[2024] FWCFB 446

Fair Work Act 2009

s.158 - Application to vary or revoke a modern award

Application to vary clause 25.5(f) of the Social, Community, Home Care and Disability Services Industry Award 2010 - lack of evidence - failure to properly address modern awards objective in detail - no basis made out upon which to vary award - application dismissed.

[1] Mr Darren Hay, who is a casual disability support worker, has made an application to vary clause 25.5(f) of the Social, Community, Home Care and Disability Services Industry Award 2010 (Award). Clause 25.5(f) currently provides:

(i) Clause 25.5(f) applies where a client cancels a scheduled home care or disability service, within 7 days of the scheduled service, which a full-time or part-time employee was rostered to provide. For the purposes of clause 25.5(f), a client cancellation includes where a client reschedules a scheduled home care or disability service.

(ii) Where a service is cancelled by a client under clause 25.5(f)(i), the employer may either:

(A) direct the employee to perform other work during those hours in which they were rostered; or

(B) cancel the rostered shift or the affected part of the shift.

(iii) Where clause 25.5(f)(ii)(A) applies, the employee will be paid the amount payable had the employee performed the cancelled service or the amount payable in respect of the work actually performed, whichever is the greater.

(iv) Where clause 25.5(f)(ii)(B) applies, the employer must either:

(A) pay the employee the amount they would have received had the shift or part of the shift not been cancelled; or

(B) subject to clause 25.5(f)(v), provide the employee with make-up time in accordance with clause 25.5(f)(vi).

(v) The make-up time arrangement can only be used where the employee was notified of the cancelled shift (or part thereof) at least 12 hours prior to the scheduled commencement of the cancelled service. If less than 12 hours' notice is provided, clause 25.5(f)(iv)(A) applies.

(vi) Where the employer elects to provide make-up time:

(A) despite clause 25.5(a), the employer must provide the employee with 7 days' notice of the make-up time (or a lesser period by agreement with the employee);

(B) the make-up time must be worked within 6 weeks of the date of the cancelled service;

(C) the employer must consult with the employee in accordance with clause 8A - Consultation about changes to rosters or hours of work regarding when the make-up time is to be worked;

(D) the make-up time can include work with other clients or in other areas of the employer's business provided the employee has the skill and competence to perform the work; and

(E) an employee who works make-up time will be paid the amount payable had the employee performed the cancelled service or the amount payable in respect of the work actually performed, whichever is the greater.

(vii) Clause 25.5(f) is intended to operate in conjunction with clause 25.5(d) and does not prevent an employer from changing a roster under clause 25.5(d)(i) or (d)(ii).

[2] The variation which Mr Hay seeks is that the restriction on the application of the provision in clause 25.5(f)(i) to full-time and part-time employees be removed, so that the provision also applies to casual employees. The grounds for the application are that, first, Mr Hay believes that the exclusion of casual employees from clause 25.5(f) discriminates against them and, second, that some employers, either previously or currently, did pay casual employees when a client cancelled an engagement.

[3] The application is opposed by the Australian Industry Group (Ai Group) and Australian Business Industrial and Business NSW (ABI). The Australian Services Union initially expressed some support for the application at the initial directions hearing in the matter on 12 April 2024 but ultimately did not participate further in the proceedings. The other unions with an interest in the Award, the United Workers' Union and the Health Services Union (HSU), made no appearance in the matter.

[4] On 12 April 2024, Mr Hay was directed, by 24 May 2024, to file a draft determination setting out the terms of the variation he sought, the evidence upon which he wished to rely, and written submissions addressing the requirements in ss 134, 138, 157 and 158 of the Fair Work Act 2009 (Cth) (FW Act) as were relevant to his application and the merits of his application generally. Mr Hay did not, pursuant to this direction, file any evidence in support of his application. He filed a short written submission in which (with some paraphrasing to reflect our understanding of what Mr Hay intended to say) he contended that:

• when he was working in the disability support sector three years ago, when a client cancelled, the casual worker got paid as if the worker supported the client;

• the modern awards objective in s 134 of the FW Act applies to all employees, and therefore the right to payment in the event of a client cancellation in clause 25.4(f)(ii)(A) should apply to casual employees;

• the Fair Work Ombudsman had stated that businesses should not discriminate against casuals but, under clause 25.5(f), businesses can do so;

• clause 25.5(f) goes against the pricing arrangements for the National Disability Insurance Scheme (NDIS) under which a provider is entitled to charge the client for a short-notice cancellation if the provider is not able to find alternative billable work for the relevant worker, and is required to pay the worker for the time that would have been spent providing the support;

• the application may have an impact on workforce participation, in that the uncertainty surrounding payment for cancelled support may discourage casual workers from continuing to seek employment with a business and work independently in the disability support sector, leading to workforce shortages;

• if any business objects to this application, they may not value their employees and instead 'prioritise corporate luxuries'; and

• it is imperative to address the issue of discrimination against casual employees in the disability support sector so that, where client support is cancelled, it can be ensured that casual workers are treated with fairness in the workplace.

[5] Mr Hay also clarified that the variation he sought was to replace the words 'full-time or part-time employee' in clause 25.5(f)(i) with 'full-time, part-time or casual employee'.

[6] The Ai Group and ABI separately filed submissions in opposition to Mr Hay's application. The Ai Group submitted, in summary, that:

• Clause 25.5(f) had been restricted in its application to full-time and part-time employees since the Award was made on 4 December 2009, but had originally been confined to rostered home care services and to roster changes notified after 5:00 pm the previous day;

• during the 4 yearly review of modern awards, ABI sought to extend the operation of clause 25.5(f) to disability services and remove the right for an employer to withhold payment for a cancellation which occurred by 5:00 pm the previous day, and the HSU sought either the deletion of the provision or its amendment to ensure that the cancellation payment had been made where 48 hours' notice had not been provided;

• no party sought the extension of the provision's application to casual employees;

1. the Commission, in a decision issued on 4 May 2021[1] (May 2021 decision), determined to vary clause 25.5(f) in a manner which broadly gave effect to ABI's claim;

• the Commission should approach Mr Hay's application with caution given the potential cost impact on employers, cumulative upon extensive variations already made to the Award as part of the 4 yearly review, and the funding constraints which many employers in the sector faced;

• the matters raised by Mr Hay in support of his application were bare assertions unsupported by any evidence and were in any event largely irrelevant;

• Mr Hay's contention concerning an alleged inconsistency with NDIS pricing was incorrect, since the provider could only claim payment if, among other things, it was required to pay the worker in respect of the cancellation;

• because, under s 15A of the FW Act, it is a key element of casual employment that there is no firm advance commitment to continuing and indefinite work, it was appropriate that casual employees not have the benefit of payment in respect of client cancellations, and the notion of providing make-up time to casual employees is paradoxical;

• the current position is also in keeping with the fact that there is no requirement under clause 25.5(c) of the Award for an employer to display a roster of the ordinary hours of work for a casual employee;

• there is no basis to consider that clause 25.5(f) involves any unlawful discrimination;

• there is no evidence that the exclusion of casual employees from clause 25.5(f) deters them from seeking employment in the disability support sector and, in any event, the evidence in the 4 yearly review was that only a small proportion of services (3.83-5.68%) were cancelled at short notice; and

• there was no basis to conclude that any of the matters prescribed for consideration under s 134(1) favoured the grant of Mr Hay's application, and many of them weighed against it.

[7] ABI's submissions covered much the same ground as the Ai Group's submissions. ABI submitted that clause 25.5(f) had to be considered within the context of clause 25 as a whole, which was concerned with ordinary hours of work and rostering. Clause 25.5(a) requires employers to publish a fortnightly roster of the ordinary hours of work of each employee at least two weeks before the commencement of the roster period but, under clause 25.5(c), it is not obligatory for this to be done for casual employees. ABI submitted that, while clauses 25.5(b) and 25.5(d) contemplate the possibility of changes being made to rosters, these provisions have no application to casual employees given that their working hours are not required to be displayed on the roster. The ABI submitted that a requirement for the rostering of casual employees, and the extension of the obligations in clause 25.5(f) to casual employees, would be antithetical to the definition of casual employment in s 15A of the FW Act and its general nature, in that insecurity of working hours is one of the defining features of casual employment for which compensation was provided by the 25 per cent casual loading. ABI also submitted that the terms of clause 25.5(f) had been the subject of detailed consideration in the May 2021 decision and there was no probative evidence or merit-based submission warranting a departure from this historical application of the clause and its further development in the May 2021 decision.

[8] Mr Hay filed written submissions in reply to those of the Ai Group and ABI. He submitted, in summary, that:

• businesses can charge a client for a cancelled shift and then use the Award not to pay a casual employee, which could potentially constitute NDIS fraud;

• clause 25.5 does not accommodate the situation whereby a casual employee, at the time of engagement, reaches an agreement with the employer at the time of engagement as to a base or minimum number of hours to be worked;

• section 15A of the FW Act and clause 25.5(c) of the Award are unfair to casual employees and are 'way out of touch with reality, [be]cause casual workers need to know how they will pay bills'; and

• Mr Hay knows casual employees that have a base roster, and a roster is a guarantee of work and an entitlement to payment if work is cancelled.

[9] After all the above written submissions were filed, Mr Hay, the Ai Group and ABI agreed that the Commission should determine the matter on the basis of those submissions and that no hearing was required. Accordingly, this is the course the Commission has taken in the matter.

[10] The Commission is empowered under s 157(1)(a) of the FW Act to make a determination varying a modern award, other in respect of modern award minimum wages or a default fund term, if it is satisfied that making the determination is necessary to achieve the modern awards objective. An application for such a variation may, under s 158(1), be made by an employee who is covered by the relevant modern award. Consistent with s 157(1)(a), s 138 provides, relevantly, that a modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective. Section 139(1) prescribes the categories of matters which may be the subject of terms in a modern award. These relevantly include minimum wages, types of employment (including full-time employment, casual employment and regular part-time employment), and arrangements for when work is performed (including hours of work, rostering, notice periods and variations to working hours.

[11] The modern awards objective is prescribed by s 134(1). Section 134(1) provides:

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(aa) the need to improve access to secure work across the economy; and

(ab) the need to achieve gender equality in the workplace by ensuring equal remuneration for work of equal or comparable value, eliminating gender-based undervaluation of work and providing workplace conditions that facilitate women's full economic participation; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da) the need to provide additional remuneration for:

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

[12] It is not in dispute, and we accept, that Mr Hay has standing, as a casual disability support worker covered by the Award, to make his application under s 158(1). It is also not in dispute, and we accept, that clause 25.5(f) of the Award, if varied as proposed by Mr Hay, would remain an award term permitted by s 139(1). The only issue to be determined is, therefore, whether the variation to clause 25.5(f) proposed is necessary for the Award to meet the modern awards objective in s 134(1).

[13] It is first necessary to consider clause 25.5(f) in its proper context. Clause 10.1 of the Award requires that employees be employed in one of three types of employment: full-time employment, part-time employment and casual employment. Clause 3.1 provides that the term 'casual employee' has the meaning given by s 15A of the FW Act. Section 15A provides for a 'general rule' concerning the meaning of 'casual employee' as follows:

(1) An employee is a casual employee of an employer only if:

(a) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and

(b) the employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay under the contract of employment.

Note: An employee who commences employment as a casual employee remains a casual employee until the occurrence of a specified event (see subsection (5)).

[14] Section 15A(2) sets out, for the purpose of s 15A(1)(a), indicia as to whether the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work. These include the existence of a firm advance commitment in the form of a mutual understanding or expectation between the employer and employee not rising to the level of a contractual term (s 15A(2)(b)), whether it is reasonably likely that there will be future availability of continuing work in that enterprise of the kind usually performed by the employee (s 15A(c)(ii)), and whether there is a regular pattern of work for the employee (s 15A(c)(iv)). As adverted to in the note to s 15A(1), s 15A(5) provides that a casual employee within the meaning of ss 15A(1)-(4) remains a casual employee until one of the following events occurs:

(a) the employee's employment status is changed to full-time employment or part-time employment under Division 4A of Part 2-2; or

(b) the employee's employment status is changed by order of the FWC under section 66MA or 739; or

(c) the employee's employment status is changed to full-time employment or part-time employment under the terms of a fair work instrument that applies to the employee; or

(d) the employee accepts an alternative offer of employment (other than as a casual employee) by the employer and commences work on that basis.

[15] Returning to the Award, clause 10.4 provides that a casual employee will be paid 1/38th of the weekly rate for the appropriate classification and, in addition, a loading of 25 per cent. Clause 10.5 relevantly provides that casual employees have a minimum engagement period of three hours where they are social and community services employees, except when undertaking disability service work, and two hours in all other cases.

[16] Clause 25 of the Award is concerned with ordinary hours of work and rostering. Clause 25.5 is entitled 'Rosters'. Clause 25.5(a) provides:

(a) The ordinary hours of work for each employee will be displayed on a fortnightly roster in a place conveniently accessible to employees. The roster will be posted at least two weeks before the commencement of the roster period.

[17] However, clause 25.5(c) provides that '[i]t is not obligatory for the employer to display any roster of the ordinary hours of work of casual or relieving staff'. Clause 25.5(d) concerns changes to rosters, and clause 25.5(e) requires the roster to display accrued days off where practicable. We have earlier set out the terms of clause 25.5(f).

[18] Having regard to the context described, two initial observations may be made in respect of clause 25.5(f) and Mr Hay's application. The first is that clause 25.5(f)(i) confines the operation of clause 25.5(f) to the cancellation of a scheduled service which a full-time or part-time employee has been 'rostered to provide'. Read in context, it is readily apparent that 'rostered to provide' refers to a working period for a service which appears on the roster published by the employer pursuant to clause 25.5(a). This is confirmed by the reference to rostering in clauses 25.5(f)(ii)(A) and 25.5(f)(vi)(C). Thus, clause 25.5(f) may be characterised as dealing with a specific type of roster change that is compelled by a short-notice client cancellation, as clause 25.5(f)(vii) confirms. The variation proposed by Mr Hay would therefore have no work to do in respect of a casual employee unless the employer, although not obliged to do so by reason of clause 25.5(c), chooses to publish a roster for the casual employee which includes the service the subject of the cancellation. The variation proposed would therefore be substantially ineffective in achieving its apparently intended purpose of extending the benefits provided by clause 25.5(f) to casual employees generally. An employer would also readily be able to avoid the variation by the expedient of ensuring that it does not publish rosters for casual employees.

[19] Second, insofar as Mr Hay contends that clause 25.5(f) is not adapted for the purposes of casual employees who have reached an agreement with the employer at the time of engagement as to a base or minimum number of hours to be worked, it appears to us that this contention is misconceived. An employee who has the benefit of such an agreement would, it appears to us, have a firm advance commitment to continuing and indefinite work for the purpose of s 15A, even if the agreement was not contractual in nature but merely constituted by a mutual understanding or expectation (s 15A(2)(b)). Such an employee would not be a casual employee for the purpose of the Award at all and thus would not be excluded from the operation of clause 25.5(f).

[20] The two matters identified above significantly vitiate the practical content of Mr Hay's application but, in any event, we will consider it in the terms advanced. It is convenient to initially deal with the two major bases of Mr Hay's application. The first of these is that clause 25.5(f) 'discriminates' in respect of casual employees. In the strict and literal sense, this is true: clause 25.5(f), like a number of other provisions of the Award, distinguishes between full-time, part-time and casual employees in its prescriptions of entitlements. However, this does not mean that this 'discrimination' is, for the purpose of s 134(1), other than fair, or is unlawful. Casual employment, as defined in s 15A, is premised on the absence of a firm advance commitment to continuing and indefinite work, and in that respect it is fundamentally different to full-time and part-time employment, which are subject to guaranteed hours of work. The provisions of the Award reflect this fundamental difference - most notably in the provision of a minimum ordinary-time hourly rate of pay for casual employees which is 25 per cent higher than for full-time and part-time employees. This loading is intended to compensate casual employees for the incidents of permanent employment under the Award, and the FW Act, which they do not enjoy. Clause 25.5(f)(i) is merely another provision in the Award which reflects this difference between casual employment and the other types of employment permitted by the Award. Its exclusion of casual employees from the operation of clause 25.5(f) is consistent with clause 25.5(c) excluding casuals from the obligation upon employers to publish rosters for each employee. It also has a reasonably apparent broader rationale, namely that the entitlements in clause 25.5(f) which apply when a service is cancelled do not appropriately apply to employees who do not have any fixed hours of work and are compensated through the casual loading for this feature of their employment.

[21] The other major basis of Mr Hay's case, namely that clause 25.5(f)(i) is inconsistent with the NDIS pricing mechanism for cancelled services, is plainly misplaced. Entitlements under the Award are not established on the basis that they need to align with the basis upon which employers covered by the Award are entitled to charge for their services (noting that NDIS work forms only part of the work covered by the Award). In any case, Mr Hay's contention about NDIS pricing is incorrect since his own submissions identify that an employer can only charge for a cancelled service if they cannot obtain alternative billable work for the employee and they are required to pay the worker for the time that would have been spent providing the service. Because, under clause 25.5(f), the employer is not required to pay a casual employee for a cancelled service, the employer would not be able to charge for that service under the NDIS pricing arrangements.

[22] Apart from the speculative assertion that a failure to vary clause 25.5(f) as proposed would affect workplace participation in the disability support sector, Mr Hay's submissions did not attempt to address the mandatory considerations in the modern awards objective. We are left with no basis upon which a finding might be made that, taking into account those considerations, the variation proposed by Mr Hay is necessary in order for the Award to constitute, together with the NES, a fair and relevant safety net of terms and conditions. We have before us, for instance, no information about the extent of the use of casual employees under the Award, the way in which work is allocated to them, the extent to which they work regularly or intermittently, the extent to which short-notice client cancellations affecting casual employees occur in practice, the amount of notice which is typically given by the client for such cancellations, and the usual practices adopted by employers in response to such cancellations in respect of notice to employees, the provision of alternative work and payment.

1. As submitted by the Ai Group and ABI, clause 25.5(f) was the subject of comprehensive reconsideration by a Full Bench in the May 2021 decision,[2] and was extensively modified as a result of that decision. In that decision, the Full Bench gave consideration to, and made findings about, each of the matters in s 134(1) (as it was at that time), and determined to vary the Award in order to meet the modern awards objective.[3] Mr Hay has advanced nothing to suggest that the Full Bench was wrong in concluding that the modified clause 25.5(f) met the modern awards objective or that anything has relevantly changed since the May 2021 decision to require any reassessment of that conclusion. We note that, since the May 2021 decision, s 134(1) has been amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 to add considerations relating to access to secure work (paragraph (aa)) and the need to achieve gender equality (paragraph (ab)). However, it was not contended that the addition of these considerations made it necessary to grant Mr Hay's proposed variation in order to meet the modern awards objective.

2. For these reasons, we are not persuaded that the variation to the Award proposed by Mr Hay is necessary for the Award to meet the modern awards objective in s 134(1). It is necessary to observe that this application is regrettably yet another example of 'the deficiency in an approach whereby a single employer or employee seeks an industry-wide variation to an industry award by reference only to their own circumstances and interests'.[4] An application for a substantive variation to a modern award, especially one with the scope of coverage and usage such as the Award, is a major undertaking. It will usually need to be supported by evidence or submissions which address the circumstances of a representative cross-section of the industry or occupation covered by the modern award in order to have prospects of success.

R Bhatt with C Beasley for The Australian Industry Group.

L Roper for Australian Business Industrial and Business NSW.

Sydney by video link using Microsoft Teams (further directions):

Australian Business Industrial and Business NSW: 3 July 2024.

1. [1] [2021] FWCFB 2383.
2. [2] [2021] FWCFB 2383 [739]-[842].
3. [3]Ibid [830]-[842].
4. [4]Application by Woolworths Group Limited [2023] FWCFB 139 [39]; see also Application by Emma Treves [2023] FWCFB 98 [70], [72]-[74]; Application by The Allison and Phil Family Trust t/a my OSHC [2024] FWCFB 144 [18]-[20]; Application by Alberto Contreras Martinez [2024] FWC 2648 [7].

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