Fair Work Act 2009 FAIR WORK COMMISSION. s. 156: 4 Yearly Review of Modern Awards AM2014/239. Pastoral Award 2010

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1 Fair Work Act 2009 FAIR WORK COMMISSION s. 156: 4 Yearly Review of Modern Awards AM2014/239 Pastoral Award 2010 SUBMISSIONS FROM THE AUSTRALIAN WORKERS UNION LEARNER SHEARER TERMS Background 1. On 24 December 2015 a Full Bench of the Fair Work Commission issued a Decision in relation to the 4 yearly review of the Pastoral Award (the Award) and accompanying Directions regarding a claim by The Australian Workers Union (AWU) to insert new terms dealing with learner shearers. 2. The Directions require the AWU to file a written submission regarding whether the proposed learner shearer term, and in particular the one in four stands aspect, is a matter which may be included in a modern award by 4pm on 5 February In accordance with these Directions, the AWU s written submissions regarding the inclusion of its proposed learner shearer term appear below. The term sought by the AWU 4. Subject to the Commission determining that the one in four stands provision can be included in a modern award, the AWU and the National Farmers Federation (NFF) previously agreed upon the wording for a new term dealing with learner shearers. The agreed terms are attached to correspondence filed by the NFF on 6 August yearly review of modern awards Pastoral Award 2010 [2015] FWCFB See 1

2 5. Prior to the Hearing on 9 December 2015, the Commission released a Revised summary of substantive issues for the Award. This document contained a slightly amended version of the agreed learner shearers term. 6. We consider the Commission s draft determination improved the language and formatting used in the agreed term without making any substantive change. On that basis, it is the terms contained in the Revised summary of substantive issues that the AWU seeks to have included in the Award. The statutory provisions 7. It does not appear necessary to cite the range of relevant statutory provisions for present purposes because the Full Bench has already made it clear that the critical sections of the Fair Work Act 2009 (the Act) are s 139 and We submit there are two important factors for the Commission to be conscious of when determining whether the learner shearer provisions can be included in the Award pursuant to s 139 or 142 of the Act. 9. The first factor is s 139 and 142 are beneficial legislative provisions which need to be interpreted in accordance with the well-established approach to the interpretation of beneficial and remedial legislation The second factor is the requirement under s 15AA of the Acts Interpretation Act 1901 (as in force at 25 June 2009) to prefer a construction that would promote the purpose or object of the Act over a construction which would not promote that purpose or object We deal with these factors on a more general level particularly in relation to s 139 (1) of the Act below and then turn to the specific elements of our proposed learner shearer term. 12. The general analysis focuses upon the references in s 139 (1) of the Act to terms about career structures, type of employment and piece rates because these are specific parts of s 139 (1) we are relying upon for the inclusion of the one in four stands provision. Beneficial legislation 13. Sections 139 and 142 fall within Chapter 2, Part 2-3 of the Act. 3 4 yearly review of modern awards Pastoral Award 2010 [2015] FWCFB 8810 at [93] 4 This is primarily derived from the High Court decision in IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1 5 Bowker [2014] FWCFB 9227 at [21] 2

3 14. The purpose of Chapter 2 in the Fair Work Act 2009 (the Act) is to prescribe conditions of employment for national system employees in Australia. 15. This is made clear by s 43 of the Act which states: Main terms and conditions 43 (1) The main terms and conditions of employment of an employee that are provided under this Act are those set out in: (a) the National Employment Standards (see Part 2-2); and (b) a modern award (see Part 2-3), an enterprise agreement (see Part 2-4) or a workplace determination (see Part 2-5) that applies to the employee. Note 1: Note 2: Note 3: The situations in which a workplace determination, rather than a modern award or enterprise agreement, provides an employee's terms and conditions of employment are limited. In most cases, this Act applies to a workplace determination as if it were an enterprise agreement in operation (see section 279). See Part 2-5 generally for the rules on workplace determinations. Part 2-8 provides for the transfer of certain modern awards, enterprise agreements and workplace determinations if there is a transfer of business from an employee's employer to another employer. Copied State instruments provide the main terms and conditions of employment for an employee to whom the instrument applies. See Part 6-3A generally for the rules about those instruments. Other terms and conditions 43 (2) In addition, other terms and conditions of employment include: (a) those terms and conditions arising from: (i) a national minimum wage order (see Part 2-6); or (ii) an equal remuneration order (see Part 2-7); and 3

4 (b) those terms and conditions provided by Part 2-9. Note: Part 2-9 deals with miscellaneous terms and conditions of employment, such as payment of wages. 16. This purpose of prescribing terms and conditions of employment for national system employees is significant because it means the provisions can be characterised as beneficial. This follows because the terms have been included for the benefit of employees. 17. The significance of legislative provisions being characterised as remedial or beneficial was summarised by a five-member Full Bench of the Commission headed by the President in Bowker 6. This case concerned the anti-bullying provisions in the Act and the Full Bench relevantly stated: [23] There are two particular features of the statutory provisions under consideration which bear upon their proper construction. [24] First, these are remedial or beneficial provisions. Part 6-4B of the FW Act allows a worker who has been bullied at work to apply to the FWC for an order to stop the bullying. It is appropriate to characterise these provisions as remedial or beneficial. The provisions are analogous to legislative provisions dealing with aspects of occupational health and safety such as: reducing excessive hours of labour in factories; 5 guarding against accidents,6 or furthering industrial safety7. [25] The characterisation of these provisions as remedial or beneficial has implications for the approach to be taken to their interpretation. As the majority (per Gibbs CJ, Mason, Wilson and Dawson JJ) observed in Waugh v Kippen:... the court must proceed with its primary task of extracting the intention of the legislature from the fair meaning of words by which it has expressed that intention, remembering that it is a remedial measure passed for the protection of the worker. It should not be construed so strictly as to deprive the worker of the protection which Parliament intended he should have. 8 [26] Any ambiguity is to be construed beneficially to give the fullest relief that a fair meaning of its language will allow, 9 provided that the 6 Bowker [2014] FWCFB

5 interpretation adopted is restrained within the confines of the actual language employed that is fairly open on the words used. 10 As their Honours Brennan CJ and McHugh J put it in IW v City of Perth:11... beneficial and remedial legislation, like the [Equal Opportunity] Act, is to be given a liberal construction. It is to be given a fair, large and liberal interpretation rather than one which is literal or technical. Nevertheless, the task remains one of statutory construction. Although a provision of the Act must be given a liberal and beneficial construction, a court or tribunal is not at liberty to give it a construction that is unreasonable or unnatural. [27] If the words to be construed admit only one outcome then that is the meaning to be attributed to the words. However if more than one interpretation is available or there is uncertainty as to the meaning of the words, such that the construction of the legislation presents a choice, then a beneficial interpretation may be adopted Section 139 (1) of the Act permits a modern award to include inter alia terms about any of the following matters : - career structures (s 139 (1) (a) (i)); - A type of employment (s 139 (1) (b)); and - piece rates (s 139 (1) (a) (ii). 19. It appears that interpreting whether a proposed term is about career structures, about [a] type of employment or about piece rates will inevitably involve a significant level of discretion. 20. As a result, the interpretation of these terms does not appear to fall into the category described in Bowker as one which would admit only one outcome Applying the decision in Bowker, this means a beneficial interpretation may be adopted 9 in relation to determining whether a particular term is about these matters. 22. On a more practical level, we submit the application of this principle effectively means that if it is arguable that a particular term is permitted to be included in 7 Bowker [2014] FWCFB 9227 at [23] to [27] 8 Ibid at [27] 9 Ibid at [27] 5

6 a modern award by s 139 of the Act, the Commission should err on the side of determining that it has jurisdiction to include the provision. 23. The modern awards objectives in s 134 of the Act can then be applied to determine whether the term should be included on a merit level. 24. We note this generally appears to be the approach adopted by a Full Bench of Fair Work Australia when the scope of s 139 of the Act was considered during the 2012 Transitional Review in Master Builders Australia Limited Similarly, a Full Bench of the Fair Work Commission in the apprentices case during the 2012 Transitional Review stated the following in relation to s 139 of the Act: The terms of the section are to be given their ordinary meaning and there is no warrant for a restrictive construction to be placed on any of them We also note the principle that: As a matter of interpretation, a court or tribunal should not read a limitation into a source of power unless the words clearly bear such a meaning In these proceedings, the AWU is seeking the inclusion of award terms that are clearly intended to be beneficial for learner shearers. 28. As a result, terms such as career structures, type of employment and piece rates in s 139 (1) of the Act should be interpreted by the Full Bench in a manner that permits the terms to be included in the Award and hence allows learner shearers to derive the proposed benefits. Objects of the Act 29. The purpose or object of the Act is to be taken into account even if the meaning of a provision is clear An object of the Act is ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment 10 Master Builders Australia Limited [2012] FWAFB Modern Awards Review 2012 Apprentices, Trainees and Juniors [2013] FWCFB 5411 at [95] 12 ING Administration Pty Ltd v Jajoo, Ramsin 2006 AIRCFB PR and the Decision of Vice President Watson and Commissioner Cargill at [40] 13 Bowker [2014] FWCFB 9227 at [21] 6

7 Standards, modern awards and national minimum wage orders 14 (our emphasis). 31. It is significant that the NFF, the principal employer organisation in the pastoral industry, is not opposed to the inclusion of the learner shearer provisions, including the one in four stands aspect, on a merit level This is an extremely strong indication that the terms form part of a relevant and fair safety net in the pastoral industry. 33. On this basis, we submit terms such as career structures, type of employment and piece rates in s 139 (1) of the Act should be interpreted in a manner that allows the learner shearer provisions to be included because this will further the object of ensuring that the Award forms part of a fair and relevant safety net of minimum terms and conditions in the pastoral industry. Elements of the term sought 34. The critical elements of the term sought by the AWU are: (i) (ii) (iii) (iv) A definition of a learner shearer (clause 44.4 (b) (i)) plus additional clarification regarding how the definition applies for a run of sheds (clause 44.4 (b) (ii)); A requirement for one in every four shearing stands to be given to or reserved for a learner shearer who is available at the start of the shed (clause 44.4 (b) (ii)); An obligation for a learner shearer to maintain records of their shearing activities in a prescribed form and to produce the records to their employer or intended employer (clause 44.4 (b) (iii)); and Guaranteed minimum earnings for a learner shearer but confined to one specified learner for every four stands used (clause 44.4 (b) (iv)). The minimum wage, definition and records requirement 35. We submit there can be no real doubt that the terms relating to elements (i), (iii) and (iv) may be included in a modern award pursuant to s 139 (1) of the Act. 14 Section 3 (b) of the Fair Work Act This was confirmed by the NFF during proceedings on 9 October 2015 see Transcript at PN75 to PN78 7

8 36. This is because element (iv) specifically prescribes a minimum wage for a learner shearer. 37. It is therefore clearly about minimum wages and hence may be included in the Award pursuant to s 139 (1) (a) of the Act. 38. Given the term alters the general application of piece rates under the Award, element (iv) could also be categorised as being about piece rates and hence permitted for inclusion pursuant to s 139 (1) (a) (ii) of the Act. 39. The definition of a learner shearer (element (i)) may be included in the Award because is a term about : - minimum wages (s 139 (1) (a)); - a type of employment (s 139 (1) (b)); and/or - piece rates (s 139 (1) (a) (ii)). 40. In the alternative, the definition of a learner shearer is incidental to the term containing a minimum wage for a learner shearer (element (iv)) and is essential to the term being able to operate in a practical way. 41. This appears relatively uncontroversial as a minimum wage serves no purpose if there is not an ability to determine who is entitled to it. Therefore, the term can be included in the Award pursuant to s 142 (1) of the Act. 42. The term requiring a learner shearer to maintain records of their shearing activities and to produce these records to an employer (element (iii)) is also capable of inclusion under s 139 (1) of the Act because it is a term about : - minimum wages (s 139 (1) (a)); - a type of employment (s 139 (1) (b)); and/or - piece rates (s 139 (1) (a) (ii)). 43. In the alternative, the term requiring the maintenance and production of these records is incidental to the term containing a minimum wage for a learner shearer (element (iv)) and is essential to the term being able to operate in a practical way. 44. This is because the shearing industry operates on a piece rates basis and the definition of a learner shearer is linked to the number of sheep shorn. Hence the entitlement to the minimum wage for a learner shearer cannot be determined unless there is a record of how many sheep the learner shearer has shorn. 8

9 45. Finally, we note the NFF and Australian Business Industrial and the NSW Business Chamber Ltd have not previously suggested that elements (i), (iii) and (iv) cannot be included in the Award under s 139 (1) of the Act. The one in four stands provision 46. Element (ii) of the proposed term requires one in four shearing stands to be given or reserved for a learner shearer who is available at the start of the shed and specifically clarifies that this does not require shearing stands to be left vacant if a learner is not available. 47. This term can be included in the Award because it is a term about : - career structures (s 139 (1) (a) (i)); - A type of employment (s 139 (1) (b)); and/or - piece rates (s 139 (1) (a) (ii)). Career structures 48. An Oxford Dictionaries website contains the following definition of career structure : A recognized (sic) pattern of advancement within a job or profession The normal pattern of advancement for a shearer is usefully described in the witness statement of Danny O Hare dated 28 July Mr O Hare describes from paragraph [19] to [23] of his witness statement how a person normally works as a rouseabout for a while before they commence learning to shear. Mr O Hare suggests the period of time as a rouseabout allows a person to build up the physical attributes necessary to work as a shearer. 50. Evidence about this stage in the career of a shearer has also been provided by Victor McCalman who states at paragraph [17] of his witness statement dated 2 August 2015: The overwhelming majority of people who start learning to shear already have a significant amount of experience in the industry. Often a worker will start as a rouseabout and then progress into learning to shear. Some make this progression quicker than others See 17 See the witness statement of Danny O Hare dated 28 July 2015 at paragraph [19] to [23] 18 See the witness statement of Victor McMalman dated 2 August 2015 at paragraph [17] 9

10 51. Terry O Connor has also given evidence to this effect We note that none of this evidence has been challenged by the employer parties. 53. A person then commences learning to shear and instead of being reliant purely on the piece rates prescribed by the relevant award historically the person has been guaranteed a minimum wage for their first 5000 sheep. 54. This recognises the unique difficulties associated with the learning stage of a shearer s career as described in the witness statements of Mr O Hare 20, Leslie Hanlon 21, Mr McCalman 22 and Mr O Connor 23 and referred to by Justice Donovan in 1948 who stated: They have previously found it difficult to make fair wages in their early shearing On this basis, we submit there is an established career structure in the shearing industry which generally comprises a period working as a rouseabout, then a period of learning to shear and finally a period working as a fully competent shearer. 56. The one in four stands provision assists a learner shearer by providing them with the opportunity to acquire skills in a safe manner during the learning stage of their career. 57. The opportunity to gain these skills may not otherwise arise because of the financial benefits for shearing contractors if the work at a shed is completed in the shortest possible amount of time by experienced shearers. 58. Specifically, overhead expenses for food, accommodation and other employees such as woolclassers or shed hands reduce if the shearing is completed in a shorter amount of time whilst the amount received by the shearing contractor from the farmer for shearing on a per head basis remains the same. This naturally encourages the use of experienced shearers as opposed to learners. 19 See the witness statement of Terry O Connor dated 3 August 2015 at paragraph [27] 20 See the witness statement of Danny O Hare dated 28 July 2015 at paragraph [18] 21 See the witness statement of Leslie Hanlon dated 2 August 2015 at paragraph [13] 22 See the witness statement of Victor McCalman dated 2 August 2015 at paragraph [20] 23 See the witness statement of Terry O Connor dated 3 August 2015 at paragraph [21] to [24] 24 See Attachment 1 to 4 yearly review of modern awards Pastoral Award 2010 [2015] FWCFB

11 59. This means the one in four stands term is critical to career progression for a learner shearer and can be legitimately characterised as being about the career structure of a shearer. Hence the term may be included in the Award pursuant to s 139 (1) (a) of the Act. Type of employment 60. Clause 44.4 (b) and 49.7 of the Award indicate that a learner shearer is a distinct type of employment. 61. Clause 44.4 (b) states: A learner shearer will be engaged as such on production of proof that they qualify for such status (our emphasis). 62. Clause 49.7 allows an employer to select which stands will be occupied by learners and for these stands to be excluded from the draw that would otherwise be used to determine the allotment of stands. 63. A Full Bench of the Fair Work Commission has previously stated the following in relation to the reference to type of employment in s 139 (1) (b) of the Act during the 2012 Transitional Review apprentices case: In our opinion, type of employment in s.139(1)(b) is to be read as describing different kinds or classes of employment that may be arranged into categories based upon the incidents, terms or conditions of the employment in question. Each type of employment will take its character from the rights, duties, obligations and privileges that attach to it. In the case of apprenticeship, which we accept is a type of employment, the rights, duties and obligations will involve the existence of a training contract and obligations on an employer associated with the provision of training to the employee. There can be no real or legal category of apprentice employment if the provision of training is not involved. Award clauses dealing with the circumstances in which training is to be provided to apprentices, and will continue, are terms about that type of employment. Putting to one side issues relating to the drafting of the clauses, which can give rise to argument as to whether a term remains in or falls outside of those envisaged by s.139, it is open to us, in the sense we have jurisdiction, to consider the subject matters referred to in the common claims. As we have earlier indicated, those common claims deal with the need for a training contract and provision of appropriate training and other obligations of both parties under it, disputes about the training contract, suspending, 11

12 limiting or extending the training contract and probation of an apprentice Given this acceptance that an apprenticeship is a type of employment, it seemingly must follow that learner shearer is also a type of employment. 65. On this basis, the one in four stands provision can be included in the Award because it is about [a] type of employment and hence permitted by s 139 (1) (b) of the Act. Piece rates 66. The necessity to include the one in four stands provision arises because the shearing industry operates on a piece rates basis. 67. As described above, the piece rates system has the effect of potentially making it unattractive to engage learner shearers because they will generally take longer to shear a sheep than a fully-fledged shearer who has shorn more than 5000 sheep. 68. The guarantee of a minimum wage to a learner shearer promotes a safe working environment for the learner shearer and the sheep because it allows the learner shearer to focus on undertaking the work carefully during the learning phase without an underlying concern that they are not working quickly enough to earn a decent wage. 69. In this context, the one in four stands provision is an essential part of the piece rates system in the shearing industry because it provides priority treatment to available learner shearers who may otherwise be denied access to shearing work because they cannot shear as quickly as a fully-fledged shearer. 70. The absence of this type of priority treatment will almost inevitably contribute to a shortage of skilled shearers which is exactly what Australia is currently experiencing On this basis, the one in four stands provision can be fairly described as being about piece rates and hence capable of being included in the Award pursuant to s 139 (1) (a) (ii) of the Act. 25 Modern Awards Review 2012 Apprentices, Trainees and Juniors [2013] FWCFB 5411 at [97] 26 See 12

13 72. In the alternative, the one in four stands provision is incidental to the piece rates terms in the Award and essential for the purpose of making the terms operate in a practical way given the intricacies of the shearing industry described above. This means the provision can be included pursuant to s 142 (1) of the Act. NFF submission 73. We note the NFF has previously characterised the one in four stands term as being about limiting certain work areas to a particular use We don t accept this characterisation because the one in four stands provision doesn t result in shearing stands being used for any purpose other than shearing. The only practical impact is in terms of determining which employee uses that particular stand. 75. In this respect, the provision seems to essentially deal with the same subject matter as clause 49.7 of the Award that is, determining which stands particular employees will use. 76. Presumably, the practical effect of the drawing of lots for stands is that an employee will have sole use of the stand that they draw. 77. It would be a strange outcome for a term that allows an employer to decide which stand/s a learner shearer will use and provides a system for determining which employee will have sole use of the other stands to be capable of inclusion in a modern award but then a term which requires one in four stands to be allocated to a learner shearer cannot be included. This appears to be the effect of the NFF s position. 78. In the alternative, if the Commission accepts the NFF s characterisation of the term, during the 2012 Transitional Review a Full Bench of the Commission accepted that a term which prevented an apprentice using swing scaffold was incidental to minimum wages (including wage rates for junior employees) and skill-based classifications, with the restriction relating to a lack of experience (ss 139 (1) (a) and 142 (1) (a)) The effect of that provision could also potentially be characterised as limiting certain work areas to a particular use but in a somewhat converse manner because the construction provision potentially restricts the work an apprentice 27 See Submission in Response from the National Farmers Federation dated 1 October 2015 at paragraph [17] 28 Master Builders Australia Limited [2012] FWAFB at [73] 13

14 can perform whereas the one in four stands provision potentially restricts the work a fully-fledged shearer can perform. 80. In any event, this did not prevent the construction term being included because the mere fact that a term limits certain work areas to a particular use does not mean the term is not about one of the matters specified in s 139 (1) of the Act. 81. We note a term limiting work areas to a particular use is not identified as one which must not be included in an award pursuant to sections 150 to 155 of the Act. Stephen Crawford SENIOR NATIONAL LEGAL OFFICER 5 February