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

Broadcasting and Recorded Entertainment Award 2010
(AM2018/17)

Broadcasting and Recorded Entertainment Award 2010 - substantive issues.

Introduction

[1] In the context of the current 4 yearly review of modern awards, an issue has arisen concerning the meaning and drafting of a particular provision in the Broadcasting, Recorded Entertainment and Cinemas Award 2010 (BREC Award). Clause 4.1 provides that the BREC Award covers employers in the broadcasting, recorded entertainment and cinema industry and their employees within the classifications set out in the BREC Award. The issue in contention concerns specifically cinema employees, and was referred to us for determination by the Full Bench dealing with technical and drafting issues of Group 4 awards, of which the BREC Award is one, in a decision dated 13 November 2018. 1

[2] Clause 14 of the BREC Award concerns classifications and minimum wages. Clause 14.12 provides:

14.12 Employees in cinemas

All employees in cinemas will receive an 8% penalty averaging component instead of Sunday penalty payments and reduced public holiday penalties.

[3] An exposure draft for the BREC Award published on 25 November 2016 as part of the 4 yearly review proposed that the clause be redrafted as follows:

13.4 Employees in cinemas

All employees in cinemas will receive an 8% loading for all hours worked. This averaging component is payable instead of Sunday penalty payments and as compensation for reduced public holiday penalties. This loading is payable for all purposes.

[4] An issue concerning the drafting of clause 13.4 of the exposure draft was identified in an earlier decision issued by the Group 4 Full Bench as follows (footnotes omitted):

“[243] LPA submitted that the reference in clause 13.4 of the exposure draft to the 8% loading being payable for all purposes is incorrect as the loading is not payable for all purposes.

[244] LPA submitted that the 8% loading was introduced into the relevant pre-reform award by consent between LPA and the Media Entertainment and Arts Alliance (MEAA), and that it was not an all purpose allowance when it was inserted. The loading was reintroduced into the modern award after having initially been excluded. LPA submitted that a Full Bench of the Australian Industrial Relations Commission (AIRC) acknowledged its submission that the allowance is not payable for all purposes in 2009 when the decision was made to reintroduce the loading.

[245] Interested parties advised that they had reached agreement that the 8% loading applies to the minimum rate of pay for each hour worked.

[246] The inclusion of this penalty payment was introduced as a result of a previous Full Bench Decision. That Full Bench explained: 

‘[8] The second change is to clause 14.12. The name of the clause is changed from “Cinema Workers” to “Employees in cinemas”. The clause itself is changed so that it reads:

All employees in cinemas will receive an 8% penalty averaging component instead of Sunday penalty payments and reduced Public Holiday penalties.

[9] This change is designed to ensure that all employees in cinemas, whether they be managerial or ‘cinema workers’ receive the 8% penalty averaging component…’

[247] The previous Full Bench did not indicate whether the 8% allowance was payable for all purposes, nor did it indicate whether the allowance was cumulative or compounding, but the intention does not appear to have been to create an all purpose allowance. Interested parties have agreed to the deletion of the words “This loading is payable for all purposes” appearing in clause 13.4 of the exposure draft and to delete the definition in clause 2 of the exposure draft. We will adopt the parties’ agreed position.

[248] We think there is merit in seeking further clarification about how the 8% loading is calculated…”

[5] References to “LPA” in the above passage are to Live Performance Australia, the trading name of the Australian Entertainment Industry Association, a registered organisation of employers. We shall refer to it in the same way.

[6] Revised exposure drafts published on 10 May 2017 and on 22 March 2019 removed the last sentence of clause 13.4 in accordance with the above decision.

Submissions and evidence

[7] The Media, Entertainment and Arts Alliance (MEAA) contends that clause 14.12 is to be interpreted as meaning that the “8% penalty averaging component” forms part of the minimum rate for “employees in cinemas” and is therefore payable for all purposes, with any additional payments prescribed by the BREC Award including the casual loading compounding on this amount. Its proposal, as ultimately formulated, is that clause 14.12 be varied as follows to put this position beyond doubt:

14.12 Employees in cinemas

All employees in cinemas will receive an 8% penalty averaging payment for all hours worked regardless of the day(s) of the week on which work is performed. This payment is in lieu of Sunday penalty payments and reduced public holiday penalties. This payment is to be added to the minimum hourly wage in clause 14.3 to form the relevant minimum hourly cinema wage.

[8] The MEAA also proposes that clause 54.4(b) of the BREC Award, which is concerned with the payment of the casual loading to casual employees in cinemas, be varied in the following manner to make it clear that the casual loading for such casual employees is to be calculated on the minimum hourly rate for such employees inclusive of the “8% penalty averaging component”.

54.4 Casual employment

…

(b) A casual employee must be paid a loading of 25% calculated upon at the relevant minimum hourly cinema wage plus a loading of 25%. Such loading is paid instead of all paid leave including annual leave, personal/carers leave and public holidays not worked whether prescribed in this award or the NES.

[9] The MEAA submitted that pre-modernisation awards applying specifically to the cinema industry included the 8 percent payment as part of the minimum weekly rates of pay, thus unambiguously establishing that it was an all-purpose payment. It was included in the BREC Award on that basis during the award modernisation process. It submitted that the text of clause 14 of the BREC Award, considered as a whole, supported its position. Clause 14.3 set out the minimum hourly and weekly wage rates, but was expressed to be (relevantly) subject to clause 14.12. Clause 14.12 was itself included in the clause of the BREC Award dealing with classifications and minimum wages, and read in conjunction with clause 14.3 established, consistent with the historical position, that it was part of the minimum wage rate and was therefore necessarily an all-purpose payment. The MEAA relied upon a statement of evidence made by Matthew Chesher, the MEAA’s Director, Legal and Policy, which set out some of the historical material concerning pre-award modernisation award coverage of cinema employees.

[10] The MEAA’s position was supported by LPA.

[11] The major cinema operators, namely Birch Carroll & Coyle Limited, Hoyts Corporation Limited, The Greater Union Organisation Pty Ltd and Village Cinemas Australia (major cinema employers), submitted that the 8 percent payment provided for in clause 14.12 was limited to being a payment instead of Sunday penalty payments and reduced public holiday penalties, was not an all-purposes allowance (as had been agreed), and had not been the subject of litigation or industrial disputation. The major cinema employers submitted that if the 8 percent payment was to form part of the BREC Award minimum hourly rate for cinema employers, then:

(1) the rate would become the minimum rate for all purposes;

(2) this would be directly contrary to the defined meaning and intended purpose of section 16 of the Fair Work Act 2009 (FW Act), which defines “base rate of pay”, which definition is then used for various purposes throughout the FW Act;

(3) the consequences, at present, of an, in effect, all purpose loading being included in the minimum rate for cinema casuals would be to require payments not intended by the FW Act such as payment in lieu of a minimum period of work not performed, for long service leave, for jury service, etc.;

(4) the suggested casual minimum rate (including for all purposes the 8%) would continue to be contrary to the use required by the FW Act of “standard rate” and payments for juniors calculated on the minimum rate for Grade 5;

(5) this would result in the creation of a new concept, being “relevant minimum hourly cinema wage”, which would be contrary to the apparent intention that the modern award create one standard wage structure and would cause confusion by adding to the list of terms already used in the Award, including:

•  minimum hourly rate;

•  hourly ordinary rate;

•  standard rate;

•  minimum hourly wage;

•  minimum wages;

•  minimum rates;

•  adult minimum wages:

•  percentages of the minimum for Grade 5;

•  relevant minimum wage;

•  ordinary pay;

•  minimum weekly wage.

[12] The major cinema employers said that there was a long history of case law which holds that it is not customary for there to be a loading on a loading, i.e. a compound calculation. The major cinema employers had a history of regarding the 8 percent payment as not being for all purposes and of not conducting the calculation on a compound basis. In this last respect, four witnesses called by the major cinema employers gave evidence to the following effect:

(1) Kerry Westwood, Director, People and Culture, the Event Group of Companies (which includes Birch Carroll & Coyle Limited (BCC) and The Greater Union Organisation Pty Ltd (GU): BCC typically employs 500-1000 casual employees per week out of a pool of about 1080, and GU employs 600-1200 casual employees per week out of a total pool of 1444 persons. Both companies are bound by collective agreements entered into under the Workplace Relations Act 1996 (WR Act) and which are preserved in effect under the FW Act. Both companies have, since 2014 (when company-specific awards ceased to operate), paid the base rate in the BREC Award pursuant to s 206 of the FW Act because the base rates in the agreements fell below those in the awards. The method they use to calculate the casual hourly rate is to take the base rate in the BREC Award, add the 8 percent payment, and add the 20% casual loading in the agreements calculated on the base rate.

(2) Jodi Paton, Director, People, Performance and Culture of Hoyts Corporation Limited (Hoyts): Hoyts has a pool of about 2611 employees covered by the BREC Award of which about 105 are available for casual engagements, and also remains bound by a collective agreement entered into under the WR Act and preserved in effect. Since about 2012, it has paid the BREC base rate pursuant to s 206 of the FW Act. It currently pays the award base rate, the 8% amount in addition, and the award 25% casual loading calculated on the base rate.

(3) Simone Rust, Human Resources Business Partner of Village Cinemas Australia Pty Ltd (Village): Village has approximately 1258 employees covered by the BREC Award, of whom about 961 are available for casual engagement. Its business remains bound by two collective agreements made under the WR Act, and for “many” years it has paid the base rate under the BREC Award pursuant to s 206 of the FW Act. Since about 2017, Village has calculated the casual rate on a cumulative basis, but prior to that it appears to have done so on a compounding basis.

[13] The major cinema employers finally submitted that the amendments proposed by the MEAA would introduce a substantive change to a “well understood and long-observed term of the Award”, and the exposure draft should remain as presently expressed.

Consideration

[14] We consider that the position advanced by the MEAA is indubitably the correct position. Prior to the award modernisation process that was conducted by the Australian Industrial Relations Commission pursuant to Part 10A of the WR Act, employees in the cinema industry were covered by an award that was discrete to that industry, the Entertainment and Broadcasting Industry – Cinema Award 1997 (1997 Award). This award was effectively established by a variation to the Theatrical Employees (Cinema and Drive-in Industry) Award 1983 made by the AIRC in 1997 which entirely replaced the earlier award’s terms. 2 In the form that it was at the time of the award modernisation process, clause 16.1 of the 1997 award set out the minimum wage rates as follows:

16.1 Wage rates

The following will be the minimum weekly rates of pay to operate from the first pay period on and from 10 January 2005:

Classification	Base rate per week $	Penalty averaging per week $	Minimum rate per week $
Cinema Worker 1	504.97	40.39	545.36
Cinema Worker 2	546.68	43.73	590.41
Cinema Worker 3	642.64	51.41	694.05

[15] It can be seen that the minimum weekly rate for each classification was the sum of two amounts, the “Base rate per week” and the “Penalty averaging per week”. Mathematically, the latter of these amounts was 8 percent of the former amount, and this was confirmed by a note contained in the 1997 award when it was made. Clause 16.2 provided for junior wages, expressed as a percentage of the minimum rates in clause 16.1. Clause 16.3 of the 1997 Award provided:

16.3 Casual employees

Casual employees will be paid an hourly rate calculated by dividing the relevant minimum rate set out in clause 16.1 and where relevant 16.2 by a divisor of 38 and adding an additional 20% loading which is in lieu of annual leave, sick leave, bereavement leave, jury leave and to compensate for the nature of casual employment.

[16] The above provision required the casual loading to be paid by reference to the “relevant minimum rate” in clause 16.1 which, as explained, included the 8 percent penalty averaging amount.

[17] The existing position at the time the award modernisation process was commenced was therefore that the penalty averaging payment formed part of the minimum rate and was therefore applied for all-purposes, including in the calculation of the casual rate.

[18] On 22 May 2009 the AIRC award modernisation Full Bench published an exposure draft for a new modern award, the Broadcasting and Recorded Entertainment Award 2010, which combined the coverage of a number of pre-existing awards including the 1997 Award covering cinema employees but also those covering television employees, commercial radio employees, broadcast journalists, film and broadcast actors and musicians, and film and television distribution. Clause 14.1 of the exposure draft provided for a common classification structure covering a number of these categories of employees including cinema employees, and clause 14.2 provided for the minimum weekly and hourly wages for these employees. No provision was made for a penalty averaging component in the prescribed minimum wages, nor was it separately provided for. Clause 23.2 of the exposure draft provided for additional leave benefits for employees other than journalists who undertook prescribed days of Sunday or public holiday work. Clause 26.2 of the exposure draft provided that all employees under the proposed award except journalists would be paid double time and a half on public holidays (unless time was taken off in lieu). These annual leave and public holiday entitlements were not contained in the 1997 award.

[19] Live Performance Australia and the MEAA subsequently filed a joint submission on 15 June 2009 in which they sought, among other things, the restoration of the 8 percent penalty averaging component (by way of a separate additional clause) and the exclusion of cinema workers from the operation of clause 26.2. Notwithstanding this submission, when the AIRC award modernisation Full Bench made the initial version of the Award on 4 September 2009 (to take effect on 1 January 2010), it did not contain the penalty averaging payment for cinema employees and retained the new entitlements in respect of annual leave and public holidays for cinema employees. LPA then made an application to vary the award as made.

[20] In a decision issued on 30 December 2009, 3 the AIRC award modernisation Full Bench determined to grant LPA’s application. It said (footnote removed, emphasis added):

“[2] The AEIA submits that a penalty averaging clause has been a feature of the Entertainment and Broadcasting Industry – Cinema Award – 1998 since 1997. The clause provides that cinema workers receive an additional 8% in lieu of Sunday penalty payments and reduced public holiday penalties for casuals. The modern award does not include the penalty averaging provision but includes Sunday penalty rates and increased public holiday penalty rates. It was put by the AIEA that the provisions of the modern award have the effect of reducing the take home pay of those employees who work Monday to Saturday shifts while providing penalty rates for only those employees who are required to work on a Sunday.

[3] The Media Entertainment and Arts Alliance (MEAA) did not object to the concept of a penalty averaging clause but claimed that it is “incumbent on the AEIA to show how many Sunday and public holiday shifts are compensated for by the 8% penalty”.

[4] The submission of the Shop, Distributive and Allied Employees Association (SDA) acknowledged the penalty averaging position of the parties to the current award but submitted that the matter for determination was whether the provision is “a fair and effective safety net condition of employment for a modern award”. It argued that the penalty averaging provision requires scrutiny to ensure that it does not disadvantage employees who work a majority of weekend and public holiday shifts while advantaging employees who work solely or mainly weekday shifts.

[5] In response to the MEAA position the AEIA reiterated that the current penalty averaging provision was negotiated between the parties during the minimum rates adjustment process, was included in the award as part of the minimum rate rather than an all-purpose allowance, and was approved as part of the properly fixed minimum rate when the current award was simplified. It also submitted that the penalty averaging component, which is set as a percentage of the base rate, retains the minimum rates relativities. In relation to the SDA submission the AEIA noted that the SDA does not represent cinema employees and had not provided any material to support the claim that the penalty averaging provision does not provide a fair and effective safety net.

[6] As the variation is sought to restore a provision of the current award which, if not reinstated could have the effect of disadvantaging some employees and is not opposed by the MEAA, we have decided to grant the application. We shall also make the consequential variations sought to the clauses relating to Sunday penalties and public holidays rates as they relate to cinema employees.”

[21] The variation made by the Full Bench added clause 14.12 in the following form:

14.12 Cinema Workers

All cinema workers will receive an 8% penalty averaging component in lieu of Sunday penalty payments and reduced Public Holiday penalties.

[22] The variation also, among other things, exempted “cinema workers” from the operation of clauses 23.2 and 26.2.

[23] Clause 14.12 took its current form after a variation made as part of the 2-yearly review of modern awards conducted pursuant to Item 6, Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 which replaced the expression “cinema workers” with “employees in cinemas”. An equivalent variation was made to clause 26.3(a) (which exempted cinema workers from clause 26.2), but (probably by oversight) not clause 23.2.

[24] The above history convincingly demonstrates, we consider, that the 8 percent penalty averaging payment was always intended to be part of the minimum award rate in relation to cinema employees, and was placed into the modern BREC Award on that basis.

[25] The text of the relevant provisions of clause 14 is consistent with this intention. Clause 14.3, which prescribes the minimum wages for adult employees under the common classification structure, is expressed to be subject to (relevantly) clause 14.12. That indicates that clause 14.12 operates upon the minimum wages prescribed by the BREC Award. The placement of clause 14.12 in clause 14, which is entitled “Classifications and minimum wages” (as distinct from clause 18, Allowances or any other provision) also indicates that its subject matter concerns or relates to minimum wages. These matters, together with the description of the payment in clause 14.12 as a “component”, all weigh in favour of the conclusion that the payment forms part of the prescribed minimum wage rate. There are no textual indicators which point persuasively in favour of any different conclusion.

[26] The evidence adduced by the major cinema employers as to their calculation method of their pay rates is not relevant to the interpretation of the BREC Award because:

(1) the BREC Award, although it covers the major cinema employers, does not apply to any of them because they remain bound by collective agreements made under the WR Act;

(2) their method of payment only involves applying the provisions of their agreements to the base rate set in the BREC Award in accordance with s 206 of the FW Act, and it is clear that the “base rate” in the BREC Award (as distinct from the minimum rate) does not include the 8 percent payment by virtue of the definition of that expression in s 16(1) of the FW Act, which excludes any penalty rate component; and

(3) in any event, the commencement of the relevant payment practices of the major cinema employers post-date the making of the BREC Award and cannot be relevant to its interpretation for that reason.

[27] For the reasons give above, we conclude that the 8 percent penalty averaging component provided for in clause 14.12 forms part of the minimum wage rates for cinema employees and is necessarily therefore an all-purpose payment. The casual loading is to be applied to the minimum wage rate for cinema employees, which includes the payment prescribed by clause 14.12.

[28] We consider that an appropriate variation to the BREC Award should be made to put the position beyond doubt for users of the award. To be clear, such an amendment is simply for the purpose of confirming the legal position which has applied since the BREC Award was made rather than to effect any substantive change. We consider that such a variation is necessary to achieve the modern awards objective in s 134(1) of the FW Act, having regard in particular to the consideration in s 134(1)(g) (with the other considerations not being relevant to a mere clarificatory change to the BREC Award).

[29] Rather than the variation proposed by the MEAA, our provisional view is that the preferable course is to express the minimum wages for cinema employees in the same way as they were expressed in the 1997 Award. This would involve extracting the seven cinema classifications levels (which are defined in Schedule E of the BREC Award) from the common salary structure in clause 14.2, and the wage rate table in clause 14.3, and separately setting out in clause 14.12 the rate for each cinema classification expressed in terms of the base rate, the 8 percent penalty averaging component and the total minimum rate (on a weekly and hourly basis). This will make clear that the “base rate” in the BREC Award for the purpose, relevantly, of s 206 of the FW Act does not include the 8 percent payment component (with the result that the variation will have no practical effect on any of the major cinema operators until such time as the Award applies to them). There will need to be a consequential amendment to clause 14.4 to deal with the position of junior cinema employees.

[30] A draft determination consistent with our decision will be published, and interested parties will be given 14 days to file any written submission they wish to make in response to it.

VICE PRESIDENT

Appearances:

I Latham of Counsel on behalf of the Media, Entertainment and Arts Alliance.

J Murdoch QC of Counsel on behalf of the Cinema Employers.

D Hamilton on behalf of Live Performance Australia.

Hearing details:

2019.

Sydney:

15 August.

Printed by authority of the Commonwealth Government Printer

<PR714007>

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

4 yearly review of modern awards
(AM2018/17)

BROADCASTING, RECORDED ENTERTAINMENT AND CINEMAS AWARD 2010
[MA000091]

4 yearly review of modern awards – Broadcasting and Recorded Entertainment Award 2010 – substantive issues – modern award varied.

A. Further to the Full Bench decision [[2019] FWCFB 7608] issued by the Fair Work Commission on XX November 2019, the above award is varied as follows:

1. By deleting the words “; Cinema Worker Level 1” in clause 14.2(b).

2. By deleting the words “; Cinema Worker Level 2” in clause 14.2(c).

3. By deleting the words “; Cinema Worker Level 3” in clause 14.2(e).

4. By deleting the words “; Cinema Worker Level 4” in clause 14.2(g).

5. By deleting the words “; Cinema Worker Level 5” in clause 14.2(h).

6. By deleting the words “; Cinema Worker Level 6” in clause 14.2(i).

7. By deleting the words “and clause 14.12” in clause 14.3.

8. By deleting clause 14.4(a) and inserting the following:

(a) The minimum wages of junior employees, other than junior employees in cinemas, are the following percentages of the minimum wage for an entertainment employee Grade 5:

Years of age	%
16	45
17	55
18	65
19	75
20	85

9. By renumbering clauses 14.4(b) to (f) as clauses 14.4(c) to (g).

10. By inserting a new clause 14.4(b) as follows:

(b) Junior employees in cinemas will be paid the percentages set out at clause 14.4(a) of the minimum rate for a Cinema Worker Level 3 in clause 14.12.

11. By deleting clause 14.12 and inserting the following:

14.12 Employees in cinemas

The minimum rates for employees in cinemas are calculated as follows:

Classifications	Base rate per week	8% penalty averaging per week	Minimum weekly rate	Minimum hourly rate
	$	$	$	$
Cinema Worker Level 1	762.10	60.97	823.10	21.66
Cinema Worker Level 2	791.30	63.30	854.60	22.49
Cinema Worker Level 3	862.50	69.00	931.50	24.51
Cinema Worker Level 4	916.60	73.33	989.90	26.05
Cinema Worker Level 5	941.10	75.29	1016.40	26.75
Cinema Worker Level 6	967.50	77.40	1044.90	27.50
Zone Manager	967.50	77.40	1044.90	27.50

NOTE 1: Employees in cinemas receive the 8% penalty averaging component instead of Sunday penalty payments and as compensation for reduced public holiday penalties. See also clauses 23.2 and 26.3.

NOTE 2: Zone Managers receive an additional allowance in accordance with clause 57.3.

B. This determination comes into operation from XX Month 20XX. In accordance with s.165(3) of the Fair Work Act 2009, this determination does not take effect until the start of the first full pay period that starts on or after XX Month 20XX.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

 1   [2018] FWCFB 6852 at [21]-[22]

 2   Print N9936, 11 April 1997.

 3   [2009] AIRCFB 998