[2016] FWCFB 3838 |
FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 4 Sch. 6—Modern enterprise award
COMMUNITY AND PUBLIC SECTOR UNION (NORTHERN TERRITORY PUBLIC SECTOR) AWARD 2002 AND OTHERS
Commonwealth employment | |
VICE PRESIDENT CATANZARITI |
SYDNEY, 19 AUGUST 2016 |
Application for a modern enterprise award to replace several enterprise instruments - whether modern enterprise award should be made - modern enterprise award should be made in the circumstances - order to be settled by member of Full Bench.
Introduction
[1] This decision relates to applications made under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the following awards (Current Awards):
● Community and Public Sector Union (Northern Territory Public Sector) Award 2002;
● Construction and Maintenance Workers (Northern Territory Public Sector) Award 2001;
● Darwin Port Corporation (Maritime Unions) Award 2003;
● Drafting, Supervisory, Technical and Other Employees (Northern Territory Public Sector) Award 2002;
● Fire & Rescue Services Employees (Northern Territory) Award 2001;
● General Employees (Northern Territory Public Sector) Miscellaneous Workers Union Award 2001;
● Health Employees (Northern Territory Public Sector) Miscellaneous Union Award 2001;
● Medical Officers (Northern Territory Public Sector) Award 2001;
● Northern Territory Public Sector (General Conditions of Service) Award 2000;
● Northern Territory Public Sector Redundancy Provisions Award 2001;
● Northern Territory Public Sector Teachers & Assistant Teachers Award 2001;
● Northern Territory Power and Water Corporation Employees Award 2002;
● Northern Territory Professional Engineers Award (Power and Water Authority) Award 2001;
● Nurses (Northern Territory Public Sector) Award 2001;
● Professional Engineers (Northern Territory Public Sector) Award 2001; and
● Transport Workers’ (Northern Territory Public Sector) Award 2002.
[2] The application was made by the Northern Territory’s Commissioner for Public Employment.
[3] On 26 May 2016 the parties jointly filed the following material in support of the application:
● Joint outline of submissions (Exhibit A);
● Statements of:
● a draft Order; and
● a draft of the Proposed Award.
[4] The application was supported by the following unions:
● Community and Public Sector Union;
● Association of Professional Engineers, Scientists and Managers Australia;
● Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union;
● Communications, Electrical, Electronic, Energy, Information, Postal,
● Plumbing and Allied Services Union of Australia;
● United Voice;
● Australian Nursing and Midwifery Federation;
● Australian Education Union;
● Australian Salaried Medical Officers Federation;
● Maritime Union of Australia; and
● Transport Workers Union.
[5] At the hearing of this matter on 9 June 2016 the following appearances were recorded;
● Ms A. Ambihaipahar for the Community and Public Sector Union (CPSU);
● Ms S. Gheller for The Association of Professional Engineers, Scientists and Managers, Australia (APESMA);
● Mr A. McCarthy for the Australian Nursing and Midwifery Federation (ANMF);
● Mr B. Devlin for Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU);
● Ms E. Early for United Voice (UV); and
● Mr M. Hathaway & Ms H. McAuliffe for the Commissioner for Public Employment for the Northern Territory.
[6] At the conclusion of the hearing we announced our decision to make the Northern Territory Public Sector Enterprise Award 2016 (Proposed Award) which had been agreed between the parties subject to its terms being finalised in conference with Commissioner Johns.
[7] On 15 June 2016 the parties jointly filed a further amended version of the Proposed Award incorporated amendments proposed during the Hearing.
[8] On 15 July 2016, the Commission’s Awards Modernisation Team suggested further amendments to the Proposed Award because of the decision in the Annual Wage Review 2015–16 on 31 May 2016 [[2016] FWCFB 3500]. It was proposed to adjust the wages and allowances, along with other minor changes.
[9] The Commission provided the parties with:
● a copy of the Proposed Award (including changes incorporated from [[2016] FWCFB 3500);
● a table clarifying the changes made to the Proposed Award.
[10] The parties were directed to consider the changes proposed, and provide comments and/or objections to the amended version of the Proposed Award, by 22 July 2016.
[11] On 22 July 2016, the Northern Territory’s Commissioner for Public Employment raised a number of objections to the Commission’s calculations and submitted:
● a revised copy of the Proposed Award;
● a revised copy of the table clarifying the changes made to the Proposed Award; and
● a table showing the proposed changes using the CPI increases from June 2015 to March 2016
[12] On 28 July 2016, the Commission provided the parties with a final version of the Proposed Award, incorporating all the changes proposed by the Northern Territory’s Commissioner for Public Employment; however the Commission noted that figures relating to expense-related allowances and motor vehicle allowances, will remain as per the Commission’s calculations. A brief explanation was provided on how these figures were calculated.
[13] On 29 July 2016, the Northern Territory’s Commissioner for Public Employment wrote to the Commission, confirming it has no objection to the final version of the Proposed Award, and suggested further minor amendments to the Proposed Award.
[14] On 9 August 2016, Commissioner Johns advised the parties that all outstanding issues had been resolved, and subject to final inspection by the Awards Modernisation Team, the Proposed Award would be finalised and the Reasons for Decision and Order would be issued.
[15] These are the reasons for our decision.
The approach
[16] The approach to be taken to the making of an enterprise modern award was established by a Full Bench in Commonwealth of Australia acting through the Minister Assisting the Prime Minister for the Public Service v the Community and Public Sector Union and Others. 1 We adopt that approach in this matter.
The legislative requirements
[17] 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 (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.
[18] 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 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.
[19] 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. The modern awards objective, set out in s.134 of the Fair Work Act 2009 (the Act), is as follows:
“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.”
[20] It is also relevant to draw attention to item 11 of Division 3 which provides:
11 Enterprise instrument modernisation process is not intended to result in reduction in take-home pay
(1) The enterprise instrument modernisation process is not intended to result in a reduction in the take-home pay of employees.
(2) An employee’s take-home pay is the pay an employee actually receives:
(a) including wages and incentive-based payments, and additional amounts such as allowances and overtime; but
(b) disregarding the effect of any deductions that are made as permitted by section 324 of the FW Act.
Note: Deductions permitted by section 324 of the FW Act may (for example) include deductions under salary sacrificing arrangements.
(3) An employee suffers a modernisation-related reduction in take-home pay if, and only if:
(a) a modern enterprise award made in the enterprise instrument modernisation process starts to apply to the employee when the award comes into operation; and
(b) the employee is employed in the same position as (or a position that is comparable to) the position he or she was employed in immediately before the modern enterprise award came into operation; and
(c) the amount of the employee’s take-home pay for working particular hours or for a particular quantity of work after the modern enterprise award comes into operation is less than what would have been the employee’s take-home pay for those hours or that quantity of work immediately before the award came into operation; and
(d) that reduction in the employee’s take-home pay is attributable to the enterprise instrument modernisation process.
[21] Item 11 highlights the injunction contained in the original request provided by the then Minister which related to disadvantage to employees.
The application of the legislative task
[22] We now turn to each of the matters that we took into account.
The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)
[23] The parties provided a history of the Current Awards. That history can be summarised as follows:
● The terms and conditions of employment applying to employees Northern Territory Public Service (NTPS) has not traditionally been regulated through instruments of general application;
● The terms and conditions of the NTPS has instead been set through legislation and subordinate legislation, Public Service Arbitrator determinations, awards and enterprise agreements;
● In the early years of the Commonwealth’s administration of the Territory, terms and conditions of employment were derived from Public Service Ordinances (a list of which was provided by the parties in Schedule 1 to the Outline of Submissions);
● Prior to being subsumed by the Conciliation and Arbitration Commission in 1984, the Public Service Arbitrator made determinations specifying the terms and conditions for Australian public servants, including those in the NTPS. A number of these were subsequently converted into Awards of the Conciliation and Arbitration Commission;
● A number of these Awards underwent simplification during the award simplification process conducted pursuant to the Workplace Relations Act 1996.
[24] It can be seen from this brief review that the Current Awards have had a long and distinct history. This was a factor in favour of making a modern enterprise award.
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: Item 4(5)(b).
[25] It was submitted that there is no single award that would, but for the Proposed Award, cover all employees who are covered by the Current Awards.
[26] It was submitted by the applicant that if the Proposed Award were not modernised then it is likely that at a number of different modern industry and occupational awards would cover its employees. They include:
● Architects Award 2010;
● Building and Construction General On-site Award 2010;
● Educational Services (Schools) General Staff Award 2010;
● Educational Services (Teachers) Award 2010;
● Electrical Power Industry Award 2010;
● Fire Fighting Industry Award 2010;
● Health Professionals and Support Services Award 2010;
● Manufacturing and Associated Industries and Occupations Award 2010;
● Medical Practitioners Award 2010;
● Nurses Award 2010;
● Professional Employees Award 2010;
● Surveying Award 2010; and
● Water Industry Award 2010.
[27] The parties agree that coverage by a large number of modern awards may lead to difficulties in enterprise bargaining. It was submitted that it would lead to an unnecessary fragmentation of the award safety net and would fail to achieve the modern awards objective.
[28] The parties jointly submitted that, while it would be possible for many NTPS employees to be covered by the Miscellaneous Award 2010, the Commission should adopt the same reasoning it applied in Commonwealth v CPSU ([2015] FWCFB 616).
[29] As was made clear in the award modernisation Full Bench decision dated 4 December 2009 ([2009] AIRCFB 945 at paragraph 153):
“We agree with those who have suggested that the coverage of the award is very narrow and likely to be limited in time where emerging industries are concerned or where the expansion of coverage of a modern award is involved. Accordingly we do not think the award should contain a comprehensive safety net designed for any particular occupation or industry. Rather it should contain basic conditions only, leaving room for the application of an appropriate safety net in another modern award in due course.”
[30] The Miscellaneous Award was not created or designed to be a universal safety net but to be a transition point to another modern award whose coverage may require review.
[31] These circumstances weighed in favour of creating a modern enterprise award.
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): Item 4(5)(c)
[32] The parties submitted that the modern awards listed above contain a common range of conditions and a range of allowances payable to employees, but that the allowances payable differ as between awards.
[33] Furthermore, it was submitted that each of these modern awards has classification structures and minimum rates of pay that differ from the classifications and rates of pay set out in the Proposed Award. The parties submitted that the classifications and rates of pay set out in the Proposed Award are better suited to the requirements of the NTPS than those appearing in the applicable modern awards.
[34] It is apparent from the history of the industrial arrangements which have applied to the applicant that the content of the various industry specific modern awards do not reflect the needs, terms and conditions of its employees. These factors weighed in favour of making a modern enterprise award.
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: Item 4(5)(d)
[35] The parties submitted that a number of terms and conditions of employment applying to the NTPS through various enterprise agreements are reflected in the Current Awards. These include:
● redundancy provisions;
● classification structures, including NTPS specific classifications such as Aboriginal and Torres Strait Islander Health Practitioner or Assistant Teacher;
● higher duties provisions;
● six weeks annual leave for employees stationed in the Northern Territory;
● Northern Territory Allowance
● leave airfare allowance
● restriction duty;
● paid parental leave; and
● leave to attend industrial proceedings.
[36] These circumstances weighed in favour of making a modern enterprise award.
The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment: Item 4(5)(e)
[37] The parties submitted that the Proposed Award contains enterprise specific terms and conditions of employment. A few are worthy of mention:
● classifications;
● hours of work;
● spans of hours;
● special provisions for school-based administrative officers;
● provisions for ordinary hours of work (e.g. flextime);
● split shifts;
● meal, rest and crib breaks;
● minimum breaks between shifts;
● higher duties provisions;
● allowances;
● penalties and overtime (including TOIL, rest relief after overtime, and restriction duty)
● emergency duty
● annual leave
● personal/carer’s leave and compassionate leave provisions;
● parental leave provisions that supplement the NES;
● leave to attend industrial proceedings; and
● redundancy provisions that supplement the NES.
[38] The parties also submitted that, while some similarities with the Australian Public Service Award exist at the lower levels, the classifications and pay relativities in the Existing Awards are enterprise specific. The Proposed Award maintains these classifications and relativities.
[39] It was submitted that if the Proposed Award were not made then the classifications and relativities would be lost and the relativities set by instruments of more general application. The parties submitted that this would be contrary to the principle of equal remuneration.
[40] These factors weighed in favour of making a modern enterprise award.
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: Item 4(5)(f).
[41] The parties jointly submitted that:
● A decision to made the Proposed Award would provide the relevant parties with an enterprise specific instrument and a fair an relevant safety net against which to apply the better-off overall test (BOOT) when assessing enterprise agreements applying to the NTPS; and
● Failure to make the Proposed Award would result in the BOOT being applied against awards with more general application, which do not represent fair safety nets for the application of this test. It was further submitted that a substantial portion of the NTPS would be without a instrument for the purposes of applying the BOOT.
[42] These factors weighed in favour of making a modern enterprise award.
The views of the persons covered by the enterprise instrument: Item 4(5)(g)
[43] While the views of every employee of the NTPS had not been canvassed, the parties submitted that support for the Proposed Award had been given by the following employee associations:
● Community and Public Sector Union;
● Association of Professional Engineers, Scientists and Managers Australia;
● Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union;
● Communications, Electrical, Electronic, Energy, Information, Postal,
● Plumbing and Allied Services Union of Australia;
● United Voice;
● Australian Nursing and Midwifery Federation;
● Australian Education Union;
● Australian Salaried Medical Officers Federation;
● Maritime Union of Australia; and
● Transport Workers Union.
[44] Whilst consent is not decisive of the matter, it was a factor in favour of making a modern enterprise award.
Any other matter prescribed by the regulations: Item 4(5)(h)
[45] There were no regulations relevant to this criterion.
Should a modern enterprise award be made?
[46] The NTPS is a unique organisation. Its core business and related activities have evolved over many years to reflect changes in its role and the functions it performs. There is no convenient alternative award that can be said to better satisfy the modern awards objective than a modernising of the Current Awards.
[47] The history of the awards discloses a rationale for their existence which remains current today. The Current Awards contain enterprise specific terms. While some of these can and should be contained in enterprise agreements, the fact remains that the awards were developed for the NTPS, and once consolidated and modernised, remain the most suitable vehicle for a fair and relevant minimum safety net into the future. In our view there was a compelling case for the making of a modern enterprise award for Proposed Award.
[48] The above factors clearly made the case for such an outcome. We considered that the Proposed Award should be made.
[49] Consequently, we made the Award in the terms agreed between the parties and filed in the Commission on 29 July 2016.
VICE PRESIDENT
Appearances:
A. Ambihaipahar appeared for the CEPU
S. Gheller appeared for the APESMA
A. McCarthy appeared for the ANMF
B. Devlin appeared for the AMWU
E. Early appeared for UV
M. Hathaway & M. McAuliffe appeared for the Commissioner for Public Employment for the Northern Territory
Hearing details:
2016.
Sydney, Brisbane, Melbourne, Darwin.
June 9.
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