DECISION

Fair Work Act 2009
s.156—4 yearly review of modern awards

4 yearly review of modern awards—plain language re-drafting—standard clauses
(AM2016/15)

4 yearly review of modern awards – plain language re-drafting – standard clauses – Sugar Industry Award 2010.

[1] This decision deals with the standard clauses to be inserted into the Sugar Industry Award 2010 (the Sugar Award).

[2] In a decision issued on 11 December 2018 1 (the December 2018 Decision), we finalised the standard redundancy term and expressed the provisional view that the term should be inserted into 100 of the 122 modern awards. The remaining 22 awards were categorised as follows:

•  Category 1: Awards with an industry-specific redundancy scheme.

•  Category 2: Awards with an industry-specific redundancy element that supplements the NES (such as providing an entitlement to redundancy pay for employees of small businesses).

•  Category 3: Awards with other variations from the standard redundancy provisions.

[3] The Sugar Award was included in category 2 because the redundancy provisions in that award supplement the National Employment Standards (the NES) by providing additional benefits to bulk terminal employees and entitlements to certain employees in sugar mills who are otherwise excluded from redundancy pay by section 123(1) of the Fair Work Act 2009 (Cth) (the Act). At [29] of the December 2018 Decision we said that the provisions of the award required further consideration.

[4] The current redundancy provision in the Sugar Award is set out in full below:

‘16. Redundancy

16.1 Redundancy pay is provided for in the NES.

16.2 Transfer to lower paid duties

Where an employee is transferred to lower paid duties by reason of redundancy, the same period of notice must be given as the employee would have been entitled to if the employment had been terminated and the employer may, at the employer’s option, make payment instead of an amount equal to the difference between the former ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of notice still owing.

16.3 Employee leaving during notice period

An employee given notice of termination in circumstances of redundancy may terminate their employment during the period of notice. The employee is entitled to receive the benefits and payments they would have received under this clause had they remained in employment until the expiry of the notice, but is not entitled to payment instead of notice.

16.4 Job search entitlement

(a) An employee given notice of termination in circumstances of redundancy must be allowed up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment.

(b) If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee must, at the request of the employer, produce proof of attendance at an interview or they will not be entitled to payment for the time absent. For this purpose a statutory declaration is sufficient.

(c) This entitlement applies instead of clause 15.2.

16.5 Bulk terminal employees

For employees in bulk terminals the redundancy entitlement will be the greater of the NES or, for employees with greater than 12 months’ continuous service, 2.5 weeks’ redundancy pay for each year of service to a maximum of 52 weeks plus:

(a) For all employees with more than 12 months’ service an amount of up to $1,000 towards retraining at a recognised institution on the production of such invoices.

(b) A service will be provided to assist employees in preparing job applications, CVs and the like.

(c) Access to a financial planning adviser will be considered upon application from the employee.

(d) Employees aged 45 years and over and/or having 10 years’ continuous service at the date of redundancy will be entitled to payment for all accrued sick leave.

(e) Employees under 45 years of age with less than 10 years’ continuous service at the date of redundancy will be entitled to 50% payment of all accrued sick leave.

(f) The maximum payment under this clause will not exceed 52 weeks of ordinary time pay excluding any accrued annual leave, sick leave, long service leave or the severance payment as set out in clause 15—Termination of employment.

16.6 Redundancy pay—apprentices and fixed term employees in sugar mills

The NES limitation on redundancy in s.123 of the Act for an employee employed for a specified period of time or for a specified task will not apply to employees of sugar mills where such employees are:

(a) engaged on a series of consecutive contracts where the period of actual service covered by the series of contracts totals in excess of 12 months. For the purpose of this clause the continuity of an employee’s service with an employer is taken not to be broken by a period between fixed term contracts which is equal to or less than eight weeks; or

(b) apprentices who are retained in employment for more than six months after the completion of their apprenticeship.’

Additional benefits for employees in bulk terminals

[5] Clause 16.5 of the Sugar Award provides for award-specific redundancy entitlements for employees engaged at a bulk terminal and supplements the NES by providing additional benefits to bulk terminal employees.

[6] It is our provisional view that clause 16.5, be retained with some minor redrafting to make the provision clearer and to ensure that it fits with the rest of the clause. The award-specific redundancy entitlements for employees in bulk terminals be retained in a re-drafted form, as set out at paragraph [11] below.

Apprentices and fixed term employees in sugar mills

[7] Section 123 of the Act limits the application of sections 117 and 119 (which deal with entitlements to ‘notice of termination’ and ‘redundancy pay’):

‘123 Limits on scope of this Division

Employees not covered by this Division

(1) This Division does not apply to any of the following employees:

(a) an employee employed for a specified period of time, for a specified task, or for the duration of a specified season;

(b) an employee whose employment is terminated because of serious misconduct;

(c) a casual employee;

(d) an employee (other than an apprentice) to whom a training arrangement applies and whose employment is for a specified period of time or is, for any reason, limited to the duration of the training arrangement;

(e) an employee prescribed by the regulations as an employee to whom this Division does not apply.

(2) Paragraph (1)(a) does not prevent this Division from applying to an employee if a substantial reason for employing the employee as described in that paragraph was to avoid the application of this Division.

Other employees not covered by notice of termination provisions

(3) Subdivision A does not apply to:

(b) a daily hire employee working in the building and construction industry (including working in connection with the erection, repair, renovation, maintenance, ornamentation or demolition of buildings or structures); or

(c) a daily hire employee working in the meat industry in connection with the slaughter of livestock; or

(d) a weekly hire employee working in connection with the meat industry and whose termination of employment is determined solely by seasonal factors; or

(e) an employee prescribed by the regulations as an employee to whom that Subdivision does not apply.

Other employees not covered by redundancy pay provisions

(4) Subdivision B does not apply to:

(a) an employee who is an apprentice; or

(b) an employee to whom an industry-specific redundancy scheme in a modern award applies; or

(c) an employee to whom a redundancy scheme in an enterprise agreement applies if:

(i) the scheme is an industry-specific redundancy scheme that is incorporated by reference (and as in force from time to time) into the enterprise agreement from a modern award that is in operation; and

(ii) the employee is covered by the industry-specific redundancy scheme in the modern award; or

(d) an employee prescribed by the regulations as an employee to whom that Subdivision does not apply.’

[8] Clause 16.6 of the Sugar Award contains redundancy pay provisions which apply to apprentices and fixed term employees in sugar mills (see [4] above).

[9] Section 123(1)(a) excludes apprentices and fixed term employers from the entitlements to notice of termination and redundancy.

[10] Clause 16.6 provides an entitlement to notice of termination and to redundancy pay that supplements the NES. It is our provisional view is that the award-specific redundancy entitlements for employees in bulk terminals should be retained in a re-drafted form as set out at paragraph [11] below.

[11] In accordance with the provisional views and [6] and [10] above it is proposed that the Sugar Award be varied to include the plain language standard redundancy clause, amended to include award-specific provisions as set out below:

16. Redundancy

NOTE 1: Redundancy pay is provided for in the NES. See sections 119–123 of the Act.

NOTE 2: Clause 16.4 supplements the NES by providing additional benefits to bulk terminal employees. Clause 16.5 supplements the NES by providing entitlements to certain employees in sugar mills excluded from redundancy pay under the NES by section 123(1)(a) of the Act.

16.1 Transfer to lower paid duties on redundancy

(a) Clause 16.1 applies if, because of redundancy, an employee is transferred to new duties to which a lower ordinary rate of pay applies.

(b) The employer may:

(i) give the employee notice of the transfer of at least the same length as the employee would be entitled to under section 117 of the Act as if it were a notice of termination given by the employer; or

(ii) transfer the employee to the new duties without giving notice of transfer or before the expiry of a notice of transfer, provided that the employer pays the employee as set out in clause 16.1(c).

(c) If the employer acts as mentioned in clause 16.1(b)(ii), the employee is entitled to a payment of an amount equal to the difference between the ordinary rate of pay of the employee (inclusive of all-purpose allowances, shift rates and penalty rates applicable to ordinary hours) for the hours of work the employee would have worked in the first role, and the ordinary rate of pay (also inclusive of all-purpose allowances, shift rates and penalty rates applicable to ordinary hours) of the employee in the second role for the period for which notice was not given.

16.2 Employee leaving during redundancy notice period

(a) An employee given notice of termination in circumstances of redundancy may terminate their employment during the minimum period of notice prescribed by section 117(3) of the Act.

(b) The employee is entitled to receive the benefits and payments they would have received under clause 16 or under sections 119–123 of the Act had they remained in employment until the expiry of the notice.

(c) However, the employee is not entitled to be paid for any part of the period of notice remaining after the employee ceased to be employed.

16.3 Job search entitlement

(a) Where an employer has given notice of termination to an employee in circumstances of redundancy, the employee must be allowed time off without loss of pay of up to one day each week of the minimum period of notice prescribed by section 117(3) of the Act for the purpose of seeking other employment.

(b) If an employee is allowed time off without loss of pay of more than one day under clause 16.3(a) the employee must, at the request of the employer, produce proof of attendance at an interview.

(c) A statutory declaration is sufficient for the purpose of clause 16.3(b).

(d) An employee who fails to produce proof when required under clause 16.3(b) is not entitled to be paid for the time off.

(e) This entitlement applies instead of clause 15.2.

16.4 Bulk terminal employees

(a) Clause 16.4 applies to an employee engaged at a bulk terminal, unless the employee is excluded from redundancy pay under the NES by sections 121(1), 123(1), 123(4)(a) and 123(4)(d) of the Act.

(b) An employee is entitled to be paid redundancy pay by the employer if:

(i) The employee’s employment is terminated by reason of redundancy; and

(ii) The employee has at least 12 months’ continuous service with the employer on the date of termination.

(c) In clause 16.4, continuous service has the same meaning as in section 119 of the Act.

(d) Redundancy pay

(i) Redundancy pay is calculated in accordance with section 119(2) of the Act.

(ii) The amount of redundancy pay is the greater of either:

•  The redundancy pay under section 119(2) of the Act; or

•  2.5 weeks’ redundancy pay for each year of continuous service up to a maximum of 52 weeks of redundancy pay.

(iii) The maximum payment under clause 16.4 will not exceed 52 weeks of ordinary time pay excluding any accrued annual leave, sick leave, long service or any payment instead of notice under section 117(3) of the Act.

(e) Additional redundancy benefits

If an employee’s employment is terminated by reason of redundancy then, in addition to any redundancy pay the employee is entitled to under clause 16.4(d), the employee is entitled to other benefits as follows:

(i) If the employee is at least 45 years old or has at least 10 years’ continuous service with the employer on termination, then the employee will be entitled to payment for all accrued sick leave.

(ii) If the employee is less than 45 years old and has less than 10 years’ continuous service with the employer on termination, then the employee will be entitled to 50% payment of all accrued sick leave.

(iii) If the employee has more than 12 months’ continuous service with the employer on termination, then the employee will be entitled to an amount of up to $1,000 towards retraining at a recognised institution on the production of such invoices.

(iv) A service to assist the employee in preparing job applications, CVs and the like.

(v) Access to a financial planning adviser—this will be considered upon application from the employee.

(f) The terms of section 120 of the Act apply as if section 120 referred to ‘clause 16.4 (d)’ rather than ‘section 119’.

NOTE: Under section 120 of the Act the Fair Work Commission can determine that the amount of redundancy pay under the NES is to be reduced if the employer obtains other acceptable employment for the employee or cannot pay that amount. Clause 16.4(f) applies these arrangements also to redundancy pay under clause 16.4.

(g) The terms of section 122 of the Act apply as if section 122 referred to ‘clause 16.4’ rather than ‘this Subdivision’ and to ‘clause 16.4 (d)’ rather than ‘section 119’.

NOTE: Under section 122 of the Act transfer of employment situations can affect the obligation to pay redundancy pay under the NES and the Fair Work Commission can make orders affecting redundancy pay. Clause 16.4 (g) applies these arrangements also to redundancy pay under clause 16.4.

(h) The maximum payment under clause 16.4 will not exceed 52 weeks of ordinary time pay excluding any accrued annual leave, sick leave, long service or severance payment as set out in clause 15—Termination of employment.

16.5 Apprentices and fixed-term employees in sugar mills

(a) Clause 16.5(d) applies to a fixed-term employee in a sugar mill, where the employee is engaged on a series of consecutive contracts where the period of actual service covered by the series of contracts is more than 12 months.

(b) For the purposes of clause 16.5(a), the continuity of an employee’s service with an employer will not be broken where there is a period of 8 weeks or less between fixed term contracts.

(c) Clause 16.5(d) applies to an apprentice in a sugar mill who is engaged in employment for more than 6 months after the completion of their apprenticeship.

(d) Redundancy pay

(i) An apprentice or fixed-term employee in a sugar mill is entitled to notice of termination or payment instead of notice in accordance with section 117 of the Act.

(ii) An apprentice or fixed-term employee in a sugar mill is entitled to redundancy pay in accordance with section 119(2) of the Act.

[12] A draft award variation determination will be published with this decision. Any party opposing our provisional view must file a submission setting out their position by no later than 4:00 pm on Friday 14 February 2020. If there is no opposition to our provisional views at [6] and [10] above we will issue a variation determination in the same terms as the draft determination.

[13] Submissions are to be sent to amod@fwc.gov.au.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   [2018] FWCFB 7447 at paras [11]-[12]