DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6A, Item 4 - Application to make a State reference public sector modern award
Sch. 6A, Item 5 - Application to terminate a State reference public sector transitional award

Health Grouping
(AM2013/33 and others)

State reference public sector transitional award modernisation – Health Grouping State reference public sector modern award to replace predecessor awards – applications to terminate State reference public sector transitional awards – Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 – Schedule 6A Items 4, 5, 6, 7, 8 and 9 – Fair Work Act 2009 ss.134 and 284.

Introduction

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

[2] The Victorian Hospitals’ Industrial Association (VHIA) has made applications under Item 5 of Schedule 6A, to terminate the following State reference public sector transitional awards (referred to collectively as the Victorian Public Sector Health Awards):

•  AM2013/33 – Medical Scientists, Pharmacists and Psychologists (Public Sector - Victoria) Award 2003 [Transitional] [AT830467];

•  AM2013/34 – Health and Allied Services - Public Sector - Victoria Consolidated Award 1998 [Transitional] [AT783945];

•  AM2013/36 – Hospital Specialists and Medical Administrators Award 2002 CRV [AT816036] (Hospital Specialists and Medical Administrators Award); and

•  AM2013/37 – Health Professional Services - Public Sector - Victoria Award 2003 [Transitional] [AT827096].

[3] The Health Services Union of Australia (HSU) has made an application (AM2013/43), under Item 4 of Schedule 6A, to make a State reference public sector modern award known as the Health Professionals, Medical Scientists and Support Services (Victoria) State Reference Public Sector Award 2018 (proposed Health Award). The proposed Health Award would replace the following State reference public sector transitional awards:

•  Medical Scientists, Pharmacists and Psychologists (Public Sector - Victoria) Award 2003 [Transitional] [AT830467];

•  Health and Allied Services - Public Sector - Victoria Consolidated Award 1998 [Transitional] [AT783945]; and

•  Health Professional Services - Public Sector - Victoria Award 2003 [Transitional] [AT827096].

The legislative context

[4] VHIA’s applications to terminate the Victorian Public Sector Health Awards are governed by Item 5 of Schedule 6A, which provides as follows:

“5 Terminating State reference public sector transitional 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 or the Commission to terminate the current award.

Note: The Commission ceased to exist on 31 December 2009: see item 7 of Schedule 18.

(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 FWC or the Commission must not terminate the current award unless the FWC or the Commission is satisfied that the employees who are covered by the current award will, if the current award is terminated, be covered by a modern award (other than the miscellaneous modern award) that, at the time of the termination, is or is likely to be in operation and that is appropriate for them.

(4) In deciding whether to terminate the current award, the FWC or the Commission must take into account the following:

(a) the circumstances that led to the making of the current award;

(b) the terms and conditions of employment applying in the industry or occupation in which the persons covered by the current award operate, and the extent to which those terms and conditions are reflected in the current award;

(c) the extent to which the current award facilitates arrangements, and provides terms and conditions of employment, referred to in paragraphs 7(2)(a) and (b);

(d) the likely impact on the persons covered by the current award of a decision to terminate, or not to terminate, the current award;

(e) the views of the persons covered by the current award;

(f) any other matter prescribed by the regulations.

(5) If the FWC or the Commission terminates the current award, the termination operates from the day specified in the decision to terminate the current award, being a day that is not earlier than the FW (safety net provisions) commencement day.

(6) If the Commission terminates the current award, the termination is taken, after the Commission has ceased to exist, to have been made by the FWC.”

[5] The HSU’s application to make a State reference public sector award is made under Item 4 of Schedule 6A, 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.”

[6] After a period ending at the end of 31 December 2013, Item 6 of Schedule 6A requires the Commission to make, or vary the coverage of, one or more State reference public sector modern awards so that employers and employees covered by remaining State reference public sector transitional awards are covered by State reference public sector modern awards. 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.”

(emphasis added)

[7] Items 7 to 9 of Schedule 6A set out the approach to formulating the terms of a State reference public sector modern award as follows:

“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.”

[8] 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.”

[9] 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.”

Applications to make a State reference public sector modern award to replace predecessor awards

[10] The Commission conducted a number of conferences where the HSU and the VHIA discussed the content of the proposed Health Award.

[11] A conference before Commissioner Lee was conducted on 5 March 2018 1 to discuss:

•  the outstanding issue of the definition of standard rate in the proposed Health Award;

•  matter AM2013/36 – application by VHIA to terminate the Hospital Specialists and Medical Administrators Award; and

•  any further matters relevant to proceedings relating to the Health grouping of State reference public sector transitional awards.

[12] The VHIA made submissions 2 in support of the HSU’s application to modernise the following:

•  Medical Scientists, Pharmacists and Psychologists (Public Sector - Victoria) Award 2003 [AT830467];

•  Health and Allied Services - Public Sector - Victoria Consolidated Award 1998 [AT783945]; and

•  Health Professional Services - Public Sector - Victoria Award 2003 [AT827096].

[13] Additionally, the VHIA proposed to replace the term ‘base rate’ with the term ‘standard rate’ in the definitions clause of the proposed award. The proposed amendment to clause 3.1 of the proposed Health Award is as follows:

“3. Definitions and interpretation

3.1 In this award, unless the contrary intention appears:

. . .

Base rate Standard rate means

(a) For HASA employees the minimum wage for Work skill group 5; and

(b) For Health Professionals the minimum wage for UG 1 Grade 1 year 2 (except for Shift and Change of Shift allowance);

(c) For Medical Scientists the minimum wage for Grade 1 year 1 (except on call allowance).”

[14] The Full Bench will make this amendment to the proposed Health Award with one minor variation. To avoid ambiguity, the words “Work skill group 5” will be replaced with the exact wording from clause 12.2—Minimum weekly wages for HAS Employees (Schedule A): “Wage/Skill Group 5”.

[15] The parties have reached agreement on the content of the proposed Health Award and have filed a draft with the Commission. The terms of the draft were settled in consultation with the VHIA and the HSU. Those terms are currently being finalised by the Commission.

[16] We will make the proposed Health Award arising from these matters, the Health Professionals, Medical Scientists and Support Services (Victoria) State Reference Public Sector Award 2018 (Health Award). An order will be issued, specifying the commencement date once the terms of the Health Award are finalised.

[17] We are satisfied that the terms of the Health Award are consistent with the modern awards objective and the minimum wages objective.

Applications to terminate State reference public sector transitional awards

[18] The VHIA submits that it was agreed between the HSU and the VHIA that matters AM2013/33, AM2013/34 and AM2013/37 would be discontinued immediately upon the Health Award coming into effect. 3 The Commission wrote to the parties on 13 April 2018 seeking confirmation that such an agreement had been reached. The HSU confirmed this on 16 April 20184. In the circumstances, we will waive the usual requirement to file a Notice of Discontinuance and will rely on the parties’ indication of consent as effecting the discontinuance.

[19] As to AM2013/36, the VHIA presses for the termination of the Hospital Specialists and Medical Administrators Award. The VHIA contends that if that award is terminated, any employee that is covered by the Hospital Specialists and Medical Administrators Award will be covered the by Medical Practitioners Award 2010 5. We note that the Medical Practitioners Award 2010 is an occupational modern award which commenced on 1 January 2010. The award includes the following exclusion from coverage:

‘4.4 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.’

[20] Item 6 of Schedule 6A requires the Commission to make, or vary the coverage of, a State reference public sector modern award so that all employees and employers covered by an outstanding State reference public sector transitional award are covered by a State reference public sector modern award. The Medical Practitioners Award 2010 is an occupational modern award, not a State reference public sector modern award, and therefore is not captured by Item 6 of Schedule 6A.

[21] Consideration of the application to terminate the Hospital Specialists and Medical Administrators Award will be deferred until the conclusion of the State Reference Public Sector Modernisation proceedings.

Conclusion

[22] The Health Award is made. An order giving effect to our decision will be issued, once the terms of the Health Award are finalised. The awards that it replaces will terminate on the operative date of the Health Award, which will be specified in the order.

[23] The respective parties have agreed that matters AM2013/33, AM2013/34 and AM2013/37 will be discontinued when the order making the Health Award comes into effect.

DEPUTY PRESIDENT

 1   Transcript – 5 March 2018.

 2   VHIA, submission – 2 March 2018 at Part A.

 3   VHIA, submission – 2 March 2018 at Part C.

 4   Correspondence between the Commission and parties – 13 April 2018 and 16 April 2018

 5   MA000031.

Printed by authority of the Commonwealth Government Printer

<AT830467, AT783945, AT816036, AT827096  PR700071>