employee will be paid an allowance of $0.76 per kilometre.

[18] The NRA application seeks to vary sub clause 19.6 in the following manner:

(a) Other than as provided in clause 19.6(b), where an employer requests an employee to use their own motor vehicle in the performance of their duties such employee will be paid an allowance of $0.76 per kilometre.

(b) Where an employee is engaged primarily to perform delivery duties of the employer's products to customers using their own motor vehicle, such employee will be paid an allowance of $0.40 per kilometre.

[19] The variation adds a subclass for those employees who are engaged primarily to perform deliveries and use their own motor vehicle to do so. In these cases, the employee will receive an allowance of approximately half that paid to employees not engaged to perform delivery duties but are from time to time requested to use their own motor vehicle in performance of their duties. The NRA contends that this issue was not considered in any detail during the Part 10A award modernisation process. 2 It is submitted that the Award covers the classification of delivery driver by reference to the “delivery of meals” in Schedule B Classifications at B.1.1.3

[20] It is submitted by the parties that the present travel allowance rate of $0.76 per kilometre is not an appropriate rate to pay employees engaged as delivery drivers in the fast food industry. The existing rate is based on rates published by the Australian Taxation Office (ATO). The ATO rate is based on a new vehicle with associated depreciation costs. It is argued that the rate of $0.76 per kilometre does not reflect the nature and role of delivery drivers in the fast food industry. The NRA submits that the allowance of $0.76 per kilometre does not meet the definition of a “fair and relevant minimum safety net”. 4 It is put that delivery drivers typically own older vehicles with lower depreciation costs.5

[21] Based on research 6 into the operating costs of the types of vehicles typically used by delivery drivers, the parties submit, that a rate of $0.40 per kilometre would fairly compensate a fast food delivery driver for the use of their private vehicle, in the performance of their duties.

[22] On the basis of the material before the Commission and the consent of the interested parties in this application including the relevant union, the Commission is satisfied that it is appropriate to issue a determination in the terms agreed to meet the modern award objective and to ensure the Award is operating effectively without anomalies.

[23] The parties have advised that any future increase to the transport allowance for delivery drivers under the new sub clause 19.6(b) will be based on the percentage increase to the rate applying to the new sub clause 19.6(a). 7

[24] A separate determination in these terms will be issued in conjunction with this decision.

COMMISSIONER