| [2016] FWCFB 6841 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 – 4 yearly review of modern awards
Coal industry | |
VICE PRESIDENT WATSON |
MELBOURNE, 17 OCTOBER 2016 |
Four yearly review of modern awards – Black Coal Mining Industry Award 2010 – Accident pay – Transitional provisions – Reduction of accident pay benefits under the Award – Power of the Fair Work Commission to hear application – Fair Work Act 2009, ss.156, 602, 603.
Introduction
[1] This decision concerns an application of the Coal Mining Industry Employer Group (CMIEG) in respect of the accident pay provisions of the Black Coal Mining Industry Award 2010 (BCMI Award). The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) and the Construction, Forestry, Mining and Energy Union (CFMEU) oppose the application and raise a threshold issue of whether the CMIEG is able to prosecute its application.
[2] On 13 July 2016 Directions were issued to the parties advising that the question of whether CMIEG is permitted to prosecute a case for reduction of accident pay benefits under the BCMI Award was to be dealt with as a threshold question and that the parties were to file and serve written submissions in relation to the threshold question. This decision deals with that question.
Background
[3] In 2013 the CFMEU made an application to the Commission seeking removal of the transitional provision attached to the accident pay provision of the BCMI Award. This application was not made in connection with the Commission’s four yearly review of modern awards. CMIEG was one of a number of parties to oppose this application.
[4] On 24 January 2014 the Commission issued an issues paper as part of the 4 yearly review of modern awards which among other things invited parties to make submissions outlining any claims they wished to pursue that would affect multiple modern awards, the so called ‘common issues’. Both the CFMEU and CMIEG made submissions in response to that issues paper, with the CFMEU’s submission concluding as follows:
“13. … the CFMEU notes that no party is precluded from addressing the substance of accident pay provisions in modern awards (including the Black Coal Industry Award 2010) in the normal way during the 4 yearly review. However, given the common nature of the sunset provision and the specific time constraint that attaches to it, a special approach to the matter is justified and necessary.” 1
[5] A further issues paper followed on 24 February 2014 with a Statement and Directions regarding the common issues issued on 17 March 2014. That Statement and Directions foreshadowed the release of a background paper on the transitional provisions common issue.
[6] The Background Paper was issued on 2 June 2014 and stated in respect of the BCMI Award:
“[13] The CFMEU and the Coal Mining Industry Employer Group proposed that the Commission should deal with the issue of the appropriate accident pay provisions to replace the present transitional provisions as a ‘common issue’ in the review. The CFMEU had previously made a separate application to vary the Black Coal Mining Industry Award 2010 outside the Review on 27 September 2013.” 2 (Footnotes not included)
[7] A further Statement was issued on 4 June 2014 3, with Directions issued on 15 July 2014.
[8] The CFMEU application regarding the BCMI Award was heard by the Full Bench at the same time as it dealt with a series of applications made by the Australian Council of Trade Unions (ACTU) seeking removal of model transitional provisions dealing with accident pay, district allowances and redundancy from various awards, as part of the Commission’s 4 yearly review. The CMIEG did not appear at the hearings (29-31 October 2014) regarding the ACTU’s applications or at any of the programming conferences held prior to those hearings.
[9] In September 2014 a number of unions made applications to insert accident pay and/or district allowances provisions into a number of awards. No such application was made in respect of the BCMI Award. Those applications were heard after the ACTU’s applications seeking the removal of the model transitional provisions had been heard and determined.
[10] Prior to the Full Bench decisions on the matter, the Accident Pay clause of the BCMI Award was as follows:
An employee in receipt of weekly payments under the provisions of applicable workers compensation legislation will be entitled to receive accident pay from the employer subject to the following conditions and limitations:
18.1 Payment to be made during incapacity
An employer must pay, or cause to be paid, accident pay during the incapacity of the employee, within the meaning of the applicable workers compensation legislation:
(a) until such incapacity ceases; or
(b) until the expiration of a period of 78 weeks from the date of injury;
whichever event will first occur, even if the employer terminates the employee’s employment within the period.
18.2 Meaning of accident pay
For the purposes of this clause accident pay means:
(a) For the initial period of 39 weeks from the date of injury, a weekly payment representing the difference between the weekly amount of compensation paid to the employee under the applicable workers compensation legislation and the weekly amount that would have been received by virtue of this award had the employee been on paid personal leave at the date of the injury (provided the latter amount is greater than the former amount).
(b) For a further period of 39 weeks a weekly payment representing the difference between the weekly amount of compensation paid to the employee under the applicable workers compensation legislation and the rate prescribed from time to time for the classification of the incapacitated employee at the date of the injury (provided the latter amount is greater than the former amount).
18.3 Pro rata payments
In respect of incapacity for part of a week the amount payable to the employee as accident pay will be a direct pro rata.
18.4 When not entitled to payment
An employee will not be entitled to any payment under this clause in respect of any period of paid annual leave or long service leave, or for any paid public holiday.
18.5 Redemptions
In the event that an employee receives a lump sum in redemption of weekly payments under the applicable workers compensation legislation, the liability of the employer to pay accident pay as herein provided will cease from the date of such redemption.
18.6 Damages independent of the Acts
Where the employee recovers damages from the employer or from a third party in respect of the said injury independently of the applicable workers compensation legislation, such employee will be liable to repay to the employer the amount of accident pay which the employer has paid under this clause and the employee will not be entitled to any further accident pay thereafter.
18.7 Calculation of period
The 78 week period commences from the first day of incapacity for work, which may be subsequent to the date of injury. Intermittent absences arising from the one injury are to be cumulative in the assessment of the 78 week limitation.
18.8 Clause ceases to operate
This clause ceases to operate on 31 December 2014.”
[11] The Full Bench has issued three decisions dealing with the issue of accident pay. The first decision 4 was handed down on 31 October 2014 (the October 2014 decision) and dealt with the ACTU’s applications seeking removal of model transitional provisions dealing with accident pay and the CFMEU’s application in respect of the BCMI Award. The second decision5 was issued on 11 February 2015 (the February 2015 decision) and among other things set out the Bench’s reasons for its October 2014 decision. The third decision6 was issued on 18 August 2015 (the August 2015 decision) and dealt with the various union applications to insert accident pay and/or district allowance provisions into a number of awards.
[12] In the October 2014 decision the Full Bench said:
“[1] The matters before the Full Bench concern transitional provisions relating to accident pay, district allowances and redundancy which were inserted into most modern awards by the Award Modernisation Full Bench in the Award Modernisation Decision 2008 [2008] AIRCFB 1000. The transitional provisions were expressed to operate for a period until 31 December 2014 (the sunset provision), during which time the parties would have the opportunity to give consideration to the future award regulation of those matters.
[2] As part of the four yearly review of awards, a background paper was prepared and distributed to parties and a series of conferences were convened by the President of the Fair Work Commission (the Commission) regarding the Transitional Provisions Common Issues. Several parties made applications in relation to the transitional provisions in awards. Applications were made by the Australian Council of Trade Unions (ACTU) to delete the sunset provision in the model transitional provisions which were inserted into most modern awards relating to accident pay and district allowances. The Construction Forestry Mining and Energy Union, Mining and Energy Division (CFMEU) applied to delete the sunset provision in the non-model accident pay provision which was inserted into the Black Coal Mining Industry Award 2010. The Australian Industry Group (AiG) applied to delete the transitional provisions relating to accident pay, district allowances applying in Western Australia and the Northern Territory, and redundancy from all applicable awards.
[3] A timetable was established for the filing of submissions and evidence in relation to the Transitional Provisions Common Issues. Written outlines of submissions together with evidence and other material were filed by interested parties, mainly in September 2014, and on 29 to 31 October 2014 the Full Bench heard submissions from the parties.
[4] Given the operative periods for the transitional provisions in modern awards, we consider that it is appropriate for the Full Bench to announce our decision, at least in relation to some of the matters before us, as early as possible.
[5] We have decided not to grant the ACTU application to delete the sunset provisions in the transitional Accident Pay and District Allowance provisions in modern awards. We do not consider that the case has been made out for the continuation of those transitional provisions having regard to the basis on which they were inserted by the Award Modernisation Full Bench in 2008 and to the submissions and material presented in the proceedings before us.
[6] In particular we note that no party has sought the inclusion in modern awards of a national standard on accident pay to apply to all award covered employees, as was anticipated by the Award Modernisation Decision 2008. We also note that no substantive case has been advanced such that the allowances applying in Western Australia and the Northern Territory “should be a permanent feature of the awards and, if so, the basis for their fixation and adjustment.” We also refer to the requirement that the Commission have regard, in considering the ACTU application, to the modern awards objective in section 134 and the requirements of sections 139 and 154 of the Fair Work Act 2009.
[7] In relation to the CFMEU application regarding the Black Coal Mining Industry Award 2010, we have decided to delete clause 18.8 of that Award with effect from 31 December 2014. In this regard, we consider that the accident pay provision in the Award provides a clear national standard for the particular industry as described in the Award Modernisation Decision 2008.
[8] In relation to the AiG application to delete transitional arrangements relating to redundancy in modern awards, we have decided to vary the relevant awards with effect from 1 January 2015. In this regard, we note that the transitional redundancy provisions will by their terms cease to operate on 31 December 2014 and that no party has opposed the removal of these provisions from awards.
[9] We will publish the reasons for this decision, and our decision on the other applications relating to the Transitional Provisions Common Issues which were dealt with in the proceedings, in due course.” (References omitted)
[13] A Determination varying the BCMI Award to delete clause 18.8 was made on 19 December 2014 7.
[14] On 16 December 2014 the Full Bench issued Directions in relation to the various union applications to amend a number of awards to insert provisions regarding accident pay and/or district allowances. Those Directions required, inter alia, that any further or amended applications to vary awards in respect of either accident pay and/or district allowances be filed by no later than 4pm on Monday, 22 December 2014. No application was made in respect of the BCMI Award.
[15] In the February 2015 decision the Full Bench said in relation to the BCMI Award:
“[70] The CFMEU application was opposed by some employer groups. In its written submissions, the ACCI recognised that the Black Coal Award contains a substantive clause dealing with accident pay which operates in its own right without reference to award-based transitional instruments but which "curiously" contains a transitional end date of 31 December 2014. It was also submitted that the clause stands apart from the model transitional accident pay clause in other awards and does not suffer the "frailties" of s.139(2) or s.154 of the Act. The ACCI did not consent or oppose the variation sought by the CFMEU. The Ai Group submitted that the accident pay clause in the Black Coal Award falls foul of s.154(1)(a) of the Act because the entitlement will fluctuate based on the level of payments under the relevant workers’ compensation schemes. It was said that to the extent that these schemes are State-based the provisions will have force either within or referable to State boundaries and in that sense will contravene s.154 of the Act. The Coal Mining Industry Employer Group supported the submissions of the Ai Group.
[71] As stated in our decision, we consider that the accident pay provision in the Black Coal Award provides a clear national standard for the particular industry as described in the Award Modernisation Decision 2008. In this regard, there was a significant amount of material presented by the CFMEU in the proceedings regarding the history and application of the provision and relevant decisions of industrial tribunals. The application of the provision is understood in the industry and does not depend on reference to other industrial instruments. The provision does not in our view include State-based terms or conditions of employment contrary to s.154 of the Act. As stated above, we do not consider that the fact that the provision may operate in the context of different State workers’ compensation schemes, and that the level of make-up payments may therefore vary for workers in different States, would of itself lead to the conclusion that the provision contravenes s.154.
[72] For these reasons, we decided to remove the sunset provision in clause 18 of the Black Coal Award.” (References omitted)
[16] The CMIEG now seeks to be heard on the question of whether the 52 week limitation period concerning accident pay entitlements should apply to the BCMI Award in the light of the August 2015 decision. In the absence of any further application(s) relating to the BCMI Award, the Award was not considered in the proceedings which led to the August 2015 decision. In the August 2015 decision the Full Bench said:
“[211] In general we consider that the safety net accident pay entitlement should only apply for a period of 26 weeks from the time of incapacity for work due to injury or illness. This is the period of accident pay entitlement under many of the pre-reform instruments to which we have been referred. We consider that this is the appropriate period to be included as part of the minimum safety net in the awards unless there are special circumstances relating to particular awards which warrant a departure from this standard. Such an entitlement will provide support for low paid and award reliant employees at least in the initial period of absence from work due to injury. It will also limit the cost impact of providing a generally applicable accident pay entitlement under the relevant awards and provide scope for collective bargaining to improve upon the minimum entitlement.
[212] We recognise that there are special circumstances relating to the awards in the first category listed earlier in this decision. The pre-reform instruments in these industries provided a generally applicable accident pay entitlement of 39, 52 or 104 weeks. The accident pay provisions in those awards provided what might be considered to be a clear national standard for the particular industries as described in the Award Modernisation Decision 2008. For similar reasons as were given in relation to the Black Coal Mining Industry Award 2010 we have decided that the previous accident pay entitlements in these award areas should be maintained as part of the minimum safety net. However, having regard to the evidence and submissions in the present proceedings, and given the purpose of modern awards in setting minimum terms and conditions for employees in particular industries or occupations consistent with the statutory objectives, we do not consider that the accident pay entitlement in any of the awards should exceed 52 weeks. We consider that there is a difference in inserting such provisions in awards by arbitral determination at this time and in the context of the present proceedings and a decision to maintain provisions which were still in operation in an award. We do not consider that it is necessary for the minimum award safety net to provide for a period beyond 52 weeks. In so deciding, we note that the evidence presented suggests that there is considerable scope in some of the industries for the safety net entitlement to be supplemented through collective bargaining.” (References omitted, underlining added)
The Competing Contentions
[17] APESMA and the CFMEU submit that CMIEG’s request be refused on the following two grounds:
(a) to grant CMIEG’s request would be to re-open a matter which was finally determined by a decision of the Full Bench on 31 October 2014 which was not affected by jurisdictional error and is thus without basis; and
(b) on the assumption the Commission still has authority to act in this matter, that is if the threshold question is answered in favour of CMIEG, CMIEG’s request should be refused on discretionary grounds including public interest considerations and the need for a proper basis requiring the Commission to take a different course than that which has been earlier determined.
[18] APESMA and the CFMEU contend that no new relevant event has occurred warranting the Commission to reconsider the matters considered by the Full Bench in its 31 October 2014 decision. To reconsider those matters, it was submitted, would not be in the public interest and would be unlikely to produce a different result to that already decided.
[19] Further, APESMA and CFMEU submit that the Full Bench in the August 2015 decision determined to insert accident pay provisions in some awards but not others having regard to the particular circumstances of different industries. Drawing on the underlined text in the extract at paragraph [15] above from the August 2015 decision, it was submitted that in that decision the Full Bench was conscious of it earlier conclusion in relation to the BCMI Award. It was also submitted that the Full Bench was “intentionally distinguishing that circumstance that led to that outcome to the one that was being determined in this case”. APESMA and the CFMEU submit that CMIEG elected not to ask the Full Bench to consider the BCMI Award when it examined the merits of accident pay clauses in the context of specific awards which resulted in the August 2015 decision and nor did it reserve its position as to the substance of the provision.
[20] CMIEG submits that it is both permissible and appropriate that the Full Bench review the maximum period of operation of the accident pay provision in the BCMI Award on the following grounds:
(a) The CFMEU’s application to delete the sunset provision of the accident pay clause in the BCMI Award was limited to the particular matter of deleting that provision, that this application has been determined, and that CMIEG does not seek to re-open the decisions of the Full Bench of 31 October 2014 and 11 February 2015.
(b) The submissions of CMIEG and AiGroup in relation to the above decisions did not deal with the merits of the quantum and time limits of accident pay in the BCMI Award because that was not dealt with in the CFMEU’s application.
(c) Even if, in dealing with CMIEG’s request, the Commission is required to “re-open” its decisions of 31 October 2014 and 11 February 2015, it has a power to do so under ss.602 and 603 of the Fair Work Act 2009 (the Act).
(d) In any event, the 4 yearly review of awards is ongoing, and s.156(2) of the Act empowers the Commission to vary a modern award. In this respect, CMIEG’s correspondence to President Ross of 22 September 2015 amounts to an extant application, which CMIEG is prepared to formalise if the Commission wishes.
(e) APESMA and CFMEU’s submissions supporting the refusal of CMIEG’s request on discretionary grounds are analogous to similar submissions put by the ACTU and several unions rejected by the Full Bench in the decision of [2015] FWCFB 3525 (at [148]-[154]) and should be rejected here.
(f) There is a proper question to be considered as to whether a 52 week limitation period on accident pay should apply to the BCMI Award, and the fact that this question was not considered at the time as it was in relation to other modern awards should not prevent CMIEG from being heard on the matter.
Should the CMIEG application be heard?
[21] As will be evident from the above chronology, which sets out key aspects of the history, the process for considering award matters in the 4 yearly review has been exhaustive and complex. Certain common issues have been dealt with as a convenient way to consider matters on a consistent basis. Nevertheless, it has been acknowledged that specific award circumstances warrant different outcomes and processes have been adopted to consider those industry circumstances. It is understandable that these processes may have led to some confusion or that matters may not have been fully considered in the various proceedings that have been conducted.
[22] With particular regard to the BCMI Award we note that the CMIEG:
[23] With regard to the grounds relied upon by the CMIEG as the basis for the Full Bench to review the maximum period of operation of the accident pay provision in the BCMI Award, we would observe that:
the various union applications to insert accident pay provisions in a number of awards were foreshadowed prior to “the substantive proceedings leading to the Full Bench’s decision of 31 October 2014” 9, though the Full Bench also acknowledged the different character of those applications10.
[24] The Full Bench acknowledged in the August 2015 decision the difference between its decision to insert accident pay provisions into a number of awards and its earlier decision to effectively maintain the existing accident pay provision in the BCMI Award (see underlined text in the above extract from the August 2015 decision). However, we note that:
[25] In this instance, the employers in the coal industry wish to be heard in relation to a matter that has not been considered by the Commission in relation to the BCMI Award. We consider that the Commission has jurisdiction to deal with this question as part of the 4 yearly review as its powers are conferred in broad terms and particularly in circumstances where the 4 yearly review is still ongoing.
[26] Further, we consider that it is appropriate to hear from the parties to ascertain whether changes of the type sought should be made. Such a course will allow the parties to advance their respective provisions and allow the Commission to consider the matter as part of the 4 yearly review. Such a course is consistent with the Commission’s statutory responsibilities and does not involve any prejudice to any party.
[27] The parties are directed to confer on appropriate further directions for the hearing and determination of whether a 52 week limitation period concerning accident pay entitlements should apply to the BCMI Award. A telephone directions hearing will be conducted in the week of 24 October 2016.
VICE PRESIDENT
Final written submissions:
CMIEG, 4 August 2016
APESMA and CFMEU, 12 August 2016
1 http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/submissions/AM20141_sub_CFMEU_310114.pdf
2 https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/common/am2014190-background-paper.pdf
8 [2015] FWCFB 644 at [71]
9 [2015] FWCFB 3523 at [154]
10 Ibid
Printed by authority of the Commonwealth Government Printer
<Price code C, PR585706 MA000001>