4 yearly review of modern awards—Award flexibility

[2017] FWCFB 5788

[2017] FWCFB 5788

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.156 - 4 yearly review of modern awards

4 yearly review of modern awards—Award flexibility

(AM2014/300)

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT KOVACIC
COMMISSIONER LEE MELBOURNE, 8 NOVEMBER 2017

4 yearly review of modern awards - common issue - award flexibility - time off instead of payment for overtime – Pastoral Award 2010 and Horticulture Award 2010

1. Introduction

1. In July 2015 a Full Bench of the Commission provisionally determined a model TOIL term to be inserted into modern awards, as part of the 4 yearly review of modern awards. The model term was the subject of number of subsequent decisions and a plain language model term and an associated Schedule containing a template agreement were finalised in July 2016.[1]

1. A subsequent decision of 11 July 2016[2] varied awards which provided for overtime, but did not give employees the option of taking time off instead of payment for working overtime, and a number of award terms that provided TOIL at ‘ordinary rates’, that is, an hour off for an hour of overtime worked. A further decision on 31 August 2016[3] dealt with TOIL provisions in another 13 awards and following that decision only 29 of the 113 modern awards which make provision for paid overtime remained outstanding. A decision of 13 December 2016 (the December 2016 decision)[4] addressed a number of award specific issues among the remaining 29 modern awards.

1. This decision deals with two of the remaining awards – the Pastoral Award 2010 (the Pastoral Award) and the Horticulture Award 2010 (the Horticulture Award).

1. After the December 2016 decision draft variation determinations were published in respect of the Pastoral Award and the Horticulture Award to insert a modified version of the model TOIL term. The draft variation determinations were based on an agreed position reached by the Australian Workers’ Union (the AWU) and the National Farmers’ Federation (the NFF). Interested parties were invited to provide comments on the draft determinations – the AWU and NFF subsequently filed submissions.

1. Consideration

1. Some four issues are raised in the submissions.

Issue 1: The Schedule – paragraph 4

1. As mentioned earlier, an associated Schedule to the model term contains a template agreement for taking time off instead of overtime. The wording of the paragraph 4 of the Schedule in the two draft determinations, reads as follows:

‘If the agreement is terminated, the employer must pay the employee for overtime worked at the overtime rate applicable to the overtime when it was worked.’

1. On 25 January 2017, the NFF submitted that for reasons of consistency with the TOIL term[5] clause 24.1, paragraph 4 of the schedule be amended as follows:

   ‘If the agreement is terminated, the employer must pay the employee for overtime worked after that time at the overtime rate applicable to the overtime when it was worked.’

1. In support of the proposed amendment the NFF submits:

‘This will ensure that parties are not mistakenly given the wrong impression, by making clear that termination of an agreement for time off instead of overtime has prospective effect. That is, overtime rates only apply to overtime worked after the agreement to take time off instead of overtime has been terminated.’

1. The AWU does not oppose this change.

1. We do not propose to make the change sought. The variation terms in the awards make it clear that overtime worked after the agreement is terminated will be paid at the overtime rate applicable to the overtime when worked (e.g. see clause 31.5(c)(iii) of the proposed variation to the Pastoral Award). Accordingly the NFF’s proposed variation is unnecessary. Further, the variation proposed is apt to confuse. It may give the impression that once a TOIL agreement is terminated an employee has no right to be paid for overtime worked but not taken as time off during the time when the agreement was in operation – that is not our intention.

Issue 2: The Schedule – paragraph 1

1. The AWU identified an additional issue arising from the prospective nature of this TOIL term. Paragraph 1 of the schedule in the draft determination states:

‘The employer and employee agree that the employee will take time off instead of being paid for all overtime that has been worked by the employee.’ (emphasis added)

1. The AWU propose the following change:

‘The employer and employee agree that the employee will take time off instead of being paid for all overtime that has been is worked by the employee under this agreement.’

1. Due to the prospective nature of this term we agree that the highlighted changes should be made. The same change will be made to the text in paragraph (a) of the TOIL term.

Issue 3: Omissions from the Agreed Draft

1. The AWU identified two omissions from the parties agreed draft. The first is the expression “…unless the employer agrees to pay out the accrued overtime earlier” which the parties had included in paragraph (f) of the TOIL term. The AWU submit:

‘The Commission has removed the end of the final sentence at this clause, which reads: “…unless the employer agrees to pay out the accrued overtime earlier”. This sentence was included as an agreed compromise between the parties. The AWU have previously submitted that the option to elect to be paid for accrued TOIL (as is provided for in the Model TOIL Term) should be maintained for these awards. The AWU relied on the earlier Full Bench Decision in these proceedings on 6 October 2015 at paragraphs [52] and [53].

However, the parties agreed upon a compromise whereby the payment of overtime on request would at least be a clear option should the employer agree to pay the accrued overtime (without creating a mandatory payment of wages). We submit the agreed wording should be retained.’[6]  (emphasis added)

1. The words “…unless the employer agrees to pay out the accrued overtime earlier” provide an additional flexibility and will be inserted in the determinations published with this decision.

1. The second omission from the Schedule is the text regarding the six month deadline for overtime to be taken as time off. While these words are contained in paragraph (f) of the TOIL term, we agree that the words should also be included in the schedule.

1. Accordingly, we propose to amend paragraphs 2 of the Schedules, as follows (changes in mark-up):

‘2. Time off must be taken within 6 months of the overtime being worked at a time or times agreed by the employee and employer. If time off is not taken within 6 months of it being worked then the employer must pay the employee for the overtime, in the next pay period following those 6 months, at the overtime rate applicable to the overtime when worked.’

1. This change is consistent with the terms of the award variation and will make it clear that an employee has a right to payment for overtime worked if time off is not taken within 6 months.

Issue 4: Pastoral Award – placement of the model term

1. The NFF and AWU submit that the TOIL term should only be included in Part 3—General Employment Conditions, rather than being inserted in the parts for the various sectors in which it will operate (Part 4—Broadacre Farming and Livestock Operations; Part 5—Pig Breeding and Raising and Part 6—Poultry Farming). As the clauses that prescribe the hours of work and overtime terms for these sectors appear within the relevant parts, rather than in Part 3, it remains our view that the TOIL terms should appear in the three affected Parts, within the existing overtime clauses. If the TOIL term were located in Part 3, it may be overlooked by the employers and their employees when seeking to determine the overtime entitlements under the various Parts.

1. Next steps

1. Draft variation determinations will be published giving effect to this decision. Any comments on the draft variation determinations should be sent to [e-mail] by 4:00pm on Friday 17 November 2017. The opportunity to comment on the draft variation determinations is not an opportunity to re-agitate issues that have been determined by this Full Bench. If no errors are identified, the determinations will be then issued in final form.

PRESIDENT

[1] [2016] FWCFB 4258.

[2] [2016] FWCFB 4579.

[3] [2016] FWCFB 6178.

[4] [2016] FWCFB 7737.

[5] See clause 31.5(k) of the Pastoral Award and clause 24.1(k) of the Horticulture Award.

[6] Submission, AWU, 3 February 2017 at [9] – [10].

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