[2021] FWC 6228

The attached document replaces the document previously issued with the above code on 4 November 2021.

Typographical error at Paragraph 7 corrected.

Associate to Commissioner Bissett

Dated 5 November 2021

Fair Work Act 2009
s.160 - Application to vary a modern award to remove ambiguity or uncertainty or correct error

Australian Payroll Association
(AM2021/66)

Application to vary a modern award to remove ambiguity or uncertainty or to correct error – General Retail Industry Award 2020 – clause 11– minimum engagement for casual employees – error identified – provisional view on appropriate variation.

[1] The Australian Payroll Association Pty Ltd has made an application in which it seeks to have varied the General Retail Industry Award 2020 (the 2020 Award) pursuant to s.160 of the Fair Work Act 2009 (FW Act) to remove ambiguity or uncertainty or correct an error. The application was made on 9 June 2021.

[2] On 2 July 2021 the President issued a direction to me pursuant to ss.616(3D)(a) and 582 of the FW Act to hear and determine the matter. Under s.616(3D)(a) of the FW Act the President may direct a single Member to perform a function or exercise a power under s.160 of the Act varying a modern award.

[3] On 9 July 2021 I issued a statement 1 in relation to the application and on 9 August 2021 a conference of interested parties was convened. Following this conference directions were issued for the filing of submissions that addressed (at least) the following:

(i) Does clause 11 (and cl 11.4 in particular) of the GRI Award contain any ambiguity or uncertainty or an error which may be resolved by a variation of the GRI Award pursuant to s.160 of the Fair Work Act 2009 (FW Act)?

(ii) If clause 11 has changed from the provisions of the 2010 Award, how did the variation arise and was it intended?

(iii) If the answer to (i) is yes, what is the ambiguity, uncertainty of error, how does it arise and how should the clause be varied to resolve the issue?

(iv) Does the Australian Payroll Association have standing, in accordance with s.160(2) of the FW Act to make an application under s.160 of the FW Act. If not, should the Commission vary the GRI Award on its own motion?

[4] Submissions were received from:

Ai Group (3 September 2021 and 14 September 2021)

Newsagents Association of NSW and ACT (Newsagents Assoc) (6 September 2021)

Shop, Distributive and Allied Employees Association (SDA) (6 September 2021 and 16 September 2021)

LEGISLATION

[5] Section 160 of the FW Act states:

160 Variation of modern award to remove ambiguity or uncertainty or correct error

(1) The FWC may make a determination varying a modern award to remove an ambiguity or uncertainty or to correct an error.

(2) The FWC may make the determination:

(a) on its own initiative; or

(b) on application by an employer, employee, organisation or outworker entity that is covered by the modern award; or

(c) on application by an organisation that is entitled to represent the industrial organisation that is entitled to represent the industrial interests of one or more employers or employees that are covered by the modern award; or

(d) if the modern award includes outworker terms – on application by an organisation that is entitled to represent the industrial interests of one or more outworkers to whom the outworker terms relate.

THE APPLICATION

[6] The application is in relation to clause 11—Casual employees of the of the 2020 Award. 2

[7] Clause 11 of the 2020 Award relevantly states:

11. Casual employees 3

11.1  A casual employee is an employee engaged as such.

11.2  An employer must pay a casual employee for a minimum of 3 hours’ work, or 1.5 hours’ work in the circumstances set out in clause 11.3, on each occasion on which the casual employee is rostered to attend work even if the employee works for a shorter time.

11.3  The circumstances are:

(a) the employee is a full-time secondary school student; and

(b) the employee is engaged to work between 3:00 pm and 6:30 pm on a day on which the employee is required to attend school; and

(c) the employee, with the approval of the employee’s parent or guardian, agrees to work for fewer than 3 hours; and

(d) employment for a longer period than the agreed period is not possible either because of the operational requirements of the employer or the unavailability of the employee.

11.4 An employer must pay a casual employee at the end of each engagement or weekly or fortnightly in accordance with pay arrangements for full-time and part-time employees.

(underlining added)

[8] The provisions in the General Retail Industry Award 2010 (2010 Award) read as follows:

13. Casual employees

…

13.4  The minimum daily engagement of a casual is three hours, provided that the minimum engagement period for an employee will be one hour and 30 minutes if all of the following circumstances apply:

(a) the employee is a full-time secondary school student; and

(b) the employee is engaged to work between the hours of 3.00 pm and 6.30 pm on a day which they are required to attend school; and

(c) the employee agrees to work, and a parent or guardian of the employee agrees to allow the employee to work, a shorter period than three hours; and

(d)  employment for a longer period than the period of the engagement is not possible either because of the operational requirements of the employer or the unavailability of the employee.

(underlining added)

[9] In its application the Australian Payroll Association says:

I am writing in relation to clause [11.2] of the GRI Award [2020] in relation to paying casuals a minimum of 3 hours work. The change in the wording to the clause states that an employer must pay a casual a minimum of 3 hours work, which implies even if the employee goes home sick and works less than 3 hours then the employer must pay them 3 hours. I gather this was not the intention as an employee can then come in and after an hour say they are sick and they get paid 3 hours, so employers may be overpaying employees as a result of the change of the wording for this clause.

Can you please investigate and ideally make it clearer again the Award?

SUBMISSIONS

Standing to make application

[10] The Ai Group, SDA and Newsagents Assoc each agree that the Australian Payroll Association does not have standing to make an application to vary the 2020 Award as it is not an employer covered by the 2020 Award or an organisation entitled to represent the industrial interests of employers or employees covered by the 2020 Award.

[11] Ai Group and Newsagents Assoc both submit that the Commission should act on its own initiative pursuant to s.160(2)(a) of the FW Act and vary the 2020 Award. The SDA submits that the Commission should not vary the 2020 Award (for the reasons discussed below).

Is the clause ambiguous or uncertain or contain an error?

[12] The Ai Group submits that clause 11.4 of the 2020 Award is effected by error.

[13] As to the identification of ‘error’, Ai Group relies on the decision of the Commission in Vehicle Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award Decision) 4 where the Full Bench said the following in relation to whether an error was established in that matter for the purpose of s.160 of the Act:

[73] With respect to the SDA, this is not demonstrative of any error. It only demonstrates that a methodology was used which the SDA, with the benefit of hindsight, would prefer not to have been used. Nothing was placed before us to suggest that the AIRC did not intend to use that methodology, or that some mathematical error was made in calculating the rates in accordance with that methodology. We do not accept that disagreement - even a well-founded disagreement - with a previous decision is sufficient to establish an error for the purposes of s.160. What is necessary is to show that some sort of mistake occurred, in that a provision of the award was made in a form which did not reflect the tribunal’s intention.

[14] The Ai Group says, in particular, that the error arose in clause 11.2 of the 2020 Award as a result of the plain language re-drafting (PLR) in circumstances where it was made abundantly clear that the PLR was not intended to result in any change to the legal effect of any provision of the Award. A change in the legal effect (of clause 13.4 of the 2010 Award), it submits, occurred by the change of wording to what is now reflected in clause 11.2.

[15] Ai Group disagrees with the contention of the SDA that the 2020 Award has not brought about any substantive change with respect to minimum engagement of casual employees from that in the 2010 Award. In particular the Ai Group says that the 2010 Award did not entitle a casual employee to a minimum of 3 hours pay. Rather, it says, the 2010 Award created an entitlement to 3 hours engagement. If a casual employee was not engaged for a minimum of 3 hours the requirement in the 2010 Award would not have been satisfied.

[16] Ai Group posits that a minimum engagement period and minimum payment are inherently different in nature

[17] The Newsagents Assoc says that the clause is not ambiguous but that it is uncertain. This uncertainty it says surrounds the circumstances in which a casual employee absents themselves from work through their own choice before the conclusion of the 3 hours for which they are entitled to be paid.

[18] The SDA submits that there is no ambiguity or uncertainty in clause 11.4 of the 2020 Award and nor is there any error that requires correction. Rather, it submits that both the 2010 Award and the 2020 Award provide for a minimum engagement of 3 hours (with the exception of 1 hour and 30 minutes provided for certain employees).

[19] The SDA submits that neither the 2010 Award nor the 2020 Award make provision for payment if an employee leaves work of their own volition during the three hour minimum engagement. However it says that what was implicit in the 2010 Award is made explicit in the 2020 Award – that is that the casual employee is entitled to a 3 hour payment ‘even if the employee works for a shorter time.’

[20] The SDA submits that, in considering both the text of clause 11.2 and the context and purpose of the plain language process, the clear intention of the Commission in the PLR was to provide clarity in relation to payment to casual employees.

[21] The SDA submits that the ‘language has remained undisturbed since the making of the 2020 Award’ and that this should be considered persuasive as to the meaning of the provision.

[22] The SDA says that Ai Group has not demonstrated any error beyond assertion. The reliance of Ai Group on the Vehicle Award Decision 5 does not assist in demonstrating that an error has occurred in this instance. Further, it says that the Ai Group has failed to demonstrate that the Commission, in making the 2020 Award, did not intend the change in wording such that it could be shown it was a mistake. Further the Ai Group has failed to demonstrate that the legal effect of the clause in the 2020 Award is different to what it was in the 2020 Award.

[23] The SDA says that the submissions of Ai Group demonstrate that there was extensive consideration by the Commission of the provisions of (what became) the 2010 Award through numerous hearings, submissions and plain language exposure drafts issued by the Commission.

If there is ambiguity or uncertainty or error, how should the 2020 Award be varied

[24] Ai Group propose that, in order to overcome the error it says exists in the 2020 Award, clause 11.2 be varied as follows:

11.2 An employer must pay a casual employee for a minimum of 3 hours’ work, The minimum daily engagement of a casual employee is 3 hours, or 1.5 hours’ work in the circumstances set out in clause [11.3], on each occasion on which the casual employee is rostered to attend work even if the employee works for a shorter time.

[25] The Newsagent Assoc submits that clause 11.2 of the 2020 Award should be varied as follows:

11.2 An employer must pay a casual employee for a minimum of 3 hours’ work, or 1.5 hours’ work in the circumstances set out in clause [11.3], on each occasion on which the casual employee is rostered to attend work and works, even if the employee, other than through absenting themselves from work, is required by the employer to work for a shorter time.

[26] As to the terms of the variation sought by Ai Group, the SDA submits that such a change is not warranted but, even if there was error, the change proposed by Ai Group goes further than the question put to the parties by the Commission.

Should the Commission exercise its discretion and vary the 2020 Award

[27] Ai Group submits that a variation to the 2020 Award is necessary to achieve the modern awards objection (s.138 of FW Act). It submits that there is no basis to require an employer to pay for the equivalent of 3 hours work (or 1.5 hours) in circumstances where a casual employee absents them self from the workplace.

[28] The Ai Group submits that the variation proposed by it would ensure the maintenance of a fair safety net in that:

•  It would rectify the error it identifies

•  It would remove the ‘windfall gain’ identified

•  It would confer the original protection of minimum engagement period

•  Employers would not be required to pay casual employees for work not performed during the minimum engagement period

•  It would restore the general principle that a casual employee receives pay for time spent working and not for time they do not work.

[29] With respect to the requirements of the modern awards objective at s.134(1) of the FW Act the Ai Group submits that:

•  Section 134(1)(a) is neutral consideration but, in any event, is just one consideration amongst a number

•  Section 134(1)(b) is a neutral consideration as the variation would neither encourage or discourage bargaining

•  Section 134(1)(c), to the extent it deals with persons obtaining employment, is a neutral consideration. The variation sought would not have an adverse effect on workforce participation

•  The practical effect of clause 11.4 of the 2020 Award is inconsistent with s.134(1)(d) as it does not promote efficient and productive performance of work. The variation will remedy this

•  Section 134(1)(da) is not relevant to the matter under consideration

•  Section 134(1)(e) is a neutral consideration

•  Section 134(1)(f) lends support to the proposed variation. The proposed variation will have a positive effect on businesses as they will not be required to pay casual employees for work not performed

•  Section 134(1)(g) supports the variation as the anomaly caused by clause 11.4 would be rectified. The variation would make it clear that an employer is required to offer a minimum period of engagement, restoring the 2020 Award to the standard established in the 2010 Award

•  Section 134(1)(h) is a neutral consideration

[30] The SDA submits, in reply:

•  Ai Group provides no evidence that casual employees leave work of their own accord during rostered hours and, in this respect, the Commission should take note of the practice of employers sending employees home during a shift ‘because they are not needed’

•  It objects to the characterisation by Ai Group of the requirement to pay a casual employee a minimum of 3 hours as a ‘windfall’ as unjust

•  To grant the variation sought by Ai Group would result in a decrease in workforce participation as it would allow employers to unilaterally send employees home without paying a minimum of 3 hours (s.134(1)(c) of FW Act). This conclusion is supported by the Ai Group’s contention that the variation would encourage flexible work practices (s.134(1)(d))

•  Ai Group has presented no evidence in support of its contention that its proposed variation will present any advantage to employers (s.134(1)(f))

•  The proposed variation, if granted, would allow employers to ‘bypass the 3 hour minimum’

[31] The SDA rejects the reason for variation put by Ai Group and says that the proposed variation would allow employers to unilaterally alter hours of casual employees contrary to s.134(1) of the FW Act and the principles of natural justice. Further it would result in ambiguity. The SDA says that these reasons weigh against the variation sought.

[32] SDA further notes that the provision, as it now appears in clause 11.2 of the 2020 Award has remained as is over a three year PLR process. This, the SDA submits, supports a conclusion that ‘the Commission decided in its favour in respect of the provision in question.’ In this respect the SDA suggests that the ‘entire [Plain Language Exposure Draft (PLED)] process hinges on the critical analysis and commentary of interested parties…This together with the clear and unambiguous wording of the provision in question places a heavy burden on a party seeking to show the Award contains an error.’

FROM THE 2010 AWARD TO THE 2020 AWARD

[33] The history leading up to the issue of the determination making the 2020 Award is instructive in considering whether the conditions necessary in relation to s.160 of the FW Act are met such that a variation of the 2020 Award might be considered. The relevant history is that of the plain language re-drafting (PLR) exercise.

[34] On 22 September 2015 the President of the Commission issued a Statement 6 which said:

[1]  Section 156 of the Fair Work Act 2009 (the Act) requires the Fair Work Commission (the Commission) to review all modern awards every four years. In a Statement issued on 17 March 2014 the Commission stated that the first 4 yearly review of modern awards (the Review) would comprise of an Initial stage, dealing with jurisdictional issues, a Common issues stage and an Award stage.

[2]  As part of the Award stage of the Review, the Commission will conduct a Pilot to produce a plain language exposure draft based on the Pharmacy Industry Award 2010 (the Pharmacy Award). The plain language exposure draft, along with any other issues relating to the review of the Pharmacy Award, will be considered by a Full Bench in 2016.

[3]  The Pilot will involve the Commission engaging the services of a plain language expert to redraft the Pharmacy Award. The expert will be instructed to redraft clauses without altering their legal effect. The plain language draft will then be user-tested by individuals covered by the award.

[4]  A report on the Pilot will be published upon its completion. The results of the Pilot will be taken into consideration by the Commission in deciding whether any other modern awards will undergo a similar process.

[35] As to the scope of the Pilot, the Statement said:

[14]  Importantly, as part of this Pilot:

•  The plain language draft is not intended to change the substantive legal effect of any award term. (emphasis added)

•  A draft prepared by the plain language expert will be based on a revised version of the existing exposure draft prepared by Commission staff in September 2015.

•  While the plain language draft will be based on a revised version of the existing exposure draft, the plain language expert will consider the ‘Plain English Draft’ submitted by the Pharmacy Guild of Australia and comments on the draft submitted by the relevant unions in preparing the draft instrument.

•  Parties to matter AM2014/209 will participate in the process of developing the plain language draft.

•  User testing of the draft instrument will be undertaken by an external provider engaged by the Commission.

[36] On 20 June 2017 the Commission published ‘Guidelines – Plain language drafting of modern awards’. The purpose of the guidelines was explained in Chapter 2 as follows:

2.1 The Guidelines have been prepared by the Commission to assist those involved in drafting and maintaining modern awards in plain language. The Guidelines will help to achieve consistency in language and structure across modern awards.

2.2 The aim of plain language drafting is to make an award as simple and easy to understand as possible, without taking away from precision or omitting necessary information or unintentionally changing the legal effect of the award. (emphasis added)

2.3 Awards that are not simple and easy to understand can cost money by creating the need for employers and employees to seek professional advice.

2.4 The Guidelines are compatible with the modern award template currently used by the Commission, including the numbering system in that template.

[37] The 2010 Award, along with 8 other awards, was included in the PLR.

[38] Clause 13.4 of the 2010 Award provides for a minimum daily engagement of casual employees of 3 hours (or 1.5 hours in specific circumstances not repeated here).

[39] On 5 July 2017 the first Plain Language Exposure Draft (July 2017 PLED) of the 2010 Award was released. It had a statement on the first page as follows:

This plain language exposure draft has been prepared by staff of the Fair Work Commission based on the General Retail Industry Award 2010 as at 5 July 2017. This exposure draft does not seek to amend any entitlements under the General Retail Industry Award 2010. It has been prepared to address some of the structural issues identified in modern awards and to apply plain language drafting principles and techniques to award-specific provisions. (emphasis added)

[40] Clauses 11.3-11.5 in the July 2017 PLED read as follows:

11.3 An employer must pay a casual employee for a minimum of 3 hours’ work, or 1.5 hours’ work in the circumstances set out in clause 11.4, on each occasion on which the casual employee is rostered to attend work even if the employee works for a shorter time.

11.4 The circumstances are:

(a) the employee is a full-time secondary school student; and

(b) the employee is engaged to work between 3:00 pm and 6:30 pm on a day on which the employee is required to attend school; and

(c) the employee, with the approval of the employee’s parent or guardian, agrees to work for fewer than 3 hours; and

(d) employment for a longer period than the agreed period is not possible either because of the operational requirements of the employer or the unavailability of the employee.

11.5 An employer must pay a casual employee at the end of each engagement unless the employer and the employee have agreed that the pay period of the employee is either weekly or fortnightly.

[41] The SDA said in its submissions of 4 August 2017 in relation to the July 2017 PLED:

76. The proposed variations to GRIA [2010 Award] clause 13.4 are substantive and the reader is not aided by the plain language redraft of clause 11.3 and 11.4…

78. The reference to a minimum daily engagement of 3 hours for casual employees has been removed. As stated at paragraph 47 [sic] 7 in relation to part-time employment, this is a substantive change.

79. The SDA does not support the insertion of clauses 11.3 and 11.4. GRIA clause 13.4 should be retained.

[42] Clause 13.4 of the 2010 Award referenced a minimum 3 hour engagement for casual employees.

[43] Neither Business SA nor Australian Business Industrial and NSW Business Chamber (ABI & NSWBC) made submissions in relation to this particular change.

[44] The view of the SDA on this matter was reflected in a September 2017 summary of submissions produced by the Commission in relation to the July 2017 PLED at item 34.

[45] A conference of the parties with an interest in the 2010 Award was held on 19 September 2017. In a report of this conference issued by the Commission that same day it was said of item 34 in the September 2017 summary: ‘parties to confirm their position’ and, of item 35: ‘Resolved at conference. Changes agreed will be incorporated in Revised Plain Language Exposure Draft.’ Item 35 was in relation to clause 11.5 of the July PLED (see paragraph [40] above) and related to the time at which a casual employee was to be paid.

[46] The parties were required to confirm their respective positions in relation the outstanding matters in the Report by 20 September 2017.

[47] In its reply of 20 September 2017 Business SA said:

5. Item 34 – Casual employment

5.1. Business SA submits the SDA’s concern regarding clauses 11.3 and 11.4 is unwarranted. It is clear that these clauses are to be read together as clause 11.3 expressly refers to ‘work in the circumstances set out in clause 11.4’.

[48] ABI & NSWBC said nothing of item 34 in its email in response to the Report.

[49] SDA said in its reply that ‘The issue in relation to minimum daily engagement has been resolved under item 35.’

[50] The PLED issued on 18 October 2017 (October 2017 PLED) amended clause 11.5 (to which item 35 referred) to read:

11.5 An employer must pay a casual employee at the end of each engagement or weekly or fortnightly in accordance with pay arrangements for full-time and part-time employees. 8

[51] A Statement 9 issued by the Commission on 18 October 2017 indicated that item 34 of the September 2017 summary (amongst other matters) remained outstanding. A further summary of submissions issued that day (October 2017 summary) contained a note from the drafters of the PLED that ‘Clause 11.3 covers the 3 hours minimum daily engagement.’

[52] At a conference in relation to the October 2017 PLED held on 26 October 2017 some discussion was had of item 34 although that appears to have generally been about the relationship between clauses 11.3 and 11.4. The SDA advised the President at this conference that if they were any further issues (in relation to Item 34) advice of such would be provided to his chambers by the following Thursday. A further PLED dated 1 November 2017 (November 2017 PLED) had no change to clause 11.3 from that of the October 2017 PLED.

[53] The SDA, in submissions filed on 9 and 10 November 2017 in relation to clause 11.3 of the October 2017 PLED, indicated it intended to make submissions in relation to item 34, but ultimately said nothing on the specific issue of minimum engagement in clause 11.3. Business SA and ABI & NSWBC made no submission on this issue.

[54] A summary of submissions issued on 13 December 2017 (December 2017 summary) showed no change in positions or comments in relation to item 34.

[55] A Statement 10 issued by the Commission on 2 February 2018 said, of item 34:

[27] Item 34 relates to clauses 11.3 and 11.4 of the revised plain language exposure draft. The SDA did not make any further submissions in relation to proposed clauses 11.3 and 11.4. This aspect of item 34 appears to be resolved.

[56] Submissions of the SDA filed on 22 February 2018 did not address item 34/clause 11.3.

[57] An agenda published by the Commission on 1 March 2018 for a proposed conference scheduled for 5 March 2018 in relation to the November 2017 PLED had, as an agenda item:

2. Outstanding items for further discussion at conference

a) Part-time employment…

b) Casual employment (items 33 and 34)

•  Clauses 11.3 and 11.4 – Drafting of minimum engagement period clause.

[58] That conference did not proceed. At a conference on 21 June 2018 the following exchange took place:

JUSTICE ROSS:  Anyone have any problem with that?  No, all right.  The second issue under casuals seems to be this proposition that the hourly rate of pay for a fulltime employee is not the same as the minimum hourly rate, and there's some issue about that.  Is that right?  It was mentioned in an earlier submission and it's not dealt with in later submissions, and the PLED's been updated.  I just wasn't sure if anything further remains in respect of that issue, and nor am I sure - I'm not sure whether item 34 from the summary, whether there is anything remaining in that given the drafter's comments, et cetera.

MS PATENA:  I think the SDA's - - -

JUSTICE ROSS:  You withdrew that, I think, or part of it.

MS PATENA:  Yes, concerns have been addressed, your Honour. 11

[59] In a Statement 12 issued on 23 July 2018 it was said of item 34:

[17] At the June 2018 conference, the SDA confirmed that they have withdrawn the issue at item 34. 13 

[60] In a further PLED issued on 25 July 2018 no further change was made to clause 11.3 and the SDA made no submissions in relation to clause 11.3 in submissions it made on 16 August 2018. Clause 11.3 and item 34 were not subject to further submissions or discussion at conference.

[61] The PLED issued on 20 November 2018 (November 2018 PLED) varied clause 11 in accordance with submissions made by the SDA in relation to clause 11.1. This variation inserted a new clause 11.2 which had the effect of renumbering clause 11.3 to 11.4. Terms in relation to minimum engagement period of casual employees were not re-visited. What became clause 11.4 in the November 2018 PLED is the clause before me in this application (now clause 11.2 of the 2020 Award). It was not subject to any further submissions or decision as part of the PLR.

[62] In summary, whilst an issue was identified by the SDA in relation to drafting the minimum engagement provisions for casual employees in the July 2017 PLED this was not pursued by any party and the clause remained as drafted.

CONSIDERATION

Should the Commission make a determination on its own initiative?

[63] The matter raised by the Australian Payroll Association in its application to the Commission with respect to (what is now) clause 11.2 of the 2020 Award, and the subsequent submissions made by interested parties on invitation of the Commission, suggest some level of disagreement as to the intent of the PLR, what the 2010 Award required in terms of hours and minimum payment to casual employees and whether the 2020 Award varies from the 2010 Award.

[64] I am satisfied that the Australian Payroll Association does not have standing to make an application to vary the 2020 Award. It is not an employer, employee, organisation or outworker entity covered by the 2020 Award, nor is it an industrial organisation entitled to represent the industrial interests of an employer or employee covered by the 2020 Award.

[65] The Australian Payroll Association do not otherwise suggest it does have standing to make the application before the Commission.

[66] Given the issues raised by the application I am satisfied that these should be considered by the Commission.

[67] For these reasons I have determined to consider the matter on the Commission’s initiative pursuant to s.160(2)(a) of the FW Act.

Is there ambiguity or uncertainty or an error in clause 11.2 of the 2020 Award?

[68] Prior to determining if clause 11.2 of the 2020 Award should be varied it is necessary to determine if it is ambiguous or uncertain or if the clause is in error.

[69] A conclusion as to ambiguity or uncertainty usually requires there to be rival contentions and an arguable case for one of the contentions. Uncertainty may also be established even if the provisions at issue have a clear meaning and are not ambiguous. Although related, the words “ambiguous or uncertain” are not synonymous. 14  The approach to the determination of whether a provision is ambiguous or uncertain was considered by a Full Bench of the Australian Industrial Relations Commission in Re Tenix Defence Pty Limited (Tenix).15 Whilst that decision was made under a different statutory scheme, the provisions of s.170MD(6) of the Workplace Relations Act 1996 is not in dissimilar terms to those in s.160(1) of the FW Act such that the reasoning in Tenix remains relevant to the matter before me.

[70] In Tenix the Full Bench observed:

[28] Before the Commission exercises its discretion to vary an agreement pursuant to s.170MD(6)(a) it must first identify an ambiguity or uncertainty. It may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement.

[29] The first part of the process - identifying an ambiguity or uncertainty – involves an objective assessment of the words used in the provision under examination. The words used are construed having regard to their context, including where appropriate the relevant parts of a related award. As Munro J observed in Re Linfox – CFMEU (CSR Timber) Enterprise Agreement 1997:

“The identification of whether or not a provision in an instrument can be said to contain an ‘ambiguity’ requires a judgment to be made of whether, on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context, including where appropriate the relevant parts of the ‘parent’ award with which a complimentary provision is to be read.”

[30] We agree that context is important. Section 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.

[31] The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.

[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.

(footnotes omitted)

[71] In Re: Public Service (Non Executive Staff – Victoria) (Section 170MX) Award 2000 16 Senior Deputy President Polites provided clarity on the meaning of ‘uncertainty’ by adoption of the following definition:

In that respect I respectfully adopt the submission made by the State of Victoria that the term “uncertainty” means the quality of being uncertain in respect of duration, continuance, occurrence, liability to chance or accident or the state of not being definitely known or perfectly clear, doubtfulness or vagueness. Those are extracts for the Concise Oxford Dictionary adopted by Commissioner Whelan in Re: Shop Distributive and Allied Employees Association v. Coles Myer [Print R0368]. In my view, as I have indicated, this provision clearly falls within that definition.

[72] In  Bianco Walling 17 a Full Court of the Federal Court of Australia made clear that the task under an analogous provision relating to enterprise agreements (s.217) was not to interpret a provision of the instrument to ascertain its legal meaning but rather to identify whether it is ambiguous or uncertain.18 The Full Court said:

…the identification of the true meaning of a provision is distinct from the question of whether it is ambiguous or uncertain. Ambiguity exists when a provision in an enterprise agreement is capable of more than one meaning. See in this respect the discussion by Gray J of the concept of ambiguity in Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 449. The ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced. A provision may be ambiguous even though it is capable of interpretation: Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union [2016] FWC 7256 at [8]. This means that it was not necessary for the FWC to interpret the 2016 Agreement in order to reach a conclusion concerning the presence of ambiguity or uncertainty...

It may well be the case that the mere existence of rival contentions as to the meaning or application of a provision or provisions in an enterprise agreement is not sufficient to indicate ambiguity or uncertainty for the purposes of s 217: Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 [2002] AIRC 531 at [49]. Instead, the FWC is to consider the matter objectively: Beltana No. 1 Salaried Staff Certified Agreement 2001 [2003] AIRC 608 at [23]. In that objective consideration, an assessment of the matters relied upon for the competing contentions will be important, including evidence that the parties to the agreement had a common understanding as to the meaning of the terms they used in their agreement. A reading of the enterprise agreement as a whole may indicate ambiguity or uncertainty in one or more of its clauses. And, as was noted by the Full Bench in Tenix, “the [FWC] will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention” at [31]. 19 

[73] The requirement for the determination of error was identified by the Full Bench in the Vehicle Award Decision where it was said:

What is necessary is to show that some sort of mistake occurred, in that a provision of the award was made in a form which did not reflect the tribunal’s intention. 20

[74] That is, to show an error of the requisite kind requires a demonstration that some sort of mistake has been made.

On ambiguity or uncertainty

[75] I am not satisfied that clause 11.2 of the 2020 Award is ambiguous or uncertain either because of the existence of rival contentions or because the provision is not clear on its face, either read alone, in the context of clause 11 or in the context of the 2020 Award.

[76] I consider clause 11.2 of the 2020 Award abundantly clear. Regardless of the period for which a casual employee is engaged they must be paid a minimum for that engagement of 3 hours pay. This amount is to be paid regardless of the period worked. At a practical level this means that a casual employee can be rostered to work for less than 3 hours (nothing in the clause sets a minimum engagement period) – say a 1 hour shift – but the employee must be paid as if they had worked for 3 hours.

[77] In reaching my conclusion on ambiguity or uncertainty I do not accept the submissions of the Newsagents Assoc. It seems to me that its submissions find uncertainty on the basis of what the clause does not provide – that is what happens to a requirement for a minimum payment if a casual employee absents themselves from the workplace of their own accord. On clause 11.2, in such a circumstance, an employee receives three hours pay as the clause requires the minimum payment even if the employee works for a shorter period of time. This is not uncertain. It may seem incongruous or unjustified, but the clause is clear.

[78] While I have reached a conclusion preferred by the SDA I do not agree with the submissions it makes. Firstly, there is no basis to conclude that clause 11.2 was intended to provide ‘clarity in relation to payment to casual employees’ This is not borne out by any evidence, submissions or claims before the PLR Full Bench or statement or decision of that Full Bench or the President. Further, the SDA has not provided the basis on which it makes this asserted reason for the change.

[79] Second, to the extent the SDA submissions go the meaning of the clause this is not the end of the matter I need to consider. Rather, as was observed by Munro J in Tenix, having determined the construction of the clause it must then be determined if the clause is ambiguous or uncertain.

On error

[80] I am satisfied that there is an error in the clause when the 2020 Award and clause 11.2 are considered in the context of the intention of the PLR.

[81] A minimum engagement period and a minimum payment are intrinsically different concepts.

[82] A minimum engagement period gives an employee certainty that, when called in for work, it will be for at least the specified period of time. That is, the employee cannot be put on a roster or called in for any shorter period of time.

[83] A minimum payment however allows a casual employee to be called in for a very short period of time but guarantees a minimum payment regardless of that period of engagement. In this way an employee may be rostered to work for a very short period of time but, regardless of that period of time, will receive the specified minimum payment.

[84] To not roster an employee for a minimum engagement period specified in an award would be a breach of the obligation of an employer under that award. To not do so where the award only specifies a minimum payment would not be a breach of an obligation as to the period of engagement. That is, the obligation on the employer is different, depending on the requirement as to time or payment.

[85] In this way a change from a requirement for a minimum engagement to a requirement for a minimum payment for a casual employee under the Award alters the legal obligation on the employer.

[86] This is not to suggest that either type of clause is right or wrong, and either provision can be found in varying Awards of the Commission.

[87] It is abundantly clear that the provisions have changed from the 2010 Award to the 2020 Award. Clause 13.4 of the 2010 Award says that the ‘minimum daily engagement of a causal is three hours’ while clause 11.2 of the 2020 Award an employer ‘must pay a casual employee for a minimum of 3 hours’ work’ regardless of hours actually worked without specification of a minimum engagement.

[88] The question to answer is, in moving from a minimum engagement in the 2010 Award to a minimum payment in 2020 Award, was an error made? If, as I have suggested, there has been a change to the legal obligation of an employer in engaging a casual employee and, given the statements that the PLR was not intended to alter the legal obligations that arose under the Award, 21 that this has occurred suggests that a mistake was made.

[89] Further, the comments of the drafting staff suggests that there was no intention to change the casual employment provisions from one of minimum engagement to a minimum payment. In the summary of positions document updated in October 2017 it was said by the drafters that:

‘Clause 11.3 [of the PLED] covers the 3 hour minimum daily engagement’

[90] That it was clear the PLR was not intended to alter any obligations in the 2010 Award suggests that an error has been made in the drafting of the 2020 Award.

[91] In considering this matter I could not find support for the submissions of the SDA that there has been no change of the obligations on employers from the 2010 Award to the 2020 Award.

[92] I do not agree with the SDA that the Ai Group submissions should be rejected for lack of evidence. The Ai Group submissions are, in essence, that the 2010 and 2020 Awards, in relation to this issue, use different words that are of different effect. The PLR was not intended to alter the legal effect. The changes made do alter the legal effect. This is not what was intended and, therefore, there is an error. The reasoning of the Ai Group is not inherently wrong and it is difficult to understand what ‘evidence’ is required.

[93] I agree with the SDA’s underlying premise that, in most cases, the money paid to an employee can be directly equated to the time worked – if a person works 6 hours they are paid for 6 hours. But in this case the difference is between the minimum hours that must be rostered by the employer and the minimum payment to be made regardless of the rostered hours. They will not always be the same. The change in wording has, in this respect clearly caused a change where no change was intended. This is a clear case of error being made. It is not apparent that this was the intended consequence of the change and the notation that the clause ‘covers’ the minimum engagement reflects that such a consequence was not intended.

[94] Comments have been made in relation to the clause in both the 2010 Award and the 2020 Award as to what is intended to occur when a casual employee, rostered for a minimum period of 3 hours leaves the workplace where they are ill (noting that casual employees do not have access to paid personal leave) or for some other reason prior to the end of their shift. That is not the matter before me nor a matter I need to resolve in determining an application under s.160 of the FW Act.

Should to 2020 Award be varied to remove the error and if so, how?

[95] I am satisfied that there is an error in the clause 11.2 of the 2020 Award. Having identified that error I am satisfied that clause 11.2 should be varied to resolve that error.

[96] In considering a variation I am not convinced that the variation proposed by the Newsagents Assoc is adequate. It seeks to remedy a matter not before the Commission – that is what occurs when an employee absents themselves from work. Should the Newsagents Assoc wish to pursue that matter an application to vary the 2020 Award is the appropriate means such that the merits of its claim may be tested.

[97] The purpose of the variation must be only to remediate the error identified and should avoid creating any new error, have an unintended consequence or result in ambiguity or uncertainty.

[98] The Ai Group’s proposed variation seeks to have the clause reflect, as closely as possible, the wording of the 2010 Award. Given its reflection of wording in the 2010 Award it suggests no alteration to the legal obligations that existed under the equivalent clause in the 2010 Award.

[99] The proposed variation (taking into account the recent variations to the clause) is:

11.2 An employer must pay a casual employee for a minimum of 3 hours’ work, The minimum daily engagement of a casual employee is 3 hours, or 1.5 hours’ work in the circumstances set out in clause 11.3, on each occasion on which the casual employee is rostered to attend work even if the employee works for a shorter time.

[100] While I am aware of the objection to the variation put by the SDA, to the extent it submits that there is no change in the obligation on employers from the 2010 Award to the 2020 Award it is difficult to accept its objection. To the extent the SDA says the 2020 Award does no more than provide clarity on existing obligations if the 2020 Award is uncertain it is at liberty to apply to vary the 2020 Award.

[101] While I note that both the Ai Group and the SDA made submissions as to the modern awards objection in s.134 of the FW Act this is not a matter I am required to consider in varying the 2020 Award pursuant to s.160 and the direction given to me by the President. I am however satisfied that the 2020 Award, as proposed to be varied by me, would continue to meet the modern awards objective.

CONCLUSION

[102] In the statement issued by me on 9 July 2021 I asked that the parties address some specific matters. On each of these specifically:

•  I am satisfied that the 2020 Award contains an error which may be resolved by a variation to the 2020 Award

•  The history of the Plain Language Re-drafting of the 2010 Award is set out in detail above. Taking this into account I am not satisfied that the change from the 2010 Award to the 2020 Award was intended in relation to minimum engagement of casual employees

•  This error can be resolved by a variation as proposed in the following paragraph

•  The Australian Payroll Association does not have standing to make an application to vary an award. I am however satisfied that I should consider the variation on my own motion

[103] It is my provisional view, for the reasons outlined above, that the General Retail Industry Award 2020 should be varied by deleting the existing clause 11.2 and replacing it with the following:

11.2 The minimum daily engagement of a casual employee is 3 hours, or 1.5 hours’ in the circumstances set out in clause 11.3.

[104] I have reached this view as to the variation for the reasons outlined above.

[105] Any party wishing to make a submission on variation in my provisional view is required to do so by email to chambers.bissett.c@fwc.gov.au by Wednesday 17 November 2021.

[106] If no objections to the provisional view are received by the date specified I will issue a determination varying the 2020 Award as indicated.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR735322>

 1   [2021] FWC 3905

 2   Note that the clause has been further varied since this application was made as a result of the Casual Terms Review 2021. That variation has not affected the terms relevant to this application except that they have been re-numbered. The 2020 Award as varied is generally referred to in this decision although in context submissions of the parties and references to an earlier version of clause 11 remain.

 3   The clause numbering has changed since the release of the exposure drafts and the finalisation of the 2020 Award. On XXX the 2020 Award was varied pursuant to a decision of the Full Bench in the Casual Terms Award Review 2021. What is now clause 11.2 was previously clause 11.4 in the 202o Award as made and clause 11.3 in the Plain Language Exposure Drafts (PLED).

 4   [2016] FWCFB 4418

 5   [2016] FWCFB 4418 at [73]

 6   [2015] FWC 6555

 7   I accept that this reference should most likely be to paragraph 46 of the SDA submission

 8   It is not immediately apparent how this resolved the concern raised by the SDA in relation to the minimum daily engagement of casual employees in clause 11 and the SDA made no submissions at the time or in this matter on this question

 9   [2017] FWC 5396

 10   [2018] FWC 702

 11   Transcript PN152-155

 12   [2018] FWC 4046

 13   Transcript, 21 June 2018  PN152-157

 14    Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (Bianco Walling) [2020] FCAFC 50 at [75]-[76]

 15   PR917548

 16   Print T3721

 17   [2020] FCAFC 50

 18    Ibid at [67]

 19    Ibid at [67] and [70]

 20   [2016] FWCFB 4418 at [73]

 21   [2015] FWC 6555. See also the Guidelines issued in relation to the plain language drafting of modern awards and the statement on the front page of the various Plain Language Exposure Drafts in relation to the 2010 Award.