Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards – Payment of wages.

[1] A number of matters concerning various ‘payment of wages’ terms in certain modern awards have been referred to this Full Bench for determination. A summary of the various matters is set out in a Statement issued 6 July 2016 (the 6 July Statement).

[2] Conciliation conferences were held on 27 July 2016.

[3] A further Statement with draft directions was issued on 2 August 2016 (the 2 August Statement). That statement provided interested parties with an opportunity to comment on the proposed directions.

[4] Comments were received from the Ai Group, Australian Business Industrial (ABI) and the Shop, Distributive and Allied Employees Association (SDA). Ai Group and ABI sought variations to the draft directions; these requests have been taken into account in the final directions.

The SDA application

[5] The SDA application 1 seeks a variation to require, among other things, that all wages be paid on a regular payday within four days of the end of the pay period. The variation is sought in the following awards:

● Fast Food Industry Award 2010;
● General Retail Industry Award 2010;
● Hair and Beauty Industry Award 2010.

[6] During the course of the conciliation conference on 27 July 2016, the parties agreed to give consideration to a draft term which may reflect a compromise between the parties’ respective positions. The proposed draft term is as follows:

Wages will be paid weekly or fortnightly according to the actual hours worked each week or fortnight.

All wages are to be paid on a regular pay day, within 7 days of the end of the pay period. The employer must notify each employee of the regular pay day. The regular pay day may be varied by agreement between the employer and employee(s) or by the provision of 4 weeks’ notice by the employer to the employee(s).

[7] A proposed draft term in relation to the General Retail Industry Award 2010 was not included in the 2 August Statement and we include a proposed term below for the consideration of interested parties.

23. Payment of wages

Wages will be paid weekly or fortnightly according to the actual hours worked each week or fortnight, or may be averaged over a period of a fortnight.

All wages shall be paid on a regular pay day within 7 days of the end of the pay period. The employer must notify the employee in writing as to which day is the pay day. Where for any reason the employer wishes to change the pay day, then the employer shall provide at least 4 weeks’ written notice to the employee of such change.

An enterprise which prior to the 1st January 2010, paid particular classifications of its employees on a monthly pay cycle may continue to pay these particular classifications of employees on a monthly pay cycle. However no employee classified at level 3 or below under this award may be paid on a monthly pay cycle and must be paid either weekly or fortnightly.

[8] Interested parties should consider and discuss the draft terms set out above. The SDA is to advise the Commission as to the outcome of those discussions by not later than 4 pm on Tuesday 23 August 2016.

[9] The SDA correspondence of 10 August 2016 also raised an issue with Attachment A to the Commission’s statement of 15 June 2016. That Attachment set out a table of awards which provide for payment of wages within a certain period as a reference for parties to this matter only. Those matters were not referred to this Full Bench for determination. The SDA provided an amended table, which is attached to this statement for the information of interested parties.

Penalty for late payment of wages

[10] ABI is seeking to vary the provisions in 10 modern awards which impose a penalty for late payment of wages. The relevant awards were listed in the 2 August Statement and included Professional Diving Industry (Industrial) Award 2010. It has come to the attention of this Full Bench that an application by Australian Mines and Metals Association in relation to this matter was determined by the Group 1 Full Bench in [2015] FWCFB 7236. The Full Bench held:

‘[230] Clause 10.3 of the Exposure Draft provides as follows:

‘… (b) Wages will be paid by cash, bank cheque or electronic funds transfer (EFT).

(c) Employees kept waiting for their wages on pay day for more than 15 minutes after the usual time for ceasing work must be paid overtime rates after that 15 minutes.’

[231] AMMA submitted that the entitlement in clause 10.3(c) should be deleted on the basis that ‘it does not reflect modern payroll operations’.

[232] This issue has recently been given some consideration by the Full Bench which dealt with a number of substantive issues in relation to the review of the Timber Industry Award 2010. One of the issues determined by the Full Bench was a claim by a division of the CFMEU to vary the award to provide for a late payment penalty where wages are paid by EFT, the award already provided for a late payment penalty where employees are paid in cash. The Full Bench traversed the submissions in detail and ultimately rejected the claim. In doing so the Full Bench stated:

“[124] Further as a matter of merit, we think that the prescription of payment in respect of time spent by an employee waiting for a late payment by cash or cheque, in respect of the delayed departure of an employee from their place of employment because their wages are not paid on time is qualitatively different from the imposition of a penalty in respect of late payment by EFT.”

[233] We agree with the sentiment that late payment penalties are not appropriate in circumstances where employees are paid by electronic funds transfer (EFT). We also agree with the comments of Mayo J of the South Australian Supreme Court in Cranford-Webster v McFarlane:

“I think it means time which the employee spends at the employer’s establishment actually waiting for his pay …
‘Waiting time’ would mean in its ordinary sense the time that an employee spent and wasted in loitering about whilst payment of wages to him was not forthcoming. The appropriate meaning to be given to ‘waiting’ would seem to be staying in expectation, stopping or remaining stationary, or inactive till the happening of the event, holding over departure.”

[234] However the Exposure Draft provides, at clause 10.3(b) that wages may be paid by cash, bank cheque or EFT. In circumstances where wages are paid in cash or bank cheque the penalty for late payment (in clause 10.3(c)) remains relevant. For that reason we do not propose to amend the Exposure Draft in the manner suggested by AMMA.’ (references omitted)

[11] We draw this matter to the attention of those with an interest in the application to vary the Professional Diving Industry (Industrial) Award 2010.

Annual leave loading issue

[12] In the 2 August Statement the following course of action was set out:

(i) The interested parties in relation to the Food, Beverage and Tobacco Manufacturing Award 2010 are to file a joint document setting out the terms of their agreement, within 7 days. Ai Group will file a short written submission in support of the agreed variation, in accordance with the final directions issued in respect of these issues.
(ii) In relation to the proposed variation to the Joinery and Building Trades Award 2010, Ai Group was to give further consideration to the terms of its proposed variation and advise of its final position, within 7 days.

(iii) Further discussions are to take place between the parties with an interest in the Electrical, Electronic and Communications Contracting Award 2010.

[13] The Commission has not received anything further from the parties in relation to these matters. The Ai Group is to advise the Commission of its position by not later than 4 pm on Tuesday 23 August 2016.

Next Steps

[14] The hearing in respect of the payment of wages matters will be listed for 9:30 am on Friday, 21 October 2016 in Sydney. Directions for the filing of submissions and evidence are set out at Attachment A. A notice of listing will follow shortly.

PRESIDENT

<Price code C, PR584276 >

Attachment A

DIRECTIONS

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

It is directed that:

1. Parties seeking to vary the payment of wages term in any modern award are to file a written submission and any supporting evidence by 4:00 pm Tuesday, 20 September 2016.

2. Parties opposing the variation of any of the payment of wages terms in the modern awards referred to in the 1 August 2016 Statement are to file written submissions and any supporting evidence by 4:00 pm Thursday, 13 October 2016.

3. A Mention will be held at 1:00 pm Monday, 17 October 2016.

4. Applicants may file submissions in reply by 4:00 pm Tuesday, 18 October 2016.

5. A Full Bench Hearing will take place at 9:30 am Friday, 21 October 2016, in Sydney.

6. All submissions and evidence should be sent to amod@fwc.gov.au.

7. All requests for video link should be sent to chambers.ross.j@fwc.gov.au.

8. Leave is granted to apply generally.

PRESIDENT

 1   SDA submission 2 March 2015; Transcript 14 December 2015, PN 410.

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