[2022] FWC 1444
General information, not legal advice.
Fair Work Commission
2022-06-08
Original judgment source is linked above.
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards - Plain language redrafting - Fast Food Industry Award 2010
4 yearly review of modern awards - plain language redrafting - Fast Food Industry Award 2010
(1) The Full Bench stated the provisional view at paragraph [156] that clause 22.2 of the Plain Language Exposure Draft (PLED) published on 28 October 2020,[2] which concerns additional annual leave for certain shiftworkers, should be deleted. Clause 22.2 of the PLED is a redrafted version of clause 28.2 of the current Fast Food Award. Interested parties were invited to make written submissions in response to this provisional view.
(2) Associated with the foregoing, the Full Bench also stated the provisional view at paragraph [210] that the words "(or 10 weeks' paid annual leave for a shiftworker, as defined by clause 22.2)" in clause 22.6(a) of the PLED and the words "(or 5 weeks' paid annual leave for a shiftworker, as defined by clause 22.2)" in clause 22.8(d) of the PLED should be deleted. These provisions in the PLED are the equivalents of clauses 28.6(a) and 28.8(d) respectively of the current Fast Food Award.
(3) The Full Bench stated the provisional view at paragraphs [207]-[208] that clause 22.3 of the PLED, which concerns the annual leave loading, should be amended. Clause 22.3 is a redrafted version of clause 28.3 of the current Fast Food Award. Interested parties were invited to make written submissions in response to this provisional view.
(4) An "application" was filed by EPI Capital Pty Ltd (EPI) on 1 March 2022 to vary clause 27.1 of the Fast Food Award pursuant to s 160 of the Fair Work Act 2009 (FW Act) to remedy alleged ambiguity or uncertainty. Clause 27.1 concerns rest breaks and meal breaks. The equivalent provisions in the PLED are contained in clause 14. EPI has conceded that it does not have standing under s 160(2) to make the "application" and has asked the Commission to consider making a determination on its own initiative, pursuant to s 160(2)(a), to address the identified ambiguity or uncertainty. Interested parties were invited to comment on the substance of EPI's "application" and whether any amendments should be made to clause 14 of the PLED.
Issues 1 and 2 - annual leave provisions relating to certain shiftworkers
22.2 Additional paid annual leave for certain shiftworkers
A shiftworker who is regularly rostered to work on Sundays and public holidays in a business in which shifts are continuously rostered 24 hours a day for 7 days a week is entitled to an additional week of paid leave under the NES. See section 87 of the Act.
For the purpose of the additional week of annual leave provided for in the NES, a shiftworker is a seven day shiftworker who is regularly rostered to work on Sundays and public holidays in a business in which shifts are continuously rostered 24 hours a day for seven days a week.
(a) During a period of annual leave an employee will receive a loading calculated on the wage rate prescribed in clause 17 - Minimum weekly wages. Annual leave loading is payable on leave accrued.
Employees who would have worked on day work only had they not been on leave - 17.5% or the relevant weekend penalty rates, whichever is the greater but not both.
Employees who would have worked on shiftwork had they not been on leave - a loading of 17.5% or the shift loading (including relevant weekend penalty rates), whichever is the greater but not both.
(a) An employee is entitled to an additional payment for accrued annual leave, calculated on the minimum hourly rate specified in clause 15 - Minimum rates for the classification in which they are employed.
(b) The additional payment for the employee's ordinary hours of work when taking paid annual leave is as follows:
An employee who would have worked on day work only had they not been on leave must be paid the greater of either:
• the minimum hourly rate plus a loading of 17.5% of the minimum hourly rate; or
• the relevant weekend penalty rate specified in clause 21.1.
An employee who would have worked on shift work had they not been on leave must be paid the greater of either:
• the minimum hourly rate plus a loading of 17.5% of the minimum hourly rate; or
• the relevant penalty rate specified in clause 21.1, including relevant weekend penalty rates.
NOTE: Section 90(2) of the Act contains provisions relating to an employee's entitlement to payment for any untaken paid annual leave when employment ends.
(a) In clause 22.3 the relevant weekend penalty percentage is the applicable percentage of the minimum hourly rate specified in clause 21, less 100%.
(b) During a period of accrued annual leave an employee will receive a loading calculated on the employee's minimum hourly rate specified in clause 15 - Minimum rates.
(c) The loading will be the greater of the following 2 amounts:
(i) 17.5% of the employee's minimum hourly rate for the ordinary hours the employee would have worked if they were not on leave, or
(ii) the relevant weekend penalty percentages of the employee's minimum hourly rate for the ordinary hours the employee would have worked on a weekend if they were not on leave.
(1) The use of the expression "additional payment" in clause 22.3 of the PLED, rather than the appellation of "loading" in clause 28.3 of the current Fast Food Award, might give rise to an ambiguity or uncertainty, and accordingly there should be a reversion to the existing terminology to retain consistency with the FW Act.[7]
(2) There was a drafting ambiguity in the calculation of the loading in clause 22.3 of the PLED. Because the "relevant weekend penalty rate specified in clause 21.1" of the PLED is expressed as being either 125% or 150% of the minimum hourly rate (as distinct from a "loading" of 25% or 50%, as expressed in clause 25.5(b)-(d) of the current Fast Food Award), the comparison between these rates and the annual leave loading was no longer like with like and would lead to employees working weekends being unintentionally lead to significantly higher annual entitlements to payment for annual leave.[8] This problem would be resolved by the introduction of a definition of "relevant weekend percentage penalty" (as per the proposed new clause 22.3(a)). It was acknowledged that that a clause requiring the reader to deduct the minimum rate from the penalty rates and then compare the remainder to the annual leave loading would introduce some complexity into the award, but, on balance, it was considered that such a clause was the clearest way to express the entitlement to annual leave loading.[9]
(3) Because, as earlier discussed, the Fast Food Award contains no substantive shiftwork provisions, clause 22.3(b)(ii) of the PLED should be deleted as its retention might lead to confusion and uncertainty.[10] There should also be a consequential amendment to remove the reference to "dayworkers".[11]
(4) In response to a submission by the Ai Group that clause 22.3(b)(i) of the PLED departed in a substantive way from clause 28.3 of the current Fast Food Award, in that it prescribed the amounts payable as hourly rates and appeared to require an hour-by-hour comparison and calculation as distinct from the calculation of a loading for an entire period of leave,[12] it was noted that paid annual leave may be granted in hourly components and taken for a period agreed between the employee and the employer. The prescription of amounts payable pursuant to clause 22.3(b) as hourly rates was consistent with the approach taken in other plain language awards and facilitated calculation of payment for periods of leave shorter than a week. However, clause 22.3 of the PLED was not consistent with other plain language awards or the current award in that it was not clear that the amounts referenced at clause 22.3(b) are to be calculated by reference to the entire period of leave taken.[13] The redrafted clause would amend the comparison required to more closely reflect to terms of the current award,[14] and this would resolve the issue raised by the Ai Group.[15]
"[191] The SDA submits that Ai Group's further submissions deal with an understanding of annual leave loading as being judged in total at the end of the period. They submit that Ai Group's approach seems to presume that annual leave can only be taken as a specific period. They submit that that requirement does not appear in the current award or in the FW Act, which provides at s.88(1) that paid annual leave may be taken for a period agreed between the employee and the employer and at s.88(2) that the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
[192] The SDA submits that the approach at s.88 of the FW Act is not novel, as s.236(2) of the Workplace Relations Act 1996 (Cth) provided: 'To avoid doubt, there is no maximum or minimum limit on the amount of annual leave that any employer may authorise an employee to take.' They state that annual leave may be taken in any period agreed between the employer and employee, with annual leave often being granted in hourly components. Consequently, any loadings should also accrue hourly.
[193] The SDA disagrees with Ai Group's further characterisation of clause 22.3 of the PLED as a substantive variation to the terms of the award. They contend that the provision the subject of Ai Group's challenge is also found in the General Retail Award and that provision remains unchanged from the initial plain language exposure draft published in 2017. They submit that that provision was not challenged by any party and does not appear to have been raised in any of the Commission's summary documents. They contend that this can only mean that the Commission rightly decided in their favour in respect of the retail industry and should conclude the same regarding the fast food industry.
[194] The SDA submits that s.235(1) of the Workplace Relations Act 1996 (Cth) provided that if any employee takes annual leave, they must be paid a rate for each hour (pro-rated for part hours) of annual leave that is no less than the rate that, immediately before the period begins, in the employee's basic periodic rate of pay (expressed as an hourly rate). They submit that Ai Group is effectively seeking to make late submissions regarding a settled matter for a substantive change to the way annual leave loading is applied in the fast food industry and this should be rejected.
[195] The SDA submits that annual leave loading was initially conceived as a mechanism to ensure that employees did not suffer a financial detriment while on leave and, in this context, it becomes clear that the purpose of the provision providing that either the weekend penalty rates or the 17.5% loading applies is to ensure that employees do not suffer a detriment in respect of their weekend penalty rates. However, to exclude the 17.5% from other days or hours taken may result in an employee suffering a detriment on those days. They submit that, as such, the submissions of Ai Group, together with their proposed wording, should be rejected."
(a) In clause 22.3 the relevant weekend penalty percentage amount is the applicable penalty rate prescribed by clause 21 for working on weekends, less the minimum hourly rate percentage of the minimum hourly rate specified in clause 21, less 100%.
(b) During a period of accrued annual leave an employee will receive a loading calculated for the period of leave on the employee's minimum hourly rate specified in clause 15 - Minimum rates.
(c) The loading for a period of annual leave will be the greater of the following 2 amounts:
(i) 17.5% of the employee's minimum hourly rate for all the ordinary hours the employee would have worked if they were not on leave during the period, or
(ii) the relevant weekend penalty percentages amounts of the employee's minimum hourly rate for the ordinary hours payable to the employee for all ordinary hours they would have worked on a weekend if they were not on leave during the period.
One meal break of at least 30 minutes but not more than 60 minutes
One or two 10 minute rest breaks, with one taken in the first half of the work hours and the second half of the work hours, two rest breaks will be given unless a second meal break is provided
One or two meal breaks of at least 30 minutes but not more than 60 minutes
(b) The timing of the taking of a rest break or meal break is intended to provide a meaningful break for the employee during work hours.
(c) An employee cannot be required to take a rest break or meal break within one hour of commencing or ceasing work. An employee cannot be required to take a rest break(s) combined with a meal break.
(d) The time of taking rest and meal breaks and the duration of meal breaks form part of the roster and are subject to any agreement reached under clause 12.2 regarding a part-time employee's regular pattern of work. An agreed variation pursuant to clause 12.3 or 12.5 may include a variation to the time of taking rest and meal breaks.
(e) Rest breaks are paid breaks and meal breaks are unpaid breaks.
(f) An employee cannot work more than five hours without a meal break.
14.1 Employees are entitled to rest and meal breaks in the following circumstances:
One unpaid meal break of at least 30 minutes but not more than 60 minutes
Two unpaid meal breaks of at least 30 minutes but not more than 60 minutes
Two 10 minute paid rest breaks - one to be taken in the first half of the shift and one in the second half of the shift
One unpaid meal break of at least 30 minutes but not more than 60 minutes
NOTE: Rest breaks count as time worked. Meal breaks do not count as time worked.
14.2 The timing and duration of rest and meal breaks for part-time employees must be included in the roster and are subject to any agreement made under clause 10.3 regarding a part-time employee's regular pattern of work.
14.3 A variation agreed under clauses 10.5 and 10.7 for a part-time employee may include a variation to the time of taking rest and meal breaks.
14.4 When rostering rest and meal breaks, the employer must seek to ensure that the employee has meaningful breaks during work hours.
(a) to take a rest break or meal break within the first or the last hour of work; or
(b) to take a rest break combined with a meal break; or
(c) to work more than 5 hours without taking a meal break
(1) deleting the words "Breaks will be given as follows:" and replacing them with the words, "An employee who works the number of hours in any one shift specified in the following table is entitled to the corresponding break or breaks:"
(2) deleting the row beginning "Less than 4 hours" from the table; and
(3) deleting the words "No meal break" from the table and replacing them with the words, "No meal break entitlement".
(a) in response to the provisional view expressed in paragraph [20] above;
(b) identifying any errors or omissions in any other part of the PLED (other than clause 4.2, which is the subject of a separate process arising from the Statement);
by 5:00 pm (AEST) on Friday, 24 June 2022. Such submissions shall be sent to amod@fwc.gov.au. To be clear, this is not intended to provide a further opportunity to continue to agitate issues already determined.

[2] This and subsequent references are to the clauses as numbered in the 28 October 2020 version of the PLED. The numbering of relevant clauses remained unchanged in the 21 January 2021 and 18 February 2021 versions, but changed in the 4 April 2022 version because of other changes made to reflect the Full Bench's provisional views in the April decision.
[18] Clause 22.3(b) was amended in the 4 April 2022 version of the PLED to reflect the Full Bench's provisional view at paragraph [207] of the April decision.
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