[2014] FWC 3884

FAIR WORK COMMISSION

DECISION


Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Item 6, Sch. 5 - Modern Award review

Real Estate Employers’ Federation of NSW
(AM2012/17)

REAL ESTATE INDUSTRY AWARD 2010
[MA000106]

Real Estate Industry

COMMISSIONER BULL

SYDNEY, 13 JUNE 2014

Modern Awards 2 year review 2012 – Real Estate Industry Award 2010 amendment to various clauses, opposed in part, variations made in part.

Background

[1] On 17 November 2011, the then President, Justice Giudice, issued a statement [2011] FWA 7975, calling for applications to be made to vary modern awards as part of the two year Transitional Review pursuant to Item 6 of Schedule 5 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).

[2] As the Fair Work Act 2009 (FW Act) safety net provisions commencement day was 1 January 2010, the Commission is required to conduct the review as soon as practicable after 1 January 2012.

[3] On 1 March 2012 the Real Estate Employers’ Federation of NSW (REEFNSW) filed an application to vary the Real Estate Industry Award 2010 (the Award) in response to the President’s statement. The application was posted to the Modern Awards Review section of the Commission’s website.

[4] The REEFNSW application proposed a number of variations to the Award in the following clauses:

and Schedule E Transitional Provisions for Written Agreements.

[5] On 2 March 2012, both the Property Sales Association of Queensland and the Real Estate Employers’ Federation SA/NT advised the Commission that it supported the REEFNSW application.

[6] On 5 March 2012, the Queensland Real Estate Industrial Organisation of Employers wrote to the Commission advising that it supported the application.

[7] On 6 March 2012, the Real Estate Association of NSW (an Industrial Trade Union of Employees) wrote to the Commission advising that it had reached consent with REEFNSW and that it supported the application.

[8] On 16 March 2012, the Real Estate Employer’s Federation of Victoria wrote to the Commission supporting the application filed by REEFNSW.

[9] On 19 November 2012, a “supplementary” application was filed by REEFNSW which was dated 15 November 2012 and sought to vary subclause 20.2 of clause 20: Stand-by and call-out.

[10] On 9 July 2013, a conference by the Commission under the auspices of Asbury DP where it was determined that discussions with interested parties be held. A further conference was held on 14 August 2013.

[11] On the 19 August 2013, REEFNSW withdrew its 19 November 2012 supplementary application and amended its original Schedule to the application which included the removal of the proposed changes to sub clause 20.2 and clause 24, together with some miscellaneous word changes to the other proposed variations.

[12] On 6 September 2013, the Real Estate Employers’ Federation of Western Australia filed a response supporting the amended REEFNSW application.

[13] The application was allocated to my Chambers in November 2013. On 6 February 2014, I directed that interested parties should file submissions in relation to a proposed draft determination.

[14] On 19 February 2014, the Real Estate Employers’ Federation of WA advised the Commission that it supported REEFNSW’s amended application.

[15] On 20 February 2014, a submission was received from the Housing Industry Association (HIA) opposing the REEFNSW application in respect of the proposed amendment to clause 3.1 to the definition of “real estate industry”.

[16] On 7 March 2014, the Australian Property Services Association New South Wales Branch (previously known as Real Estate Association of NSW) advised the Commission that it continued to support the REEFNSW application.

[17] On 12 March 2014 a telephone conference was held between the parties and the Commission where the HIA’s opposition to the application was discussed. Following the phone conference further directions were issued requiring REEFNSW to file any variation to its amended application and for the HIA to file submissions in respect of its objection. REEFNSW and any other interested parties were to file any reply.

[18] A variation to the amended application concerning the definition of “real estate industry” and accompanying submissions was filed by REEFNSW on 26 March 2014. The HIA filed submissions opposing the proposed changes to the definition of “real estate industry”. Submissions were also received from the Real Estate Employers’ Federation of Western Australia on 24 April 2014.

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

[20] On 26 April 2014, the Commission requested the parties to advise the Commission whether a hearing was required. On 2 May 2014, the HIA advised that it wished to be heard on the matter. Consequently the matter was listed for hearing on 15 May 2014, at which REEFNSW, the Australian Property Services Association NSW/QLD Branch, the Registered Real Estate Sales Persons Association of SA and the HIA appeared.

[21] On 20 May 2014, as requested by the Commission during the hearing REEFNSW forwarded a consolidation of the changes sought and advised that the changes to Schedule E - Transitional provisions for Written Agreements at E3.3 New South Wales were no longer sought. 1

[22] Additional comments made in this correspondence relating to the proposed change to the definition of “real estate industry” and the insertion of words suggested by the Commission during the hearing to resolve the impasse have not been considered as this was rejected at the time 2 and the arguments of all parties concluded on this matter on 15 May 2014.3

Two Year Review

[23] The purpose of the two year 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.

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

[25] The modern award objective is found at s 134 of the FW Act and is expressed as follows:

[26] The scope of the two year transitional review was considered by a Full Bench in Modern Awards Review 20124 In that decision, the Full Bench stated:

REEFNSW Application

[27] The application to vary the Award is made on the basis of remedying perceived uncertainties and/or ambiguities that REEFNSW has identified in the Award. 5 It is not submitted that the substance of the proposed variations have previously been considered by a Full Bench of the Commission in determining the final Award.6

[28] Other than the proposed amendment to the Definitions clause opposed by the HIA, no submissions have been received in opposition to the remaining proposed variations. As indicated above, a number of interested parties have advised the Commission of their support for the REEFNSW application.

[29] The proposed variations are dealt with in the order they appear in the Award.

Clause 3: Definitions and interpretation

[30] The proposed change seeks to amend the definition of “real estate industry” in respect of Award coverage on the grounds that there is a possible ambiguity. 7 It is said that it was always intended by the major parties to the Award that employees working for a “builder or property developer” would be covered by the Award. This is on the basis that the Notional Agreements Preserving State Awards (NAPSAs) applying in New South Wales, Queensland and South Australia covered employers who were builders or property developers and employed salespersons and property management staff.8 The NSW NAPSA, the Real Estate Industry (State) Award 2003, is said to have been the principal and dominant NAPSA in terms of the numbers of employers and employees covered and makes specific reference to builders and property developers in the definition of Employer at clause 3(d).

[31] While it is submitted that property developers and builders already fall within the definition, it is put that this may not be readily apparent to employers and employees who are not familiar with the Award. As the Award is unclear as to coverage of these employees it is submitted that the variation will remove any doubt about the application of the Award to property builders and developers who employ employees in the classifications under the Award.

[32] REEFNSW argues that an express reference to “property builders and developers” is an anomaly that arose through an inadvertent oversight during the Part 10A Award Modernisation process.

[33] In respect of the proposed change to the definition “real estate industry”, the Full Benches in AIRCFB 865 [2009] and AIRCFB 945 [2009] considered the coverage of the Award without specific reference to “property builders or developers”.

[34] The current award definition reads as follows:

[35] The variation sought is in the following manner: 9

[36] Other than the obvious changes in syntax, the significant change is the addition of the words property builders or developers to what is described as businesses providing the named associated services.

[37] It is put that the proposed amendment to the definition of “real estate industry” will correct an anomaly and removes any doubt that the Award applies to builders and property developers provided that employers providing the named associated services employ employees in classifications listed in the Award. REEFNSW argued that the proposed change neither extends nor alters coverage of the Award and is entirely consistent with the two year transitional review exercise. 10

[38] Also argued by REEFNSW is that their proposed amendment is consistent with the modern awards objective at s.134(1)(g) of the FW Act which requires the Commission to ensure that modern awards are simple and easy to understand.

HIA submission

[39] In opposition to the proposed variation to the definition of “real estate industry” the HIA argue that the variation seeks to apply the Award to employees engaged to “sell contracts to build homes” 11 and that there is no evidence the inclusion of this category of salesperson was intended to be included in the Award. The HIA submit that the matter is best raised during the four yearly review of Modern Awards.

[40] The HIA submit that there is a clear and real distinction between the sale of construction work and the sale of real property. The acceptance of the REEFNSW variation would as put by the HIA result in further confusion in relation to property builders and developers who engage employees to sell contracts to build homes.

[41] The HIA submission accepts that property builders and developers already fall within the definition subject to them being involved in buying/acquiring or selling or leasing or managing real property and therefore don’t accept that there is any ambiguity. 12 It is also argued that there is no evidence of an anomaly that prevents the Award from operating effectively.

[42] It is not accepted by the HIA that the proposed variation will reflect the intent of the drafters of the Award. They note that the draft versions of the Award provided by the industry parties did not include the words now sought and that there is no evidence that there was any intent expressed or discussed to include the proposed words.

Conclusion

[43] The Award together with other modern awards was made as a result of an extensive process undertaken by the Australian Industrial Relations Commission pursuant to Part 10A of the Workplace Relations Act 1996.

[44] The existing definition of “real estate industry”, by the use of the phrase “Such services include:” preceding the list of services nominated, is intended to enlarge the definition of “real estate industry”, meaning it is a non exhaustive and indicative list. 13 Consequently it is legitimate to argue that the provisions of services associated with sales, acquisitions, leasing and/or management of residential, commercial, retail, industrial, recreational, hotel, retirement and any other leasehold or real property and/or businesses includes “property builders or developers” without the need to add those words to the definition.

[45] Both REEFNSW and the HIA accept that the provision of services by “property builders or developers” are encompassed in the definition of “real estate industry” although that service is not specified in the indicative list, provided the rest of the definition is met namely the service is associated with the sale of real property and there is an employee in one of the Award classifications then the Award applies.

[46] REEFNSW argue that the absence of a reference to “property builders or developers” was an oversight and that under the Real Estate Industry (State) Award 2003 (NSW) the definition of Employer included a builder and property developer, these words should have been included from the outset. This oversight results in an anomaly that, in accordance with the two year review, should be remedied. It is submitted that persons not having access to specialist advice may erroneously believe that property builders or developers are not covered by the Award.

[47] No actual examples of the perceived confusion were supplied by REEFNSW and the argument of confusion by third parties can only be hypothetical without such evidence.

[48] In regard to the existence of an anomaly it is difficult to see how an anomaly exists when all parties agree that the existing wording of the definition provides for coverage of property builders or developers without the inclusion of these words. This is due to the list in the definition being indicative as opposed to exhaustive. Had the definition contained an exhaustive list and property builders or developers were not included, the argument that an anomaly exists would be more persuasive. The Real Estate Industry (State) Award 2003 (NSW) definition of Employer vis-a-vis the Award definition “real estate industry” is shown below:

NSW NAPSA - DEFINITION OF EMPLOYER

MODERN REAL ESTATE AWARD - SERVICES LISTED IN DEFINITION OF REAL ESTATE INDUSTRY

REAL ESTATE AGENT

REAL ESTATE AGENCY

STOCK AND STATION AGENT

STOCK AND STATION AGENCY

BUSINESS AGENT

BUSINESS AND HOTEL BROKING

STRATA MANAGING AGENT

STRATA AND COMMUNITY TITLE MANAGEMENT (OR SIMILAR SERVICE HOWEVER DESCRIBED)  14

BUILDER

Property BUILDERS OR DEVELOPERS (PROPOSED)

PROPERTY DEVELOPER

AUCTIONEER

 

ANY OTHER PERSON EMPLOYING SALESPERSONS

 
 

BUYERS AGENCY

 

REAL ESTATE VALUATION

[49] With the various differences in the named businesses in the Award as compared to the definition of employer in the NSW NAPSA, it is not clear in the REEFNSW submissions why the words “property builders or developers” was an inadvertent omission while the other omissions, alterations and additions were by design. Further the NSW NAPSA defines a “salesperson” to include any person employed as a salesperson in connection with the sale or lease or buildings “to be built”. 15 This coverage is not included in the Award and on this basis REEFNSW submitted the Award coverage is not as wide as the NSW NAPSA.16 This is to be contrasted with the submission of the HIA which believes the proposed variation has the potential to extend the coverage of the Award to apply to employees “engaged to sell contracts to build homes”.17

[50] There was no evidence put before the Commission of any practical difficulties that the absence of a reference to “property builders or developers” from the definition of “real estate industry” had caused to any party. I am thus unable to conclude that the Award is not operating effectively.

[51] In my view it does not follow that the omission or inclusion of some services from an indicative list results in an “immediately self evident” anomaly 18, nor do I find it to be an “irregularity, deviation from the common or natural order, exceptional condition or circumstance”.19

[52] It was further submitted by REEFNSW that a failure to add an express reference to “property builders or developers” has the effect of hiding or disguising the potential of property builders and developers to be covered by the Award. This in my view is tilting at windmills; the list of services in the existing definition is agreed by all to be an indicative list only and, as such, it does not mask other services that may also be included.

[53] I find that no anomaly has been demonstrated.

[54] The Commission’s obligation is to achieve the modern awards’ objective by ensuring that modern awards are simple and easy to understand. In my view this objective is not assisted by the insertion of the proposed wording, as all parties already agree that the services provided by “property builders or developers” are covered by the Award, so long as the balance of the “real estate industry” definition is met. It is not necessary for this to be clarified further where no evidence of confusion or misunderstanding has been provided. The variation sought is equivalent to converting an indicative list to an exhaustive list, which is not the intent of the definition.

[55] While not making the amendment sought for the reasons provided, this does not derogate from the Award covering builders or property developers where they otherwise fall within the definition of “real estate industry”. Had there been any evidence of confusion or doubt about this, the proposed amendment would have been considered more favourably. As it was, all parties were in agreement that property builders or developers were services covered by the Award and were not excluded by the indicative list.

Clause 17: Matters relating to commission, bonus or incentive payments

The application seeks to insert an additional paragraph after 17.1 (a) which reads as follows:

[56] It is said that, under the existing clause, uncertainty arises in relation to the calculation of commission, bonus or an incentive arrangement where an employee elects to transfer to a new arrangement where there are sales in progress and not yet completed. The variation as proposed will make clear that where a change in commission, bonus or incentive arrangement takes place, the same calculation principles in respect of non-completed sales that apply where an employment contract is terminated will also apply to situations where the employee has transferred to a new commission, bonus or incentive arrangement. That is, the employee’s entitlement that was in force on the date the contract for sale or lease of the property became legally-enforceable will apply.

Conclusion

[57] Based on the submissions of REEFNSW and there being no objections, I accept that the proposed variation to clause 17 of the Award will remedy an existing uncertainty and will provide for the Award to operate effectively by removing the technical problem identified by REEFNSW.

Clause 18: Allowances

[58] The application seeks to make a number of changes to the Allowances clause based on what is said to be ambiguous provisions relating to payment of motor vehicle allowances to employees who provide their own motor vehicle to perform work.

[59] The first change relates to circumstances where the motor vehicle allowance is not payable. REEFNSW submit that the current wording in subclause 18.1(f) could be interpreted to mean a full time employee must receive a full week’s motor vehicle allowance when the employee has been absent from work for one or two days which was not the intention of the drafters of the award. It is proposed that the first sentence in subclause 18.3 be amended to make it clear that a full week’s motor vehicle allowance is not payable in these circumstances.

[60] A further concern is that sub clause 18.3 which states when the motor vehicle allowance is not payable does not make reference to the entitlement in subclause 18.4(c); this is said to have been an unintentional omission. The insertion of the reference to subclause 18.4(c) in subclause 18.3 will provide South Australian agencies with the same exclusion that applies to others.

[61] It is also submitted that the motor vehicle allowance does not prescribe how the allowance should be reduced in circumstances where the allowance is not payable. It is proposed that an additional sentence be added at the end of subclause 18.3 to provide that a pro rata calculation operate where the allowance is reduced by one fifth for each day the vehicle is not used by the employee.

[62] Subclause 18.3(c) provides that where an employee is unable to use their motor vehicle due to a loss of their driver’s licence, the motor vehicle allowance is not payable. The proposed variation will provide for the possibility of an employee being able to continue to perform their duties by making alternate travel arrangements involving the use of a motor vehicle.

[63] The motor vehicle allowance rate is based on whether the vehicle is under or over five years of age and the engine capacity of the vehicle. REEFNSW submit that difficulties have arisen where the employee fails to inform their employer of a change in the engine size or age of their vehicle resulting in overpayments and underpayments of the motor vehicle allowance.

[64] To remedy this situation it is proposed that any increase in the motor vehicle allowance only become payable after the employer has been provided with a copy of the new registration papers. Further, where the allowance should be lowered, the employee must notify the employer within seven days of a change in vehicle and provide the employer a copy of the new registration papers.

Conclusion

[65] Based on the submissions of REEFNSW and there being no objections, I accept that the proposed variations to clause 18 of the Award will remedy existing uncertainties and will provide for the Award to operate effectively by resolving the anomalies and technical problems identified by REEFNSW.

Clause 20: Stand-by and call-out

[66] Sub clause 20.1 provides for a payment to an employee under a property management or strata and community management classification to agree in writing on a method of payment and compensation for being on stand-by or call-out outside of ordinary hours. The provision requires this arrangement to be agreed “upon commencement of employment ...

[67] REEFNSW states that the existing wording prevents the employee and employer agreeing to a stand-by/call-out compensation amount at any other time during a period of employment which was not the intention when the Award was drafted. The variation sought is to remove the stipulation that the agreed arrangement is to occur “upon commencement of employment, or when this award comes into operation”.

Conclusion

[68] Based on the submission of REEFNSW and there being no objection, I accept that the proposed variation to clause 20 of the Award will assist in providing for the intention of the provision to be given its true meaning by removing the anomaly identified, allowing the Award to operate effectively.

Schedule E Transitional provisions for Written Agreements

[69] Schedule E of the Award provides for an administrative process to be followed in relation to the registration of written agreement made under clauses 15 and 16 of the Award.

[70] The proposed changes to Schedule E are the insertion of the words “and the Northern Territory” in E.3.5(a) and (b) and the insertion of REEF SA/NT where the reference REEF is used in E.3.5(b)(i). These changes recognise that the federally-registered name of the Real Estate Employer’s Federation of South Australia has now changed to the Real Estate Employers’ Federation of South Australia and the Northern Territory (REEF SA/NT).

[71] I note that pursuant to s.159(1)(a) of the FW Act the Commission may make a determination varying a modern award to reflect a change in the name of an employer on its own initiative.

Conclusion

[72] The proposed changes to recognise the Real Estate Employer’s Federation of South Australia name change are appropriate to allow the Award to operate effectively.

[73] A separate determination to give effect to this decision will be issued in conjunction with this decision.

COMMISSIONER

Appearances:

Mr M Helm for the Real Estate Employers’ Federation NSW

Mr H Lewocki for the Australian Property Services Association NSW and Qld Branch and Registered Real Estate Sales Persons Association of SA

Ms M Adler for the Housing Industry Association.

Hearing details:

2014.

Sydney

May 15.

 1   It is noted that the consolidated Schedule of Variations attached also excluded the original changes sought to be made in E.3.1. This was confirmed in an email of 23 May 2014 from REEFNSW.

 2   Transcript PN254, PN302

 3   The HIA in correspondence of 20 May 2014 opposed these comments being considered

 4   [2012] FWAFB 5600.

 5   Attachment 2 Grounds and reasons for the variations of originating application.

 6   [2009] AIRCFB 945; [2009] AIRCFB 865.

 7   Attachment 2 to application at paragraph 5.

 8   See Ground 5 in initial application.

 9   Variation to original amendment 26 March 2014.

 10   The Commission can only vary a modern award to stop employers/employees being covered in limited circumstances s.163(1) of the FW Act, but this application is said to preserve the status quo in terms of coverage.

 11   HIA submissions 20 February 2014 (reads 2013) at 1.2.4

 12   HIA submissions 9 April 2014 at 3.1.5.

 13   Marsal Pty Ltd v Comptroller of Stamps (Vic) (1982) 82 ATC 4536.

 14   The reference to Strata and community title management (or similar service however described) was inserted by the Full Bench in [2009] AIRCFB 945 at paragraph 172.

 15   Clause 3 Definitions at (k)(ii) and (iii).

 16   Transcript PN139.

 17   HIA submissions 9 April 2014 at 6.1.4.

 18   REEF NSW Submissions 23 April 2014 at 3.4.

 19   [2013] FWC 4576.

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