[2021] FWCFB 3222
FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s.157–Application to vary or revoke a modern award

Restaurant & Catering Industrial
(AM2021/58)

Restaurants

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT CLANCY
COMMISSIONER BISSETT

MELBOURNE, 3 JUNE 2021

Industrial relations reform working groups – letter from Minister – award flexibility – exemption rates – classification structures – Restaurant Industry Award 2020 – application received.

1. Background

[1] On 9 December 2020, the Commission received a letter from the Minister for Industrial Relations in which the Minister expressed the Government’s view that:

‘…in the extraordinary circumstances that have been caused by the COVID pandemic that it would be in Australia’s economic best interest for the Fair Work Commission to use its powers under s.157(3)(a) of the Fair Work Act 2009 (the Act) to undertake a process to ensure several priority modern awards in sectors hardest hit by the pandemic be amended. The process would be envisaged, if you considered it appropriate, to maintain a focus on key changes that could potentially support Australia’s economic recovery. The Government would obviously provide every available assistance to ensure the timely and comprehensive conduct of this process.’ 1

[2] The awards identified by the Minister as priority awards included the Restaurant Industry Award 2020 (the Restaurant Award).

[3] The Minister’s letter identified the following award flexibility measures that ‘could prove critically important for providing businesses in the most distressed part of the economy with the confidence to increase hiring during the recovery’:

  Potentially simplified pay arrangements in the form of ‘loaded rates’ and/or ‘exemption rates’ designed to reduce the cost of administrative burden and address concerns about perceived risks arising from existing pay rate complexities and complexity risks that may lead to, particularly small business, mistakenly underpaying employees.

  Further streamlining of present classification structures so that they are clearer, easier to understand and simpler to apply. This might involve reducing the number of classifications through a broad-banding exercise with no reductions in pay and minimal increases in pay accompanied by greater variety and higher value work.

[4] On 10 December 2020, the President issued a Statement 2 commencing a process on the Commission’s own motion (the Award flexibility–Hospitality and retail sectors matter). A conference in relation to the Restaurant Award was convened on 17 December 2020. A Statement3 issued on 21 December 2020 noted that the following points were raised at the conference in relation to the Restaurant Award:

  The employer parties expressed interest in the simplification of the classification structure.

  Some parties were attracted to the idea of exemption rates for senior employees.

[5] Parties with an interest in the Restaurant Award were then directed to file any proposals for award variations and any other relevant comments (including any general principles to guide this process) by 4 pm on Wednesday 27 January 2021.

[6] On 27 January 2021, Restaurant and Catering Industrial (RCI) made a submission, summarising its proposal in relation to the Restaurant Award. A further conference was held on 4 February 2021. 4 At this conference, RCI indicated that it had been engaged in discussions with the United Workers’ Union (UWU) and that these discussions had been productive. Further time was requested in order for the parties to continue their discussions.

[7] On 23 April 2021, RCI made an application to vary the Restaurant Award. The application seeks to vary the Restaurant Award by including a new Schedule R in order to assist employers and employees recover from the COVID-19 pandemic. The proposed schedule includes:

  A simplified classification structure

  Exemption rates, and

  A ‘substitute’ allowance in substitution for certain work and expense related allowances.

[8] At a mention on 28 April 2021, the parties requested a private conference facilitated by the Commission to discuss the application. The transcript of the mention is available on the dedicated webpage for this application.

[9] A private conference was held on 14 May 2021.

[10] Following the conference, an amended draft determination was filed on 31 May 2021. RCI also filed a submission in support of the application together with witness statements from the following people:

  Zac Mina, Chief Operating Officer of Gambaro Group

  Lee Green, General Manager of Canning River Cafe and Fresh Convenience Catering

  Mark Holmes, General Manager of Grand Pacific Group

  Sarah Hooper, co-owner of La Vida Restaurant and La Vida Privato

  Jeremy Courmadias, Group General Manager of Pink

  Craig Squire, Director of Ochre Restaurant and Catering

  Andrew Zaniewski, Managing Director of Ramen Danbo Australia Pty Ltd

  Vincenzo Salvatore, Chief Financial Officer of Lucas Group Services Pty Ltd

  Tom Green, Head of Policy, Government & Public Affairs of Restaurant & Catering Australia

  Ben Cummings, General Manager Sydney Restaurant Group

  Sunshine Dyer, owner operator of American Bourbon Bar and Grill

  Tim Johnson, Director of Corbett & Claude Pty Ltd

[11] The amended application seeks to insert a new Schedule into the Restaurant Award covering the same three flexibilities.

[12] The parties sought a further private conference, which took place at noon on 1 June 2021.

2. COVID-19 pandemic and background information

[13] The application arises from the unique set of circumstances pertaining to the COVID-19 pandemic.

[14] Commission staff have prepared the following information notes which have been published on the COVID-19 updates webpage:

  Information note – COVID-19 situation update

  Information note – Government responses to COVID-19 pandemic

[15] As noted above, the restaurant industry has been one of the industries hit hardest by the pandemic. The Commission also published an information note about the Accommodation and food services industry (which includes the restaurant industry) on 10 December 2020. This note includes information about the impact of the COVID-19 pandemic. An updated information note was published on 1 June 2021.

[16] At the commencement of the Award flexibility–Hospitality and retail sectors matter, the Commission published the following information which may also be relevant:

  Classification structure in the Restaurant Award

  Exemption rates (background information)

  Enterprise agreements in the Hospitality Sector

[17] The following information was provided by the Attorney General’s Department to assist the Commission in the Award flexibility–Hospitality and retail sectors matter:

  Arbitral history of exemption provisions

  Exemption provisions in award-based transitional instruments

  Earnings for chefs

[18] As noted in the submission filed by RCI on 31 May 2021, the Commission has previously varied the Restaurant Award inserting various Schedules to assist the industry and employees in it to respond to the Pandemic:

  Schedule I - Award Flexibility During the COVID-19 Pandemic, and

  Schedule X - Additional Measures During the COVID-19 Pandemic.

3. The Application

[19] As noted above, the application seeks to add a new schedule to the Restaurant Award. The proposed schedule has three key elements:

  An exemption rate

  A simplified classification structure, and

  An all-purpose substitute allowance

3.1 The Exemption Rate

[20] The proposed exemption rate (clause R.3) is described by RCI as follows:

‘(a) it only applies to persons otherwise paid at the level 5 or 6 rate in the Award thus limiting its application to senior or specialist roles in the industry;

(b) it operates by agreement with an individual employee;

(c) where such agreement is made it must be reduced to writing;

(d) any such agreement can be unilaterally terminated on four weeks’ notice;

(e) while subject of an agreement the employee must be paid for each hour worked at the rate of 170% of their ordinary hourly rate;

(f) this rate is paid for the first 57 hours worked in a week;

(g) after 57 hours the employee is paid at overtime rates based on the 170% hourly rate;

(h) the employee receives the 170% rate for the purposes of annual leave and personal leave;

(i) an exemption rate agreement results in the following clause of the Award not being applied:

  16.5 and 16.6 (meal break);

  21 (allowances);

  23 (overtime rates) but not clause 23.2; and

  24 (penalty rates).

(j) all other provisions of the Award continue to apply such as hours of work etc; and

(k) the National Employment Standards apply.’

[21] The RCI submission sets out the following arguments in favour of the proposed exemption rate:

‘(a) It removes excessive administration required from employers who already face increasing compliance measures from Pandemic related government directives and restrictions.

(b) Provides for a minimum guaranteed rate of pay for employees which can be utilised to incentivise staff and applicants during the recruitment process.

(c) It is attractive for potential applicants and existing employees because it provides a realistic and tangible cap of 57 hours instead of relying on “reasonable overtime” for an annualised salary arrangement which was ambiguous, uncertain and reconciled in arrears.

(d) Promotes business confidence and encourages employment with assurance of hours and expectations of pay while reducing the administrative burden and compliance costs required from employers and employees.’

[22] While we agree with the RCI submission that it is useful to include the number of hours of overtime that the exemption rate is intended to compensate the employee for, we note that the clause does not provide a ‘cap’ on overtime that can be worked. The proposed exemption rate of 170% includes overtime of up to 19 hours on top of the 38 hours averaged per week by a full-time employee (57 hours in total). It then provides an additional payment for overtime worked above 57 hours and as such clearly contemplates hours being worked above the ‘cap’. In these circumstances, it may be useful to include a note referring to s.62 of the Act to alert the employee to their ability to refuse to work additional hours if they are unreasonable. A note in similar terms to the note at clause 23 of the Restaurant Award might be appropriate:

NOTE: Under the NES (see section 62 of the Act) an employee may refuse to work additional hours if they are unreasonable. Section 62 sets out factors to be taken into account in determining whether the additional hours are reasonable or unreasonable.

3.2 The Simplified Classification Structure

[23] The proposed simplified classification structure (clause R.4) is described by RCI as follows:

‘(a) it applies to a limited number of streams and classifications;

(b) it operates to broad band certain work tasks that currently are classified into separate classifications and streams;

(c) this broad banding seeks to reflect the practical way employees often work especially in cafes and in smaller businesses covered by the Restaurant Award;

(d) no employee can be worse off under the proposal which ensures that an employee either continues to receive their current rate (where there is no practical change) or a higher rate (where the employee is to perform a broader range of tasks); and

(e) for obvious reasons the operation of the classification structure is determined by the employer to ensure simplicity across their establishment workforce.’

[24] The RCI submit that the simplified classification structure will assist employers during the recovery from the pandemic because:

‘(a) It removes the complexity to classify employees by reducing 6 arbitrary and overlapping levels to 3 easy-to-understand tiers.

(b) It consolidates the restaurant/café worker by combining the Kitchen Stream and Food and Beverage Attendant Stream, providing confidence and assurance that employees are being classified correctly even when they are required to help out with broader general duties; which is an increasingly common feature of the industry through the Pandemic and the recovery.

(c) Promotes multi-skilling and training of employees to be able to execute a broader range of tasks that are currently found in other streams.

(d) Provides flexibility for employers and increases productivity levels by employees who are multi-skilled.

(e) It reflects the manner in which many smaller businesses in the industry work in practice.’

[25] In a submission filed on 2 June 2021, RCI clarified some drafting questions that arose during the 1 June 2021 conference. These drafting issues have been taken into account in the attached draft determination.

3.3 The Substitute Allowance

[26] The proposed substitute allowance (clause R.5) is described by RCI as follows:

  it provides for a single all-purpose payment per hour worked in substitution for several work and expense related allowances

  it operates by agreement with an individual employee or to the establishment workforce as a whole on a 75% vote of employees

  where such agreement is made it must be reduced to writing

  any such agreement can be unilaterally terminated on four weeks’ notice with an individual or 50% plus one where the 75% rule was applied

  while subject of an agreement the employee must be paid the substitute allowance for each hour worked

  the substitute allowance is paid for all purposes of the Restaurant Award, and

  this rate is different for different classifications given the modelling used to arrive at it and the higher prevalence of paying the allowances that are substituted at the lower classification levels of the Restaurant Award in the industry.

[27] On 2 June 2021, RCI filed a further submission outlining the rationale for the calculation of the substitute allowance. The document set out:

‘… that some 408,873 hours of rostered work were examined.

This data set was broken down by employment status and classification level.

While potentially counter intuitive at first glance the data set when broken down showed that employees at the lower levels of the classification structure had a higher incidence of receiving the allowances being substituted than employees at the higher classification levels.

This was in part due to the fact that employees on lower classification levels triggered the payment of more allowances than employees on higher classification levels. Also, the prevalence of casual employees as a proportion of the hours examined also impacted the calculation of the rate. As there are far more casual employees on levels 1 & 2, their allowance rate was found to be higher.

This trend reversed when coming to levels 5 and 6 of the classification structure which might have been more expected.

Accordingly, to create an outcome where employees were not worse off the substitute allowance needed to be higher for level 1 descending to level 4 and then ascending for level 5 and 6.’

[28] This rationale is also set out in the witness statement of Mr Tom Green dated 31 May 2021.

[29] In their submission dated 31 May 2021, RCI submit that the substitute allowance will assist employers in the industry during the recovery from the pandemic because:

  It encourages employment with a higher headline rate of pay to attract labour during the recruitment process when the industry is dealing with both demand and supply side challenges during the recovery.

  It reduces the compliance costs and administrative burden borne by employers from calculating each allowance separately for each employee.

  It allows for a more consistent and better estimation about the cost of wages for cashflow purposes rather than ad hoc allowances that may or may not apply in a given week.

  It promotes the compliance process by allowing for a single reference point as a substitute allowance, thereby reducing the costs of compliance for employers who already face increasing compliance measures from Pandemic related government directives and restrictions.

  It increases ease of employment by providing peace of mind and assurance for compliance purposes, allowing employers to focus on other functions in the business.

[30] We note that s 149 of the Fair Work Act 2009 (Cth) provides for the automatic variation of allowances to coincide with a variation in modern award wages:

‘If a modern award includes allowances that the FWC considers are of a kind that should be varied when wage rates in the award are varied, the award must include terms providing for the automatic variation of those allowances when wage rates in the award are varied.’

[31] In the RCI submission dated 2 June 2021, they note that the substitute allowance should be ‘adjusted to reflect the change in minimum award rates set down by the Commission for the 2021/22 financial year’. A term providing for the adjustment of the substitute allowance has been included in the draft determination attached to this statement.

3.4 Safeguards

[32] The proposed schedule provides a number of safeguards that apply to each of the clauses. These are:

  The proposed schedule is expressed to operate for a limited period (clause R.1).

  The exemption rate can only be accessed by agreement between an employer and an individual employee. Any agreement must be recorded in writing.

  The substitute allowance can only be accessed by agreement between an individual employee and an employer; or by agreement with 75% of affected employees. These agreements must also be recorded in writing.

  An agreement can be terminated by giving 4 weeks’ notice in writing.

  An employer must consult with affected employees and their representatives (if any), prior to initiating any of the provisions in the proposed schedule.

  Disputes about the operation of the Schedule can be dealt with by the Commission by arbitration. In arbitrating a dispute the Commission may:

  terminate an agreement made under Schedule R if it determines that it was not entered into genuinely

  terminate an agreement made under Schedule R if it determines that the employer failed to consult as required

  require an employer to pay an employee the difference between what they were paid under this Schedule and what they would otherwise have received under this award if the FWC determines that any agreement entered into was unfair for an employee, and

  terminate an agreement for an employee if the FWC determines that any agreement entered into was unfair for that employee.

[33] The submission filed by RCI notes that throughout this matter it has engaged with the UWU, participated in conferences before the Commission and participated in a private conference between the RCI and the UWU convened by the Commission. They note that:

‘The dialogue with the UWU assisted by the FWC has been constructive and engaging. The outcome of this dialogue has been an on-going process to reduce differences between the parties and to try and arrive at a position that balances outcomes for employers with safeguards and benefits for employees within the context of the recovery from the Pandemic.’

[34] The amended application asked the Commission re-convene the private conference which commenced on 14 May 2021. A further private conference was convened on 1 June 2021.

[35] During the course of the conference the UWU expressed a degree of caution about the proposed variations at the conference on 1 June 2021 but acknowledged that it is ultimately a matter for the Commission to determine whether the proposed variations meet the modern awards objective. RCI and the UWU indicated that they have agreed to jointly monitor the use of the Schedule during the period of its operation. Both parties indicated that they would be assisted by the expression of a provisional view by the Commission in respect of the application filed.

[36] This Statement and our expression of a provisional view has been prepared in response to the parties’ request.

[37] During the award modernisation process the Australian Industrial Relations Commission outlined some of the arbitral history of exemption rates clauses 5. One of the cases cited by the AIRC, the Clerks (Breweries) Consolidated Award case, provided an outline of what such a clause should include:

‘Any notional bargain which the parties seek to include in the Award should have the following elements:

  specify the rate of pay (ie either a flat amount or a percentage above the minimum rates prescribed in the Award);

  identify a limited number of award clauses which do not apply to employees in receipt of the specified rate;

  provide adequate protection for employees including an entitlement to a specified minimum number of days off per work cycle;

  ensure that appropriate records are kept;

  provide an overall obligation that an employee will receive no less under the annualised salary than they would have been entitled to if all award obligations had been met; and

  provide a review mechanism whereby any employee may lodge a grievance with the Commission.’ 6

[38] The variation proposed by RCI contains each of these elements and is consistent with previous arbitral practice in which exemption rates were confined to the higher classification levels in an award. We note that the proposed clause does not expressly provide for a specified minimum number of days off per work cycle, however, the ordinary hours of work and rostering provisions (clause 15) of the Restaurant Award continue to apply to the employee. Clause 15.1(f) provides that an employee must have a minimum of 8 full days off work in a 4 week period.

[39] It seems to us that the measures encompassed in the proposed variation strike an appropriate balance between the provision of additional flexibility and treating affected employees fairly.

[40] Having regard to the material filed and the safeguards included in the proposed schedule, it is our provisional view that the Restaurant Award should be varied in the terms set out in the draft determination at Attachment A to this Statement, subject to the inclusion of the note discussed at [22] above.

[41] We note that the UWU has expressed some caution in relation to the application. The variations are somewhat novel and a degree of caution is warranted. It is our provisional view that the new Schedule R should operate for an initial period of 12 months. The Schedule will then be subject to review prior to expiry of the 12 month period of operation.

4. Next steps

[42] Submissions and any evidence in response to the provisional views should be filed by 4pm on Monday 28 June 2021. Submissions in reply are to be filed by 4pm, Friday 2 July 2021.

[43] Absent a specific request for an oral hearing the matter will be determined on the papers.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

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Attachment A

MA000119  PRXXXXXX

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DETERMINATION

Fair Work Act 2009
s.157—Application to vary a modern award to achieve the modern awards objective

Variation on the Commission’s Own Motion, Restaurant & Catering Industrial
(AM2020/103, AM2021/58)

RESTAURANT INDUSTRY AWARD 2020
[MA000119]

Broadcasting and recorded entertainment industry

JUSTICE ROSS, PRESIDENT

PLACE, MONTH 2021

Restaurant Industry Award 2020 – Renaming of certain classification titles and COVID-19 Pandemic Recovery.

A. Further to the decision [[2021] FWC XXXX] issued by the Fair Work Commission on DD Month 2021, the above award is varied as follows:

1. By inserting Schedule AA as follows:

Schedule AAClassification Structure and Definitions

Note: To avoid any doubt, any employee at the introductory level, their duties as stipulated under the current award in Schedule A – Classification Structure and Definition will remain unchanged.

AA.1 Restaurant/Café Worker Grade 1

AA.1.1 Means an employee who is engaged in any of the following:

(a) picking up glasses; or

(b) providing general assistance to food and beverage attendants of a higher classification not including service to customers; or

(c) removing food plates; or

(d) setting or wiping down tables; or

(e) cleaning and tidying associated areas; or

(f) receiving money; or

(g) cooking breakfasts and snacks, baking, pastry cooking or butchering; or

(h) general cleaning duties within a kitchen or food preparation area and scullery, including cleaning cooking and general utensils used in a kitchen and restaurant; or

(i) assisting employees who are cooking; or

(j) assembling and preparing ingredients for cooking; or

(k) general pantry duties.

AA.1.2 In addition to the duties set out in AA.1.1, means an employee who has not achieved the appropriate level of training and who is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for food or beverages, including cleaning tables; or

(d) receiving money; or

(e) attending a snack bar; or

(f) performing delivery duties; or

(g) taking reservations and greeting and seating guests.

AA.1.3 In addition to the duties set out in AA.1.1 and AA.1.2, means an employee who has the appropriate level of training, and who is engaged in specialised non- cooking duties in a kitchen or food preparation area.

AA.2 Restaurant/Café Worker Grade 2

AA.2.1 Means an employee who has the appropriate level of training and is engaged in any of the following:

(a) supplying, dispensing or mixing liquor; or

(b) assisting in the cellar; or

(c) undertaking general waiting duties for both food and liquor, including cleaning tables; or

(d) receiving money; or

(e) assisting in the training and supervision of food and beverage attendants of a lower classification; or

(f) delivery duties; or

(g) taking reservations and greeting and seating guests; or

(h) cooking duties such as baking, pastry cooking or butchering.

AA.2.2 In addition to the duties set out in AA.2.1, means an employee who has the appropriate level of training, which may include a supervisory course, and who has responsibility for the supervision, training and co-ordination of kitchen attendants of a lower classification.

AA.3 Restaurant/Café Worker Grade 3

AA.3.1 Means an employee who has the appropriate level of training, which can include a supervisory course, who:

(a) carries out specialised skilled duties in a fine dining room or a restaurant; or

(b) has responsibility for the supervision, training and co-ordination of food and beverage staff or for stock control for one or more bars.

Notation: To avoid any doubt an employee classified in one of the classifications set out in this Schedule shall perform all the duties of the classification as required by the employer.

AA.4 Chef stream

AA.4.1 Chef grade 1 (tradesperson) means a commi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training, and who is engaged in cooking, baking, pastry cooking or butchering duties.

AA.4.2 Chef grade 2 (tradesperson) means a demi chef or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training and who is engaged to perform general or specialised cooking, butchering, baking or pastry cooking duties or supervises and trains other cooks and kitchen employees.

AA.4.3 Chef grade 3 (tradesperson) means a chef de partie or equivalent who has completed an apprenticeship or passed the appropriate trade test or who has the appropriate level of training in cooking, butchering or pastry cooking and who performs any of the following:

(a) general and specialised duties, including supervision or training of kitchen employees; or

(b) ordering and stock control; or

(c) supervising other cooks and kitchen employees in a single kitchen establishment.

2. By inserting Schedule R as follows:

Schedule R - Award flexibility for COVID-19 Pandemic Recovery

R.1 The provisions of Schedule R 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. Schedule R operates from XX XXX 2021 until XX XXX 2023. The period of operation can be extended on application to the Fair Work Commission.

R.2 During the operation of Schedule R, the following provisions apply:

R.3 Exemption Rate

R.3.1 An employer and a full time employee (paid at the Level 5 or Level 6 rate of pay) may enter into an agreement to pay the employee no less than 170% of their relevant Level rate of pay each week as set out in clause 18 Minimum Rates of this award (the Exemption Rate).

R.3.2 Where an agreement to pay the Exemption Rate has been made, the following clauses of this award shall not apply:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21 (allowances);

(c) clause 23 (overtime rates) but not clause 23.2; and

(d) clause 24 (penalty rates).

R.3.3 Where an agreement has been made to pay an employee the Exemption Rate the employee must be paid the Exemption Rate for each hour worked up to and including 57 hours in a week and for hours worked in excess of 57 in a week the employee must be paid:

(a) 150% of the Exemption Rate for the first two hours in excess of 57 in the week; and then

(b) 200% of the Exemption Rate thereafter in the week.

R.3.4 The Exemption Rate shall be the rate for the purposes of calculating:

(a) personal leave; and

(b) annual leave.

R.3.5 Clause R3 does not apply to employees classified under the administrative and general stream (Schedule A.4).

R.4 Classification Structure and Definitions

R.4.1 Subject to clause R.4.2 an employer may elect to classify all relevant employees in accordance with the classifications set out in Schedule AA in substitution for classifying the employee in accordance with Schedule A.

R.4.2 An employee who is classified in accordance with Schedule AA shall be paid the minimum rate for the relevant classification in Schedule AA as set out in the table below in substitution for the minimum rates set out in clause 18–Minimum Rates of the award that would otherwise apply:

R.5 Substitute Allowance

Subject to this clause:

R.5.1 an employer and an employee may enter into an agreement to pay the employee a substitute allowance below (the Substitute Allowance):

R.5.2 an employer and at least 75% of the employees in the workplace concerned may agree to pay all of the employees in the workplace a Substitute Allowance below:

R.5.3 Where an agreement to pay the Substitute Allowance has been made in accordance with clause R.5, the following clauses of this award shall not apply:

(a) clauses 16.5 and 16.6 (meal break);

(b) clause 21.2 (meal allowance);

(c) clause 21.3 (split shift allowance);

(d) clause 21.4 (tool and equipment allowance);

(e) clause 21.5 (special clothing allowance); and

(f) clause 21.6 (distance work allowance).

R.5.4 The Substitute Allowance shall be paid for all purposes of this award.

R.5.5 The Substitute Allowance is adjusted in accordance with increases to wages.

R.6 Manner of Application

R.6.1 To avoid any doubt, clauses R.3 to R.5 inclusive operate on the following basis:

(a) Exemption Rates (R.3): individual employer and full time employee agreement;

(b) Classification Structure and Definitions (R.4): employer election to apply to all relevant employees in the workplace; and

(c) All-Purpose Substitute Allowance (R.5): individual employer and employee agreement or all employees in the workplace collectively, if at least 75% of the employees agree.

R.7. Agreement to be recorded in writing

R.7.1 Individual agreements

Where an employer and employee enter into an agreement under clause Schedule R.3 or R.5 it must be:

(a) in writing;

(b) signed by the employer and the employee; and

(c) state the date the agreement commences operation.

R.7.2 Agreements with at least 75 per cent of employees

Where an employer and 75% of their employees enter into an agreement under clause R.5 (b) it must be:

(a) in writing;

(b) signed by at least one of the employees; and

(c) state the date the agreement commences operation.

R.8 Termination of Agreement

R.8.1 Where an employer and individual employee enter into an agreement under clause R.3, either party may terminate that agreement by giving the other party no less than four weeks’ notice in writing.

R.8.2 Where an employer and individual employee enter into an agreement under clause R.5.1 either party may terminate that agreement by giving the other party no less than four weeks’ notice in writing.

R.8.3 Agreements made under clause R.5.2 can be terminated by 50% plus one of the employees being covered by the agreement serving four weeks’ notice on the employer in writing.

R.9 Consultation

R.9.1 Prior to initiating any of the provisions in clauses R.3 to R.5, the employer must consult with all employees affected by the proposed change and their representatives (if any).

R.9.2 For the purpose of the consultation, the employer must:

(a) Provide to the employees and representatives information about the proposed change (for example, information about the nature of the change and when it is to begin); and

(b) Invite the employees to give their views about the impact of the proposed change on them (including any impact on their family or caring responsibilities) and also their representative (if any) to give their views about that impact.

R.9.3 The employer must consider any views given under clause R.9.2(b).

R.10 Consent Arbitration

R.10.1 An employer who enters into an agreement under the provisions of Schedule R provides consent to a dispute being settled by the Fair Work Commission through arbitration in accordance with clause 34—Dispute resolution and section 739(4) of the Act.

R.10.2 In arbitrating a dispute the Fair Work Commission may:

(a) terminate an agreement made under Schedule R if it determines that it was not entered into genuinely;

(b) terminate an agreement made under Schedule R if it determines that the employer failed to consult as required by clause R.10;

(c) require an employer to pay an employee the difference between what they were paid under this Schedule and what they would otherwise have received under this award if the Fair Work Commission determines that any agreement entered into under this Schedule was unfair for an employee; and

(d) terminate an agreement made under Schedule R for an employee if the Fair Work Commission determines that any agreement entered into under this Schedule was unfair for that employee.

3. By updating the table of contents accordingly.

B. This determination comes into operation on Day Month 2021. 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 Day Month 2021.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

 1   Letter from Minister for Industrial Relations, 9 December 2020.

 2   [2020] FWC 6636

 3   [2020] FWC 6931

 4   Transcript, 4 February 2021

 5   See Clerks – Private Sector Award 2010 [2009] AIRCFB 922 at [15]-[19].

 6   Clerks (Breweries) Consolidated Award Print S6443, 26 May 2000 at [45].