Welcome to the Fair Work Commission’s Quarterly practitioner update.
This newsletter is designed to help workplace relations practitioners stay up to date with key decisions of the Commission, and to provide information about new or updated Commission forms, processes, resources and events.
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This section provides summaries of a number of key Commission decisions made under the Fair Work Act 2009 (Cth) (the Fair Work Act). In this edition of the Quarterly practitioner update, we have featured 16 Commission decisions issued between 1 April 2018 and 30 June 2018.
Please note that summaries of decisions contained in this publication are not a substitute for the published reasons for decision.
The Fair Work Act requires the Commission’s Expert Panel (the Panel) to conduct and complete a review of the national minimum wage (NMW) and minimum wages in modern awards in each financial year. The decision affects an estimated 2.3 million employees who have their pay set by an award and a significant number of employees paid at junior or apprentice/trainee rates based on the NMW rate.
In setting the NMW rate the Panel is required to take into account various economic considerations, such as ‘the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth’.
The Panel found that ‘economic indicators now point more unequivocally to a healthy national economy and labour market’. The labour market had improved significantly with strong employment growth and the economy continues to grow and overall business conditions at highest levels since global financial crisis. Inflation and wages growth remained low and the economic forecasts presented in 2018–19 Budget, RBA and International Monetary Fund all pointed to improving economic conditions.
The Panel is also required to take into account employment impacts of the NMW and modern award minimum wages and any proposed increases to these rates. The Panel remained of the view that modest and regular minimum wage increases do not result in disemployment effects or inhibit workforce participation.
The Panel noted that the increase of the NMW over the last decade had not resulted in improvements to actual or relative living standards for many categories of NMW and award-reliant households, due to changes in the tax-transfer system. The Panel considered that the gender pay gap was relevant to its review and that an increase in the NMW and modern award minimum wages would assist in reducing the gender pay gap.
The Panel concluded that the prevailing economic circumstances provided an opportunity to improve the relative living standards of the low paid and to enable them to better meet their needs. The Panel acknowledged that the increases would not lift all NMW and award-reliant employees out of poverty, but to grant an increase as proposed by ACCER and the ACTU was likely to run a substantial risk of adverse employment effects, which would impact on groups already marginalised in the labour market.
The Panel determined it was appropriate to increase the NMW by 3.5 per cent. The NMW will now be $719.20 per week or $18.93 per hour, this is equivalent to an increase of $24.30 per week to weekly rate or 64 cents per hour to hourly rate. The Panel also considered it important to adjust modern award minimum wages by the same percentage. Weekly wages in the NMW order and modern awards will be rounded to the nearest 10 cents. Determinations and orders giving effect to this Decision came into operation on 1 July 2018.
The respondent objected to this unfair dismissal application on the basis that the applicant was not dismissed. The applicant submitted that he was forced to resign, and that he considered that his contract was repudiated when he was transferred to another position which he considered was a significant demotion.
The Commission adopted the reasoning of the Full Bench in Bupa and focussed on whether the applicant was forced to resign because of the conduct or course of conduct engaged in by the respondent, rather than exploring notions of ‘constructive dismissal’. The Commission found that the applicant’s job function was varied consistent with his skills, qualifications and experience. The respondent’s conduct did not give rise to dismissal nor did it force the applicant to resign. The unfair dismissal application was dismissed.
The applicant in this unfair dismissal matter had founded a private company with her husband. She held a position of director of the company and was also the company secretary. The applicant was removed from her position as company secretary by a board resolution due to alleged insufficient performance. The respondent submitted that the applicant was never an employee as there was no written contract or representations of employment, and the applicant had received no employment related benefits.
The Commission considered the employment relationship. There was no written contract of employment, and no evidence or contention as to the existence of an oral contract of employment. The applicant was not paid a salary. The Commission found that the applicant was not an employee and her application was dismissed.
In this matter the respondent to an unfair dismissal application which was dismissed pursuant to s.399A of Fair Work Act applied for costs against the applicant under s.400A and s.611.
There is a ‘general rule’ that parties should bear their own costs of proceedings before the Commission, however there are exceptions to the ‘general rule’. The Commission considered whether the application at first instance was instituted without reasonable cause [Kanan], and found the application had no reasonable prospects of success [Spencer v Commonwealth of Australia]. The Commission found that there had been numerous unreasonable acts or omissions, including the failure of the applicant to attend proceedings or to comply with directions.
The Commission held that this application was ‘one of the rare and exceptional examples of cases contemplated by s.400A in which there should be a departure from the 'general rule' that parties to proceedings under the Fair Work Act should pay their own costs. The costs application was granted.
In relation to this unfair dismissal matter the applicant named one entity as her employer. She later applied to have a second entity joined to the proceeding as a respondent. The Commission had to determine the correct identity of the employer. There was no express contract between the applicant and second respondent and there had been no transfer of business between the first respondent and the second respondent.
The Commission considered whether a contract should be implied and found no proper basis to infer that a new contract existed with the second respondent. Based upon the limited material before the Commission the correct identity of the employer was found to be the first respondent.
The Commission then considered whether there was a resignation or a dismissal at the initiative of the employer. The applicant had provided the employer with five weeks’ notice, the employer then intervened to terminate the applicant’s employment immediately. The Commission found that the intervening event constituted a dismissal at the initiative of the employer. The Commission found that the dismissal was harsh, unjust and unreasonable and ordered compensation of $7,848.
The respondent to this application for unfair dismissal objected on the grounds that the application was lodged out of time, and argued that the applicant’s employment ended prior to her commencing a period of annual leave. The applicant argued that her annual leave had been approved and that she was not advised that her position would not be available after her return from annual leave.
The Commission took into account communication between the applicant and the respondent, as well as payslips which showed that the applicant had received annual leave payments. The Commission accepted the applicant’s version of events and found that the application was lodged within time. The respondent’s jurisdictional objection was dismissed.
The applicant in this unfair dismissal application was dismissed from the childcare centre she worked at for ‘gross misconduct’. The respondent claimed it had CCTV footage which showed the applicant manhandling children.
Despite the presence of the Team Leader during the alleged misconduct, the respondent did not call upon her to provide evidence. The respondent also took no steps to investigate the conduct before dismissing the applicant. The Commission found that the conduct, though unprofessional, did not amount to serious misconduct. The Commission found that there was no valid reason for dismissal as the conduct warranted a warning and further training, not dismissal. The Commission also considered factors such as the respondent’s failure to provide the applicant with notification of her dismissal, or the opportunity to respond in finding the dismissal harsh, unjust and unreasonable.
In this unfair dismissal matter the respondent was a labour hire business. The applicant was assigned to work as a casual employee at the Department of Justice (DOJ). The DOJ expressed concerns to the respondent about the applicant’s performance. The respondent then advised the applicant that her assignment had ceased without providing reasons. The respondent submitted that while the assignment with the DOJ had ceased, the respondent would continue looking at other opportunities for her.
The respondent’s primary case was that the ‘temporary employment agreement’ that the applicant was employed under was not terminated by the respondent. While the assignment at the DOJ had ceased, it was the applicant who walked away from the arrangement with the respondent.
The Commission considered Kool v Adecco, ‘the contractual relationship between a labour hire company and a host employer cannot be used to defeat the rights of a dismissed employee seeking a remedy for unfair dismissal’. The Commission found that the applicant had a reasonable expectation of continuing employment and worked on a regular and systematic basis. The applicant was not given an opportunity to respond to the respondent’s performance concerns. The Commission found that the dismissal was harsh, unjust and unreasonable and ordered compensation of $15,000.
The Commission received five applications for the approval of five enterprise agreements:
All of the agreements provide for ‘loaded rates’, these are higher rates of pay which are meant to incorporate, in part or in whole, penalty rates and other financial benefits which are covered by separate provisions in the appropriate modern awards. The five applications were referred to the Full Bench for consideration as to how the better off overall test (BOOT) can be properly applied to agreements which include loaded rates. This issue is particularly important to settle since an earlier Full Bench decision in Hart, where a decision to approve an agreement applying to a major Australian retailer and its employees was dismissed on appeal.
There are two well-established propositions which concern the application of the BOOT. The first is that the BOOT requires that the Commission finds that each award covered employee, and each prospective employee, would be better off under the agreement than under the relevant modern award. The definition of ‘each’ is ‘every, of two or more considered individually or one by one’, so as a result every award covered employee or prospective employee must be better off overall. If any employee is not better off overall, the relevant enterprise agreement does not pass the BOOT. In an agreement containing loaded rates in whole or partial substitution for award penalty rates, it is not sufficient that the majority of employees, even a very large majority, are better off overall if there are any employees at all who would not be better off overall. Section 193(7) of the Fair Work Act permits the Commission to assume that if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that all of the employees in that class would be better off overall in the absence of evidence to the contrary. However s.193(7) will only be of utility if the enterprise agreement affects the members of the class of employees in the same way such that there is likely to be a common BOOT outcome.
The second is that the BOOT requires an overall assessment to be made. This means the Commission must identify the terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement. Where the terms required to be compared bear directly upon the remuneration of employees, the assessment is essentially a mathematical one. However the position becomes more complex when an agreement contains provisions superior to, or not contained in the reference award Entitlements to non-monetary benefits, benefits which are accessible at the employee’s choice, or monetary benefits which are contingent upon specified events occurring. While it is necessary for the Commission to take such entitlements into account in the BOOT assessment, ascertaining the value they are to be assigned may be a difficult task. It is unlikely that a non-monetary, optional or contingent entitlement under the agreement will sufficiently compensate for the detriment for all affected employees.
The following principles apply to the application of the BOOT to a loaded rates agreement:
Having regard to the above principles the Decision gives examples of the type of loaded rate structures which are capable, on proper analysis, of passing the BOOT.
The Full Bench decided that the Allied Agreement, the JWT Agreement and the PSA Agreement each failed the BOOT with respect to casual employees who were not assigned to a specified work roster pattern. Neither Allied, JWT nor PSA proposed any undertakings to rectify this issue, which were capable of acceptance under s.190(3). As a result the applications for approval of the Allied Agreement, the JWT Agreement and the PSA Agreement must be dismissed.
In relation to the Aldi Prestons Agreement and the Aldi Stapylton Agreement, casual rates were used as a comparison for part-time employees, due to a lack of guaranteed and identifiable hours of work for part-time employees. The Full Bench considered that the ‘make good’ provisions in the agreements were not sufficient, and that leave provisions must be paid consistent with the National Employment Standards, not based on ‘notional shift hours’. The Full Bench issued further directions, and decided that the applications for approval of the Aldi Agreements would be considered by a single Member of the Commission instead of the Full Bench.
At first instance the Commission approved the CPB Contractors (Victoria) Civil Framework Agreement 2017, made by CPB Contractors P/L and the Australian Workers’ Union. The CFMMEU opposed the approval of the Agreement. Whilst it was not a bargaining representative, the CFMMEU was permitted to make submissions and appear at the appeal hearing. The Full Bench found that the CFMMEU had an interest in the decision beyond that of an ordinary member of the public and was consequently a person aggrieved by the decision. The question on appeal was whether the enterprise covered by the agreement was a ‘genuine new enterprise’.
The Full Bench found that the evidence supported that the enterprise covered by the agreement existed at the time that the agreement was made, therefore it was not a genuine new enterprise. The jurisdictional fact in s.172(2)(b)(i) of the Fair Work Act was not made out. The appeal was upheld and the decision at first instance was quashed. The application to approve the agreement was dismissed.
This matter relates to an appeal against the approval of the Project Agreement 2017 by the Commission. The appellants contested that the Commission erred in determining compliance under ss.180, 186, 188 of the Fair Work Act and subsequently erred in the approval of the agreement. The appellants contended that the Commission had erred at first instance in its determination of five issues.
The Full Bench only needed to consider the appellants’ challenge to the first of the five issues, namely that the Commission erred in concluding that s.180(3) had been complied with. The Full Bench found that CBI Constructors did not take reasonable steps to notify the relevant employees of the voting method, nor the time and place at which the vote of the agreement would occur at the start of the access period for the agreement. The Full Bench found that s.180(4) is to be construed on the basis that the access period consists of seven clear calendar days, and that by the application of s.36(1) of the Acts Interpretation Act 1901 (Cth) the access period ends at the end of the calendar day immediately preceding the day on which the voting process for a proposed agreement commences. It was unnecessary to determine the other four grounds of appeal. Permission to appeal was granted and the appeal was upheld. The first instance decision was quashed.
This matter was an appeal against a decision regarding an industrial dispute under the Carter Holt Harvey Wood Products Australia P/L Myrtleford Enterprise Agreement 2013. At first instance the Commission found that employer response action in the form of a ‘lockout’ was not ‘service’ within the meaning of s.22 of the Fair Work Act. The appellants argued that the lockout was an ‘authorised’ absence rather than ‘directed’ and therefore employees were entitled to accrue annual leave.
The Full Bench found that the Commission was correct in its orthodox interpretation of the meaning of ‘service’ and the application of precedent. It found that it was clear from the legislation that annual leave was not accrued during a period of lockout. The appeal was dismissed.
This matter relates to an application to deal with a stand down dispute. The applicant was a laboratory technician working for the respondent. He was stood down following a production impairment which was due to a catastrophic fire. The respondent made arrangements for employees to be relocated to alternate sites and businesses within the business group. The applicant expressed an interest in doing alternate work and accepted temporary secondment as a mutton boner on the same pay rate. The applicant was stood down without pay after declining a revised offer to remain as a mutton boner under the Lobethal Food Process Worker Employee Collective Agreement 2008, which would result in $25,000 reduction in remuneration.
The Commission considered that the applicant’s rejection of the revised offer was not unreasonable, as he had a contractual entitlement to his substantive rate of pay. The Commission also considered that a stand down period beyond two months was excessive. The Commission held that standing down the applicant was unfair as it was of an ongoing and indeterminate nature. The parties were given seven days from the date of the decision to negotiate a remedy, otherwise the Commission was prepared to issue an order for a sum equivalent to redundancy payment, notice, loss of remuneration and outstanding annual leave accrual.
The Australian Mines and Metals Association and Master Builders Australia appealed against the Commission’s decision to amalgamate the CFMEU, MUA and TCFUA.
The Full Bench had to consider whether the statutory prerequisite for the fixing of an amalgamation day set out in s.73(2)(c) of the Fair Work (Registered Organisations) Act 2009 (Cth) had been satisfied. The appellants contended that the Commission erred in its construction of the expression ‘civil proceedings’ in s.73(2)(c) and consequently erred by fixing an amalgamation day. The Full Bench was satisfied that the conclusion reached by the Commission at first instance was correct. That the expression ‘civil proceedings’ in s.73(2)(c) bears its ordinary meaning and includes civil penalty provisions. Permission to appeal was granted and the appeal was dismissed.
An application seeking an order for planned industrial action by certain employees of National Patient Transport P/L (NPT) was made to the Commission. NPT contended that the planned industrial action by United Voice and the ANMF was not protected industrial action because the requirements of s.414(6) of the Fair Work Act had not been satisfied. NPT argued that the notices did not adequately specify the nature of the action to be taken.
The Commission found that some of the notified industrial action could not be protected industrial action. The application was granted in part. An order was made against two notified forms of industrial action, being the wearing of campaign related materials, and the distribution of campaign related materials.
This application for unfair dismissal was lodged on Friday 10 November 2017 by email on the approved form. The application said there were three attachments, however only Annexure A was attached, Annexures B and C were missing. The application was also lodged without payment of the filing fee. The filing fee was paid on Monday 13 November, after the expiration of the 21 day time limit; and Annexures B and C were provided on Thursday 16 November. The respondent argued that the application was invalid as it was incomplete when it was lodged.
The Commission considered what was necessary to make an application complete, and whether an application was invalid if it was not accompanied by the filing fee. The Commission found that there was no requirement that an application must be complete to be valid, and that to require this would be inconsistent with the Objects of Part 3-2 of the Fair Work Act. The Commission noted that whilst the filing fee must accompany an application, this does not require the fee to be paid at the same time as the application. The Commission determined that it was a valid application and was made within the 21 day time frame. The matter was referred for conciliation.
This section provides a summary of a Full Court of the Federal Court of Australia review of a Commission decision.
The Full Court of the Federal Court has dismissed the appeal by One Key Workforce Pty Ltd (One Key) against Flick J’s decision quashing the RECS (QLD) Pty Ltd Enterprise Agreement 2015 approved by the Commission.
The Full Court upheld the primary judge’s findings that the Commission fell into jurisdictional error by failing to regard the contents and terms of the explanation One Key Workforce provided to employees before casting votes. The Full Court commented that without knowing the content of the explanation provided, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure the terms and effect were explained to the employees who voted. The Commission also fell into jurisdictional error by failing to consider, in determining whether employees had genuinely agreed to the Agreement, whether employees were likely to have understood its terms and effect, and not just those that directly affected them.
The Full Court reasoned:
The Full Court found that the necessary state of satisfaction that the Agreement had been genuinely agreed to was not reached and, as such, the basis for the exercise of power conferred on the Commission to approve the agreement was absent.
The Full Bench issued a Statement setting out their concerns regarding the Supported Wage System (SWS) arrangements in the Supported Employment Services Award 2010. The Full Bench expressed a provisional view that the current wage assessment tool does not adequately meet the modern awards objective.
In their statement, the Full Bench reached a provisional conclusion that the award should be varied to incorporate a new classification structure and wage assessment tool to better achieve the modern awards objective. The Full Bench confirmed that they do not propose to grant any of the claims in the various forms sought by the claimant parties, but expressed the view that it is likely to be necessary to vary the award in terms not proposed by any party. The Full Bench went on to state a number of provisional conclusions to give parties an opportunity to consider them and make submissions if necessary.
The Full Bench intends to list the matter for a report back hearing.
The Full Bench handed down a decision to insert the model time off in lieu of overtime (TOIL) term into two remaining awards, the Journalist Published Media Award 2010 and the Broadcasting, Recorded Entertainment and Cinemas Award 2010. The Full Bench issued a draft variation determination for the Broadcasting Award, giving interested parties a final opportunity to comment on the proposed amendments. A final determination was issued for the Journalists Award.
The final Determination [PR607586] varying the Broadcasting Award was then issued on 29 June 2018 and the Determination [PR607581] varying the Journalist Award comes into operation from 1 September 2018.
The benchbooks are designed to provide information to parties to assist in the preparation of material for matters before the Commission. The benchbooks contain plain language summaries of the key principles of industrial relations law and how these have been applied in Commission decisions.
The updated versions incorporate the changes to the high income threshold and compensation cap, and are both currently available as online versions and as PDFs.
The Commission is consolidating its various access to justice programs in operation around the country. A new Workplace Advice Service (WAS) will consolidate the Workplace Advice Clinics, the Pro Bono programs, the Out of Hours pilot, and some new initiatives into one overarching service model.
The WAS will offer free legal advice (approximately one hour) to parties in matters at three key stages:
In addition to the WAS the Commission has recently commenced a pilot program with Justice Connect to provide free legal advice to people who are considering or have lodged a general protections application in the ACT and NSW.
The WAS will commence in Melbourne and Sydney initially, on 30 July 2018, with the existing service providing employees with access to legal advice continuing to operate in Brisbane. Other states will be added to the WAS throughout 2018–19.
The filing fee for dismissal, general protections and anti-bullying applications made under sections 365, 372, 394, 773 and 789FC of the Fair Work Act increased to $71.90 on 1 July 2018.
The high income threshold in unfair dismissal cases increased to $145,400 and the compensation cap to $72,700.
There has been an amendment to Form F3 – Employer's response to unfair dismissal application to incorporate the increase to the high income threshold.
The Commision is building a new case management system – eCase.
eCase will be where you can find all the information about your case/s. You will be able to lodge 83 originating application types using a simple portal and be kept informed about their progress.
Extensive user experience research will help us to better understand what works well for users – both one-time and frequent parties – and to identify where we need to make improvements. One of our key findings was that the needs of frequent users and one-time users are very different. These insights have informed the design of eCase.
eCase will store all information and documentation about your case/s. You can use digitised forms, copy, save and circulate as a draft, view and review your submissions, and track the progress of each case.
For information about workshop and training opportunities, please email firstname.lastname@example.org.
eCase is one of a number of initiatives being undertaken by the Commission to improve the quality and efficiency of our services.
The Fair Work Commission today released reports from two projects examining user experience that provide useful insight and recommendations about the Commission's services. Both reports highlight where processes work well for users and identify opportunities to improve user experience through new or enhanced practices and resources. The reports add to the Commission’s understanding of how users experience the Commission’s processes. The reports are:
These reports add to our understanding of how users experience the Commission's processes and complement and build on other initiatives designed to drive process and operational improvement.
You can subscribe to a range of updates about decisions, award modernisation, the annual wage review, events and engagement and other Commission work and activities on the Commission’s website.
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