| [2020] FWCFB 1630 |
| FAIR WORK COMMISSION |
STATEMENT |
Fair Work Act 2009
s.157—Variation of a modern award to achieve the modern awards objective
Joint application by the Australian Chamber of Commerce and Industry and the Australian Industry Group
(AM2020/10)
Clerical industry | |
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 26 MARCH 2020 |
Joint Application to vary modern award to achieve the modern awards objective – application supported by ACTU and ASU – provisional views.
[1] This statement concerns an application to vary a modern award; namely the Clerks-Private Sector Award 2010 (MA000002) (the Clerks Award) filed jointly by the Australian Chamber of Commerce and Industry (ACCI) and the Australian Industry Group (Ai Group), with the support of the Australian Council of Trade Unions (ACTU) and the Australian Services Union (ASU) on 26 March 2020 (the Joint Application).
[2] At the request of the parties, the hearing of this matter will be expedited. Any party wishing to respond to the Joint Application and the provisional views set out in this statement is to file a submission by 4pm on Friday 27 March 2020. Instructions for the filing these submissions are in ‘Next steps’ below.
[3] The application will be listed for hearing at 9:30am on Saturday 28 March 2020. Further details of the process for this hearing are set out under ‘Next steps’ below.
[4] The application arises from the unique set of circumstances pertaining to the COVID-19 pandemic.
[5] On 24 March 2020, we granted an application to vary the Hospitality Industry (General) Award 2010 (the Hospitality award). Our reasons for that decision were published on 25 March 2020 1 (the Hospitality decision)
[6] In the Hospitality decision we set out the range of Government responses to the COVID-19 pandemic at [16] to [27].
[7] The Joint Application sets out the following impacts of the COVID-19 pandemic on office work:
‘50. Office work is currently materially impacted by CoV.
51. Most offices in CBD’s and major towns are now empty with employees encouraged to work from home as far as practicable.
52. Those still attending work are adopting new work patterns to reduce the level of exposure to colleagues.
53. This includes rostering a limited number of employees into work at any one time and spacing employees out in the physical office environment.’
[8] The application seeks to add a new schedule; Schedule I–Award Flexibility during the COVID-19 Pandemic, to the Clerks Award. It is proposed that the new schedule operate until 30 June 2020. The proposed Schedule I proposes flexibility in the relation to:
• the range of duties employees can be required to perform;
• the minimum engagement for a part-time and casual employees working from home;
• the spread of ordinary hours of work for day workers working from home;
• the temporary reduction of ordinary hours by agreement;
• the taking of annual leave; and
• the notice period for a close-down.
[9] The draft award variation determination proposed in the Joint Application is attached.
[10] The Commission may make a determination varying a modern award if the Commission is satisfied that the determination is necessary to achieve the modern award objective. 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).
[11] 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. 2‘
[12] The Joint Application addresses the modern awards objective in the following way:
‘75. In terms of the matters the Commission has regard to in setting the safety net the following is now relevant:
(a) “relative living standards and the needs of the low paid”; this must now be seen in the context of seeking to maintain employment rather than losing employment even if this means some employees chose to temporarily to maintain employment while accepting reduced employment benefits and take home pay.
(b) “the need to promote social inclusion through increased workforce participation”; this must be seen in the context of seeking to maintain employment rather than losing employment.
(c) “the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; this must been seen in the context of allowing business to survive the Pandemic and the Measures so that they can operate to sustain what employment they can and be in an effective position to recover and maintain and then grow employment once the Pandemic passes.
(d) “the likely impact of any exercise of modern award powers on employment growth, inflation and the sustain ability, performance and competitiveness of the national economy; again this must been seen in the context of allowing business to survive the Pandemic and the Measures so that they can operate to sustain what employment they can and be in an effective position to recover and maintain and then grow employment once the Pandemic passes.’
[13] As we have set out above at [8] above, the Joint Application proposes a range of variations directed at providing targeted flexibility in relation to:
• the range of duties employees can be required to perform;
• the minimum engagement for a part-time and casual employees working from home;
• the spread of ordinary hours of work day workers working from home;
• the temporary reduction of ordinary hours by agreement;
• the taking of annual leave; and
• the notice period for a close-down.
[14] We note that terms about such matters may be included in a modern award pursuant to ss.136(1)(a) and (c), and ss.139(1)(a), (c) and (h) of the Act.
[15] Additional considerations apply to the annual leave flexibilities in proposed clauses X.4 (n), (o) and (p).
[16] Clauses X.4(n), (o), (p) and (q) provide:
Annual leave
(n) Employers and employees may agree to the taking of 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.
(o) Instead of clauses 29.6, 29.7 and 29.8, an employer may direct an employee to take any annual leave that has accrued, by giving at least one week’s notice, or any shorter period of notice that may be agreed. A direction to take annual leave shall not result in an employee having less than two weeks of accrued annual leave remaining.
Close down
(p) Instead of clause 29.5 and subject to subclause (q), an employer may:
(i) require an employee to take annual leave by giving at least one week’s notice as part of a close-down of its operations, or part of its operations, or any shorter period of notice that may be agreed; and
(ii) where an employee who has not accrued sufficient 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 closedown.
(q) Subclause (p) does not permit an employer to require an employee to take leave for a period beyond the period of operation of this schedule.
[17] Subsections 93(3) and (4) of the Act are relevant in this regard and provide as follows:
“Terms about requirements to take paid annual leave
(3) A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.
Terms about taking paid annual leave
(4) A modern award or enterprise agreement may include terms otherwise dealing with the taking of paid annual leave.” (emphasis added)
[18] Section 93 is part of the NES. Modern awards and the NES interact in different ways:
• A modern award may include any terms that the award is expressly permitted to include by a provision of Part 2-2 (which deals with the NES) (ss.55(2) and 136(1)(c)).3
• A modern award may include terms that:
(i) are ancillary or incidental to the operation of an entitlement of an employee under the NES; or
(ii) terms that supplement the NES (s.55(4)).
[19] 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) of the Act.
[20] The issue before us is whether these provisions are ‘reasonable’ within the meaning of s 93(3).
[21] We note that the terms in clause X.4(n), (o) and (p) are of limited duration to address an extraordinary set of circumstances. Further, a direction to take annual leave requires the giving of at least 1 week’s notice and such a direction (but not including a direction in relation to close down) shall not result in an employee having less than 2 weeks accrued annual leave remaining. It is our provisional view that the term proposed is a permitted term and that it is ‘reasonable’ within the meaning of s.93(3). In relation to the latter point we invite the applicants to consider varying proposed clause (o) such that the employer is to consider the personal circumstances of an employee before issuing a direction for that employee to take accrued annual leave.
[22] In relation to clause (n) we note that, the statutory notes to s.55(4) provides a relevant example. Note 1 states:
“Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay.
[23] It is our provisional view that clauses X.4(n), (o) and (p) are ancillary or incidental terms permitted by s.55 (4).
[24] It is our provisional view, taking into account the relevant s.134 considerations, that the variation of the Clerks award as proposed in the Joint Application is necessary to achieve the modern awards objective.
Submissions
[25] Any submission supporting or opposing the Joint Application and the provisional views set out at [21], [23] and [24] must be filed by 4pm on Friday 27 March 2020. Submissions should be:
• Sent to amod@fwc.gov.au and include the matter number (AM2020/10) in the subject line.
• Filed in Word format.
[26] Any party who wishes to attend the hearing in relation to this matter should send an email to Chambers.Ross.j@fwc.gov.au specifying a name and contact telephone number by 4pm on Friday 27 March 2020.
Hearing
[27] The hearing at 9:30 am on Saturday 28 March 2020 will be conducted by telephone. At this stage, the following parties will be contacted.
1. L. Izzo, ACCI and Ai Group
2. M. Rizzo, ASU and ACTU
PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR717825>
DRAFT DETERMINATION |
Fair Work Act 2009
s.157 – Application to vary a modern award to achieve the modern awards objective
Clerks – Private Sector 2010
(AM2020/______)
PRESIDENT ROSS |
___________ 2020 |
Award schedule – COVID-19 pandemic
A. Further to the decision [___________] issued by the Full Bench of the Fair Work Commission on ______________ 2020, the above award is varied as follows:
1. In the Table of Contents add a new Schedule I.
2. Add the following Schedule I to the award:
Schedule I - Award flexibility during the COVID-19 Pandemic
X.1 The provisions of this schedule 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.
X.2 Schedule I operates from ___________ 2020 until 30 June 2020. The period of operation can be extended on application.
X.3 A reference in this schedule to an employee “working from home” is to be read as a reference to an employee who is working from home because of measures in response to the COVID-19 pandemic.
X.4 During the operation of Schedule I, the following provisions apply:
Operational flexibility
(a) An employee will perform all duties that are within their skill and competency regardless of their classification under clause 15 and Schedule B, provided that the duties are safe, and the employee is licensed and qualified to perform them, where necessary. No employee shall have their pay reduced as a result of being directed to perform duties in accordance with this clause.
Part-time employees working from home
(b) Instead of clause 11.5, for a part-time employee who is working from home by agreement with the employer, the employer is required to roster the employee for a minimum of two consecutive hours on any shift.
Casual employees working from home
(c) Instead of clause 12.4, for a casual employee who is working from home by agreement with the employer, the employee is entitled to a minimum payment of two hours’ work at the appropriate rate.
Ordinary hours of work for employees working from home
(d) Instead of clause 25.1(b), where an employee requests and the employer agrees, the spread of ordinary hours of work for day workers is between 6.00am and 11.00pm, Monday to Friday, and between 7.00am and 12.30pm on Saturday, for employees working from home by agreement with the employer.
(e) Day workers are not shift workers for the purposes of any penalties, loadings or allowances under the award.
(f) The facilitative provision in clause 25(2), which allows the spread of hours to be altered, will not operate for the employees referred to in subclause (d).
Agreed temporary reduction in ordinary hours
(g) An employer and the full-time and part-time employees in a workplace or section of a workplace, may agree to temporarily reduce ordinary hours of work for the employees in the workplace or section for a specified period while this schedule is in operation. The approval of at least 75% of the full-time and part-time employees in the relevant workplace or section shall be required.
(h) For the purposes of subclause (g), ordinary hours of work may be temporarily reduced:
(i) For full time employees, to not fewer than 75% of the full-time ordinary hours applicable to an employee immediately prior to the implementation of the temporary reduction in ordinary hours.
(ii) For part-time employees, to not fewer than 75% of the part-time employee’s ordinary hours immediately prior to the implementation of the temporary reduction in ordinary hours.
(i) Where a reduction in hours takes effect under subclause (g), the employee’s ordinary hourly rate will be maintained but the weekly wage will be reduced by the same proportion.
(j) Nothing in this schedule prevents an employer and an individual employee agreeing in writing (including by electronic means) to reduce hours or to have an employee move temporarily from full-time to part-time hours of work, with a commensurate reduction in the minimum weekly wage.
(k) For an employee whose hours have been reduced in accordance with subclause (g):
(i) the employer must not unreasonably refuse an employee request to engage in reasonable secondary employment; and
(ii) the employer must consider all reasonable employee requests for training, professional development and/or study leave.
(l) For the purposes of subclause (g), where there is any reduction in the ordinary hours of work for full-time or part-time employees in a workplace or section during the period this schedule is operation, all relevant accruals and all entitlements on termination of employment will continue to be based on each employee’s weekly ordinary hours of work prior to the commencement of this schedule.
(m) For the purposes of subclause (g), the support of employees shall be determined by a vote of employees. In order for the vote to be valid, the employer must comply with the following requirements:
(i) Where any of the employees are known to be members of the Australian Services Union or another organisation, the ASU or other organisation shall be informed before the vote takes place.
(ii) Prior to the vote of employees, the employer shall provide the employees with the contact details of the ASU, should they wish to contact the ASU for advice.
(iii) The employer must notify the Fair Work Commission by emailing XXXX@fwc.gov.au that the employer proposes to conduct a vote under this schedule. The employer shall provide the work email addresses of the employees who will be participating in the vote, to the Commission. The Commission will then distribute the ASU COVID-19 Information Sheet to the employees prior to the vote. The Commission shall list the name of the business on a register which will be accessible to the ASU, upon request, for the period when this schedule is in operation.
(iv) The vote shall not take place until at least 24 hours after the requirements of paragraph (i), (ii) and (iii) have been met.
Annual leave
(n) Employers and employees may agree to the taking of 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.
(o) Instead of clauses 29.6, 29.7 and 29.8, an employer may direct an employee to take any annual leave that has accrued, by giving at least one week’s notice, or any shorter period of notice that may be agreed. A direction to take annual leave shall not result in an employee having less than two weeks of accrued annual leave remaining.
Close down
(p) Instead of clause 29.5 and subject to subclause (q), an employer may:
(i) require an employee to take annual leave by giving at least one week’s notice as part of a close-down of its operations, or part of its operations, or any shorter period of notice that may be agreed; and
(ii) where an employee who has not accrued sufficient 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 closedown.
(q) Subclause (p) does not permit an employer to require an employee to take leave for a period beyond the period of operation of this schedule.
B. This determination comes into effect on __________2020.
PRESIDENT
2 See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227.
3 Section 127 provides that the Regulations may permit modern awards to include terms that would or might otherwise be contrary to Part 2-2 or s.55, or prohibit modern awards from including terms that would or might otherwise be permitted by Part 2-2 or s.55. No such regulations have been made.