[2018] FWCFB 7145
FAIR WORK COMMISSION

DECISION


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

4 yearly review of modern awards – Award stage – Group 3
(AM2014/241)

JUSTICE ROSS, PRESIDENT
SENIOR DEPUTY PRESIDENT HAMBERGER
DEPUTY PRESIDENT CLANCY
COMMISSIONER JOHNS

MELBOURNE, 23 NOVEMBER 2018

4 yearly review of modern awards – award stage – exposure drafts – technical and drafting issues – Group 3 awards – outstanding issue – Ports, Harbours and Enclosed Water Vessels Award 2010.

[1] Section 156 of the Fair Work Act 2009 (the Act) requires the Fair Work Commission (the Commission) to review all modern awards every four years (the Review).

[2] This decision deals with the remaining outstanding technical and drafting issue arising out of the review of the Ports, Harbours and Enclosed Water Vessels Award 2010 (the Ports Award) which is being reviewed in Group 3 of the award stage. This decision should be read in conjunction with the decisions issued on 6 July 2017 1 (the July 2017 decision), 30 October 20172 (the October 2017 decision), 13 March 20183 (the March 2018 decision), and 15 October 20184 (the October 2018 decision).

[3] The outstanding issue in the Ports Award relates to the rates which are to apply to shift work on weekends. In the October 2018 decision we provided interested parties an opportunity to file submissions regarding the issue and said that the matter would then be determined on the papers, unless there was any objection.

[4] Submissions were received from the Australian Federation of Employers and Industry (AFEI) and the Construction, Forestry, Maritime, Mining and Energy Union - Maritime Union Division (CFMMEU). No party objected to the matter being determined on the papers.

[5] The relevant background to the issue is set out at paragraphs [160] – [175] of the October 2018 decision as follows:

‘[160] In the March 2018 decision, the Full Bench proposed to convene a further conference of interested parties to discuss the outstanding issue of which rates apply to shiftwork on weekends.

[161] A proposal about how to resolve the matter was outlined in a background paper published on 6 June 2018, which stated:

‘[25] With the exception of Business SA and MIAL, the parties appear to agree that shift work on Saturdays and Sundays is paid at the overtime rate and is not inclusive of shift allowance. Both the current award and exposure draft seem to support this, though it requires a careful reading of the three relevant clauses to arrive at that position.

[26] If this position were adopted it may be desirable to insert a new clause at 13.3 of the exposure draft, to clarify how the shiftwork rates interact with overtime, along the following lines:

“Shiftwork rates in clause 13.2 are not payable when working overtime. The relevant overtime rate is payable instead.”

[162] This proposal was discussed at the conference which was convened on Thursday 21 June 2018. During the conference the AWU, AMOU, MUA, AIMPE and MIAL all agreed with the proposed new clause 13.3 which was set out at paragraph [26] of the background paper.

[163] The AWU and AMOU suggested that alternative wording may be preferable due to the contention around whether or not shiftwork can be worked on Saturdays and Sundays. They suggested the following wording:

“Shiftwork rates in clause 13.2 are not payable when working outside of ordinary hours. In clause 7.2, the relevant overtime is payable instead.”

[164] The MUA also supported the alternate wording as did AIMPE who had concerns regarding the use of the words “when working overtime”. Whilst MIAL broadly supported the new wording they noted that as shiftwork, by its definition, will finish outside of the span of ordinary hours the wording may cause confusion. Ultimately, the parties agreed to proceed with the wording of the clause proposed in the background paper.

[165] AFEI did not support the proposal and advanced an alternative view in respect of the issue. At the conference before the Commission, AFEI were requested to convene a teleconference of interested parties to address their position concerning ordinary hours and weekend rates under the Award. During that teleconference, AEFI were requested by a number of other parties to file written details explaining their position.

[166] On 2 August 2018 AEFI made a submission explaining their position, which was also made on behalf of the Boating Industry Association – Commercial Vessels Division and the Association of Marine Park Tourism Operators. The submission states:

“The Background Paper states, incorrectly in our view, that ‘any work between midnight on Friday and midnight on Sunday is overtime.’ The Background Paper’s statement indicates its conclusion is based on Clause 18.2 of the Award which states ‘[o]rdinary hours may be worked between 6am and 6pm for up to eight hours per day, Monday to Friday inclusive.’”

[167] AFEI submits the following:

“•  Clause 18.2 of the Award is not an exhaustive statement of when ordinary hours can be worked;

•  Clause 20.1(b) of the Award is clear that it permits ordinary hours to be worked on Saturdays, irrespective of whether it is day work or shift work

•  Clause 20.3 of the Award is clear that it permits ordinary hours to be worked on Sundays, irrespective of whether it is day work or shift work;

•  The Award prescribes a loading of 50% and 100% respectively for ordinary hours and overtime worked on Saturdays and Sundays;

•  Clause 18.2 of the Award is not an impediment to working ordinary hours on a weekend, or on shift work;

•  There is no justification for removing the wording currently in Clause 20.1(b) and 20.3 of the Award from the substantive text of the section, which permits ordinary hours to be worked on weekends.

•  The Exposure Draft should be revised to ensure it is clear that it continues to permit an employee to work ordinary hours on a Saturday and Sunday, as is currently permitted by Clause 20.1 of the Award.”

[168] AEFI submit that Clause 12.2 of the Exposure Draft be revised as follows to retain the wording from the current Award:

12.2 Employees will be paid the following rates for overtime worked Monday to Friday, ordinary hours and overtime worked on a Saturday or on a Sunday, or work on a public holiday:

[169] Clause 12.2 of the current exposure draft was initially proposed in table form in the MUA submission of 14 April 2016 to clarify when overtime rates were applicable. The words above that table were modified to incorporate suggested words from the AWU’s submission dated 18 April Submission. Clause 12.2 of the exposure draft, which was last published on 18 July 2017, is currently in the following terms:

12.2 Employees will be paid the following rates for all overtime worked Monday to Friday, work on a Saturday or on a Sunday, or work on a public holiday or ordinary weekend work at the following rates:

[170] AEFI states that if the Commission intends to proceed with the current wording in Clause 12.2 of the Exposure Draft that directions be issued for interested parties to file written submissions on this matter.

[171] Clause 12.2 of the current exposure draft was initially proposed in a table form in a submission from MUA on 14 April 2016, with alternative wording at the start of the clause to resolve the inconsistency between the span of hours provided for ordinary hours at clause 7.2 and the mention of ordinary hours in relation to overtime on weekends. The words above the table in that submission (which were incomplete) were further modified to incorporate suggested words from the AWU’s 18 April 2016 submission.

[172] AEFI’s submission seeks to resolve a potential inconsistency between the span of hours clause and the inclusion of ordinary hours for overtime rates on weekends and public holidays by stating that the span of hours clause is non-exhaustive. The span of hours clause, at 7.2 of the exposure draft and 18.2 of the current award reads as follows:

“Ordinary hours may be worked between 6.00 am and 6.00 pm for up to eight hours per day, Monday to Friday inclusive.”

[173] Whilst this clause uses the phrase “may be worked” rather than “must be worked” or “are only worked” suggesting it may be considered permissive rather than exhaustive, we see little utility in a span of hours clause that is not exhaustive. If we accept AFEI’s submission that ordinary hours can be worked on weekends, it should follow that the span of hours clause be amended to clarify this.

[174] AEFI’s submission does not specifically address the issue of whether shiftwork undertaken on weekends attracts shift allowance rates in addition to overtime rates. If AFEI’s proposal were accepted, the proposed clause 13.3 may no longer exclude the possibility of shiftwork rates being paid in addition to overtime rates on weekends as shiftwork on weekends could be classed as work at ordinary hours that attract overtime rates rather than is overtime work.

[175] Interested parties are invited to file submissions by 4.00 pm on 31 October 2018. Submissions should be sent to amod@fwc.gov.au. The matter will then be determined on the papers, unless there is any objection to this course.’

AFEI submission

[6] In a submission filed on 31 October 2018, AFEI propose further amendments to the exposure draft and provide detailed reasons for why it says the current award does allow for ordinary hours and overtime to be worked on weekends and does not allow for payment of both overtime rates and shiftwork rates on weekends. The AFEI submission is summarised below.

[7] The AFEI submit the following in respect of which rates apply to shift work on weekends:

•  for each hour of work on a Saturday, the rate of 1.5 times the ordinary hourly base rate of pay (this does not include any shift rate at cl. 21.2 of the current award),

•  for each hour of work on a Sunday, the rate of 2 times the ordinary hourly base rate of pay (this does not include any shift rate at cl. 21.2 of the current award). 5

[8] AFEI submit that ‘while ordinary time hours are distinct from overtime hours under the current award, the respective rates for ordinary hours on a Saturday and on a Sunday are commensurate with the rates for overtime on a Saturday and on a Sunday.’ 6 AFEI submit the relevant provisions of the current award for determining the rates for work on a Saturday and Sunday are clause 20.1(b) and 20.3 which are set out below:

‘20. Overtime and penalty rates

20.1 Employees will be entitled to be paid:

. . .

(b) a loading of 50% of the ordinary hourly base rate of pay for all ordinary hours and overtime worked between midnight Friday and midnight Saturday;

. . .

20.3 Sunday work

An employee will be paid a loading of 100% of the ordinary hourly base rate of pay for any hours, ordinary and overtime, worked on a Sunday.’

[9] AFEI submit that ‘that shift hours are in the nature of ordinary hours of work, albeit the hours usually attract an additional payment. Thus, a shift of ordinary hours is different in character from any overtime hours worked outside of that shift.’ 7 AFEI further submit that clauses 20.1(b) and 20.3 mention both ordinary hours and overtime, but they do not conflate the two. AFEI submit that hours on a Saturday or Sunday can either be ordinary hours or overtime.8

[10] AFEI also submit that the rate on which the loadings are calculated at clauses 20.1(b) and 20.3 are calculated for both ordinary hours and for overtime hours is the hourly rate of pay for ordinary hours of work and that rate does not include any loadings or penalties which would otherwise apply to the hours of work. 9

[11] The current award provides for shift work rates at clause 21.2 as follows:
21.2 Shiftwork rates

[12] AFEI submit that the shift loadings at clause 21.2 are not included for the purposes of calculating any ordinary time or any overtime worked on a Saturday or on a Sunday. 10 AFEI submit the ‘correctness of this approach is reflected in the rates set out at table A.2.1 and table A.2.2 of the Exposure Draft and by the most recent rates published by the Fair Work Ombudsman – none of these rates implies any compounding of shift rates at cl.21.2 with the weekend rates for ordinary time or overtime at cl. 20.1(b) and cl.20.3.’11

[13] AFEI note that their proposal of 2 August 2018 was not intended to be a substantive change to the award conditions and AFEI does not seek a change in entitlements from the current award, 12 its concern focussed on the difference in approach between 20.1(b) and 20.3 of the current award and clause 12 of the exposure draft.13 AFEI submit that each of the sub-clauses at cl. 20.1(a)-(c) of the current award are separated by a semicolon, whereas in the introductory text at clause 12.2 of the exposure draft are separated by commas. AFEI submit this could ‘suggest conflation, rather than separation, of the items addressed, could convey an impression that it is dealing with overtime only – and yet under the current award cl.20.1 (b) and cl.20.3 address both ordinary hours and overtime hours.’14

[14] AFEI propose a new clause 7.2 of the exposure draft as follows:

7.2 Span of hours

Ordinary hours may be worked:

(a) between 6.00am and 6.00pm for up to eight hours per day, Monday to Friday inclusive; or

(b) in accordance with a shift of ordinary hours as per clause 13 ‘Shiftwork’ of this award, or on a Saturday, a Sunday or a public holiday.

[15] AFEI propose a new clause 12.1 of the exposure draft as follows (and delete the existing 12.2):

12.1 Employees will be paid at the applicable rates shown in the table below for:

(a) any overtime worked Monday to Friday;

(b) any ordinary hours and any overtime worked on a Saturday;

(c) any ordinary hours and any overtime worked on a Sunday;

(d) any ordinary hours and any overtime worked on a public holiday.

[16] AFEI propose a new clause 13.2 of the exposure draft as follows:

13.2 Shiftwork rates

(a) Except where the ordinary hours are worked on a Saturday, a Sunday or a public holiday, employees will be paid the following rates for ordinary hours worked on any shift type defined at clause13.1 of this award:

(b) Where the ordinary hours are worked on a Saturday, a Sunday or a public holiday, the employee will be paid at the applicable rate set out in clause 12.1 of this award.

[17] AFEI propose to delete the definition of ‘ordinary hourly rate’ at Schedule H – Definitions and replace with:

‘ordinary hourly rate has the meaning given to it at A.1.1 of Schedule A – Summary of Hourly Rates of Pay of this award.’

CFMMEU submission

[18] In a submission filed on 1 November 2018, the CFMMEU (Maritime Union Division) oppose AFEI’s proposal to amend clause 12.2 of the exposure draft as set out in their correspondence of 2 August 2018. It submits ‘the proposal has the effect of enabling employees to be rostered to work ordinary hours on weekends, on public holidays and outside the span of hours set out in clause 7.2.’ The CMMMEU submits the AFEI proposal ‘would also enable an employee to be rostered for 8 hours from 7pm on a Monday but only paid at 115% of their ordinary rate of pay rather than 150% of their ordinary rate of pay for the first 3 hours and 200% of their ordinary rate of pay thereafter.’ 15 The CFMMEU submits this ‘is the first time in over 8 years and at the death nell of the 4 yearly review that it has been suggested that employees could be paid in this way.’16

[19] The CFMMEU submits the intent of the MUA in the award modernisation process in originally proposing the award provisions was:

‘(a) Ordinary hours of work were worked between 6.00am and 6.00pm for up to eight hours per day, Monday to Friday;

(b) all hours worked on a Saturday be paid at 150% of the ordinary rate of pay;

(c) all hours worked on a Sunday be paid at 200% of the ordinary rate of pay; and

(d) all hours worked on a Public Holiday be paid at 250% of the ordinary rate of pay.’ 17

[20] The CFMMEU submit that in light of the concerns of AFEI that the award permits the working of ordinary hours outside the span of 6am to 6pm for up to 8 hours per day Monday to Friday clause 7.2 of the Exposure Draft should be amended to read:

7.2 Ordinary hours may only be worked between 6.00am and 6.00pm for up to eight hours per day, Monday to Friday inclusive. 18

Consideration

[21] It appears that there is broad agreement between interested parties that all hours worked on a Saturday or Sunday, regardless of whether they are overtime or ordinary hours, are paid at the same rate (i.e. 150 per cent on a Saturday and 200 per cent on a Sunday).

[22] It also appears that there is some agreement amongst the parties that if ordinary hours can be worked on a weekend, shift work rates are not payable, the relevant rate in clause 12.2 of the exposure draft is applicable.

[23] The issues raised by AFEI and CFMMEU in relation to the Ports, Harbours and Enclosed Water Vessels Award 2010 will be the subject of a conference before the President at 2pm on 20 December 2018 in Sydney. Any further submissions in respect of these issues are to be filed by 4pm on Monday 10 December 2018. If the issues are not resolved at the conference they will be determined on the papers, absent any request for an oral hearing. Any such request must be made by no later than 4pm on 20 December 2018.

[24] Submissions should be sent to amod@fwc.gov.au.

Finalising Exposure Drafts

[25] Each exposure draft will be updated and republished. Parties will be provided with one final opportunity to comment on the technical and drafting aspects of the exposure drafts in respect of the Group 3 awards. This will not be an opportunity to reargue matters which have already been determined, but will provide interested parties with an opportunity to comment on variations made to the exposure drafts to incorporate decisions relating to common issues and any technical drafting issues determined in this decision.

[26] A Statement regarding the process for finalising the exposure drafts and concluding the award stage of the review will be issued in due course.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR702526>

 1   [2017] FWCFB 3433

 2   [2017] FWCFB 5536

 3   [2018] FWCFB 1405

 4   [2018] FWCFB 6368

 5   AFEI submission, 31 October 2018 at 2

 6   AFEI submission, 31 October 2018 at 3

 7   AFEI submission, 31 October 2018 at 7

 8   AFEI submission, 31 October 2018 at 7

 9   AFEI submission, 31 October 2018 at 12

 10   AFEI submission, 31 October 2018 at 15

 11   AFEI submission, 31 October 2018 at 19

 12   AFEI submission, 31 October 2018 at 29-30

 13   AFEI submission, 31 October 2018 at 31

 14   AFEI submission, 31 October 2018 at 34

 15   CFMMEU submission, 1 November 2018 at 2

 16   CFMMEU submission, 1 November 2018 at 3

 17   CFMMEU submission, 1 November 2018 at 4

 18   CFMMEU submission, 1 November 2018 at 5