1 Fair Work Act 2009 s.158—Application to vary or revoke a modern award Application by Australian Business Industrial and NSW Business Chamber Ltd re Clerks—Private Sector Award 2020 (AM2023/31) Application by Australian Business Industrial and NSW Business Chamber Ltd re Banking, Finance and Insurance Award 2020 (AM2024/31) Application by The Australian Industry Group re Clerks—Private Sector Award 2020 (AM2024/32) JUSTICE HATCHER, PRESIDENT SYDNEY, 22 JUNE 2026 Applications to vary the Clerks—Private Sector Award 2020 and the Banking, Finance and Insurance Award 2020 – exemption rates – whether to hear preliminary legal question arising from Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025 separately – privilege claim in respect of documents produced by Australian Business Industrial, Professor Paul Gollan and Professor Martin O’Brien – reallocation to a Full Bench for hearing and determination. [1] On 22 December 2023, Australian Business Industrial and NSW Business Chamber Ltd (together, ABI) applied under s 158 of the Fair Work Act 2009 (Cth) (FW Act) to vary the Clerks—Private Sector Award 2020 [MA000002] (Clerks Award) to insert a new provision concerning an ‘exemption rate’. ABI’s proposed new clause would, in broad terms, exempt employers who, by agreement, pay employees classified at Levels 3 through 6 a rate of pay which is a specified percentage (155 per cent) above the applicable minimum award rate from compliance with a range of provision in the Clerks Award, including in relation to penalty rates and overtime. On 30 July 2024, ABI filed a similar application in relation to the Banking, Finance and Insurance Award 2020 [MA000019] (BFI Award). [2] On 31 July 2024, the Australian Industry Group (Ai Group) also applied under s 158 of the FW Act to insert a clause relating to exemption rates in the Clerks Award. The Ai Group’s proposed clause differs from ABI’s in a number of respects, including in that it does not specify the rate above which employers would be exempted from compliance with the clauses relating to penalty rates, etc. [2026] FWC 2305 DECISION [2026] FWC 2305 2 [3] To date, the parties other than the applicants that have actively participated in the proceedings are the Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Finance Sector Union of Australia (FSU). [4] In accordance with directions earlier made, ABI and the Ai Group filed the evidence they relied upon and submissions in support of their respective applications by mid-February 2025. On 19 February 2025, I made directions requiring the ASU and the FSU to file their evidence and submissions by 15 August 2025, and for ABI and the Ai Group to file their material in reply by 29 August 2025. [5] Two interlocutory issues have arisen. The first concerns a claim of legal professional privilege by ABI over certain documents produced in response to orders for production issued upon application by the FSU on 4 July 2025. On 22 July 2025, I directed that ABI file written submissions in support of its claim for privilege by 25 July 2025 and that the FSU file submissions in response by 29 July 2025, with the issue then to be determined on the papers. [6] The second issue concerns the effect of s 135A of the FW Act upon the applications. Section 135A was added to the FW Act by the Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025 (Amendment Act) and commenced on 30 August 2025. Under s 127(a) of Schedule 1 to the FW Act, s 135A applies to ‘an application for the making, variation or revocation of a modern award made before that commencement’, and thus applies to the applications made by ABI and the Ai Group. Section 135A provides: 135A Special provisions relating to penalty rates and overtime rates (1) In exercising its powers under this Part to make, vary or revoke modern awards, the FWC must ensure that: (a) the rate of a penalty rate or an overtime rate that employees are entitled to receive is not reduced; and (b) modern awards do not include terms that substitute employees’ entitlements to receive penalty rates or overtime rates where those terms would have the effect of reducing the additional remuneration referred to in paragraph 134(1)(da) that any employee would otherwise receive. (2) Subsection (1) does not limit the operation of section 144 (flexibility terms) or section 160 (which deals with variation to remove ambiguities or correct errors). (3) Nothing in subsection (1) requires the FWC to exercise its powers under this Part to make, vary or revoke modern awards. [7] Anticipating the enactment of the Amendment Act, on 7 August 2025 the FSU and the ASU raised the following issue in an email to my chambers: The Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 [(Bill)] has passed the lower house and is currently before the Senate. The ASU and FSU expect the Bill will pass Parliament swiftly and will have a direct impact on the proposals that are being advanced by the applicants in matters AM2023/31; AM2024/31; AM2024/32. The ASU and FSU are of the view that the proposals being advanced would not be permitted if the Bill passes Parliament. [8] In their email, the FSU and the ASU requested that the 19 February 2025 directions be vacated and the matters listed for a report-back in the second half of September 2025. The [2026] FWC 2305 3 parties subsequently agreed that the directions be set aside, the determination of the privilege claim be deferred and the matter listed for a report-back hearing on 14 October 2025. [9] At the hearing on 14 October 2025 (by which time s 135A had taken effect), the ASU and the FSU submitted that s 135A affected whether the applications could proceed at all or in their current form (with the ASU submitting that s 135A was ‘fatal’ to the applications), and proposed that the question of the impact of this provision be dealt with preliminarily as a separate question. This was opposed by ABI and the Ai Group, which submitted that it would be necessary to hear evidence about the impact on individual employees affected by the applications. [10] At the end of the hearing, I indicated that it would be necessary to give some consideration to the issue to determine what directions should issue and, in doing so, I would consider the timing of the Full Bench proceedings in matters AM2024/9, AM2024/26, AM2024/33 and AM2024/40. In those matters, which concerned a range of proposals for variations to the General Retail Industry Award 2020, a similar issue had arisen. [11] No decision has yet been issued in the Retail Award matters. [12] Having regard to these matters, I do not consider that the ASU’s and FSU’s proposal for a preliminary hearing on the impact of s 135A upon the applications should be adopted. This is for two reasons. The first is that I do not consider that it could be demonstrated that s 135A is ‘fatal’ to the applications without first hearing the parties’ respective evidentiary cases. Taking ABI’s application with respect to the Clerks Award as an example, which seeks to incorporate a range of penalty rates into enhanced base rates of pay, it would require evidence of the effect upon employees’ earnings in a range of scenarios to determine whether there had been an effective reduction in penalty rates or overtime rates that would offend s 135A(1)(a) or a reduction in the additional remuneration referred to in s 134(1)(da) contrary to s 135A(1)(b). Second, under s 599, the Commission is not required to make a decision in relation to the applications in the terms applied for. Therefore, even if it were demonstrated that the variations sought in the applications would offend s 135A, it would be open to the Commission to make variations in different terms which might not offend s 135A. Using the ABI application concerning the Clerks Award as an example again, if the proposed 155 per cent uplift in the base rate is shown to be insufficient to avoid a contravention of s 135A(1)(b), it may be that a different percentage might avoid such a contravention. [13] Accordingly, I consider that the appropriate course is to refer the applications to a Full Bench and program the matters for hearing. I make the following directions: 1. Matters AM2023/31, AM2024/31 and AM2024/32 are referred to a Full Bench comprising Deputy President Wright and Commissioners Crawford and Sloan. 2. The ASU, the FSU, and any other interested party opposing the applications are to file: (a) any submissions in response to all three applications; and (b) any evidence upon which they seek to rely in response to those applications [2026] FWC 2305 4 by 4:00 pm (AEST) on Friday, 25 September 2026. 3. The applicants are to file: (a) any submissions in reply to the material filed pursuant to item 2 of these directions; (b) and any evidence in reply to that material by 4:00 pm (AEDT) on Friday, 6 November 2026. 4. The matters are set down for hearing before the Full Bench from Monday, 7 to Friday, 11 December 2026 in Sydney, commencing at 10:00 am each day. [14] The claim for legal professional privilege referred to in [5] above will be determined by the Full Bench on the basis of the submissions already filed. PRESIDENT Appearances: T Lawrence for Australian Business Industrial and NSW Business Chamber Ltd. P Willink for The Australian Industry Group. K Thomas for the Australian Municipal, Administrative, Clerical and Services Union. L Sutherland for the Finance Sector Union of Australia. Hearing details: 2025. Sydney by video link using Microsoft Teams (report-back): 14 October. Printed by authority of the Commonwealth Government Printer <PR811257>