DECISION

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

4 yearly review of modern awards-Payment of wages
(AM2016/8)

4 yearly review of modern awards – common issue – payment of wages – payments on termination – Alpine Resorts Award 2010 – Pharmacy Industry Award 2010 – Rail Industry Award 2010.

[1] In a Decision 1 issued on 17 July 2018 (the July 2018 decision), we finalised the payment on termination of employment model term and expressed the provisional view that the 86 modern awards which were silent in respect of the time period within which termination payments are to be made should be varied to include the model term. The model term is set out below:

X. Payment on termination of employment

(a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after. 2

[2] In a Decision 3 issued on 15 August 2018 (the August 2018 decision), we confirmed the provisional view in relation to 83 of the 86 awards. Three of the 86 modern awards had been the subject of award-specific submissions and we decided not to vary those awards at that time. The three awards are:

•  the Australian Ski Areas Association opposed the insertion of the model term in its current form in the Alpine Resorts Award 2010; 4

the Pharmacy Guild of Australia submitted that consideration should be given to altering the model clause for the Pharmacy Industry Award 2010; 5 and

•  the Rail Employers submitted that the period for payment be increased from 7 days to 14 days in the Rail Industry Award 2010. 6

[3] In a Decision dated 4 September 2019 7 we set out the parties’ positions in respect of each of these awards and determined that a conference would be convened in an effort to reach agreement in respect of the variation of these awards. A conference was convened before Commissioner Lee on 3 October 2019 in respect to the Alpine Resorts Award 2010. Conferences were also convened before Commissioner Lee on 9 October 2019 in respect to the Pharmacy Industry Award 2010 and the Rail Industry Award 2010 (the October Conferences). The transcripts are available on the Commission’s website.8

[4] This decision deals with these 3 awards.

Alpine Resorts Award 2010

[5] On 10 August 2018, the Australian Ski Areas Association (ASAA) made a submission opposing the insertion of the model term into the Alpine Resorts Award 2010 (Alpine Award). 9 ASAA proposed the following variations to the model term:

X. Payment on termination of employment

(a) The employer must pay an employee no later than 7 days after the day whichever is the earlier of either 14 days after the day on which the employee’s employment terminates or the employer’s next usual pay cycle:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of the termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act

[6] ASAA submit that the variation to the model term is necessary due to the unique nature of the alpine resorts industry and, in particular, that the majority of employees in the industry are engaged on a seasonal basis and that ‘it is common for hundreds of staff to finish their employment within a 3 to 4 week period at the end of the snowsports season.’ 10 Further, the snowsports season may be extended or reduced by several weeks at short notice which means that the resorts require greater flexibility to make termination payments.

[7] The AWU filed a submission opposing the ASAA’s proposal variation and submitting that the model term should be inserted into the award.

[8] The nature of the alpine resorts industry was recently considered by a Full Bench of the Commission in the Alpine Resorts Award 2010 – substantive issues concerning coverage decision. 11 In that decision the Full Bench made findings which relevantly include:

(3) Alpine resorts covered by the Alpine Award have highly seasonal businesses which are heavily weather dependent and earn most of their revenue during the winter months…

….

(6) Alpine resorts employ large numbers of additional casual employees during the winter snow season to meet the peak demand of that period….

[9] ASAA and the AWU attended the 3 October 2019 Conference and reached a provisional agreement about a term to be inserted into the Alpine Award. Following the conference, Commissioner Lee’s chambers wrote to the parties setting out the following term with variations to the model term shown in red text:

20. Payment of wages

20.1 An employer may pay an employee their wages either weekly, fortnightly or monthly by payment into the employee’s nominated bank account by electronic funds transfer, without cost to the employee.

20.2 Payment on termination of employment

(a) Subject to clause 20.2(b), the employer must pay an employee no later than 14 days after the day on which the employee’s employment terminates:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) For an employee paid weekly in accordance with clause 20.1, the employer must pay the employee no later than the end of the employee’s next complete 7 day pay period after the day on which the employee’s employment terminates.

(c) The requirement to pay wages and other amounts under clause 20.2(a) and (b) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

Note 2: Clause 20.2(c) allows the Commission to make an order delaying the requirement to make a payment under this clause. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under s.120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.

[10] The AWU wrote to the Commission on 3 October 2019 confirming that it does not oppose the draft variation. On 8 October ASAA wrote to the Commission confirming that it agrees with the variation set out above. 12

[11] A variation determination in the terms set out at [9] above will be issued with this decision.

•  Industry Award 2010

[12] The Pharmacy Guild of Australia (PGA) proposed an amendment to the model term to allow for payment on termination to be made in accordance with the normal pay cycle. The PGA acknowledges that we rejected a proposal by ABI to make this amendment to the model term generally 13 but submits that because the Pharmacy Industry Award only allows for payment on a weekly or fortnightly cycle, employees would not have to wait an unreasonable amount of time to receive their payment.

[13] In addition, the PGA submit that a large percentage of businesses in the Pharmacy Industry Award are smaller businesses who do not have dedicated bookkeeping staff and engage contractors for a set number of hours to perform a payroll function. They submit that the cost of having to make termination payments out of the normal pay cycle will be much higher for these smaller businesses.

[14] The Health Services Union (HSU) filed a submission opposing the variation to the model clause proposed by the PGA. The SDA in correspondence received 5 December 2019 indicated they support the HSUA submission.

[15] Following the 9 October 2019 Conference, the PGA confirmed that it does not object to the model term being inserted into the Pharmacy Award in correspondence dated 15 October 2019. 14

[16] The Pharmacy Award will be varied to include the model term set out at [1] above. A variation determination will be issued with this decision.

•  Industry Award 2010

[17] The Rail Employers proposed an amendment to the model term to allow payment to be made ‘no later than 14 days after the day on which the employee’s employment terminates.’ 15

[18] The Rail, Tram and Bus Union (RTBU) filed a submission on 2 September 2019 opposing the variation to the model clause proposed by the Rail Employers.

[19] Following the 9 October 2019 Conference, on 22 October 2019 the Rail Employers wrote to the Commission withdrawing their proposed amendment to the model term. 16

[20] The Rail Award will be varied to include the model term set out at [1] above. A variation determination will be issued with this decision.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR714768>

 1   [2018] FWCFB 3566.

 2   [2018] FWCFB 3566 at [119].

 3   [2018] FWCFB 4735.

 4   Australian Ski Areas Association submission 10 August 2018.

 5   Pharmacy Guild of Australia submission 10 August 2018.

 6   Rail Employers submission 9 August 2018.

 7   [2019] FWCFB 5879.

 8   Transcript 3 October 2019.

 9   ASSA submission dated 10 August 2018.

 10   ASAA submission at [5].

 11   [2018] FWCFB 4984.

 12   ASAA correspondence dated 15 October 2019.

 13   [2018] FWCFB 3566 at [34] to [36].

 14   Pharmacy Guild correspondence dated 15 October 2019

 15   Rail employer submission dated 9 August 2018.

 16   Rail employer correspondence 22 October 2019