| [2020] FWCFB 3416 [Note: a correction has been issued to this document] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective
Application to vary the Vehicle Repair, Services and Retail Award 2020
(AM2020/37)
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 30 JUNE 2020 |
Application to vary modern award to achieve the modern awards objective – Schedule I – Award flexibility during the COVID-19 Pandemic.
[1] On 11 May 2020 we issued a Decision 1 granting an application filed by the Victorian Automobile Chamber of Commerce (VACC) , the Motor Trade Association of South Australia Inc, the Motor Traders Association of New South Wales, the Motor Trades Association of Queensland Industrial Organisation of Employers and Ai Group to insert a new schedule, Schedule J – Award flexibility during the COVID-19 Pandemic, into the Vehicle Repair, Services and Retail Award 2020 (the Vehicle Award) (note Schedule J has been renumbered and is now Schedule I).2 The application was supported by the Australian Chamber of Commerce and Industry (ACCI), the Australian Automotive Dealer Association (AADA) and the Motor Trade Association of Western Australia and was also consented to by the Australian Manufacturing Workers Union (AMWU), the Shop Distributive and Allied Employees Association (SDA) and the Australian Council of Trade Unions (ACTU). The new schedule came into operation on 11 May 2020 and will cease to operate on 30 June 2020.
[2] This Decision concerns an application to vary the Vehicle Award (the Application) filed by Victorian Automobile Chamber of Commerce, the Motor Trade Association of South Australia Incorporated, the Motor Traders Association of New South Wales and the Motor Trades Association of Queensland Industrial Organisation of Employers (collectively, the Applicants). The Application was supported by ACCI and the AADA.
[3] The Applicants, ACCI and AADA have had discussions with the relevant union parties and the ACTU. There is no objection to the Application from any relevant union party.
[4] The Application seeks to extend the operation of some of the clauses contained in Schedule I for a limited period, until 31 July 2020. It does not seek the continued operation of clause I.2 (Classifications and Duties) or clause I.5 (Close-down), due to the low utilisation of these clauses by employers.
[5] The draft determination seeks to retain the flexibilities contained within clauses I.3 (Temporary reduction of hours) and I.4 (Annual leave), with the following limitations on their use:
(a) clause I.3 can only be used by those businesses which have already utilised it and implemented a temporary reduction in hours prior to 30 June 2020, with the existing limitations in the Schedule continuing; and
(b) existing protections in clause I.6 remain.
[6] Schedule I, with the proposed variations marked up in red, is set out at Attachment A.
[7] The proposed schedule will operate until 31 July 2020.
[8] On 28 June we issued a Statement 3 (the June 2020 Statement) expressing the provisional view that, taking into account the relevant s.134 considerations, the variation proposed was necessary to achieve the modern awards objective. Any interested party was invited to file a written submission supporting or opposing the Application and our provisional view, by 4pm on Monday 29 June 2020.
[9] In the June 2020 Statement we said that if no submissions were filed opposing the Application and our provisional view then we would grant the Application and vary the Vehicle Award in the terms sought. No such submissions were received; accordingly, for the reasons which follow, we grant the Application and will vary the award.
[10] On 28 June an Information Note was published, on the impact of COVID-19 on employees and employers likely to be covered by the Vehicle Award and a snapshot of the recent effects of the pandemic on vehicle sales. The information note was prepared by Commission staff.
[11] The Information Note states that Federal Chamber of Automotive Industries (FCAI) have released vehicle sales data for May 2020, which show that vehicles sales recovered from the low in April to 59 894, an increase of 53.9 per cent, but was still 35.3 per cent lower than in May 2019. The FCAI note, ‘[t]he May total sales figures also represent the largest drop in May sales since VFACTS statistics began recording in 1991.’4
[12] Chart 1 below presents the number of new vehicle sales over the past 10 years. While total vehicle sales appear to have trended downward since around 2018, there was a significant decline in sales in April 2020 as a result of COVID-19. Despite a small recovery in May 2020, sales remain below pre-COVID levels.
Source: Trading Economics (2020), Australia New Vehicles Sales, June.
[13] Chart 2 presents vehicle sales by type for the first five months of 2020. The decline in sales has been relatively broad based across vehicle types, with the exception of heavy commercial vehicles which were relatively unaffected.
Source: FCAI (2020), FCAI releases May 2020 new vehicle sales statistics, Media releases, 3 June.
[14] The decline in rental car sales (40 per cent) has contributed to the overall decline in vehicle sales, attributable to a sharp drop in demand from tourists and business travellers. 5 Recent research has suggested rental car industry revenue is expected to decline 6.4 per cent as a result of bushfires and COVID-19.6 The decline in demand is also evidenced by survey responses from selected Victorian car dealerships who reported a 69 per cent decline in sales as well as a decline car servicing.7
[15] In the submission filed in support of the Application the Applicants state:
‘Despite an easing of restrictions by governments and associated signs of improvement, the Industry experiences acute challenges, which commenced prior to, but which have been exacerbated by, the advent of COVID-19.
In May 2020, across Australia, only 59,894 new cars were sold, which was a 35.3% decline compared to May 2019.7 It was the 26th month of negative growth in new car sales. The previous month experienced a 48.5% drop. New car dealerships are also experiencing a lack of new supply due to the shut-down of manufacturing plants overseas, including the United States and South Korea. The value of imported motor vehicles in May declined 40% to $1.6bn (ABS 5368.0.55.024).’ 8
[16] It is apparent from the material set out above that the employees and employers covered by the Vehicle Award continue to be adversely affected by the restrictions put in place to contain the COVID-19 virus.
[17] The Commission may make a determination varying a modern award if the Commission is satisfied the determination is necessary to achieve the modern awards objective. The modern awards objective is in s.134 of the Fair Work Act 2009 (Cth) (the Act) and provides as follows:
‘What is the modern awards objective?
134(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.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:
(a) the FWC’s functions or powers under this Part; and
(b) the FWC’s functions or powers under Part 2-6, so far as they relate to modern award minimum wages.
Note: The FWC must also take into account the objects of this Act and any other applicable provisions. For example, if the FWC is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).’
[18] The modern awards objective is to ‘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 the particular considerations identified in ss.134(1)(a)–(h) (the s.134 considerations).
[19] The modern awards objective is very broadly expressed. 9 It is a composite expression which requires that modern awards, together with the National Employment Standards (NES), provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in ss.134(1)(a)–(h).10 Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.11
[20] The obligation to take into account the s.134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process. 12 No particular primacy is attached to any of the s.134 considerations13 and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.
[21] It is not necessary to make a finding that the award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award. 14 Generally speaking, the s.134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.15 In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance.
[22] Section 138 of the Act emphasises the importance of the modern awards objective:
‘Section 138 Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.’
[23] What is ‘necessary’ to achieve the modern awards objective in a particular case is a value judgment, taking into account the s.134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence. 16
[24] Before turning to the modern awards objective we propose to deal with the various safeguards in Schedule I. As we noted in the 11 May 2020 decision which inserted the schedule into the award, the schedule contains two types of safeguards:
• ‘universal’ safeguards that apply at large to requests or directions made under the Schedule; and
• specific safeguards that apply with respect to individual provisions of the Schedule.
[25] Clause I.2.3 provides that an employer may direct a full-time employee to work an average of between 22.8 and 38 ordinary hours per week. The employee will be paid on a pro-rata basis and the arrangements for working ordinary hours in clauses 37 and 44.1 will apply on a pro-rata basis.
[26] Clause I.2.4 provides that an employer may direct a part-time employee to work an average of between 75% and 100% of their agreed hours per week, or an average of between 75% and 100% of their agreed hours per week over the roster cycle.
[27] An employer may only implement a temporary reduction in hours of work under clause I.3 if the employee cannot be usefully employed for their normal days or hours as a consequence of business changes attributable to the COVID-19 pandemic or government initiatives to slow the spread of the virus.
[28] Subclauses I.2.5, I.2.6 and I.2.7 provide that employees may not have their hours of work reduced if the amount payable under the reduced hours falls below the minimum amounts specified in these subclauses.
[29] Prior to an employer issuing any direction under clause I.2.3 and I.2.4 the employer must:
• consult with the affected employee/s in accordance with Clause 8A—Consultation about changes to rosters or hours of work and provide as much notice as practicable; and
• if the affected employee/s are members of a union, notify the relevant union of its intention to implement these arrangements.
[30] Where the amount paid to an employee under clause I.2 is less than the normal weekly pay an employee received prior to a directed reduction in hours under clause I.2, the employee can have their weekly pay increased, by agreement with the employer, to the weekly pay they received prior to a directed reduction in hours, by accessing accrued paid annual leave or any other form of accrued paid leave (other than personal/carer’s leave where the employee is not entitled to take this leave).
[31] An employee given a direction under clause I.2.3 or I.2.4 continue to accrue annual leave and personal leave, and any other applicable accruals under the Vehicle Award, based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
[32] If an employee given a direction under clause I.2.3 or I.2.4 takes a period of paid annual leave or personal leave, the payment for accessing that accrued annual leave will be based on the full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I. Further, if an employee who has been given a direction under clause I.2.3 or I.2.4 is made redundant while working reduced hours, any applicable redundancy payment will be calculated based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
[33] An employee given a directive under clause I.2 will revert to their ordinary hours of work prior to the commencement of Schedule I once the directive ceases to have effect in accordance with clause I.1.3. Clause I.3.1 provides that the provisions of clause I.3 continue to apply to employers who implemented a temporary reduction in hours of work under the schedule.
[34] Clause I.3 contemplates a regime whereby:
(a) an employer may request an employee to take annual leave;
(b) the request must be made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and to assist the employer to avoid or minimise the loss of employment;
(c) the employer must not request the taking of leave if it results in an employee retaining an annual leave balance of less than 2 weeks;
(d) the request must be made 72 hours before the leave is to be taken; and
(e) the employee is required to consider and not unreasonably refuse the request.
[35] Clause I.3.4 provides that employers and individual employees may agree to take up to twice as much annual leave at a proportionately reduced rate for all or part of any agreed or directed period away from work, including any close-down.
[36] We now turn to the modern awards objective.
[37] It was common ground that the considerations in s 134(da), (e), (g) and (h) were not relevant. We deal with the other considerations below.
s. 134(1)(a): relative living standards and the needs of the low paid
[38] A threshold of two-thirds of median full-time wages provides ‘a suitable and operational benchmark for identifying who is low paid,’ 17 within the meaning of s.134(1)(a). Using this threshold as the benchmark, most of the award reliant employees covered by the Vehicle Award are ‘low paid’ within the meaning of s.134(1)(a).
[39] We accept that the proposed variation may result in low paid employees working less hours and consequently receiving less pay. It is axiomatic that such a reduction in pay will mean that they are less able to meet their needs. But, as noted in our initial decision inserting the schedule, employers and employees face an invidious choice and the retention of as many employees as possible in employment, albeit on reduced hours, is plainly a priority.
[40] We also note the agreed measures to mitigate the impact of reduced hours, particularly by maintaining relevant accruals; the minimum wages ‘floor provisions’; and the requirement for consultation with affected employees. The general safeguards set out above are also relevant.
s. 134(1)(b) the need to encourage collective bargaining
[41] The proposed variation may be said to decrease the incentive for employers to bargain; but it is also likely that employee and employer decision making about whether or not to bargain is influenced by a complex mix of factors. It is also relevant that the proposed variation is time limited. Section 134(1)(b) speaks of ‘the need to encourage collective bargaining’. We are not persuaded that the proposed insertion of Schedule I would ‘encourage collective bargaining’. It follows that this consideration weighs against the variation proposed.
s. 134(1)(c) the need to promote social inclusion through increased workforce participation
[42] This consideration is directed at obtaining employment. As noted in clause I.1.1 the provisions of Schedule I are ‘aimed at preserving the ongoing viability of businesses and preserving jobs during the COVID-19 pandemic’. The variation will facilitate the parties’ shared objective of retaining as many employees in employment as practicable in the current crisis. While the variation will not increase workforce participation it will assist in mitigating the employment impacts associated with the COVID-19 pandemic.
s. 134(1)(d) and (f) the need to promote flexible modern work practices and the efficient and productive performance of work and the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden.
[43] It is convenient to deal with these considerations together. The proposed variation will promote flexibility and the ‘efficient and productive performance of work’ and will reduce the regulatory burden on business. This is a factor which weighs in favour of making the variation sought.
[44] Additional considerations apply to the proposed annual leave flexibilities (in proposed clause I.3). Subsections 93(3) and (4) of the Act are relevant in this regard. Subject to the requirement to take leave being reasonable, a modern award term which provides that an employee can be required to take a period of annual leave is a term of the type contemplated by s.93(3). The issue in the present matter is whether proposed clause I.3 is ‘reasonable’ within the meaning of s.93(3).
[45] Clause I.3 provides that an employer may request that an employee take paid annual leave; the employee must consider the request and must not unreasonably refuse the request. The term in question is of limited duration and is a response to an extraordinary set of circumstances. Further, the right to request is subject to a number of safeguards:
• the employer must consider the employee’s personal circumstances;
• the request must not result in the employee having a balance of paid annual leave of fewer than 2 weeks;
• an employer can only make a request where it is reasonable in all the circumstances and if the request is made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and is necessary to assist the employer to avoid or minimise the loss of employment; and
• the request must be made a minimum of 72 hours before the date on which the annual leave is to commence.
[46] We are satisfied that proposed clause I.3 is a permitted term and is ‘reasonable’ within the meaning of s.93(3).
[47] As to the proposed clause I.3.4 – the ability to take twice as much annual leave at half the rate of pay for all or part of any period of annual leave – we are satisfied that the proposed term is an ancillary or incidental term permitted by s.55(4).
[48] The terms in the proposed Schedule I are terms that may be included in a modern award pursuant to ss.136(1)(a) and (c), and ss.139(1)(a), (c), (h) and (j) and s.142(1) of the Fair Work Act 2009.
[49] We are satisfied that the variation proposed is necessary to achieve the modern awards objective and in so deciding we have taken into account the considerations in s.134(1)(a) to (h), insofar as they are relevant. Once varied, the Vehicle Award will only include terms to the extent necessary to achieve the modern awards objective.
[50] For the reasons set out above, we will make the variation determination sought. The determination will come into operation on 1 July 2020. As required by s.165(3), the determination does not take effect in relation to a particular employee until the start of the first pay period that starts on or after the day the determination comes into operation.
[51] A copy of the variation determination is set out at Attachment B.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR720600>
Schedule I—Award flexibility during the COVID-19 Pandemic
I.1 Award Flexibility during the Covid-19 Pandemic
I.1.1 The provisions of Schedule I are aimed at preserving the ongoing viability of businesses and preserving jobs during the COVID-19 pandemic and not to set any precedent in relation to award entitlements after its expiry date. The provisions in clause I.2 to I.6 only operate during the operation of the Schedule.
I.1.2 Schedule I operates from 11 May 2020 until
30 June 2020 31 July 2020. The period of operation can be extended on application to the Fair Work Commission.
I.1.3 A direction under Schedule I ceases to have effect when it is withdrawn, revoked or replaced by the employer, or on
30 June 202031 July 2020, whichever is earlier.
I.1.4 Schedule I does not apply to any employee employed by an employer that qualifies for the JobKeeper Scheme if the employee is an ‘eligible employee’ as defined in section 9 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.
I.1.5 Any direction or request given by an employer under Schedule I must be given in writing and does not apply to the employee if the direction is unreasonable in all of the circumstances.
I.1.6 Any dispute regarding the operation of Schedule I may be referred to the Fair Work Commission in accordance with clause 37—Dispute resolution.
I.1.7 Any direction given by an employer under Schedule I is not valid unless the employee is advised in writing that the employer consents to a dispute arising from the direction being settled by the Fair Work Commission through arbitration in accordance with clause 37—Dispute resolution and section 739(4) of the Act.
I.2 Classifications and duties RS&R employees
I.2.1 As directed by their employer, where necessary employees will perform any duties that are within their skill and competency regardless of their classification under clause 15—Classifications and Schedule A—Vehicle Industry RS&R—Skill Level Definitions, provided that the duties are safe, reasonably within the scope of the employer’s operations, and the employee is licensed and qualified to perform them.
I.2.2 Clause 16.5—Higher duties will apply to employees engaged on duties carrying a higher rate than their ordinary classification.
I.2.3 An employer must not reduce an employee’s pay if the employee is directed to perform duties in accordance with clause I.2.
I.2.4 An employee given a directive under this clause will revert to their duties prior to the commencement of Schedule I once the directive ceases to have effect in accordance with clause I.1.3, unless otherwise agreed between the employer and employee.
I.2 Temporary reduction of hours of work—full-time and part-time employees
I.2.1 For employers who implemented a temporary reduction in hours of work under this clause I.2 before 30 June 2020, the following provisions apply.
I.2.2 An employer may only implement a temporary reduction in hours of work under this clause if the employee cannot be usefully employed for their normal days or hours as a consequence of business changes attributable to the COVID-19 pandemic or government initiatives to slow the spread of the virus.
I.2.3 Subject to clauses I.2.1, I.2.4, I.2.5 and I.2.7, and despite clause 9—Full-time employees, an employer may direct a full-time employee to work an average of between 22.8 and 38 ordinary hours per week. The employee will be paid on a pro-rata basis. The arrangements for working ordinary hours in clauses 22—Ordinary hours of work and rostering and 28.1(a) (which pertain to ordinary hours of work) will apply on a pro-rata basis.
I.2.4 Subject to clauses I.2.1, I.2.6 and I.2.7, and despite clauses 10.3, 10.4, 10.5 and 28.1(b) (which pertain to part-time employment), an employer may direct a part-time employee to work an average of between 75% and 100% of their agreed hours per week, or an average of between 75% and 100% of their agreed hours per week over the roster cycle.
I.2.5 Subject to clause I.2.5, a full-time employee at Level 1–5 may not have their hours reduced pursuant to clause I.2.2 where the amount payable under the reduced hours falls below $1,115.70 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.6 A full-time Vehicle Industry Tradesperson at Level 1 or 2 may not have their hours reduced pursuant to clause I.2.3 where the amount payable under the reduced hours falls below $1,500.00 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.7 A part-time employee who prior to the commencement of Schedule I had an agreed pattern of hours under clause 10—Part-time employees that would have entitled the employee to earn over $836.78 a fortnight in respect of those hours, may not have their ordinary hours reduced pursuant to clause I.2.3 to a point that would cause them to receive less than $836.78 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.8 Prior to any employer issuing any direction under clauses I.2.3 or I.2.4 an employer must:
(a) consult with the affected employee/s in accordance with clause 36—Consultation about changes to rosters or hours of work and provide as much notice as practicable; and
(b) if the affected employee/s are members of a union, notify the relevant union of its intention to implement these arrangements.
I.2.9 Where the amount paid to an employee under this clause is less than the normal weekly pay an employee received prior to a directed reduction in hours under this clause, the employee can have their weekly pay increased, by agreement with the employer, to the normal weekly pay they received prior to a directed reduction in hours by access to accrued paid annual leave or any other form of accrued paid leave (other than personal/carer’s leave where the employee is not entitled to take this leave).
I.2.10 An employee given a direction under clauses I.2.3 or I.2.4 will continue to accrue annual leave and personal leave, and any other applicable accruals under this award, based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.11 Nothing in Schedule I prevents an employer and an individual employee agreeing in writing (including by electronic means) to reduce the employee’s hours or to move the employee temporarily from full-time to part-time hours of work, with a commensurate reduction in the minimum weekly wage.
I.2.12 If an employee given a direction under clauses I.2.3 or I.2.4 takes a period of paid annual leave or personal leave, the payment for that leave will be based on the full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.13 If an employee who has been given a direction under clauses I.2.3 or I.2.4 is made redundant while working reduced hours, any applicable redundancy payment will be calculated based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.14 An employee given a directive under this clause will revert to their ordinary hours of work prior to the commencement of Schedule I once the directive ceases to have effect in accordance with clause I.1.3.
I.3.1 Subject to clause I.3.6 and despite clauses 29.8, 29.9 and 29.10 (Annual leave), an employer may, subject to considering an employee’s personal circumstances, request an employee to take paid annual leave, provided that the request does not result in the employee retaining a balance of less than 2 weeks annual leave after the leave is taken. Such a request must be made a minimum of 72 hours before the date on which the annual leave is to commence.
I.3.2 An employee must consider and may not unreasonably refuse a request to take annual leave made pursuant to clause I.3.
I.3.3 Clauses I.3.1 and I.3.2 do not prevent an employer and an employee agreeing to the employee taking annual leave at any time.
I.3.4 Employers and individual employees may agree to take up to twice as much annual leave at a proportionately reduced rate for all or part of any agreed or directed period away from work, including any close-down.
I.3.5 The period of annual leave must commence before 30 June 2020 but may end after this date.
I.3.6 An employer can only request that an employee take annual leave pursuant to this clause if the request is made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and to assist the employer to avoid or minimise the loss of employment.
I.4.1 Clause I.5 applies only if the employer has decided to close down for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of the coronavirus.
I.4.2 Subject to clauses I.5.1 and I.5.3 and instead of clause 29.6—Annual close down, an employer may:
(a) require an employee to take paid annual leave as part of a close-down of its operations, or part of its operations, by giving at least one week’s notice, or any shorter period of notice that may be agreed; and
(b) where an employee has not accrued sufficient paid leave to cover part or all of the close-down, the employee is to be allowed paid annual leave for the period for which they have accrued sufficient leave and given unpaid leave for the remainder of the close-down.
I.4.3 Clause I.5.2 does not permit an employer to require an employee to take leave for a period beyond the period of operation of Schedule I.
I.4.4 Where an employee is placed on unpaid leave pursuant to clause I.5.2, the period of unpaid leave will count as service for the purposes of relevant award and NES entitlements.
I.4 Secondary jobs/training
I.4.1 If an employee is directed to
take unpaid leave under clause I.5 or work temporary reduced hours under clause I.2 and the employee makes a request to engage in:
(a) reasonable secondary employment;
(b) training; or
(c) professional development;
the employer must consider and not unreasonably refuse the request.
MA000089 PR720601
Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective
Application to vary the Vehicle Repair, Services and Retail Award 2020
(AM2020/37)
VEHICLE REPAIR, SERVICES AND RETAIL AWARD 2020
[MA000089]
Vehicle repair, services and retail industry | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 30 JUNE 2020 |
Application to vary modern award to achieve the modern awards objective – Vehicle Repair, Services and Retail Award 2020.
A. Further to the decision ([2020] FWCB 3416) issued by the Fair Work Commission on 30 June 2020, the above award is varied as follows:
1. By deleting Schedule I and inserting the following:
Schedule I—Award flexibility during the COVID-19 Pandemic
I.1 Award Flexibility during the Covid-19 Pandemic
I.1.1 The provisions of Schedule I are aimed at preserving the ongoing viability of businesses and preserving jobs during the COVID-19 pandemic and not to set any precedent in relation to award entitlements after its expiry date. The provisions in clause I.2 to I.6 only operate during the operation of the Schedule.
I.1.2 Schedule I operates from 11 May 2020 until 31 July 2020. The period of operation can be extended on application to the Fair Work Commission.
I.1.3 A direction under Schedule I ceases to have effect when it is withdrawn, revoked or replaced by the employer, or on 31 July 2020, whichever is earlier.
I.1.4 Schedule I does not apply to any employee employed by an employer that qualifies for the JobKeeper Scheme if the employee is an ‘eligible employee’ as defined in section 9 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.
I.1.5 Any direction or request given by an employer under Schedule I must be given in writing and does not apply to the employee if the direction is unreasonable in all of the circumstances.
I.1.6 Any dispute regarding the operation of Schedule I may be referred to the Fair Work Commission in accordance with clause 37—Dispute resolution.
I.1.7 Any direction given by an employer under Schedule I is not valid unless the employee is advised in writing that the employer consents to a dispute arising from the direction being settled by the Fair Work Commission through arbitration in accordance with clause 37—Dispute resolution and section 739(4) of the Act.
I.2 Temporary reduction of hours of work—full-time and part-time employees
I.2.1 For employers who implemented a temporary reduction in hours of work under this clause I.2 before 30 June 2020, the following provisions apply.
I.2.2 An employer may only implement a temporary reduction in hours of work under this clause if the employee cannot be usefully employed for their normal days or hours as a consequence of business changes attributable to the COVID-19 pandemic or government initiatives to slow the spread of the virus.
I.2.3 Subject to clauses I.2.1, I.2.4, I.2.5 and I.2.7, and despite clause 9—Full-time employees, an employer may direct a full-time employee to work an average of between 22.8 and 38 ordinary hours per week. The employee will be paid on a pro-rata basis. The arrangements for working ordinary hours in clauses 22—Ordinary hours of work and rostering and 28.1(a) (which pertain to ordinary hours of work) will apply on a pro-rata basis.
I.2.4 Subject to clauses I.2.1, I.2.6 and I.2.7, and despite clauses 10.3, 10.4, 10.5 and 28.1(b) (which pertain to part-time employment), an employer may direct a part-time employee to work an average of between 75% and 100% of their agreed hours per week, or an average of between 75% and 100% of their agreed hours per week over the roster cycle.
I.2.5 Subject to clause I.2.5, a full-time employee at Level 1–5 may not have their hours reduced pursuant to clause I.2.2 where the amount payable under the reduced hours falls below $1,115.70 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.6 A full-time Vehicle Industry Tradesperson at Level 1 or 2 may not have their hours reduced pursuant to clause I.2.3 where the amount payable under the reduced hours falls below $1,500.00 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.7 A part-time employee who prior to the commencement of Schedule I had an agreed pattern of hours under clause 10—Part-time employees that would have entitled the employee to earn over $836.78 a fortnight in respect of those hours, may not have their ordinary hours reduced pursuant to clause I.2.3 to a point that would cause them to receive less than $836.78 a fortnight (not including any tool, meal or leading hand allowances paid under Part 3—Wages and Allowances), as a consequence of the reduction.
I.2.8 Prior to any employer issuing any direction under clauses I.2.3 or I.2.4 an employer must:
(a) consult with the affected employee/s in accordance with clause 36—Consultation about changes to rosters or hours of work and provide as much notice as practicable; and
(b) if the affected employee/s are members of a union, notify the relevant union of its intention to implement these arrangements.
I.2.9 Where the amount paid to an employee under this clause is less than the normal weekly pay an employee received prior to a directed reduction in hours under this clause, the employee can have their weekly pay increased, by agreement with the employer, to the normal weekly pay they received prior to a directed reduction in hours by access to accrued paid annual leave or any other form of accrued paid leave (other than personal/carer’s leave where the employee is not entitled to take this leave).
I.2.10 An employee given a direction under clauses I.2.3 or I.2.4 will continue to accrue annual leave and personal leave, and any other applicable accruals under this award, based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.11 Nothing in Schedule I prevents an employer and an individual employee agreeing in writing (including by electronic means) to reduce the employee’s hours or to move the employee temporarily from full-time to part-time hours of work, with a commensurate reduction in the minimum weekly wage.
I.2.12 If an employee given a direction under clauses I.2.3 or I.2.4 takes a period of paid annual leave or personal leave, the payment for that leave will be based on the full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.13 If an employee who has been given a direction under clauses I.2.3 or I.2.4 is made redundant while working reduced hours, any applicable redundancy payment will be calculated based on each full-time or part-time employee’s ordinary hours of work prior to the commencement of Schedule I.
I.2.14 An employee given a directive under this clause will revert to their ordinary hours of work prior to the commencement of Schedule I once the directive ceases to have effect in accordance with clause I.1.3.
I.3 Annual leave
I.3.1 Subject to clause I.3.6 and despite clauses 29.8, 29.9 and 29.10 (Annual leave), an employer may, subject to considering an employee’s personal circumstances, request an employee to take paid annual leave, provided that the request does not result in the employee retaining a balance of less than 2 weeks annual leave after the leave is taken. Such a request must be made a minimum of 72 hours before the date on which the annual leave is to commence.
I.3.2 An employee must consider and may not unreasonably refuse a request to take annual leave made pursuant to clause I.3.
I.3.3 Clauses I.3.1 and I.3.2 do not prevent an employer and an employee agreeing to the employee taking annual leave at any time.
I.3.4 Employers and individual employees may agree to take up to twice as much annual leave at a proportionately reduced rate for all or part of any agreed or directed period away from work, including any close-down.
I.3.5 The period of annual leave must commence before 31 July 2020 but may end after this date.
I.3.6 An employer can only request that an employee take annual leave pursuant to this clause if the request is made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and to assist the employer to avoid or minimise the loss of employment.
I.4 I.4 Secondary jobs/training
I.4.1 If an employee is directed to work temporary reduced hours under clause I.2 and the employee makes a request to engage in:
(a) reasonable secondary employment;
(b) training; or
(c) professional development;
the employer must consider and not unreasonably refuse the request.
2. By updating the table of contents and cross-references accordingly
B. This determination comes into operation on 1 July 2020. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 1 July 2020.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
2 ehicle Repair, Manufacturing, Services and Retail Award 2010 was varied to become the V ehicle Repair, Services and Retail Award 2020. Vehicle Manufacturing employees are now covered by the Manufacturing and Associated Industries and Occupations Award 2020.
4 FCAI (2020), FCAI releases May 2020 new vehicle sales statistics, Media releases, 3 June.
5 Car Advice (2020), Rental cars hit the brakes during coronavirus crisis, June.
6 Ibid.
7 Australian Financial Review (2020), Australia's $55b car dealers teeter as sales plummet, 20 April.
8 Annexure B to Application, 26 June 2020 at paras [13] and [16].
9 Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35]
10 (2017) 265 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [41]–[44]
11 [2018] FWCFB 3500 at [21]-[24]
12 Edwards v Giudice (1999) 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [56]
13 Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [33]
14 National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [105]-[106]
15 See National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [109]-[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review
16 See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227
17 [2017] FWCFB 1001 at [166]