Australian Industrial Relations Commission|2000-12-29

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union - re application for variation of award - T4991 [2000] AIRC 722; (29 December 2000)

s.113 application for variation

s.107 reference to Full Bench

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

INDUSTRIES AWARD, 1998 - Part I

Application for variation of award; types of employment; section 107 reference; definition of casual employee; casual rates of pay; minimum daily hours for casual part-time workers; maximum term of engagement; minimum payment for attendance for types of employment; whether special case required; distinction between remedial variation of award and adjustments above or below safety net; matter not an instance where enterprise bargaining should be given priority over variation of award safety net; nature of special case required; allowability of provisions claimed under section 89A; limitation on engagement as casual within jurisdiction as an incident of a type of employment; concept and incidents of casual employment; type of employment is central to regulatory role of award safety net; legal existence of casual employment is dependent upon engagement as such; history of award discloses award was not intended to restrict employer access to casual employment after 1930; historical rationale for casual loading needs to be reviewed to take account of contemporary legislative and award safety net regime; claim for restriction on circumstances in which casual employee may be engaged dismissed; award varied to provide for right to elect to convert certain ongoing casual employments; award provisionally varied to provide for duty to state terms of casual employment; award varied to require minimum periods of engagement for casual employment four hours per day and three hours per day for part-time employment; contemporary function of casual rate loading is to translate between different types of employment appropriate minimum standards and conditions; components of loading considered; award varied to increase loading to 25%.

1. The matter for determination and hearing procedure:

[1] In this matter, application was lodged on 12 August 1999 by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) under section 113 of the Workplace Relations Act 1996 (the Act) for variation of the Metal, Engineering and Associated Industries Award, 1998 - Part I (the Award). The variation sought would in effect redefine casual employment, introduce an increase to the loading on rates of pay for casual employees, regulate other conditions applicable to them, and prescribe minimum daily hours for part-time workers. The application was made by the AMWU on behalf of the Metal Trades Federation of Union (MTFU). The MTFU is an unregistered confederation of the AMWU and six other unions with membership covered by the Award: The Australian Workers Union (AWU), Construction, Forestry, Mining and Energy Union (CFMEU), the Association of Professional Engineers, Scientists and Managers Australia (APESMA), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the Australian Liquor, Hospitality and Miscellaneous Workers Union (ALHMWU) and the National Union of Workers (NUW). On 16 September 1999, the President referred the application to be heard and determined by a Full Bench, pursuant to section 107 of the Act.

[2] An extensive case was presented by the AMWU in support of the claim, eliciting similarly detailed and researched presentations in response from the AiG in particular and the Commonwealth. Several interlocutory rulings[1] were made prior to the substantive cases which occupied 11 days of hearing. The hearing of the merits of the application commenced on 23 May 2000. The respective cases included voluminous exhibits comprised of statistical, research and survey material about casual employment. Evidence was presented from some 32 witnesses most of whom were cross examined. The hearing concluded on 31 August 2000 when the parties represented spoke to written submissions.

[3] A full list of appearances is appended to this decision. In the presentation of the substantive cases and submissions on the merits, Mr T. Wallace with Mr B. Terzic and Mr D Oliver appeared for the AMWU; Mr S. Wood appeared for the AWU; Mr J. Rainford for the CEPU; Mr Oliver appeared also for the MTFU, which was granted leave to intervene. Mr M. Moir appeared with Ms M. Das for the Australian Industry Group (AiG), Mr G. Jervis for the Australian Business Industrial (ABI) and the Australian Chamber of Commerce and Industry (ACCI), and Mr J. Macken appeared for the Commonwealth intervening. Appearances and written submissions were made to also by the Australian Council of Trade Unions (ACTU), the Human Rights and Equal Opportunities Commission (HREOC), the Women's Electoral Lobby (WEL) and the Australian Hotels Association (AHA) each of whom was granted leave to intervene.

[4] In substance, the AMWU application seeks to insert provision in the Award to:

4.1 modify and extend the existing definition of casual employment, and restrict the use of that type of employment to short term, and emergency work needs, or to work that cannot practicably be rostered to "permanent employees";

4.2 require specification in writing to the employee at the time of engagement as to the type of employment and some terms and conditions;

4.3 establish a maximum of four weeks' engagement as a casual employee; and an entitlement converting casual employment continued four weeks to standard weekly, so-called "permanent" or "full-time", employment;

4.4 establish for casual employment a minimum daily engagement period of six hours for each attendance;

4.5 increase from 20% to 30% the loading to rates of pay applicable to casual employment; and

4.6 provide for a minimum four consecutive hours of employment for part-time workers for each day of attendance.

[5] The AiG, the Commonwealth and the respondent employers generally opposed each and every demand of the application.

[6] It will be most expedient to marshal an outline of the cases presented by the respective parties and interveners around the issues that developed about the points of claim as summarised. However, it is convenient first to put the claims in perspective with the current provisions of the award.

2. Casual employment as a type of employment under the Award:

[7] The primary references to "casual employment" and "casual employees" appear in clause 4. That clause introduces the categories of employment provided for under the Award. Paragraphs 4.2.2 and 4.2.3 are the most immediately relevant provisions, but it is convenient to contrast broadly, omitting details, some other types of employment described in the same clauses. The subclause so far as relevant for that purpose, reads:

This clause describes the various categories of employment under this award.

4.2.1(a) An employer may initially engage a full-time or part-time employee for a period of probationary employment for the purpose of determining the employee's suitability for ongoing employment. The employee must be advised in advance that the employment is probationary and of the duration of the probation which can be up to but not exceed three months.

4.2.1(b) A probationary employee is for all purposes of the award a full-time or part-time employee.

4.2.1(c) Probationary employment forms part of an employee's period of continuous service for all purposes of the award, except where otherwise specified in this award.

Any employee not specifically engaged as being a part-time or casual employee is for all purposes of this award a full-time employee, unless otherwise specified in the award.

A casual employee is to be employed by the hour. A casual employee for working ordinary time shall be paid an hourly rate calculated on the basis of one thirty-eighth of the weekly award wage prescribed in clause 5.1 for the work which they perform plus a casual loading of 20 per cent. The loading constitutes part of the casual employee's all purpose rate.

4.2.4(a) An employee may be engaged to work on a part-time basis involving a regular pattern of hours which shall average less than 38 hours per week

4.2.4(b (i) Before commencing part-time employment, the employee and employer must agree:

(1) upon the hours to be worked by the employee, the days upon which they will be worked and the commencing and finishing times for the work;

(2) upon the classification applying to the work to be performed in accordance with Clause 5.1 of this award;

(ii) Except as otherwise provided in this Award a part-time employee is entitled to be paid for the hours agreed upon in accordance which 4.2.4 (b)(i)(1).

(iii) The terms of this agreement may be varied by consent.

(iv) The terms of this agreement or any variation to it shall be in writing and retained by the employer. A copy of the agreement and any variation to it shall be provided to the employee by the employer.

4.2.4(c) The terms of this award shall apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

A part-time employee who is required by the employer to work in excess of the hours agreed upon in accordance with 4.2.4(b) (i) and (iii), shall be paid overtime in accordance with clause 6.4 of this award.

Where the part-time employee's normal paid hours fall on a public holiday prescribed in clause 7.5 and work is not performed by the employee, such employee shall not lose pay for the day. Where the employee works on the holiday, such employee shall be paid in accordance with Clause 7.5 of this award.

4.2.5 Employment for a Specific Period of Time or a Specific Task or Tasks

4.2.5(a) An employee may be engaged on a full time or part time basis for a specific period of time or for specific task/s.

4.2.5(b) The details of the specific period of time or specific task/s shall be set out in writing and retained by the employer. The employer shall provide a copy to the employee.

4.2.5(c) An employee engaged in accordance with 4.2.5(a) is for all purposes of the award a full-time or part-time employee, except where otherwise specified in this award.

4.2.5(d) Service under a contract of employment for a specific period of time or specific task/s shall form part of an employee's period of continuous service, where such employee is engaged as a full-time or part-time employee immediately following such contract of employment.

4.2.6(a) The terms of this award will apply to apprentices, including adult apprentices, except where it is otherwise stated or where special provisions are stated to apply. Apprentices may be engaged in trades or occupations provided for in this clause where declared or recognised by an Apprenticeship Authority.

Subject to appropriate State legislation, an employer shall not employ an unapprenticed junior in a trade or occupation provided for in this clause.

The parties to this Award shall observe the terms of the National Training Wage Interim Award 1994, as amended.

The terms of this award apply to unapprenticed juniors except where otherwise stated or where special provisions are stated to apply."

[8] The provisions of subclause 4.2 "describe" and to some extent supply some of the incidents of eight kinds of employment under the Award:

• Probationary Employment (a subcategory of either full-time or part-time employment);

• Employment for a Specific Period of Time or a Specific Task or Tasks (also a subcategory of either full-time or part-time employment);

2.2 The function and incidents of casual employment as a type or category of employment under the Award:

[9] Types of employment provided for in an award are foundational to the award's regime, and therefore to the award safety net. The expressions "categories of employment" and "types of employment" in industrial jargon refer to types of contract of employment. A type of employment specified in an award is the subject to which the terms and conditions for that type of employment are awarded. Usually an award applies to one or more main or primary types of employment; each other type, in concept at least, is exempt from some or all of the conditions awarded to apply to the primary category or categories. For purposes of the Award, weekly hire, in effect a form of continuing employment for standard hours, has long been the primary category provided for under the Award's predecessors. Each other type of employment may be seen as a response to operational, employment market, or perhaps special case needs. Those needs have been met by making provision as the need arose for the extra type of employment contract to which specific exemptions or peculiar conditions were then awarded. The reasons for having a category of employment should be distinguished from the reasons for awarding exemptions or differential conditions to apply to the supplementary category. Aspects of the use later made of a category in the industry can also be distinguished from each of those reasons. Those distinctions appear not always to have been kept in mind in some of the cases or analysis dealing with particular types of employment.

[10] The primary type of employment now provided for under the Award is full-time employment. In substance, full-time employment is the lineal descendant of weekly hire employment under the predecessor awards[2]. Paragraph 4.2.2 describes or defines it to be the type of employment comprehending all employees except those specifically engaged as a casual, or part-time employee, or otherwise excluded by the Award. The incidents of some categories of employment are provided for seriatim throughout the Award. Thus, full-time employment and unapprenticed junior employment are categories for which the incidents or terms of employment provided by the Award are not expressed in subclause 4.2. Other provisions of the Award apply to those categories expressly, or by construction in the absence of a contrary intention. The incidents of other types of employment, part-time employment in particular, are more fully or generally expressed in subclause 4.2.

[11] The manifest incidents of casual employment that appear from a reading together of paragraphs 4.2.2 and 4.2.3 in their present form are:

• the employee must be specifically engaged as a casual employee;

• ordinary time work shall be one thirty eighth of the weekly rate prescribed for the classification in which employed, plus a casual loading of 20%, to be part of the all purpose rate.

[12] Of those incidents, the most important and most distinctive is that the employee is "employed by the hour". Those words connote the association of casual employment under the Award with a contract of employment based on "hourly hire". Engagement on hourly hire is distinct from the "weekly hire" that was once characteristic of full-time employment, or from "daily hire". When we discuss the history of the concept of casual employment, it will be seen that in 1920 the Court of Conciliation and Arbitration introduced the principle of weekly hiring in its awards, apparently with the intention that wherever employment in an industry is regular or continuous, weekly engagement should be prescribed[3]. In contrast, the award contract of employment provision for work considered to be irregular or not continuous allowed for daily hire engagements, or, in at least one of the Award's predecessors, hourly hire engagement[4]. As we shall see, the Award no longer identifies continuing employment with weekly hire. The Award's identification of casual employment with employment by the hour as distinct from and in addition to payment by reference to an hourly rate appears to have been revived by consent during the award simplification process. The retention in the Award of those incidents of casual employment appears now to be common ground.

[13] Other incidents of casual employment are dependent upon the articulation of that category with specific terms and provisions of the Award. Thus, casual employment, or casual employees, are referred to in ways that exclude the operation of paragraph 4.3.1 (notice of termination of employment); subparagraph 4.4.3(a) (severance pay); subparagraph 6.4.4(b) (10 hours rest period after overtime); subparagraph 7.1.1(c) (entitlement to annual leave); clause 7.1.11 (proportionate leave on termination); subclause 7.2 (personal leave, including sick leave, bereavement leave and carer's leave); subclause 7.4 (parental leave); subclause 7.5 (public holidays). Provisions covering leave for jury service (subclause 7.3), stand-down of employees, and abandonment of employment, expressly, or by implication do not apply to casual employment. In contrast, subclause 8.2 provides that casual employment is a category of employment under Part 11 and attracts loading of 17.5%, although such casual employees are also entitled to annual leave under clause 11 of Part 11.

[14] Several other provisions, notably paragraph 5.1.3 and subclause 5.2 associated with classification of work training and assessment against competency standards are expressed in terms that do not exclude casual employment. However, in practice those provisions do not establish an effective duty to apply the classification and career path process to other than the full time and part-time categories of employment. The AiG's contention to contrary effect[5] was based almost entirely on instances of employees whose movement beyond C13 or C14 level classification took place after they had become full-time employees. Although it would appear that the work done by a casual should be matched with the appropriate classification on engagement, we consider it unlikely that the provisions of paragraph 5.1.3 and subclause 5.2 would be applied to keep a casual employee's classification level under review, or to provide career path training opportunities.

[15] Some provisions of the Award are expressed with sufficient width to be applicable to casual employment. Thus the definition of ordinary time (subclause 6.1); the application of overtime loadings (paragraph 6.1.1), and the dispute resolution procedures each are expressed in language that does not exclude casual employment. A casual employee's entitlement to overtime is not expressed with the particularity that subparagraph 4.2.4(d) grants that entitlement to a part-time employee. However, whatever effect flows from the term of casual employment being by the hour appears to be ignored in practice. Casuals generally are accorded overtime payments in accordance with the Award for work that falls outside the pattern that corresponds with full-time ordinary hours.

[16] In a supplementary written submission, the AiG asserted that the following provisions apply to casuals in much the same way as they do to other types of employment:

• classifications and rates of pay (subclause 5.1);

[17] The AMWU contended that a number of provisions of the Award did not apply, or had little practical effect for the benefit of casual employees. The AiG took issue with the AMWU's more general contentions about some provisions identified by the AMWU in that context. There is no dispute, whatever alternative unpaid options may be available to casual employees, that the following Award entitlements provided for full time employees do not apply to casual employees:

• personal leave (including paid sick leave, bereavement leave, and carer's leave);

• notice of termination, (and, by extension, the statutory remedies against unfair dismissal within the first 12 months of service);

[18] In relation to other entitlements, we would summarise the position as follows. Subject to the observation made at paragraph 14 above, we accept AiG's submission to the effect that, as a matter of form, the Award's classification, training, and overtime provisions apply to casual employees. In practice, the systematic application of the classification process to work performed by a casual employee appears likely to be exceptional. Labour hire employers are remote from the work performed. Casuals generally are not well positioned to query the application of standard criteria to their job or jobs. The evidence included several instances of employees whose base level classification remained unchanged after some years of service as a casual. Conversely, it is clear that casual employment will often be a "launching pad" or a recruiting aid leading to placement in the employer's full-time weekly paid workforce. However our immediate purpose is to identify the effective incidents of casual employment as provided in the Award.

[19] Casual employees may be accorded some training. The broad training obligation placed on the employer by the Award, (subclause 5.2), does not exclude casual employees. Again, in practice, casual employees are at real disadvantage in securing access to whatever formal training opportunities are made available to employees in most of the work places covered by the Award.

[20] Under the Award, casual employees appear to have more or less equal entitlement to overtime penalty rates for work outside the ordinary hours of the enterprise as worked by full-time employees. They do not have an entitlement equivalent to that of a part-time employees in relation to overtime for work in excess of the "agreed hours", (subparagraph 4.2.4(d)). That entitlement may not in practice be much applied. Generally, the balance of evidence about overtime suggests that full-time employees more frequently are given preference in the allocation of work performed at the times that attract overtime rates.

2.3 Superannuation standard entitlements incidental to casual employment:

[21] Although superannuation is only vestigially an award based benefit, we have examined also the possibility that casual employees may be less likely to benefit from employer's contributions to occupational superannuation schemes. The AMWU submissions extracted unpublished ABS survey data about the distribution of the benefit. It indicates that in August 1999 the incidence of "standard superannuation" benefits for casual employees engaged on full-time basis in the metals and engineering industry was 78.2%, whereas casuals engaged in part-time were surveyed at 54.8%. In contrast, for "full-time permanent" employees, the incidence of standard benefits was 98.5%[6].

[22] Those figures point to a likelihood of an effect of casual status on eligibility to join superannuation arrangements. The Australian Council of Trade Unions (ACTU) submitted there is clear evidence that intermittency of employment leads to a significant gap in superannuation coverage. It contended that the differential access of casual employees to superannuation should be included as an element in assessing the loading to casual rates of pay. However, only a limited amount of substantive evidential material is available to us. It concerns only the Superannuation Guarantee legislative scheme. An employee to whom an employer pays less than $450 a month is exempted for purposes of determining the employer's liability to make SGEA contributions. The substance of the AiG submissions on this point was that, in the metal and manufacturing industry, full-time and part-time employees are just as likely to be exempted from SG benefits as casual employees.

[23] That proposition would appear to be supported by available material about the level of casual employees earnings in the industry. However, it does not exclude the possibility that the survey data relied upon by the AMWU is accurate, or that it discloses a real difference in the access of casual employees to employer superannuation contributions compliance. That data, even if accurate, remains unexplained. Among several conceivable explanations is the possibility of a significantly higher avoidance by employers of SG contribution requirements as they apply to casuals. Other possibilities include an effect of intermittent engagements.

[24] Both those possibilities would appear to less mystifying or improbable if practical effect continues to be given to subclause 6(a) of the Metal Industry (Superannuation) Award 1989[7], (the 1989 Superannuation Award). It defined "eligible employee" as follows:

"'Eligible employee' means an employee who is or becomes a member of the superannuation fund selected in accordance with clause 8 hereof and who is:

(i) a weekly employee with not less than 4 weeks continuous service with the employer; or

(1) had a start with the employer on 30 days in a period no greater than one year, provided such period commences no earlier than the date one year preceding the operation of this award; and

(2) worked an average in the case of junior employees of at least twelve hours per week and in the case of adult employees at least six hours per week with the employer during the one month immediately preceding any day the employer would (but for this definition) be required to make the superannuation contributions prescribed in clause 7 hereof."

[25] The definition is now defunct in one sense. It was overtaken by the SG legislative requirements. The relevant award is currently subject to an item 51 review. However, it would seem that the parties designed the original provision to meet what was believed to be the administrative difficulty, costs and perhaps the futility of loading superannuation funds with membership and short-term contributions on behalf of casuals with no enduring presence in the industry. The tests imposed require "a start on 30 days in a period no greater than a year" and at least six hours per week during any month preceding any day, the employer would be required to make contributions at the times specified by the Superannuation Fund under subclause 7(b). Those tests may have caused a good deal of indecision about which casual employees should be made members of funds and have contributions started on their behalf. Decision is reserved in the item 51 review of the 1989 Superannuation Award. The parties have submitted an agreed draft that does not reproduce the provision about eligibility. However, that change seems unlikely by itself to reverse any established propensity to exclude casual employees from superannuation arrangements.

[26] On the state of the material evidence before us, and having regard to the residual character of award superannuation rights, we are unable to draw any firm conclusion about the effect of casual employment on access to employer superannuation contributions.

[27] In the preceding paragraphs we have examined the most distinctive features of casual employment that distinguish it from the award based features of full-time employment. Although we have considered them, we have not attempted to list exhaustively all points raised by the AMWU, nor have we made reference to some of other differences or disadvantages extrinsic to the Award.

3. The AMWU's application and the positions put for and against it:

[28] Omitting formal and consequential provisions the effective variation sought by the AMWU reads as follows:

"1. By deleting clause 4.2.3 and inserting in lieu thereof the following:

4.2.3(a) A casual employee is to be employed by the hour. A casual employee shall only be engaged in circumstances set out at 4.2.3(b).

4.2.3(b) Casual employees may only be engaged in the following circumstances:

• to carry out work in emergency circumstances; or

• to perform work unable to be practicably rostered to permanent employees.

4.2.3(c) A casual employee for working ordinary time shall as a minimum be paid the hourly rate prescribed in 5.1 for weekly employees engaged in the same classification for the same class of work plus a loading of 30 per cent. The loading constitutes part of the casual employee's all-purpose rate.

4.2.3(d) Upon engagement, an employer shall provide to a casual employee an instrument of appointment in writing which stipulates the type of employment and informs the employee of the duties required, the number of hours required, and the rate of pay.

4.2.3(e) (i) An employee who has been employed on a regular pattern of hours in 4 consecutive weeks shall after that time be engaged as a permanent employee if the employment on a regular pattern of hours continues into the next consecutive week. Any such employee shall thereafter be treated for all purposes of this award as a full-time or regular part-time employee, as the case may be.

(ii)By agreement between the employer and the majority of employees in the relevant workplace, or section of it, plus the relevant union, the employer may apply paragraph (i) as if the reference to "4 consecutive weeks" is a reference to "8 consecutive weeks", but only in respect of a currently engaged individual employee or group of employees.

(iii)An employee must not be engaged or re-engaged as a casual employee under this subclause to avoid any obligation under this award.

• not more than once on each day in which he/she is engaged.

2. By re-numbering paragraph 4.2.4(a) as 4.2.4(a)(i) and inserting new sub-paragraph 4.2.4(a)(ii) and 4.2.4(a)(iii) as follows:

4.2.4(a)(ii) An employer is required to roster a part-time employee for a minimum of four consecutive hours on any day or shift.

4.2.4(a)(iii) By agreement in writing as per 4.2.4(b) part-time employees engaged in non-production cleaning functions may be rostered for a minimum of two consecutive hours on any day or shift."

[29] The case presented by the AMWU was supported generally by the AWU, the ACTU, HREOC and WEL. The bulk of the evidence and exhibit material adduced by the AMWU went to the industrial merits of the claims developed around the use, and what it contended was the abuse, of casual employment under the Award. The thrust of that material is indicated by several general findings that the AMWU submitted should be made. With minor changes the "findings" proposed by the AMWU are that:

• casual employment has expanded significantly over the last two decades; coinciding with significant changes in the work force and in the use of casual employment since 1974 when the casual employment loading was last adjusted;

• in work covered by the award, for many low-skilled workers the casual mode of employment has been used unfairly and to their detriment;

• casual employees, particularly those in low-skill grades, under the award, are among the most disadvantaged in terms of pay and conditions.

• disadvantages to casual employees that are not adequately compensated by the prevailing loading include:

♦ a lack of career path, training and skill development;

♦ irregularities and a lack of predictability of income and future work;

♦ exclusion from the award's facilitative provisions;

♦ a greater likelihood of being retrenched without redundancy pay or dismissed without access to unfair dismissal remedies; and

♦ changes to personal leave, parental leave and other entitlements made since 1974

• many casuals have little scope or ability to improve their circumstances through bargaining - they depend on the award, and

• although the existing casual employment prescriptions operate to the satisfaction of all those concerned in some circumstances, and of the employers particularly in other circumstances, the relevant parties could use alternative arrangements if current casual employment options are closed off.

[30] Those propositions were developed against a background that included a history of metal trades award provisions dealing with casuals; academic research and statistical material about the incidence of casual employment and non-standard forms of employment in the metals and manufacturing industry; the socio-economic disadvantage of casual employees as a class of more precariously employed workers; and submissions about the jurisdictional basis of and the arbitral jurisprudence affecting the points of claim.

[31] The AiG made common cause with the Commonwealth in opposing all elements of the AMWU's claim. Each contended that no special case had been made out, that some elements of the claim were not allowable award matters. The AiG sought also that, even if jurisdiction existed to vary the Award, it should not be exercised. Though its witness evidence and exhibit material, the AiG contested the accuracy of the AMWU's depiction of casual employment as a precarious, disadvantaged, and abused category of employment. Rather, casual employment in the metal and manufacturing industry covered relatively regular and systematic relationships. Casual employees were often retained over a longer periods to meet a wider set of needs for flexibility in work force arrangements than could be satisfied within the limitations sought by the AMWU claim. Australian manufacturers needed a high degree of flexibility in the type of labour employed. The likely outcome of granting the AMWU's application would be that companies would suffer a significant reduction in productivity and flexibility, with a consequential reduction in all forms of employment as international competitiveness declined. The findings of fact and conclusions that the AiG sought to have drawn from the evidence were that:

"• casual employment is an important tool for dealing with global competitive pressures within Australian manufacturing firms;

• casual employment acts as a conduit between unemployment and permanent employment in the metal industry;

• employers in the metal industry are pro-active in converting casual jobs to permanent jobs;

• casual employment often leads to improved career prospects and progression up the classification structure;

• casual employees are not necessarily disadvantaged in relation to pay and conditions, skill, training, job security and job satisfaction in the metal industry;

• a significant proportion of casual employees prefer that mode of employment, and take advantage of the flexibility of casual employment to balance work and personal priorities;

• although the metal industry is characterised by a relatively high degree of bargaining, small firms are often unable to engage in formal workplace bargaining."[8]

[32] The Commonwealth in two written submissions provided a statistical overview of casual employment across all industries. The second submission included an analysis of recent trends in a way that excluded owner-managers. It disputed an AMWU proposition that the history of the Award demonstrated an original and enduring intention or principle that casual employment be confined to a narrow band of circumstances. The Commonwealth submitted that, for the AMWU to succeed, it must make out a special case within the Wage Fixing Principles but it had failed to do so. On the material presented, the proposed restrictive definition, conversion clause, and increase in the casual loading would have a number of adverse implications. Among other adverse effects would be reductions in workplace flexibility, productivity, employment, employee and employer choice, employee and family income, dispute prevention and compliance. The alterations proposed would be contrary to the Act in many respects. A formal written instrument of engagement would reduce flexibility, would go beyond the award safety net of conditions, and would place an unnecessary administrative burden on employers without a corresponding benefit to employees. In the Commonwealth's view the casual loading of 20% is at a level that should be considered appropriate. The Commonwealth detailed what it submitted to be significant methodological flaws and internal contradictions that invalidate the AMWU's calculations to justify a loading level of 30%.

[33] As we have already noted, the AMWU, the AiG and the Commonwealth each presented substantial and elaborate cases covering a very wide range of debate about the AMWU's application and the positions put for and against it. Much of the material was prepared with care and considerable research effort directed to providing an accurate and comprehensive review of available data about the characteristics of casual employment and its growth within the industry covered by the Award. It is not practical, nor is it in our view necessary, to attempt to do justice to the quality of much of the material by summarising it. We have found it most convenient to marshal our decision around what we consider to have been the most important issues to emerge from the detailed and extensive material put to us. We have arranged those issues under three headings:

• the character of the application and the wage fixing or other principles applicable to its determination;

• jurisdictional issues about the allowability of particular elements of the AMWU application under section 89A of the Act;

• issues about the merits of particular elements of the application.

[34] In formulating the issues and particularly those about the character of the application, we have paraphrased and integrated some points made variously in both respondents and applicants submissions or evidence. Although our formulation may depart from that advanced by a relevant party or intervener, we consider that the substance of the respective points is covered.

[35] The primary and subsidiary issues about the character of the application and the applicable body of principle may be summarised as follows:

[24.1] Is the AMWU application a claim within or about the safety net and does a determination to grant it in whole or part require a special case to be made out?.

[24.1.1] Is the application properly characterised as a claim about the award safety net? Should it more appropriately be characterised merely as a claim about remediation of the Award?

[24.1.2] If the former, is the application a claim for a variation of the Award above or below the award safety net?

[24.1.3] Do the Wage Fixing Principles require a special case?

[24.1.4] Is the matter itself a special case by reason of the s.107 reference of it to a Full Bench?

[24.1.5] If not, what principles must be satisfied to establish the existence of a special case?

[36] The corresponding jurisdictional issues or points taken about the allowability of particular elements of the application may be summarised as follows:

[25.1] The award of the proposed restriction on engagement of casual employees is not an allowable matter within subsection 89A(2).

[25.2] The award of the proposed limitation of casual employment to an effective period of four weeks whereupon any continued employment will be converted to full-time employment:

(a) is not an allowable matter within subsection 89A(2); and

(b) is prohibited by or in breach of subsection 89A(4).

[25.3] The award of the proposed prohibition on engagement or re-engagement of casual employee is not an allowable matter within subsection 89A(2).

[37] The subject headings of the major issues about the merits of each element of the claim are readily apparent, but numerous subsidiary issues cannot so readily be comprehensively summarised in isolation from the detail. However, for convenience of later reference, we include in this context the primary issues presented about each point of claim:

[26.1.1] Does "casual employment" have a standard or clear meaning; how should it be defined?

[26.1.2] Is a restriction on the use of casual employment as a type of employment properly intrinsic to the definition of that type of employment?

[26.1.3] If so, what, if any limits on the use of casual employment should be made by award conditions as to:

(c) work not able to be rostered to full-time employees.

[26.2.1] Should a four week, or other specified time limit on the period of continuous engagement of a casual employee be awarded?

[26.2.2] As an alternative, or as a complement to any such limitations, should provision be made giving a casual employee a right to have the employment converted to full-time or part-time employment?

[26.2.3] If any of those provisions were to be made, should there be also a prohibition on engagement or re-engagement for the purpose of avoiding either any such limit or any right that might be awarded to elect for another type of employment?

[26.3] Should there be a duty on the employer to stipulate in writing provided to the employee the terms of a contract for casual employment?

[26.4.1] Should there be a duty on the employer to provide a minimum of 6 consecutive hours of work per day of attendance for each casual engagement?

[26.4.2] Should the award prohibit split shifts meaning more than one engagement as a casual employee on each day of attendance?

[26.5] Should there be a duty on the employer to provide, to a part-time worker, a minimum of 4 hours work per day of attendance?

[38] The claimed increase to the loading on the rate of pay for casual employees gave rise to the issue most debated on the industrial merits. The most general of those issues may best be stated in terms of the rationale and methodology for establishing the loading:

[27.2] Is the concept or rationale of the loading to:

(a) fully compensate casual employees for income forgone through inability to accrue the same annual income and entitlements as workers who are entitled to and take paid leave, together with a factor compensating for itinerance, lost time, the irregular nature of casual employment and as a deterrent to the use of it; (AMWU and ACTU); or

(b) achieve the "cashing out" only of certain award benefits namely paid annual leave including loading, sick or personal leave, and public holidays; (Commonwealth and AiG); or

(c) a transparent itemisation fully reflecting the disamenities of casual employment, and compensating for entitlements generally available to ongoing employees but foregone by casuals and legitimately compensated for (HREOC).

[27.3] Having regard to whatever rationale is determined for the loading, what methodology should be applied to evaluate the benefits compensated for. In particular:

(b) should the valuation of a benefit be assessed in terms of the cost to the employer of the corresponding benefits that full-time employees receive, based on relative costs for actual time worked; or,

(c) should the valuation of a benefit be assessed in terms of the relative value to permanent employees of benefits such as leave?

[39] The subsidiary questions or points developed about those general issues included:

• the history of loadings in the Award and the rationale for the use of a loading;

• the need, or lack of need, for a contemporary rationale for loading in the Award and the relationship of the rationale to a formula for assessment of the level of the loading;

• whether a special case exists for a change to the current loading, including whether a special case is necessary?

• if such case exists, what elements should be taken into account in fixing the loading and how should the valuation of those elements be made?

• whether any change should be made to the loading;

• is any such change precluded, or negatived by other considerations including potential flow-on effect; employment effects; or the wage fixing principles.

5. The issues about the character of the application and the need for a special case:

[40] The several issues set out in paragraph 35 above were developed about the character of the application and the operation of wage fixing principles. The issues as stated adequately reflect the main points of the arguments put in support of the respondents contentions. The reference of this matter to a Full Bench under section 107 was supported by all parties. One premise upon which the reference was sought and made was the likelihood that the determination of the application attracted the special case requirement of the wage fixing principles.

[41] So far as relevant the applicable principles read:

"1. ROLE OF ARBITRATION AND THE AWARD SAFETY NET

Existing wages and conditions in the relevant awards of the Commission constitute the safety net which protects employees who may be unable to reach an enterprise or workplace agreement. The award safety net also provides the benchmark for the no-disadvantage test that the Workplace Relations Act 1996 (the Act) requires be applied before agreements are certified.

As a result of the award simplification process, awards will, where necessary, be varied so that they:

• act as a safety net of fair minimum wages and conditions of employment (s.88A(b));

• are simplified and suited to the efficient performance of work according to the needs of particular workplaces or enterprises (s.88A(c)); and

• encourage the making of agreements between employers and employees at the workplace or enterprise level (s.88A(d)).

This evolving award system will remain the safety net referred to in the Act. It will, and is intended by the legislature to, change in response to economic, social and industrial circumstances.

2. WHEN AN AWARD MAY BE VARIED OR ANOTHER AWARD MADE WITHOUT THE CLAIM BEING REGARDED AS ABOVE OR BELOW THE SAFETY NET

In the following circumstances an award may, on application, be varied or another award made without the application being regarded as a claim for wages and/or conditions above or below the award safety net:

(a) to include previous National Wage Case increases in accordance with Principle 3;

(b) to incorporate test case standards in accordance with Principle 4;

(c) to adjust allowances and service increments in accordance with Principle 5;

(d) to adjust wages pursuant to work value changes in accordance with Principle 6;

(e) to reduce standard hours to 38 per week in accordance with Principle 7;

(f) to adjust wages for arbitrated safety net adjustments in accordance with Principle 8;

(g) to vary an award to include the federal minimum wage in accordance with Principle 9;

(h) to make orders under Part VIA of the Act.

10. MAKING AND VARYING AN AWARD ABOVE OR BELOW THE SAFETY NET

An application to make or vary an award for wages or conditions above or below the safety net will be referred to the President for consideration as a special case.

Applications involving a consideration of s.89A(7) are subject to this Principle. Applications involving claims to incorporate agreements (expired or not) into awards (paid or minimum rates) ordinarily will not be considered to constitute a special case.

A party seeking a special case must make an application pursuant to s.107 supported by material justifying the matter being dealt with as a special case. It will then be a matter for the President to decide whether it is to be dealt with by a Full Bench."[9]

[42] One issue posed in effect by the parties about the operation of these principles is whether the application in this instance is a claim for a variation above or below the safety net, or a mere claim for remediation of the safety net. For the purpose of applying the wage fixing principles, the definition of safety net must be taken to be adequately stated in Principle 1. It is not necessary to examine whether any more developed or different meaning may be necessary in another context. It is only for the purposes of the wage review principles that the definition is relevant to this matter. The wording in Principle 1 gives emphasis to existing wages and conditions in the relevant awards. On that view of the safety net, any change to an existing condition in an award requires a variation of the award above or below, or perhaps along or about the safety net. The AMWU however relied on the approach in Victorian Employers' Chamber of Commerce Industry v Australian Liquor, Hospitality and Miscellaneous Workers Union[10], (VECCI v ALHMWU), to the effect that a remedial variation to the award need not be regarded as a variation above the safety net.

[43] In VECCI v ALHMWU, a Full Bench of the Commission granted leave to appeal against a decision altering shift penalties in the Building Services (Victoria) Award 1994[11], but holding that:

"[9] ... if the award safety net is being circumvented then a variation designed to prevent such circumvention cannot in our view, be regarded as a variation above the safety net. The variation is for purposes of protecting the safety net as it was intended to operate.

[10] Our concern here however, is that there are aspects of Merriman C's variation which on the material before us may go beyond the mere protection of the safety net and in fact create additional obligations in circumstances where it could not be said that the safety net was intended to operate to make shift premiums payable. If this is the case such a variation would clearly be beyond the safety net and would not be made in accordance with the principles."[12]

[44] We accept that the principle stated is apt to be applied to the circumstances called in aid of the application in this matter. However, the Full Bench in the passages cited decided that the distinction between remedial variation and changes beyond the safety net involved questions of fact and degree which would need to be addressed. Similarly, in this case, there are questions of degree that will need to be considered. Variation of the Award to adjust it to bring it more closely into alignment with what is perceived to be a more appropriate minimum standard condition is consistent with a remedial variation of the award. Thus in one sense the application seeks a variation of the safety net. To meet that determinative requirement, a Full Bench has been established to deal with the issue raised. It is open to the Bench to examine whether a special case is made out. In our view, that requirement is more easily satisfied in respect of a variation that is merely remedial in character.

[45] In this instance, some elements of the claim are essentially remedial. There is a circularity of the demarcation between the omnibus category of full-time employment and the other main types, casual and part-time. Consequently, the form of engagement specifically as a casual may be susceptible to remedial variation to reduce the possibility of ambiguity. A particular instance may be the claim made for what the AMWU described as an extension to casual employees of a duty akin to that which already exists for an employer to stipulate in writing to a specific term employee the tasks or specific term (subparagraph 4.2.5(b)). In contrast, the claim for an increase in the casual rate loading to 30% of the pay rate may not be relevantly distinguishable from a claim for an increase above the safety net. This is not to deny that the claim is based in part upon contentions about a need to remedy or renovate an existing but outdated standard provision; or, the reliance upon industry awards that provide for loadings above 20%; or, a proposition that a casual rate loading fixed at an appropriate level, whatever that might be, is integral to the safety net. Many claims for increases above the safety net are likely to be based on similar contentions.

[46] The forgoing analysis must beg for the time being another question about the level of any safety net in the Award, or industry. The submissions of the AiG and the Commonwealth each contended that there are sufficiently discernible common characteristics across industry awards generally to allow some general conclusions about the level of the safety net. The methodology used by the respondents to arrive at those conclusions was challenged by the AMWU. In putting its case, and in counter to the respondents, the AMWU relied upon its own analysis of manufacturing industry awards. That analysis demonstrated instances, and for some conditions, preponderances of award conditions at the level sought by the application, or at levels above the existing provisions of the Award.

[47] We have accepted that the character of our determination of this matter is on a special case basis. It is necessary for us to determine elements of the application that may affect the definition or incidents of the types of employment to which one part or other of the existing safety net applies. It is also necessary for us to determine some points about the level at which the relevant part of the safety net constituted by the Award should be set. That necessarily entails that, for some purposes, regard be paid to an assessment of what may be the existing level of the safety net as reflected in cognate awards. However that assessment may or may not be a relevant consideration to be taken into account. It is not necessarily part of the exercise to define the safety net constituted for the award to which this application applies. Nor is it a pre-condition to making a determination about conditions of employment of the kind that are under consideration in this matter.

[48] As to the question of what constitutes a special case, the Commonwealth contended in effect that a special case requirement entails that the AMWU show that the primacy of bargaining should not prevail against any variation being made. In one respect, that contention is supported by considerations inherent to the structure of the arbitral powers accorded by the Act. None the less, in our view, an adequate case can and has been made for not according primacy to bargaining about the substantive matters claimed by the application:

• the adequacy, integrity and internal consistency of the safety net of the Award affecting an important type of employment has been put in issue in the proceedings;

• the type of employment now provided in the Award has not ever been reviewed in a comprehensive way;

• the employees most affected are more vulnerable, less organised, less effectively represented in collective bargaining arrangements than is the case with full-time or part-time employees under the Award;

• the AiG acknowledged the appropriateness of some relevant matters left unresolved in the award simplification process being submitted to arbitration;

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union - re application for variation of award - T4991 [2000] AIRC 722; (29 December 2000)

At a glance

Court

Decision date

Source

Judgment (653 paragraphs)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union - re application for variation of award - T4991 [2000] AIRC 722; (29 December 2000)

1. The matter for determination and hearing procedure:

2. Casual employment as a type of employment under the Award:

2.2 The function and incidents of casual employment as a type or category of employment under the Award:

2.3 Superannuation standard entitlements incidental to casual employment:

3. The AMWU's application and the positions put for and against it:

5. The issues about the character of the application and the need for a special case:

7. Merit issues: the concept and definition of casual employment:

7.1 Award provisions for weekly hiring and employment by the hour:

7.2 The notions and uses of casual employment reflected in judicial decisions about statutory references to casual employment:

7.3 The award history of types of casual employment and its incidents:

7.4 Conclusions about the award history of casual types of employment:

7.5 The available data about the history and rationale of the award casual rate loading:

8. The claim for restriction on circumstances in which casual employees may be engaged:

8.1 The contemporary function of the award definition of casual employment:

8.2 The merits of the claim for restricted use of casual engagements:

9. The claims for a maximum limit on the period of casual employment and for a right to convert to another type of employment:

9.2 Consideration of merits of claim for maximum period of engagement:

9.3 Determination of variation to create a right to elect to convert certain ongoing casual employment to full-time or part-time employment:

10. Claim for a duty on employer to stipulate terms of engagement in writing:

10.2 Provisional determination of variation to require details of terms of casual engagement to be stated:

11. Claim for minimum daily engagement provisions for casuals and part-time workers:

11.1 Submissions of applicant and respondents:

11.2 Determination of minimum engagement provisions for casual and part-time employees:

12. The claim for casual rate loading of 30%:

12.3 The submissions put by the respondent employers and the Commonwealth:

12.4 Analysis about limits of a special case and the award safety net:

12.5 The case by case character of loading adjustments and core common components:

12.6 General approach to the components to be assessed or valued in the casual rate loading of the Award:

13. Specific components to be assessed in determining casual loading::

13.2 Long service leave as a component of casual rate loading:

13.3 Notice of termination and severance entitlements as a component in calculation of a casual loading:

13.4 Itinerance, lost time and deterrence as components in calculation of a casual loading:

13.5 Training, industrial citizenship and the award safety net as components in calculation of casual loading:

14. Conclusion and determination of casual loading:

Legislation Cited (2)

Cases Cited (10)