| FWCFB 4735|
|FAIR WORK COMMISSION|
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and others
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 4 Sch. 6—Modern enterprise award
(EM2013/38)Australian Postal Corporation
VICE PRESIDENT WATSON
MELBOURNE, 17 JULY 2015
Applications by Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, the Community and Public Sector Union, The Association of Professional Engineers, Scientists and Managers, Australia, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union and the Australian Postal Corporation for a modern enterprise award to replace Australia Post General Conditions of Employment Award 1999, Australia Post Administrative / Professional Award 1999, Australia Post Operations Award 1999 and Australia Post Technical Award 1999 – determination of matters in dispute in the drafting of the modern award – Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Schedule 6 Item 4, Schedule 6 Item 6, Fair Work Act 2009 ss.134, 147 and 284.
 In our decision of 17 April 2015 1 we determined that a modern Australia Post enterprise award should be made.
 At the time of making that decision, we acknowledged the work of the parties to develop a draft award that reflects the statutory criteria and advised that Commissioner Lee would convene a conference of the parties to assist in fine tuning the terms of the award before it is ultimately made by the Full Bench.
 Commissioner Lee has subsequently conducted two conferences with the parties; the most recent on 4 June 2015. While some progress has been made, a number of matters require determination by this Full Bench as the parties have been unable to agree on the terms. The six matters requiring determination by the Full Bench are set out in paragraph five of the correspondence to the Chambers of Vice President Watson from Mr Avallone, counsel for the Australian Postal Corporation (Australia Post), dated 10 June 2015. That correspondence also attached a draft award with the areas of dispute between the parties identified. The parties have confirmed that the Full Bench has before it all that is necessary to make a determination on these six matters. 2 In summary, the matters are: minimum engagement for part time employees, the casual loading rate, redundancy entitlements, adjustment of allowances, whether to include an “in charge allowance” and whether to include the proposed clause 30.7—“method for arranging hours”.
The legislative requirements
 In settling the terms of the award we have again considered the legislative requirements which led us to making the award.
 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.”
 Item 6 links the modern enterprise award objective to the modern award objective and the minimum wages objective found at ss.134 and 284 of the Fair Work Act 2009 (the Act). It provides:
“6 The modern enterprise awards objective
(1) The modern awards objective and the minimum wages objective apply to the FWC making a modern enterprise award under this Division.
(2) However, in applying the modern awards objective and the minimum wages objective, the FWC must recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. This is the modern enterprise awards objective.”
The approach to be taken
 In examining the approach which should be taken to settling the enterprise modern award we have been referred to the decision of the Full Bench in Commonwealth of Australia acting through the Minister Assisting the Prime Minister for the Public Service 3(the APS decision). In that decision, the Full Bench made the following observation when dealing with the determination of terms to be included in a modernised enterprise award:
“It can be seen that whilst the creation of a modern enterprise award is a new award and not a variation to the existing award, nevertheless the current terms and conditions play an important role and must be given appropriate weight when regard is had to the history of the modern award process. The difficulty faced by the Commission when it was required to modernise numerous awards in a sector and examine the “critical mass”, is not present when an enterprise award is considered. The conversion of an existing enterprise award to a modern enterprise award presents a much clearer picture. The ability not to disadvantage employees and increase the cost to employers is a less complex task. We emphasise that the modern award process was not a substitute for reasoned argument with relevant evidence where significant changes were sought to be made to longstanding terms and conditions of employment which were in awards of the Commission. This is not to say that the modern award process cannot embrace change, it can. The legislative requirements demand change, but particular change. It can been [sic] seen that the award modernisation process was not designed, simpliciter, to alter bargaining power.” 4
It is against this background that we must consider the matter before us, but in the correct statutory context.
Matters at issue
 Whilst there has been a considerable amount of work in reaching a mostly agreed draft in the proposed award, some matters remain at issue and have been the subject of argument. We now turn to those matters.
1. Minimum engagement for part time employees
 The unions seek to replace the existing award provisions with clauses derived from modern industry awards, including a minimum three hour engagement for part time employees. The existing award provisions do not provide for minimum engagement. Australia Post opposes the proposal of the unions. Australia Post submits that the absence of any minimum engagement period is the product of the negotiations between the parties that have established the existing enterprise specific terms, reflects the current position under the Australia Post Enterprise Awards and the flexibility is critical to Australia Post’s capacity to cover mail processing peaks. The unions’ submission acknowledges that the Australia Post enterprise instruments do not include a minimum engagement period for part time employees but that the absence of such a clause is not an enterprise specific term. Further, that if a minimum engagement period for part time employees is not included, this would constitute a failure to take into account the modern award objectives of the relative living standards and the needs of the low paid together with the need to promote social inclusion through increased workforce participation.
 We do not agree that the absence of minimum engagement constitutes a failure to include an enterprise specific term. There are existing award provisions regulating the engagement of part time employees which do not include minimum engagement. Consistent with the approach in the APS decision referred to above, in the making of a modern enterprise award, existing conditions maintain an important role. We do not think that a failure to include a minimum engagement clause will fail to take into account the modern award objectives referred to by the unions. Accordingly, we determine that the approach preferred by the unions to replace existing award provisions regulating part time employment, including a minimum engagement period, is rejected.
2. Casual Loading Rate
 The casual loading rate in the existing awards is 22.5%. The unions seek to increase the casual loading rate to 25%. Australia Post opposes this approach. It submits that the proposed loading of 22.5% reflects an existing enterprise specific term in the General Conditions Award and forms part of the overall terms and conditions. It further submits that there should not be an approach of simply imposing all of the modern award conditions applying in industry based awards that would otherwise apply to Australia Post, nor allow the cherry picking of those conditions from industry based awards. The unions submit that a minimum loading of 25% is appropriate for all casual employees across all enterprises and industries and that this has been recognised by the Commission 5. Further, that reasoning has been adopted and applied by subsequent Full Benches including the award modernisation decision of 19 December 2008.6
 We agree with the submissions of the unions on this matter. We also agree with the submissions of Australia Post that the exercise of making a modern enterprise award should not involve the simple imposition of conditions in industry based modern awards. However, the quantum of casual loading has a particular arbitrated history. Because the disabilities associated with casual employment are uniform, the award modernisation Full Bench adopted a uniform casual loading. That is an approach founded on fairness and equity. We consider a quantum of 25% is necessary is to give effect to the modern awards objective.
 The unions seek to insert into the award a clause which provides for amounts above the National Employment Standards (NES) redundancy entitlements, incorporating by reference the Redundancy/Redeployment/Retraining Agreement 1995 (RRR agreement). The RRR agreement was certified on 2 February 1996, under Division 2 of Part VIB of the Industrial Relations Act 1988. The RRR agreement no longer applies in its own right however and is now an attachment to the Australia Post Enterprise Agreement 2013.
 Australia Post oppose this course of action as the RRR agreement has never been part of a pre-existing award and should not be included in the new award.
 The terms the unions seek to include have a history in the organisation, however that history has never extended to the particular terms being contained in an award. They have always been part of an enterprise agreement and indeed continue to have force as an attachment to the current enterprise agreement. An award is a safety net—a set of minimum entitlements. Accordingly, we determine that it is not appropriate to include the terms of the RRR agreement in the award to be made. The award terms for redundancy should simply reflect the NES.
4. Indexation of Allowances
 The parties agree on which allowances should be included in the modern enterprise award and the mechanism by which those allowances will be indexed in accordance with wage increases into the future. However, the existing allowances have not been adjusted since 2005, largely, the unions contend, as a result of the inability to do so following the amendments to the Workplace Relations Act 1996 by the Workplace Relations Amendment (Work Choices) Act 2005 in 2006. Australia Post contends that the quantum of the allowances under a modern enterprise award should be based on allowances as they were at 2005, primarily because there was a mechanism for the unions to apply for allowances to be varied that was not utilised through the period. Having not utilised that mechanism, the unions are now seeking a retrospective “catch up” increase. The unions seek that the various allowances in the award be retrospectively indexed, to reflect wage rate increases in the period 2005-15, and in the case of the meal allowance, to reflect a CPI increase for the same period. The unions submit that the approach favoured by Australia Post will deprive employees of the benefit of a safety net by ignoring a decade of indexation of allowances. The unions contend that it was not possible to vary allowances during the relevant period.
 We are of the view that the allowances to be included in the modern award should be adjusted to reflect the increases in wage rates during 2005-15. We think this is necessary to ensure that the modern enterprise award to be made contains rates of payment for allowances that provide a relevant safety net and best meets the modern award objective.
 We note for completeness that indexing the allowances will not have an actual impact on the current level of allowances paid.
5. In- charge allowance
 The unions seek to include an in-charge allowance derived from clause 9.4 of the Australia Post Operations Award 1999. The opposition to the inclusion of this provision from Australia Post is related to its position on the indexation of allowances. That is, that the in-charge allowance should not be indexed to allow for increases since 2005. If the allowance is not indexed then the circumstances under which the allowance would be triggered would no longer arise because the minimum salary for both a postal services officer and a senior postal services officer already exceed the relevant salary in Schedule B of the Operations Award.
 We do not accept, for the reasons canvassed in relation to indexation of allowances above, that the in-charge allowance should not be indexed. Accordingly, when the allowance is indexed there would be scope for the allowance to be triggered. We determine that the in-charge allowance should be adjusted to reflect the increases in wage rates during 2005-15 and included in the modern enterprise award to be made.
6. Method of arranging ordinary hours
 Australia Post seeks the inclusion of the following clause in the award to be made:
“30.7 Method of arranging ordinary hours
The method of arranging ordinary hours may be:
(a) by employees working a constant number of ordinary hours each day; or
(b) by fixing one or more days a week on which employees work a lesser number of hours; or
(c) by fixing one or more days on which all employees will be off during a particular work cycle; or
(d) by rostering employees off on various days of the week during a particular work cycle so that each employee has one or more days off during that cycle.”
 This clause is not contained within the existing awards. Australia Post submits it is appropriate to include this clause in order to give effect to s.147 of the Act. The unions submit that the clause is not necessary.
 We note that the draft of the proposed award does include extensive terms specifying or providing for the determination of the ordinary hours of work for each employee at clauses 30.1 to 30.6. We are of the view that these provisions satisfy the requirement under s.147 of the Act and the additional proposed clause 30.7 is not necessary.
 This decision resolves the matters in dispute between the parties in the drafting of the new award. We direct the parties to confer on a revised draft of the award, taking into account this decision and submit it to the Chambers of Vice President Watson by 27 July 2015. There may be some matters of drafting which may require fine tuning so we refer the matter to Commissioner Lee to settle the final draft with recourse to members of this Full Bench if necessary.
Final written submissions:
Australia Post on 10 June 2015.
Unions on 26 June 2015.
1  FWCFB 2554
2 Email correspondence E Bulluss 10 June 2015 and CEPU 26 June 2015
3  FWCFB 616
4 Ibid at para 
5 Union submission at para 
6 Ibid at para 
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