Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.

ABORIGINAL LEGAL RIGHTS MOVEMENT INC. (SA) AWARD 1999

Application by Australian Municipal, Administrative, Clerical and Services Union (052V) - Whether the Aboriginal Legal Rights Movement Inc. (SA) Award 1999 is capable of being the subject of an application - Factors to be considered when making a modern enterprise award - Case made out for making of modern enterprise award - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Schedule 6 Item 4, Schedule 6 Item 6.

Introduction

[1] This decision relates to an application to make a modern enterprise award to replace the Aboriginal Legal Rights Movement Inc. (SA) Award 1999 (the ALRM Award). The application is made by the Australian Services Union (the ASU). The objective of modernising the ALRM Award is agreed by the other party to the ALRM Award, the Aboriginal Legal Rights Movement Inc. (ALRM). However there is some disagreement on the terms of the Award.

[2] The ALRM is a not for profit, independent, incorporated Aboriginal community organisation. It provides legal services, assistance, support and financial counselling services to Aboriginal people primarily in relation to their involvement in the criminal justice system in South Australia. It commenced operations in 1971. It currently has approximately 68 employees, mostly in the capacities of managers, solicitors, field workers and administrative staff. The ALRM is funded through the Commonwealth Attorney General’s Department.

The Legislative Task

[3] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (the Transitional Act) which provides:

“(5)       In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:

(a)  the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b)  whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c)  the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d)  the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e)  the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f)  the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g)  the views of the persons covered by the enterprise instrument;
(h)  any other matter prescribed by the regulations.”

[4] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise, in the context of the modern awards objective and the minimum wage objective, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. We turn to consider these factors in relation to the circumstances of this case.

The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)

[5] The ALRM Award has its origins in a certified agreement made in 1993. The ALRM Award was made in 1996. It was based on the earlier certified agreement. The Award was created in order to provide a single form of regulation for the diverse and specialised positions within the organisation and to provide a single, stable and appropriate set of terms and conditions. At the time it was made there was no other appropriate single award that would have applied to ALRM employees. There has not been another collective agreement made since the ALRM Award was made. The ALRM Award has therefore not operated as a safety net underpinning enterprise agreements, but as an enterprise agreement in an alternative form. Its ongoing application has avoided the need for renegotiation and provided stability for the ALRM and its employees.

Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4(5)(b)

[6] It is likely that managers and solicitors would not be covered by any other modern award if the ALRM Award is not modernised and retained. Field officers may be covered by the Social, Community, Home Care and Disability Services Industry Award 2010 (the SCHCADS Award) which covers organisations involved in social work and welfare work. Although the work of field workers is considered by the ALRM as more of a legal nature than a social or welfare nature, the Legal Services Award is unlikely to apply as it contains an exclusion for employers in the Aboriginal legal services sector.

The content of the SCHCADS Award and the Legal Services Award: Item 4(5)(c)

[7] The ALRM contends that the industry awards do not take into account the cultural needs of employees of the ALRM and do not contain allowances for fieldworkers and administrative workers that are contained in the ALRM Award.

The terms and conditions of employment applying in the industry: Item 4(5)(d)

[8] Equivalent organisations to the ALRM in NSW, the ACT and Queensland apply the terms of the SCHCADS Award and the National Employment Standards contained in the Fair Work Act 2009. Organisations in the Northern Territory, Western Australia and Victoria are covered by Enterprise Agreements.

The extent to which the ALRM Award provides enterprise-specific terms and conditions of employment: Item 4(5)(e)

[9] The ALRM submits that there are enterprise-specific terms in the ALRM Award relating to allowances, leave entitlements and public holidays and that these have cultural significance for the ALRM employees. Further, the classifications and rates of pay have been tailored to the work of the ALRM employees. The ALRM receives funding on the basis of its award obligations. 70% of its budget is used to pay employee salaries. It submits that the additional administrative burden and regulatory cost that comes with negotiating registered agreements is an additional cost that the ALRM cannot afford. It considers that the timing of salary increases is unlikely to be concurrent with the funding process.

The likely impact on the persons covered by the ALRM Award, and the persons covered by the SCHCADS Award and the Legal Services Award, of a decision to make, or not make, the modern enterprise award: Item 4(5)(f)

[10] If the ALRM Award is not modernised and retained a number of employees will immediately become award and agreement free, unless the ALRM negotiates an enterprise agreement. A number of entitlements in the ALRM Award are not contained in the SCHCADS Award for those who would become covered by that award. The ALRM has concerns that these entitlements would not be included in future funding arrangements.

The views of the persons covered by the enterprise instrument: Item 4(5)(g)

[11] The modernisation and retention of the ALRM Award is supported by the ALRM, the ASU and ALRM employees.

Any other matter prescribed by the regulations: Item 4(5)(h)

[12] There are no prescribed matters.

Should a modern enterprise award be made?

[13] In this case, one community service organisation strongly supports the retention of an enterprise award to cover its employees. The ALRM Award has a history and ongoing operation more like an enterprise agreement than an award. There is no overarching enterprise agreement and the stability and ease of application of the ALRM Award is preferred by the ALRM to the administrative burden of regularly renewing an enterprise agreement. The ALRM Award is the basis of its funding arrangements and contains benefits for employees that would not be found in an applicable industry award. The ALRM Award is unique in relation to Aboriginal legal services organisations. Other comparable employers operate on the basis of the industry award or an enterprise agreement.

[14] If an enterprise award is to be made we believe that it should conform to the general approach for awards such as containing properly fixed minimum award rates of pay, and not contain overall benefits less than the industry award. This may require some amendments to the ALRM Award that has applied to date and a different package of terms and conditions. This in turn may have funding implications.

[15] We acknowledge the strong desire of the ALRM and the ASU to effectively retain the ALRM Award as a more stable version of an enterprise agreement. Although this appears to be a unique approach in this industry, it does not, in our view, undermine the modern awards objective or the modern enterprise awards objective. Awards are generally a safety net underpinning alternative packages of terms and conditions in enterprise agreements. However this award has a long history of consent, and is strongly preferred as the vehicle for enterprise specific terms and conditions. The lack of another appropriate industry award and the absence of agreement coverage are unusual features. In addition, it appears to us that the classification structure and duties attached to that structure have been designed having regard to the community it services.

[16] On balance we consider that we should make a modern enterprise award with respect to the ALRM. We propose that the terms of the award will be finalised after a conference is held between the parties and a member of this bench.

Conclusions

[17] We are satisfied that a case has been established to modernise the ALRM Award and to make a modern enterprise award applying to the ALRM and its employees. The terms of the award will be finalised following conferences between the ALRM and the ASU under the auspices of a member of this bench.

VICE PRESIDENT WATSON

Appearances:

Mr J. Cooney for the Australian Services Union.

Ms K. Smith, solicitor, for the Aboriginal Legal Rights Movement Inc.

Hearing details:

2014.

Melbourne - Video Conference Link to Adelaide

22 July.

Final written submissions:

Joint submissions by Australian Services Union and the Aboriginal Legal Rights Movement Inc. on 13 August 2014.

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