[2010] FWAFB 9774 [2010] FWAFB 9774 Download Word Document FAIR WORK AUSTRALIA DECISION Fair Work Act 2009 Division 2B—application of this Act in States that refer matters Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Schedule 3A, items 29 and 30—FWA to consider varying modern awards etc. Award Modernisation (AM2010/52) Australian Hotels Association and others (AM2010/252) Health Services Union (AM2010/253 and AM2010/254) Australian Municipal, Administrative, Clerical and Services Union (AM2010/255) Liquor, Hospitality and Miscellaneous Union (AM2010/256) JUSTICE GIUDICE, PRESIDENT SENIOR DEPUTY PRESIDENT ACTON COMMISSIONER HAMPTON MELBOURNE, 17 DECEMBER 2010 AWARD MODERNISATION – DIVISION 2B STATE AWARDS [1] This decision concerns amendments to the transitional provisions in modern awards made necessary by the termination of Division 2B State awards. Termination will occur by operation of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) on 31 December 2010. 1 The background and context, including the relevant statutory provisions, are set out in a decision issued on 5 November 2010 (the 5 November decision). 2 In the 5 November decision we outlined a number of changes to the model transitional provisions to accommodate the termination of Division 2B State awards on 31 December 2010. Following the decision draft determinations were issued for comment. On 6 December 2010 we made determinations varying a large number of modern awards. However we delayed making determinations in relation to some modern awards in order to provide an opportunity for interested persons and bodies to make further submissions. For that purpose we sat on 13 December 2010 to hear submissions in relation to four matters identified in the notice of listing. [2] The four matters in which a determination is required are: (a) amendments to the transitional provisions in the Hospitality Industry (General) Award 2010 (Hospitality Modern Award) in relation to South Australia; 3 (b) a proposal by Australian Business Industrial (ABI) in relation to the transitional provisions in the Social, Community, Home Care and Disability Services Industry Award 2010 (Social Welfare Modern Award); 4 (c) a proposal by the Australian Municipal, Administrative, Clerical and Services Union (ASU) concerning the transitional pay equity orders applying in the State of Queensland; and (d) applications by a number of unions in Tasmania to vary the terms of four modern awards in relation to public holidays in Tasmania. Hospitality Modern Award - SA [3] Schedule B to the Hospitality Modern Award contains transitional provisions in relation to South Australia. Those provisions are not in the form of the model phasing schedule on which phasing provisions in most modern awards are based. In the 5 November decision we noted, as a number of parties had pointed out, that Schedule B requires specific consideration. [4] Following our decision Commissioner Hampton convened a conference to discuss the form of the variation. Based on the conference and some discussions since a draft determination has been developed. It has the support of the Australian Hotels Association (SA), the Liquor, Hospitality and Miscellaneous Union (LHMU) and the ASU. We approve the agreed draft and a determination will be made varying Schedule B substantially in that form. ABI proposal concerning the Social Welfare Modern Award [5] In the 5 November decision we decided that the terms of Division 2B awards should be kept in operation until 31 January 2011. After that date the phasing schedules in modern awards will operate in relation to employers and employees formerly covered by Division 2B State awards in the same way as they apply to other national system employers. In a submission filed on 29 November 2010, which was resubmitted with only minor variations on 10 December 2010, ABI proposed that the terms of the relevant Division 2B State awards should be kept in operation until 30 June 2011. Under the proposal the terms of the Social Welfare Modern Award, including the phasing schedule, would apply to employers and employees formerly covered by Division 2B State awards in the same way as they apply to other national system employers from 1 July 2011. The reason given by ABI was to the effect that there will or are likely to be changes in minimum wages in the Social Welfare Modern Award operative from 1 July 2011 as a result of the Equal Remuneration Case. 5 It submitted that it would be more sensible for Division 2B employers to maintain Division 2B award conditions until July rather than have to make two lots of changes - one in February and another in July. [6] To some extent the ABI proposal goes over matters covered in earlier proceedings and dealt with in the 5 November decision. The decision includes the following passage: “ [27] ...We acknowledge that in some awards there will be a significant increase in minimum wages on 1 February 2011. It should be borne in mind, however, that modern award minimum wages were increased by $26 in July 2010 but minimum wages in Division 2B State awards were not. There is a benefit in standardising the arrangements to reduce the regulatory burden on employers. Also, to the extent that we can, we should eliminate differences in treatment between employers and employees covered by the modern award in question. This will reduce the possibility of unfair competition between employers in relation to minimum wages and conditions and also be fairer for employees.” [7] We adhere to these conclusions. The differences between the minimum wages in the Social Welfare Modern Award and those in the various Division 2B State awards are not uniform. It is clear, however, that the minimum wage for some classifications in Division 2B State awards is up to $20 less than the corresponding minimum wage in the relevant transitional minimum wage instrument. A difference of that magnitude is substantial. While some Division 2B State awards contain minimum wages higher than those in the corresponding award-based transitional instrument at the higher classification levels, employees at those levels will have the benefit of the take-home pay provisions. [8] We do not think it would be appropriate to depart from the general principles expressed in the 5 November decision. We have decided not to adopt the ABI proposal. The Queensland transitional pay equity order [9] Item 30A of Schedule 3A to the Transitional Act provides that Fair Work Australia is taken to have made a transitional pay equity order at the date of the referral (1 January 2010) which continues the effect of a pay equity order made by a State industrial body. In the 5 November decision we indicated that the transitional provisions applying to Division 2B State award employers and employees should include a reference to item 30A where necessary. This issue arises in particular in the State of Queensland as the result of the decision of Commissioner Fisher on 6 May 2008. 6 That decision was made in relation to the Queensland Community Services and Crisis Assistance Award - State 2008 (the Queensland award) and provided for a series of increases on pay equity grounds. The principles in that decision were later adopted by the Queensland Industrial Relations Commission as the basis for awarding similar increases in other awards. [10] The ASU submitted that including a note in the transitional provisions in the Social Welfare Modern Award is inadequate. It submitted that we should include a Queensland schedule which sets out the minimum wages in the transitional pay equity order applying in that State. The ASU filed a draft schedule which it said gives effect to the proposal. It also drew our attention to the terms of the Queensland award as published by the Industrial Registrar on 1 November 2010. While some wages in the Queensland award differ from those in the ASU draft schedule, the ASU indicated that the differences arise from different methods of converting weekly amounts to annual amounts. The ASU submitted in support of its proposal that it is desirable that employers and employees are aware of their obligations under the transitional pay equity order and the best way to achieve that objective is to publish the minimum wages in a schedule to the Social Welfare Modern Award. While Jobs Australia and the Queensland Government supported the ASU’s approach, ABI opposed it. [11] ABI submitted that the draft schedule is inaccurate, principally because it includes an increase of $20 per week for all employees referable to the Queensland State Wage Case 2010. 7 ABI contends that State Wage Case adjustments are not part of the transitional pay equity order. For that reason, if a schedule is to be included, the minimum wages in the Queensland award should be discounted accordingly. [12] We note that under item 30A a transitional pay equity order is taken to have been made on 1 January 2010. The State Wage Case decision was made later in 2010. If the ABI submission is correct, the minimum wages in the Queensland award would need to be discounted by $20 at least in calculating minimum wages in the transitional pay equity order for the purposes of the proposed schedule. [13] The issue raised by the ABI submission is one of significance. While it would be desirable to have certainty as to the rates in the transitional pay equity order, we do not think that these proceedings are appropriate to resolve the issue. Firstly, there has been very little debate about the issue, which arose relatively late in the proceedings, and the answer is not immediately apparent. Any determination of the issue may require interpretation of item 30A and reference to the terms of Commissioner Fisher’s decision of 6 May 2009, the schedule to that decision and orders subsequently made to implement the decision. Secondly, the Queensland award may not be the only award which gave rise to a transitional pay equity order on 1 January 2010. No submissions were addressed to us concerning the minimum wages in any other orders. The Disability Support Workers Award - State 2003 is particularly relevant where the Social Welfare Modern Award is concerned. We are not satisfied that the position of employees formerly covered by that award has been adequately considered. Thirdly, transitional pay equity orders, as already indicated, arise by operation of the Transitional Act. The situation may be contrasted with one in which Fair Work Australia makes an award and then issues a determination implementing it. In that case there can be no doubt that the determination crystallizes the parties’ legal obligations under the award. By contrast, where a transitional pay equity order is concerned, any ruling given by Fair Work Australia is little more than an expression of opinion because it cannot alter the legal effect of the order. Acknowledging again that debate has been limited, as we see it including a transitional pay equity schedule in the award could not alter the legal obligations of the parties under a relevant transitional pay equity order. [14] For these reasons we have decided not to adopt the ASU proposal. Public holidays in Tasmania [15] The final matter for determination relates to public holidays. On 26 November 2010 the Tasmanian Minister for Workplace Relations filed three applications to vary modern awards on behalf of various unions. The applications sought to include additional public holidays in the modern awards concerned for employees formerly covered by Division 2B State awards. The following table illustrates the new public holiday sought in each award and on whose behalf the application was made. Award Public holiday Union Legal Services Award 2010 8 Easter Tuesday ASU Health Professionals and Support Services Award 2010 9 Easter Tuesday Devonport Cup Day Launceston Cup Day Health Services Union, Tasmania No.1 Branch (HSU (Tas)) Nurses Award 2010 10 Easter Tuesday Devonport Cup Day Launceston Cup Day HSU (Tas) Children’s Services Award 2010 11 Devonport Cup Day Launceston Cup Day LHMU [16] At the hearing on 13 December 2010 submissions were made in support of the applications by Mr Baker on behalf of the Minster, as intervener, and each of the unions adopted his submissions. It was submitted that during the discussions which preceded the Tasmanian Government’s referral of its powers to the Australian Parliament the then Minister for Workplace Relations and Deputy Prime Minister consistently stated that no workers were to be disadvantaged with the introduction of the Fair Work legislation. Equally, the Tasmanian Minister stated that he would ensure that Tasmanian workers transferred to coverage under the Fair Work Act would not be disadvantaged by that move. Mr Baker indicated that a number of employees covered by a small number of State awards will be worse off under the corresponding modern award “as a result of losing their award entitlement to public holidays not generally observed through the Tasmanian Statutory Holidays Act 2000 ”. It was explained that the Launceston Cup, the Devonport Cup and Easter Tuesday are not included in the Statutory Holidays Act 2000 because they are not traditionally observed as public holidays for all industry sectors. It was submitted that because of the terms of the Fair Work Act, Tasmania does not have the legislative capacity to create a public holiday for specific industrial sectors. 12 Finally, it was submitted that the employees concerned will lose these entitlements on 1 January 2011 unless the amendments are made. We note that no one appeared to oppose the applications. [17] Despite the lack of opposition to the applications, we are obliged to consider them in the overall context of award modernisation. The first point to be made is that movement from a Division 2B State award to a modern award will almost always involve a number of changes in conditions, some more beneficial for employees and some less beneficial. It is rarely possible to measure the net effect of the change by pointing to one change in award conditions. In this case no attempt was made to show that, viewed overall, the terms and conditions of employees will be less beneficial under the modern award than under the Division 2B State award. But there is a related and more fundamental point. [18] If granted, the applications will apply only to employees of employers of the class which were subject to the referral on 1 January 2010. Essentially that class is made up of employers which are not constitutional corporations. Employees of all other Tasmanian employers in the private sector would continue to be governed by the modern award conditions and would not receive the additional public holidays. As a general rule it is undesirable to maintain differences between employers and employees formerly covered by Division 2B State award and other national system employers and employees for any longer than necessary. As we indicated in the 5 November decision, to the extent that we can it is desirable that we eliminate differences in treatment between employers and employees covered by the same modern award. [19] The applications are rejected. Conclusion [20] There are no other matters arising from the termination of Division 2B State awards. Subject to the making of the necessary determinations, this decision marks the end of the process under items 29 and 30 of Schedule 3A. PRESIDENT Appearances: B Briggs for Australian Business Industrial. T Evans for the Australian Hotels Association (SA). K Harvey with C Dodds and W Fridell for the Australian Municipal, Administrative, Clerical and Services Union. J. Eddington for the Health Services Union (Tasmania No. 1 Branch). M Pegg for Jobs Australia. N Swancott for the Liquor, Hospitality and Miscellaneous Union. P Tullgren for the Liquor, Hospitality and Miscellaneous Union (Tasmania Branch). P Baker for the Minister for Workplace Relations (Tasmania). Hearing details: 2010. Melbourne. Brisbane (video link). September, 20. Melbourne. Sydney (video link). Adelaide (video link). Hobart (video link). December, 13. 1 Item 21 of Schedule 3A to the Transitional Act. 2 [2010] FWAFB 8558 . 3 MA000009. 4 MA000100. 5 C2010/3131. 6 Queensland Industrial Gazette 15 May 2009, Vol.191, No. 2, pp. 19 - 59. 7 10 August 2010. 8 MA000116. 9 MA000027. 10 MA000034. 11 MA000120. 12 Section 27(2)(j) of the Fair Work Act was relied on. Printed by authority of the Commonwealth Government Printer <Price code C, PR505204>