Modern Award Review update

Workplace Directions

Since December 2013, the Fair Work Commission (‘Commission’) has been undertaking the 4 Yearly Review of Modern Awards (‘Review’). As part of the Review, the Commission has focussed on some key common issues as well as reviewing each of the modern awards individually. Below is a summary of the common issues, including the claims under review and what stage they are up to.

Annual leave

The claims of the parties in relation to annual leave provisions in modern awards include granting leave in advance of accrual, payment by EFT, cashing out annual leave and dealing with excessive leave accruals. Model clauses were drafted and refined with input from the parties and draft determinations were subsequently published prior to hearings held in December 2015.

It is expected that a final decision will soon be published regarding these issues.

Part-time and casual employees

Employers have sought changes to part-time provisions to provide greater flexibility to alter part-time employee hours of work as required.

Unions have sought changes to casual provisions to increase minimum engagement periods to four hours, require compulsory conversion from casual to permanent employment after six or 12 months service (depending on the industry), and to impose other restrictions on casual employment. Those other restrictions include prohibiting engagement of casuals to avoid award obligations, a requirement to offer hours to existing employees prior to engaging more casuals or part-time employees, and obliging employers to notify casuals of their classification, rate of pay and ‘likely number of hours’.

The case is part-heard. Further hearings have been scheduled for July and August 2016 to deal with the outstanding issues.

Public holidays

Employer groups have made claims to cap the number of public holidays and to provide more flexible arrangements regarding days in lieu.

Directions were issued inviting parties to file evidence and submissions for any further public holiday issues they wish to raise by March 2017, with the expectation that these matters will be heard before a Full Bench in April 2017.

Award flexibility / facilitative provisions

Employers have been successful in seeking that provisions to allow employers and employees to agree to time off in lieu of payment if overtime under awards that do not already contain such provisions. The time off would have to be taken within six months of the overtime being worked, and would be on the basis of one hour off for each hour of overtime worked. Awards already containing time off in lieu of overtime provisions are still being considered.

Family and domestic violence clauses

The Australian Council of Trade Unions (‘ACTU’) proposes that all modern awards should include model terms relating to requests for ‘family friendly’ arrangements, a right to return to substantive positions after parental or adoption leave, and access to personal leave for pregnancy or adoption-related appointments. The ACTU later amended this claim to a parental leave clause rather than ‘family friendly’ arrangements following a jurisdictional objection to its inclusion.

With regards to the domestic violence clause, the ACTU seeks to vary all modern awards to include 10 days paid domestic violence leave per year and rights to request a change in working arrangements in connection with their disclosure of domestic violence.

A jurisdictional hearing was held in August 2015 with regards to these matters where the employer groups sought to strike out the ACTU claim. The Commission held that evidence and submissions would need to be considered before forming a final view about the jurisdictional objections. The parties have been directed to file evidence and submissions by September 2016, with an expectation that the matters will be listed for hearing in October 2016.

Micro business schedule

Employers are seeking to include a micro business schedule in 93 modern awards. The clause will vary the standard clauses relating to types of employment, payment of wages, ordinary hours of work, breaks, overtime and some further claims regarding public holidays (in addition to the public holidays common issue claims). The intention of such a schedule, it is said, is to provide simplicity, clarity and appropriateness for the circumstances of small businesses and their employees.

The parties have been directed to file evidence and submissions by May 2016, with an expectation that the matter will be listed for hearing after June 2016.

Transitional / sunsetting provisions for accident pay, redundancy and district allowances

This common issue has dealt with multiple claims regarding redundancy, accident pay, district allowances and other provisions with state-based differences that were transitional or had ‘sunset’ dates of 31 December 2014.

All of the provisions in question were removed from the modern awards in March 2015, as they were considered obsolete because of their strict transitional nature or sunset date (31 December 2014). The union groups, however, have made further claims with regards to including model accident pay and location allowance clauses. With regards to accident pay, determinations were made and issued on 18 August 2015 with model clauses inserted into 21 modern awards.

With regards to the location allowance, parties have been directed to file any amended submissions and further evidence by May 2016.

Penalty rates case

The Commission is also undertaking a review of penalty rates in a number of modern awards in the hospitality and retail sectors. The issue of penalty rates was a key feature of the Productivity Commission’s ‘Workplace Relations Framework Report’, which we reported on in the August 2015 edition of Workplace Directions.

Employers sought a reduction of weekend and public holiday penalty rates. A number of objections to evidence have been filed in these proceedings, which has delayed the progress of deciding on these issues. However, final submissions were heard over four days in in April 2016 and the Commission has reserved its decision.

Authored by Tim McDonald, Partner, Sydney

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