Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6A, Item 4 - Application to make a State reference public sector modern award

State reference public sector transitional award modernisation – State Agencies Grouping - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 – Schedule 6A Items 4, 6, 7, 8 and 9 – Fair Work Act 2009 ss.134 and 284.

[1] This matter arises from the operation of Schedule 6A to the Fair Work (Transitional Provisions and Consequential Provisions) Act 2009 (the Transitional Act) in relation to awards that fall within the definition of ‘State reference public sector transitional awards’ under the Transitional Act.

[2] The Community and Public Sector Union (CPSU) and others have made applications under Schedule 6A, Item 4, to make a State reference public sector modern award known as the Victorian State Government Agencies Award 2015. This award will replace all existing instruments applying to employers covered by the award.

[3] The application to make a State reference public sector award is governed by Item 4 of the Schedule 6A to the Transitional Act which provides as follows:

“4 Making State reference public sector modern awards on application

(1) An employer or organisation that is covered by a State reference public sector transitional award (the current award) may apply to the FWC for the making of a State reference public sector modern award (the proposed award).

(2) The application may be made only during the period starting on the WR Act repeal day and ending at the end of 31 December 2013.

(3) The application must specify the employers, employees and organisations (the proposed parties) proposed to be covered by the proposed award.

(4) The FWC must consider the application, and must make a State reference public sector modern award covering the proposed parties if the FWC is satisfied that:

(a) the proposed parties are covered by State reference public sector transitional awards; and

(b) the employers and organisations that are proposed parties have agreed to the making of the application.

Note: The proposed parties will cease to be covered by State reference public sector transitional awards when the State reference public sector modern award comes into operation: see item 29 of Schedule 3.”

[4] Item 6 of Schedule 6A requires the Commission to make or vary a State reference public sector modern award so that employees covered by State reference public sector transitional awards are covered by a State reference public sector modern award. Item 6 states in full:

“6  Further obligation of the FWC to make or vary State reference public sector modern awards at end of application period

If, at the end of the period referred to in subitem 4(2), there are one or more State reference public sector transitional awards that still cover some employers and employees, the FWC must make, or (in accordance with section 168L of the FW Act) vary the coverage of, one or more State reference public sector modern awards so that all those employers and employees are covered by State reference public sector modern awards.

Note: The employers and employees will cease to be covered by the State reference public sector transitional awards when they start to be covered by a State reference public sector modern award that is in operation: see item 29 of Schedule 3.”

[5] Items 7 to 9 of Schedule 6A concern the approach to formulating the terms of a State reference public sector modern award. These provisions state:

“7  The State reference public sector modern awards objective

(1) If the FWC is required by item 4 or 6 to make a State reference public sector modern award, the modern awards objective and the minimum wages objective apply to the making of the modern award.

(2) However, in applying the modern awards objective and the minimum wages objective, the FWC must recognise:

(a)  the need to facilitate arrangements for State reference public sector employers and State reference public sector employees that are appropriately adapted to the effective administration of a State; and

(b)  that State reference public sector modern awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to State reference public sector employers and State reference public sector employees.

This is the State reference public sector modern awards objective.

Note 1:    See also item 13 (State reference public sector transitional award modernisation process is not intended to result in reduction in take-home pay).

Note 2:    See also item 19 (how the FW Act applies in relation to the State reference public sector transitional award modernisation process before the FW (safety net provisions) commencement day).

8  Terms of State reference public sector modern awards

(1) Division 3 (other than sections 143 and 154) of Part 2-3 of the FW Act (which deals with terms of modern awards) applies in relation to a State reference public sector modern award made under this Division.

Note: See also item 19 (how the FW Act applies in relation to the State reference public sector transitional award modernisation process before the FW (safety net provisions) commencement day).

(2)  If FWA makes a State reference public sector modern award before the FW (safety net provisions) commencement day, the State reference public sector modern award must not be expressed to commence on a day earlier than the FW (safety net provisions) commencement day.

9  Coverage terms

Coverage terms must be included

(1) A State reference public sector modern award must include terms (coverage terms) setting out, in accordance with this item, the employers, employees and organisations that are covered by the State reference public sector modern award.

Employers and employees

(2) The coverage terms must be such that:

(a)  the only employers that are expressed to be covered by the modern award are one or more specified State reference public sector employers; and

(b)  the only employees who are expressed to be covered by the modern award are specified State reference public sector employees of those employers.

Organisations

(3) A State reference public sector modern award may be expressed to cover one or more specified organisations, in relation to:

(a)  all or specified employees covered by the modern award; or

(b)  the employer, or all or specified employers, covered by the modern award.

Outworker entities

(4) A State reference public sector modern award must not be expressed to cover outworker entities.

How coverage etc. is expressed

(5) For the purposes of this item:

(a)  an employer or employers may be specified by name or by inclusion in a specified class or specified classes; and

(b)  employees must be specified by inclusion in a specified class or specified classes; and

(c)  organisations must be specified by name.”

[6] The references to the modern awards objective and the minimum wage objective in Item 7 refer to the objectives in ss. 134 and 284 of the Fair Work Act 2009 (the Act). Section 134 relevantly states:

“134 The modern awards objective

What is the modern awards objective?

(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.”

[7] Section 284 relevantly states:

“284 The minimum wages objective

What is the minimum wages objective?

(1) The FWC must establish and maintain a safety net of fair minimum wages, taking into account:

(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and

(b) promoting social inclusion through increased workforce participation; and

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

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

(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.

This is the minimum wages objective.”

[8] A number of conferences were held at the Commission in which discussions were had with interested parties concerning the content of the proposed award.

The parties have reached agreement on the content of the proposed award and filed a draft award with the Commission. The terms of the draft award were settled in consultation with interested parties.

The Full Bench makes the award arising from these matters in the terms now published. We will provide that it shall operate from 6 August 2015.

The Commission is satisfied that the terms of the award are consistent with the modern awards objective and the minimum wages objective. The Victorian State Government Agencies Award 2015 is in substantially similar terms to the State Government Agencies Award 2010. The making of separate awards is mandated by the legislation set out above. Nevertheless it is desirable that the safety net awards are as uniform as possible for equity and efficiency reasons. We commend the parties on their constructive efforts in bringing about this outcome.

VICE PRESIDENT

Final written submissions:

State of Victoria (with the agreement of interested unions) on 29 July 2015.

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