| [2021] FWCFB 6071 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – Overtime for casuals
(AM2017/51)
VICE PRESIDENT HATCHER |
SYDNEY, 17 DECEMBER 2021 |
4 yearly review of modern awards - Hair and Beauty Industry Award 2010 – outstanding issues.
Introduction
[1] This decision concerns an outstanding issue that has arisen in this part of the 4 yearly review of modern awards in relation to the Hair and Beauty Industry Award 2010 (HB Award). This issue arose following our decision of 5 March 2021 1 (March decision), in which we noted that clause 31 of the HB Award does not appear to prescribe a rate which applies when a full-time or part-time employee works outside the spread of hours specified in clause 28.2(a) or in excess of the maximum daily hours specified in clause 28.3.2 In the March decision, we invited interested parties to address this issue in their submissions, and submissions were subsequently received from the Australian Workers’ Union (AWU), the Shop, Distributive and Allied Employees’ Association (SDA) and the Australian Industry Group together with Hair and Beauty Australia and the Australian Hair Council (Ai Group).
[2] In a further decision issued on 2 August 2021 3 (August decision), we noted that the submissions had identified that the issue had previously arisen during the concurrent Modern Award Plain Language proceedings being conducted by a differently constituted Full Bench. We advised in that decision that the President of the Commission had assigned the determination of the issue to this Full Bench.4 The presiding member conducted a conference in relation to this issue on 11 August 2021 (August conference). At this conference, the parties advised that they were content for the Full Bench to determine the issue on the basis of the written submissions already filed.
[3] The AWU submitted that:
• the award should be varied to confirm full-time and part-time employees are entitled to be paid overtime rates for work performed outside the span of hours and for hours worked in excess of the maximum per day;
• the intent of clauses 28.2 and 31.2 is to require payment of overtime rates to full-time and part-time employees where employees work outside the ordinary span of hours, as demonstrated by the express reference in clause 31.2 to the ordinary hours of work in clause 28.2;
• the only alternative construction available of clause 31.2 is that the award currently operates to prohibit the working of hours outside the span of hours because these hours could not be classified as ordinary hours and would not meet the definition of overtime;
• similarly, if overtime rates are not payable when the maximum hours prescribed in clause 28.3 are exceeded, the award must be interpreted as prohibiting the working of additional hours; and
• any technical argument that hours outside the span or in excess of the daily maximum would be classified as overtime hours that do not attract penalty rates should be rejected by the Commission, as it would result in a manifestly unjust outcome whereby the overall remuneration for an employee for working ordinary hours (minimum hours plus superannuation) would be lower than the overall remuneration for working overtime (as superannuation is generally not paid on overtime).
[4] The AWU submitted that the current ambiguity should be remedied by amending clause 31.2(a) to the following effect:
Overtime hours worked by a full-time or part-time employee in excess of, or outside of, ordinary hours are to be paid at 150% of the ordinary hourly rate of pay for the first three hours and 200% of the ordinary hourly rate of pay after three hours.
[5] It submitted that, under its proposed variation, the overtime rates in clause 31.2(a) would continue to operate subject to clause 31.2(d) which requires a loading of 100% for all ordinary hours and overtime worked on a Sunday. The AWU submitted that the proposed variation is consistent with the modern awards objective in s 134 of the Fair Work Act 2009 (FW Act) in that half of all award-reliant employees in the hair and beauty industry are “low paid”, as defined in the 2019-2020 Annual Wage Review and clarification of overtime rates may provide a small improvement to the relative living standards and needs of the low paid (s 134(1)(a)). It also submitted that the proposed variation supports the need to provide additional remuneration for employees working overtime pursuant to s 134(da), as the award arguably does not currently compensate full-time and part-time employees for the disabilities associated with working in excess of the maximum daily hours or outside the span of hours.
[6] The SDA similarly submitted that the HB Award should be varied to prescribe that work performed outside the spread of hours by full-time and part-time employees should attract payment at the overtime rate. In respect of work performed by permanent employees in excess of the maximum daily hours specified in clause 28.3, it submitted that this work should also attract overtime payment which will provide internal consistency within the HB Award with regards to how casuals are paid overtime pursuant to clause 31.2(b)(ii). The SDA noted that the absence of an overtime rate for work done in excess of the daily maximum hours for permanent employees under the HB Award is anomalous and should be amended to reflect other modern awards, such as clause 21.2 of the General Retail Industry Award 2020 and clause 26.2 of the Fast Food Industry Award 2010.
[7] The Ai Group opposed any variation to the HB Award which would entitle full-time and part-time employees to overtime rates of pay for work performed in excess of the maximum number of ordinary hours that may be worked in a day pursuant to clause 28.3. It submitted that the HB Award does not require the payment of overtime rates in such circumstances, and the proposition that the absence of a requirement to pay overtime rates for work performed in excess of the daily maximum number of hours results in a prohibition against the performance of such work is a misnomer. The Ai Group contended that the variations to the HB Award proposed by the unions would amount to a significant substantive change that is not necessary to achieve the modern awards objective. In particular, it submitted that there is no evidence before the Commission associated with the relative living standards and the needs of the low paid and no basis for concluding that the proposed change would promote social inclusion through increased workforce participation. Rather, it submitted that, to the extent that the proposed change would result in employers altering the way in which they arrange their employees’ hours of work, the proposed change may by inconsistent with the promotion of flexible modern work practices and the efficient and productive performance of work. It also submitted that the likely impact on business will clearly be negative, potentially increasing employment costs in a sector that has suffered significantly in the context of the COVID-19 pandemic.
Consideration
[8] The current provisions relevant to this issue are as follows. Clause 28.2(a) of the HB Award provides that ordinary hours “must not” exceed an average of 38 per week and “may be” worked within the spread of hours of 7.00am–9.00pm, Monday to Friday, 7.00am–6.00pm on Saturday and 10.00am–5.00pm on Sunday. Clause 28.3 provides that an employee “may be” rostered up to a maximum of 9 hours on any day except that the employee may be rostered to work one 10.5 hour day per week and, by mutual agreement, a second 10.5 hour day.
[9] Clause 31.2(a) makes provision as to the circumstances in which overtime penalty rates are payable to full-time and part-time employees as follows:
(a) Overtime—full time and part-time employees
Hours worked by full-time or part-time employees in excess of the ordinary number of hours of work prescribed in clause 28.2 are overtime hours and are to be paid at 150% of the ordinary hourly rate of pay for the first three hours and 200% of the ordinary hourly rate of pay after three hours.
[10] As observed in the March decision, clause 31.2(a) does not provide, in relation to clause 28.2, that overtime rates are payable for work rostered outside the prescribed spread of hours. Nor does it provide that overtime rates are payable if work is rostered outside the daily limits prescribed by clause 28.3. This is in contrast to the position for casual employees, since clause 31.2(b)(ii) provides that casual employees are to be paid overtime rates for work in excess of 10� hours per day and clause 31.2(c) provides that casual employees will be paid overtime rates for hours worked outside the spread of hours provided for in clause 28.2(a) (except for Sundays, when a separate rate applies for all hours worked: clause 31.2(e)).
[11] We consider that the position described is clearly anomalous. There is no logical rationale for the more beneficial treatment of casual employees in respect of overtime penalty rates. Nor do the provisions of the HB Award referred to make plain what is intended in respect of work performed outside of the spread of hours or outside of the prescribed maximum daily hours when such hours do not exceed 38 in a week. We do not consider that it was intended that any such work be prohibited altogether: the language used (“may be”) in clauses 28.2(a) and 28.3 is not indicative of an outright prohibition, clause 28.2(a) is only concerned with when ordinary hours (i.e. hours payable at ordinary time) may be worked, and clause 28.3 with the rostering of hours. Other modern awards do not take the approach of prohibiting work outside the spread of hours or the prescribed maximum daily hours. No party proposed that there should be any such prohibition. Nor do we consider that it was intended that such work would continue to be paid at the ordinary-time rate, since that would render the daily spread of hours (other than for casuals) and limitation on daily hours ineffective for all practical purposes. The anomaly appears to us likely to have arisen from an oversight.
[12] Accordingly, we will vary the HB Award to provide that, for full-time and part-time employees, overtime penalty rates will apply to work performed outside the daily spread of hours or in excess of the prescribed daily maximum hours. Such a variation will make the HB Award consistent with like modern awards, including the General Retail Industry Award 2020 (clauses 21.2(a) and (b)), the Fast Food Industry Award 2010 (clause 26.2), the Hospitality Industry (General) Award 2020 (clauses 15.1 and 28.2) and the Restaurant Industry Award 2020 (clauses 15.1 and 23.1). We are satisfied that such a variation is necessary to achieve the modern awards objective. In respect of the considerations required to be taken into account under s 134(1) of the FW Act, we consider that the most pertinent considerations are paragraph (da)(i) and (ii) (the need to provide additional remuneration for employees working overtime, unsocial, irregular or unpredictable hours) and paragraph (g) (the need to ensure a simple and easy to understand modern award system). We consider that these considerations weigh in favour of the variation. In respect of paragraphs (d) and (f), we cannot in the absence of evidence assess whether the variation will have any discernible effect on the efficient and productive performance of work or whether it will affect employment costs. It certainly seems to us inherently unlikely that employees will be required to any significant degree to work outside the spread of hours, having regard to normal trading hours. Accordingly, we assign neutral weight to these considerations. We consider that the other matters in s 134(1) are not relevant or are of neutral weight.
[13] As to the form of the variations, we note two matters:
(1) It needs to be made clear that the maximum daily hours prescribed by clause 28.3 are limits on ordinary hours, so that overtime applies if these limits are exceeded.
(2) There is a current drafting anomaly in clause 31.2(a) in respect of part-time employees. Clause 12.6 provides that part-time employees are entitled to overtime rates for work in excess of their agreed number of hours. However, clause 31.2(a) refers to part-time employees being paid overtime rates for work in excess of the ordinary number of hours prescribed by clause 28.2 (i.e. 38). All parties agreed that clause 12.6 reflects the correct position. 5
[14] The variation to be made will therefore incorporate the above two matters. A draft determination will be issued in conjunction with this decision, and parties will be given 21 days to comment upon the form of the variation.
[15] In its submissions, the SDA submitted that the HB Award does not have an overtime provision for work performed outside the rostering conditions for full-time and part-time employees and proposed that clause 31.2(a) be varied to clarify all of the circumstances where overtime would apply for permanent employees. The Ai Group opposed this proposed variation on the basis that it does not constitute a clarification of the HB Award but a significant substantive change. It submitted that an employee is not entitled to overtime rates for such work and a case has not been made out for altering the HB Award to require as such.
[16] We do not propose to act upon the SDA’s submission in this proceeding. If the SDA wishes to pursue the matter, it may file an application to vary the HB Award pursuant to s 158 of the FW Act.
VICE PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR736858>
2 Ibid at [13]
4 Ibid at [5]-[6]
5 Transcript, 11 August 2021, PNs 16-28