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The Fair Work Commission released a statement on 21 March 2018 summarising a series of decisions made between December 2014 and June 2017 modifying the proposed award drafts in ways that will have a significant impact when the review is completed.

This EMA Note summarises those decisions under the following headings:

• Inconsistencies with the National Employment Standards
• Changes to the ordinary hourly rate of pay definitions and references
• Removal of absorption clauses
• Specific changes to the Hydrocarbons Industry (Upstream) Award
• Specific changes to the Manufacturing and Associated Industries and Occupations Award
• Specific changes to the Marine Tourism and Charter Vessels Award and the Professional Diving
Industry (Recreational) Award

• Specific changes to the Vehicle, Manufacturing, Repair, Services and Retail Award
• Specific changes to the National Training Wage schedule

Please note that this is not an exhaustive list of all the changes to the modern awards, and is only a summary of the more relevant changes that were raised in the Fair Work Commission’s recent summary.

Inconsistencies with the National Employment Standards

The provisions described below were all inconsistent with the NES. These inconsistencies have already been rectified in the current iterations of the modern awards. However, as these changes were included in the recent Fair Work Commission Statement, for completeness, they have been included in this summary. Employers should ensure that they have no outstanding policies or procedures which follow the older provisions.

Annual Leave Provisions

The NES provides that annual leave must accrue progressively during a year of service, according  to an employee’s ordinary hours of work, and must accumulate year to year. There is no minimum qualifying period for the accrual of annual leave. 29 individual modern awards contained provisions which were inconsistent with this NES requirement, including the Manufacturing and Associated Industries and Occupations Award 2010, the Pharmaceutical Industry Award 2010, and the Vehicle, Manufacturing,Repair, Services and Retail Award 2010. For all modern awards whose annual leave clauses were inconsistent with the NES and have since changed, see the attached list.

Other Leave Provisions

The Air Pilots Award 2010, the Aircraft Cabin Crew Award 2010, and the Labour Market Assistance Industry Award all provided for circumstances in which personal/carer’s leave may be accessed during and instead of annual leave. These were inconsistent with the NES, which states that an employee is taken not to be on annual leave for any period of other leave, without limitations.

Changes to the Ordinary Hourly Rate of Pay Definitions and References

Many modern awards have provisions for ‘all purpose allowances’ – usually in relation to casual loading.This provides that, when calculating any entitlements owed to an employee, their ‘ordinary rate of pay’ is to include the all purpose allowance. The Fair Work Commission decided that the definition for ‘all purposes’ should be included in relevant modern awards to avoid confusion. In addition, schedules in these awards that contain the ordinary weekly pay for employees should also include ordinary hourly rates, which will reflect the presence of any ‘all purpose allowances’. Current exposure drafts include such schedules. The Commission acknowledges that detailed schedules for some modern awards,including the Vehicle Manufacturing, Repair, Services and Retail Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010 may be inappropriate, given the complexities of the rates of pay in those awards.

Removal of Absorption Clauses

The Fair Work Commission has made the decision to remove all clauses in modern awards that allow for above-award rates of pay to absorb other monetary obligations arising under the award. The reasoning provided is that the awards are to provide a ‘minimum safety net’ for employees, and the absorption clauses go beyond this minimum safety net. However, the Commission has stated that ‘such matters are adequately dealt with by the common law principles of set off […] and should be left to individual employers and employees to determine’. As such, this change will not have any significant effect of employers.

Award Specific Changes

The Fair Work Commission Statement included some award-specific changes to the exposure drafts. While not an exhaustive list, we have included some of the more relevant awards in this summary.

Hydrocarbons Industry (Upstream) Award

The following will apply to the Hydrocarbons Industry (Upstream) Award 2014:

• A definition for ‘permanent night shift’ is included in the exposure draft for the purpose of providing clarity to when the 30% loading for shiftworkers on permanent night shift will apply.
• As per the above summary, the ‘ordinary rate of pay’ in the award is to include all purpose allowances, including the industry allowance and the electricians licence allowance.
• The casual loading rate is to be calculated based on the ‘ordinary rate of pay’, inclusive of the all purpose allowances.

Manufacturing and Associated Industries Award

The following will apply to the Manufacturing and Associated Industries Award 2014. Note that the Fair Work Commission’s summary included a decision solely on this award, and as such, more changes are summarised in this section.

• Coverage for work in ‘cork and cork products’ has been included in the exposure draft.
• The exposure draft limits ordinary hours for day workers, continuous shiftworkers, and non-continuous shift workers (not engaged in vehicle manufacturing) to eight hours per day, unless agreed between the employer and employees.
• The exposure draft now states that ‘any change to rosters or hours of work is subject to the consultative provisions…’ for day workers, and continuous and non-continuous shiftworkers.
• The exposure draft now provides a minimum 20 minute meal break when an employee is required to work more than five hours.
• Meal allowances and meal break clauses distinguish between the ordinary hourly rate and the applicable rate.
• The exposure draft states that payment for annual leave will not include overtime, shift loading, weekend penalty rates, special rates, or any other payment (with the exception of annual leave loading).
• The rates of pay schedule in the exposure draft has been amended to include the ‘all purpose rates’, and parties are satisfied that the result is simple to read and easy to understand.
• The monetary allowances schedule has been modified in the exposure draft to include the ‘Supervisor/Trainer/Co-ordinator––Technical allowance’ and the ‘float glass furnace repair’ allowance.
• The definition for ‘irregular casual’ has been removed from the exposure draft, as the phrase is not used in the award.
• The definition for ‘all purpose’ has been included in the definitions section of the exposure draft.
• The definition for ‘applicable rate of pay’ has been included in the exposure draft to mean the ordinary rate of pay plus penalties and allowances and will substitute ‘ordinary rate of pay’ in the appropriate clauses of the award.
• The Commission has encouraged parties to discuss relevant examples for inclusion in the award, as it may help with clarity and simplicity.

The parties have also agreed on a number of technical changes and agreed on the various applicable rates. In accordance with these agreements, the minimum hourly rate table now includes a column for 125% of the minimum hourly rate.

Marine Tourism and Charter Vessels Award 2010, Professional Diving Industry (Recreational) Award 2010

The exposure drafts for the Marine Tourism and Charter Vessels Award 2014 and the Professional Diving Industry (Recreational) Award 2014 were amalgamated to reduce the number of modern awards. The parties rejected this, and in the absence of any support for the amalgamation, the Fair Work Commission has now broken the awards up in to two separate exposure drafts.

Vehicle, Manufacturing, Repair, Services and Retail Award 2010

The following will apply to the Vehicle, Repair, Services and Retail Award 2014. Note that the ‘manufacturing’ part of this award has been transferred to the Manufacturing and Associated Industries and Occupations Award.

The column for ‘casual hourly rates’ has been removed from the exposure draft. The column only reflected the loading for work on Monday to Friday, between 6:00am and 6:00pm. Parties elected to remove the column to avoid any potential confusion as to what rate was applicable to casual employees at various times.

National Training Wage

The current National Training Wage schedule includes the paragraph:

This schedule does not apply to the apprenticeship system or to any training program which applies to the same occupation and achieves essentially the same training outcome as an existing apprenticeship in an award as at 25 June 1997.

The current exposure draft does not include any such paragraph. Parties were invited to make submissions to any training program which the paragraph may still have application, but no submissions have been made.

Modern awards in which the annual leave provisions were amended:

Alpine Resorts Award 2010
Ambulance and Patient Transport Award 2010
Aquaculture industry Award 2010
Business Equipment Award 2010
Car Parking Award 2010
Concrete Products Award 2010
Corrections and Detention (Private Sector) Award 2010
Dry Cleaning and Laundry Industry Award 2010
Electrical, Electronic and Communications Contracting Award 2010
Fire Fighting and Industry Award 2010
Food, Beverage and Tobacco Manufacturing Award 2010
Graphic Arts, Printing and Publishing Award 2010
Local Government Industry Award 2010
Manufacturing and Associated Industries and Occupations Award 2010
Miscellaneous Award 2010
Oil Refining and manufacturing Award 2010
Pest Control Industry Award 2010
Pharmaceutical Industry Award 2010
Poultry processing Award 2010
Professional Employees Award 2010
Road Transport and Distribution Award 2010
Seafood Processing Award 2010
Security Services Industry Award 2010
Storage Services Award 2010
Timber Industry Award
Transport (Cash in Transit) Award 2010
Vehicle Manufacturing, Repair, Services and Retail Award 2010
Water Industry Award 2010
Wine Industry Award 2010

Conclusion

This is only a summary of the key decisions that were mentioned in the Fair Work Commission’s recent statement. Employers are encouraged to review the exposure drafts for themselves as they are released, which can be found on the Fair Work Commission’s website.

Require further information/assistance?

If you require further information arising out of the current modern award reviews, please contact one of our consultants.

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