[2016] FWCFB 5429 |
FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 4 Sch. 6—Modern enterprise award
Commonwealth employment | |
VICE PRESIDENT CATANZARITI |
SYDNEY, 19 AUGUST 2016 |
Application for a modern enterprise award to replace the Australian Nuclear Science and Technology Organisation (General) Award 2000 - 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 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 Australian Nuclear Science and Technology Organisation (General) Award 2000 1 (Current Enterprise Award).
[2] The application was made by the Community and Public Sector Union (CPSU) and the Association of Professional Engineers, Scientists and Managers Australia (APESMA).
[3] The application was supported by the Australian Government, the Australian Nuclear Science and Technology Organisation (ANSTO), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
[4] On 6 May 2016 the parties filed the following joint material in support of the application:
● Joint outline of submissions (Exhibit B);
● Statement of Robert Blissett, General Manager of Human Resources & Workplace, Health & Safety at ANSTO (Exhibit A); and
● Copy of the Current Enterprise Award (Attachment A to the Statement of Robert Blissett).
● Draft Order of the Proposed Award
[5] At the hearing of this matter on 23 May 2016:
● C Ms H Fairhall from Ashurst for ANSTO;
● Mr L Benfell from the CPSU;
● Ms S Gheller from APESMA; and
● Mr M Nicolaides from the AMWU.
[6] At the conclusion of the hearing we announced our decision to make the Australian Nuclear Science and Technology Organisation (ANSTO) Enterprise Award 2016 (Proposed Award) which had been agreed between the parties subject to the finalisation of its terms in conference with Commissioner Johns.
[7] On 8 June 2016 the parties jointly filed a further amended version of the Proposed Award incorporating amendments proposed during the Hearing, namely the inclusion of the revised model term for the cashing out of annual leave.
[8] On 14 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 figures.
[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; and
[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 20 July 2016.
[11] On 19 July 2016, the AMWU submitted that it agreed with the further amended version of the Proposed Award, but suggested additional amendments to the calculations in the various rates proposed for classifications within its coverage.
[12] On 19 July 2016, the Commission incorporated the figures proposed by the AMWU and provided the parties with revised versions of the Proposed Award and the table clarifying the proposed changes.
[13] On 20 July 2016, ANSTO advised that it agreed with most of the proposed changes, but suggested further amendments to the calculation of the meal allowance.
[14] On 22 July 2016, ANSTO and the AMWU jointly submitted to the Commission, that upon further review they agree with the meal allowance figures provided on the 19 July 2016.
[15] On 24 July 2016, the Commission provided to the parties with a final version of the Proposed Award incorporating all the changes agreed to. The parties were directed that, unless any objection was raised by 26 July 2016, the Reasons for Decision and Order would be issued.
[16] These are the reasons for our decision.
The approach
[17] 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. 2 We adopt that approach in this matter.
The legislative requirements
[18] 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.
[19] 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.
[20] 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.”
[21] 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.
[22] 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
[23] 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)
[24] The parties provided a history of the Current Enterprise Award. That history can be summarised as follows:
● Historically, the terms and conditions of ANSTO employees (and employees of its predecessor organisation) were determined by the ANSTO Executive, subject to the approval of the Public Service Board;
● In 1981 ANSTO’s predecessor, the Australian Atomic Energy Commission (AAEC) was split with parts of the AAEC joining the Commonwealth Scientific and Industrial Research Organisation and the remainder continued until 1987 when it was replaced by ANSTO;
● The passage of the Prime Minister and Cabinet Legislation Amendment 1991 removed the requirement for the approval of the Public Service Board, and the terms and conditions of employment relating to ANSTO employees began to evolve independently of the terms and conditions relating to Australian Public Service employees;
● In 1990, a number of awards and public sector instruments were, to the extent they covered ANSTO employees, set aside and replaced with ANSTO Award. This award was the result of significant negotiations and reflected substantial changes in the structure of the ANSTO. In making the ANSTO Award, Sheather C stated that the ANSTO Award “contains, unaltered, a number of conditions which have been applied as a general standard at ANSTO”;
● The Current Enterprise Award was made during the award simplification process and combined the ANSTO Award 1990, the ANSTO Safety and Operations Supervisors Shift Workers Award 1992 and the ANSTO Emergency Alarm Centre Shift Workers Award 1992.
[25] It can be seen from this brief review that the Current Enterprise Award has 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).
[26] 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 Enterprise Award.
[27] It was submitted by the applicant that if the Current Enterprise Award were not modernised then it is likely that at a number of different modern industry and occupational awards may cover a limited number of its employees. They are:
● Manufacturing and Associated Industries and Occupations Award 2010; and
● Professional Employees Award 2010.
[28] The parties agreed that employees covered by the Current Enterprise Award work in the Commonwealth public sector and, at present, there is no industry-based modern award that covers employees in that sector.
[29] It may be observed that coverage by a number of modern awards may lead to difficulties in enterprise bargaining. Further, it might lead to an unnecessary fragmentation of the award safety net and would fail to achieve the modern awards objective.
[30] 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)
[31] The parties submitted that the content of the modern industry and occupational awards are specific to a particular occupation or industry.
[32] Further, they jointly submitted that there are significant differences between the ANSTO Award and the modern industry and occupational awards which might otherwise apply, because those awards focus on the other industries and occupations.
[33] It was further submitted that the content of the modern industry and occupational awards do not reflect the terms and conditions currently operating in ANSTO.
[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 directed the Commission’s attention to the decision in Coleambally Irrigation Co-operative Limited v AWU and ors 3 in which the parties submitted that the Commission considered enterprise agreements that appeared to cover activities in the relevant industry
[36] The parties submitted that the Australian Nuclear Science and Technology Organisation Enterprise Agreement 2012-2014 4(Enterprise Agreement) set out terms and conditions which apply to most ANSTO employees.
[37] The parties submitted that the following terms and conditions from the Enterprise Agreement are reflected in the Current Enterprise Award:
● Clause 16.5 – Flextime
● Clause 23 – a more generous entitlement to personal leave; and
● Clause 28 – a more generous entitlement to redundancy pay.
[38] 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)
[39] It was submitted that there are enterprise specific terms and conditions that apply to employees of ANSTO in addition to the flextime, personal leave and redundancy entitlements set out above. A few are worthy of mention:
● employment categories comprising of temporary, part-time, term, continuing and apprentices;
● the Current Enterprise Award covers employees up to and including the upper levels of senior executives, as well as senior specialists.
● ordinary hours of work of 36 hours 45 minutes for all staff; and
● nine day fortnight arrangements for the working of ordinary hours.
[40] The parties submitted that the Current Enterprise Award contains seven different employment streams that are unique to ANSTO and that each stream contains its own unique relatives that differ from other awards in the public sector.
[41] The parties submitted that the Full Bench of the Commission that modernised the APS Award recognised that the existence of established salary relativities was a factor in favour of making a modern enterprise award. The parties submitted that the established wage relativities in the Current Enterprise Award is a factor in making the Proposed Award.
[42] Robert Blissett gave evidence about the specific terms and conditions of employment. In summary the evidence as to the effect that:
● ANSTO works in partnerships and collaborative ventures with national and international organisations. Consequently, a number of employees are engaged on temporary or fixed term basis to provide services for the duration of the relevant project. These positions are varied in nature and include posts to represent Australia on mission to the International Atomic Energy Agency in Vienna, through to co-funded research projects with universities and industry partners, including the mining industry.
● ANSTO offers post-doctoral fellowships all over the world, and these fixed term posts are critical in the development of career researchers and scientists. ANSTO’s post-doctoral programs, and other early career programs, engage 25 early career researchers each year in a fixed term or temporary nature to build Australia’s scientific capacity and provide experience for a pipeline of scientists and researchers into the future.
[43] 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).
[44] The parties jointly submitted that:
● while the majority of ANSTO employees are covered by the Enterprise Agreement, a decision to make, or not to make, the Proposed Award will be relevant to the operation of the better off overall test (the BOOT); and
● a decision to not make the Proposed Award would result in the BOOT being assessed against the Miscellaneous Award 2010, the Professional Employees Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010. The parties submitted that these awards do not contain terms and conditions that reflect the particular circumstances of employment at the ANSTO.
[45] The modern award exercise, in its totality, is concerned with a safety net going forward from which the BOOT can be applied as an anchor point for bargaining.
[46] The parties submitted that the terms and conditions provided for in the Miscellaneous Award 2010 do not provide for a fair or relevant minimum safety net for the purpose of the BOOT.
[47] There is considerable force to these arguments and they were a factor in favour of making a modern enterprise award.
The views of the persons covered by the enterprise instrument: Item 4(5)(g)
[48] All parties to the Current Enterprise Award supported the making of this modern enterprise award. No person opposed the award. Whilst consent is not decisive of the matter, it is a factor in favour of making a modern enterprise award.
Any other matter prescribed by the regulations: Item 4(5)(h)
[49] There were no regulations relevant to this criterion.
Should a modern enterprise award be made?
[50] ANSTO is a unique organisation. There is no convenient alternative award that can be said to better satisfy the modern awards objective than a modernised Australian Nuclear Science and Technology Organisation (General) Award 2000.
[51] The history of the Current Enterprise Award discloses a rationale for its existence which remains current today. The terms of Current Enterprise Award 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 this enterprise, 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 the ANSTO.
[52] The above factors clearly made the case for such an outcome. We considered that a modern Australian Nuclear Science and Technology Organisation (ANSTO) Enterprise Award 2016 should be made.
[53] Consequently, we made the Award in the terms agreed between the parties as amended and provided by the Commission on 24 July 2016.
VICE PRESIDENT
Appearances:
H Fairhall, from Ashurst
L Benfell, from the CPSU
S Gheller, from APESMA
M Nicolaides, from the AMWU
Hearing details:
2014.
Sydney, Canberra, Melbourne
May 23.
1 AT765755.
4 AE892599.
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