STATEMENT

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

4 yearly review of modern awards–plain language re-drafting–standard clauses
(AM2016/15)

4 yearly review of modern awards – plain language re-drafting – standard clauses – Sugar Industry Award 2010.

[1] This statement deals with the redundancy clause to be inserted into the Sugar Industry Award 2010 (Sugar award).

[2] In a decision issued on 29 January 2020 1, we expressed a provisional view that the Sugar award should be varied to include the standard redundancy clause with award specific amendments. A draft variation determination was published with our decision. Interested parties were directed to file any submission opposing the provisional view by 4 pm on Friday 14 February 2020.

[3] Ai Group filed a submission on 14 February 2020 2 in which it did not oppose the inclusion of the standard redundancy clause or the retention of award specific elements, but did identify two issues with the drafting of the clause. Both of the drafting issues relate to the translation of the current Sugar award clause 16.6 into clause 16.5 in the draft determination.

[4] The first issue raised by Ai Group relates to the proposed wording of clause 16.5(c) in the draft determination set out below:

16.5 Apprentices and fixed-term employees in sugar mills

(a) Clause 16.5(d) applies to a fixed-term employee in a sugar mill, where the employee is engaged on a series of consecutive contracts where the period of actual service covered by the series of contracts is more than 12 months.

(b) For the purposes of clause 16.5(a), the continuity of an employee’s service with an employer will not be broken where there is a period of 8 weeks or less between fixed term contracts.

(c) Clause 16.5(d) applies to an apprentice in a sugar mill who is engaged in employment for more than 6 months after the completion of their apprenticeship.

(d) Redundancy pay

(i) An apprentice or fixed-term employee in a sugar mill is entitled to notice of termination or payment instead of notice in accordance with section 117 of the Act.

(ii) An apprentice or fixed-term employee in a sugar mill is entitled to redundancy pay in accordance with section 119(2) of the Act.

[5] Ai Group submit that the use of the word ‘engaged’ instead of the word ‘retained’, which is used in the current award at clause 16.6(b), creates uncertainty about the meaning of the provision. It is submitted that an example of this uncertainty is the question of whether the 6 month period needs to be one continuous period. Ai Group submit that this issue could be resolved by reverting to the wording in the Sugar Award at clause 16.6. We agree and it is our provisional view is that the wording should be amended as follows:

(c) Clause 16.5(d) applies to an apprentice in a sugar mill who is engaged retained in employment for more than 6 months after the completion of their apprenticeship.

[6] The second issue raised by Ai Group is that the current clause 16.6 only affects 2 of the 3 exclusions in s.123(1)(a) of the Fair Work Act 2009 (Cth), namely employees employed for a specified period of time or for a specified task. The current clause 16.6 is set out below.

16.6 Redundancy pay—apprentices and fixed term employees in sugar mills

The NES limitation on redundancy in s.123 of the Act for an employee employed for a specified period of time or for a specified task will not apply to employees of sugar mills where such employees are:

(a) engaged on a series of consecutive contracts where the period of actual service covered by the series of contracts totals in excess of 12 months. For the purpose of this clause the continuity of an employee’s service with an employer is taken not to be broken by a period between fixed term contracts which is equal to or less than eight weeks; or

(b) apprentices who are retained in employment for more than six months after the completion of their apprenticeship

[7] Section 123(1) exempts certain categories of employee from notice of termination and redundancy pay entitlements, as follows:

123 Limits on scope of this Division

Employees not covered by this Division

(1) This Division does not apply to any of the following employees:

(a) an employee employed for a specified period of time, for a specified task, or for the duration of a specified season;

(b) an employee whose employment is terminated because of serious misconduct;

(c) a casual employee;

(d) an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement;

(e) an employee prescribed by the regulations as an employee to whom this Division does not apply.

[8] Ai Group submit clause 16.6 currently provides that apprentices who are retained in employment for more than six months after the completion of their apprenticeship are entitled to redundancy pay. It is submitted that by re-framing the industry-specific redundancy entitlement as a positive obligation to pay redundancy pay as opposed to the current limitation on the application of redundancy pay to of only two of several exclusions in s.123, the draft determination arguably disturbs other exclusions, including those for employees of ‘small business employers’ and for employees whose period of continuous service with the employer is less than 12 months.

[9] Ai Group submit this issue could be resolved by retaining the current wording in clause 16.6 instead of the re-drafted wording in clause 16.5 of the draft determination.

[10] We do not agree with the proposition that the redrafting proposed at clause 16.5 disturbs other exclusions in s 123. However, we propose to deal with the concern raised by making an amendment to Note 2 at the start of the redundancy clause. Note 2 will be split into 2 separate notes as follows:

NOTE 2: Clause 16.4 supplements the NES by providing additional benefits to bulk terminal employees.

NOTE 3: Clause 16.5 supplements the NES by providing entitlements to certain employees in sugar mills excluded from redundancy pay under the NES by section 123(1)(a) of the Act because they are employed for a specified period of time or for a specified task. The other exclusions in s 123(1) continue to apply.

[11] A revised draft determination will be published with this decision. Interested parties are invited to comment on the revised draft. Submissions should be filed by 4 pm on Friday 20 March 2020. Submissions in reply should be filed by 4 pm on Friday 3 April 2020. In the absence of any objection we will proceed to issue a final variation determination in the same terms as the draft determination.

PRESIDENT

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 1   [2020] FWCFB 379

 2   Ai Group submission, 14 February 2020