Bootmakers and Heel Bar Operatives &c (State) Award [2001] NSWIRComm 114

HEARING DATES: 03/27/2001; 04/06/2001 DATE OF JUDGMENT: 05/29/2001

APPLICANTS: Mr A.G. Rogers of counsel SDA, SAWEF Mr M. Lennon Labor Council LEGAL REPRESENTATIVES: RESPONDENTS: Ms K. Barratt with Mr G. Moses Employers First Ms D. Tamplin Australian Retailers Association

JUDGMENT: - 18 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: KAVANAGH J

Date: Tues 29 May 2001 IRC1283 of 1999 BOOTMAKERS & HEEL BAR OPERATIVES &c (STATE) AWARD Notice of Award Review pursuant to s19 of the Industrial Relations Act 1996 DECISION 1 This matter comes before the Commission by way of a Notice of Review of Award as required under s19 of the Industrial Relations Act 1996 ("the Act"). Under s19 of the Act the Commission is required: 1. . . . to review each award . . . at least once every 3 years. 2. The purpose of a review is to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards. 3. The Commission must take account of the following matters in the review of awards: (a) any decision of the Commission under Part 3 or any other test case decision of the Commission, (b) rates of remuneration and other minimum conditions of employment, (c) part-time work, casual work and job-sharing arrangements, (d) dispute resolution procedures, (e) any issue of discrimination under the awards, including pay equity, (f) any obsolete provisions or unnecessary technicalities in the awards and the ease of understanding of the awards, (g) any other matter relating to the objects of the Act that the Commission determines . 4. The Commission must also take account of the effect of the awards on productivity and efficiency in the industry concerned. 5. During a review of awards, relevant industrial organisations and any other parties to the awards may make submissions on any of the matters being reviewed.

6. The Commission is to make such changes to awards as it considers necessary as a result of a review (emphasis added) Note. In addition to submissions of relevant industrial organisations, the Minister, the President of the Anti-Discrimination Board and State Peak Councils may make submissions in pursuance of their general right of intervention in Commission proceedings under s167.

2 Employers First challenges, under the s19 review, two existing provisions of the award, namely, Bootmakers & Heel Bar Operatives &c (State) Award, both of which deal with part-time work in the boot repair industry. The award at cl 3(h) "Definitions" states: Part-time Employee - is employed on a weekly basis to work a set number of hours and days each week. The number of hours is not less than 12 hours per week nor more than 30 per week to be worked on not more than five days per week.

3 Clause 5(iv)(a) Part-time Employment would also be affected. It reads at present: The ordinary hours of work, exclusive of meal times, shall be the same as those prescribed for full time employees but shall not in any case be less than four hours per day nor less than 12 hours per week nor more than 30 hours per week. Provided that where an employee's regular rostered work is in excess of 30 hours per week then such an employee shall be deemed to be a weekly employee and paid as such. 4 Employers First, on behalf of the employer parties to this Award who employs workers in the boot trade industry, challenges the definition of part-time work as contained in the present award and the award provision which sets out the hours of work for part-time employees. It is submitted the present clause imposes on employers a condition that is an unjustified and an unnecessary impediment to part-time employment given the needs of employers in the industry. 5 In support of their opposition to two clauses in the award under review, Employers First propose the following clauses are more appropriate (clause 3(h) of the current award): 2(h) Part Time Employee - is employed on a weekly basis to work a set number of hours and days each week. The number of hours is not less than 7.6 per week nor more than 38 hours per week. And (clause 5(iv)(a) of the current award): 10(iv)(a) Ordinary hours of work, exclusive of meal times, shall be the same as those prescribed for full-time employees but shall not, in any case, be less than four hours per day nor less than 7.6 hours per week nor more than 38 hours per week. Provided that no existing part-time employee as at 5 September 2000 will have their hours reduced to less than 12 hours per week. In addition they seek to insert into the award: a savings clause for existing part time employees from the date of decision by the Commission.

6 The unions and the Labor Council defend the terms of the existing clauses; object to the terms of the proposed clauses and argue the proposed changes by Employers First are beyond the scope of a s19 Review consideration by the Commission under the Act.

7 Ms K. Barratt with Mr G. Moses appeared for Employers First, Mr A.G. Rogers of counsel appeared for the Shop, Distributive and Allied Employees' Association, NSW Branch and Shop Assistants and Warehouse Employees' Federation of Australia, Newcastle & Northern, NSW, Ms D. Tamplin appeared for the Australian Retailers Association and leave was granted for Mr M. Lennon to appear on behalf of the Labor Council in accordance with his general right of intervention in Commission proceedings under s167. 8 Ms Tamplin supported the application as advanced by Ms Barratt and Mr Moses, and Mr Lennon supported the position advanced by Mr Rogers.

The Evidence 9 Employers First submits the present clause 5(iv)(a) has effect as a restrictive prohibition, inserted into the award when part-time employment was not encouraged. Employers First submits the social and industrial climate in New South Wales has continued to change and the incidence of part-time employment across the country has increased significantly to a point where part-time employment is actively sought by both employers and employees to suit requirements. Employers First submits there is a need for flexibility in this industry and the part-time clause in the award should be less restrictive as to the minimum hours required per week for a part-time employee. 10 Employers First relied upon evidence called from Mr Stephen Barlow, Payroll Manager, of Minit Australia Pty Limited. Mr Barlow opined he represented the largest single employer in the boot trade industry in New South Wales as the Mr Minit operation accounted for 20% to 25% of the total number of outlets in the industry, operating 51 stores in New South Wales alone. The unions opined Mr Minit represented approximately 10% of employers in this industry.

11 Mr Barlow in his evidence revealed 34 Mr Minit stores trade Monday to Sunday and the balance trade Monday to Saturday each week, except for two stores which trade 5 days a week. A majority of the company's stores also trade on Thursday nights. The evidence revealed therefore 60-70% of their shops trade on a Sunday. 12 A significant amount of oral and documentary evidence especially evidence relating to the rostering of staff and the hours of work relating to the operation of Mr Minit, was received. It revealed many of Mr Minit's stores are one person operations. As the employer generally opens its stores in shopping centres and malls, their hours of operation are bound by the trading policy of the particular operator. Therefore, the employees of Mr Minit are required to work in accordance with the Mr Minit roster, that is, 11 days each fortnight and a casual employee works the 12th day. The casual employees receive at least one regular shift each week. The employer submits the current award does not allow those regular employees to be classed as part-time workers as the shift on which they are rostered does not provide a 12 hour minimum as required under the present part-time clause in the award. The work roster of Mr Minit also allows, when there is annual leave or long term leave absences from its country stores, for a relief employee to be sent from Sydney or Newcastle. 13 An examination of the rosters in the Sydney stores reveals the employees work two shifts - one eight hours a day and one 11 hours a day allowing for night time trading but over seven days. In the Monday to Saturday stores, full time employees are rostered to work an average of 49.5 hours in the first week and 41.5 hours in the second week. However, in a break down of how the roster works "on the job", employees are actually working up to 56 hours per week and they are rostered to work these hours. One of the permanent fortnightly rosters allows for 49.5 hours work the first week, then 55.5 hours work the second week (see Macquarie Trading shop). An average employee works 7 hours overtime a week. 14 The volume of trading indicates the company needs its best operators to work on a Thursday, Friday and Saturday and in some shops an additional employee is rostered to work on those days. If Sunday trading is involved an average employee works not 11 days each fortnight but 12 days. It is difficult in the one man operation to allow for any time off. Absences such as for illness or for personal reasons cause a problem. 15 The company conceded there is a high rate of trained staff turnover and, from what was not a particularly scientific but nonetheless very persuasive exit interview, it was revealed the long working hours required by the rosters was a major factor in many of the voluntary terminations of employment. 16 The difficulty the Commission has with this evidence is, while a more flexible working arrangement may be advantageous to the employer, the evidence revealed the employer is at present not utilising the existing part-time provision in the award. Of the company's 82 employees, 78 are full time employees, 3 are casual employees and 1 is a part-time employee. This comment is not made as a criticism of an employer who repeatedly committed itself to retaining its full time employees. 17 The employer submits the proposed 7.6 hour minimum provision for part-time work would allow the company, in regional areas where there is little Sunday trading, to work a part-time worker one day per week and a full time employee only five days a week not up to seven days. The company submits its staff's long working hours in the city stores and in the regional shopping centres also could be alleviated with the use of the proposed amended part-time provision to the award.

The s19 Considerations 18 The first issue before the Commission is whether this application, for an amendment to clauses as contained in an award, can be considered under a s19 review of the award by the Commission. It cannot be argued that the application by Employers First seeks to make a significant change to the part-time provision of the award. The Act provides, through other provisions, for parties to bring contested matters before the Industrial Relations Commission and for parties to make application for variations to awards and for applications for consideration of a new award. 19 The Commission under the s19 award review is, pursuant to s19(6), empowered to make such changes to an award as "it considers necessary". The Commission pursuant to s19(4) must take into account the effect of the award on productivity and efficiency in the industry. Under s19(2), the purpose of the review is "to modernise" the award. Relevantly along with other matters, the Commission must take into account under s19(3)(c) part-time work, casual work and job sharing arrangements in its considerations. 20 The Commission has been given guidance as to the effect of the various indicia to be examined in s19 award review by a Full Bench of the Industrial Relations Commission of NSW, namely in the Principles for Review of Awards State Decision 1998 (1998) 85 IR 38 (at 47-48) ("Award Review Decision"). As to s19(6) the Full Bench said:

(b) The construction of s19(6) of the 1996 Act. . . . The statutory injunction in s19(6) is mandatory, requiring that "the Commission is to make such changes to awards as it considers necessary as a result of a review". In our view, such changes must be made as part of the review process. The legislature did not intend that the fate of the changes found to be necessary be left to the Commission's discretion being complied with by the award parties. We observe that the s19 review process as part of industrial regulation by awards involves both new and different processes and obligations. They are philosophically different to the familiar processes available to award parties in the 1996 Act ... It requires the Commission to make changes to the award which properly flow from the review process. That obligation could not be achieved by the giving of a possibly unenforceable direction to award parties that they make an application consistent with the view the Commission had formed in the review . . . . . . the Commission of necessity would have regard to other principles applicable to the making or variation of an award, such as the wage fixing principles and would not act inconsistently with them. The parties would also be given an opportunity to be heard. Nevertheless, if the Commission formed the view in the review proceedings that a particular change to the award was required then, in order to satisfy the purpose of the review as specified in s19(2), it would be obliged to make the change as part of the review process in accordance with the mandatory provisions of s19(6). To adopt any other approach would potentially make the review process a pointless exercise. The fate of awards judged as requiring modernisation, presumably as a result, in part at least, of a lack of attention by the award parties, would again be left to the same parties. Potentially, that would result in the award review process being a time-consuming, expensive and ultimately futile exercise.

21 The Commission is also required to consider this application in the context of some general legal principles. In Crown Employees (Teachers in Schools and TAFE and Related Employees) Salaries and Conditions Award [2000] NSWIRComm275 where a Full Bench of the Commission determined in a consent application to vary a clause of an award, the Commission had to consider the public interest. Reliance was placed on a recent High Court of Australia decision in Australasian Memory Pty Limited v Brien [2000] HCA 30 [at 17] where it was held it was quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the expressed words. In the Crown Employees Case the Full Bench held [at 52(a)]: . . .cogent reasons would need to be advanced why the general words . . . would be read down and none is demonstrated on the face of the section.

22 The Full Bench recommended a purposive approach to construing sections of the Act [at 52(c)]: The adoption of a purposive or non-literal approach to the provision is entirely consistent with the modern approach to statutory construction. That is, it is appropriate to ascertain the intention of the legislature through the object or purpose underlining the legislation and to ascertain the meaning of the words in the light of that object or purpose.

23 The question arises as to how s19 of the Act, having a function and purpose of review, interrelates with s10, s11 and 17 and other associated provisions of the Act. In the Award Review Decision (at 44) the Full Bench gave a cautionary warning: Applications brought by award parties in order to meet the needs of employers and employees in the circumstances of a particular industry or enterprise are pursued and determined in accordance with the provisions of the 1996 Act ... together with other applicable legislation and applicable principles, including those established in State Wage Case decisions, State decisions and test case decisions. By way of contrast, the process established by s19 has a stated and limited purpose - namely 'to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards.' And: Care must be taken it seems to us to ensure that these two processes are not confused. 24 As to the meaning of the word "modernise" the Full Bench in the Award Review Decision stated (at 43): . . . we were variously addressed on the meaning of the word 'modernise' as used in s19(2) where the purpose of the review process is specified to be "to modernise awards, to consolidate awards relating to the same industry and to rescind obsolete awards". "Modernise" is not a defined term but is a word which is used with its ordinary meaning, to be understood in its statutory context as comprehending both bringing the award up to date and making it contemporary. . . . comprehended in the s19 review process in "modernising" awards is an obligation to ensure that the awards are made consistent with the current statutory framework. 25 The union challenges this application brought by Employers First under a s19 review process. In its challenge it relies on the Full Bench's words of warning in the Award Review Decision (at 56): There is no special role provided by s19 for the Commission itself to call evidence in review proceedings or to embark upon a wide ranging investigation into the operation of a particular award or industry.

26 Employers First also, however, relies on what the Full Bench said in the Award Review Decision (at 74): 15. When taking account of part time work, casual work and job sharing arrangements in accordance with s19(3)(c), the Commission will have regard to the needs of employers and employees as well as the public interest in removing from awards unjustified impediments to employment.

27 As to the effect of s19(3) and s19(4), the Full Bench in the Award Review Decision referred (at 52) to the State Part-Time Work Case (1998) 78 IR 172 stating: . . . . .Evidence led by the Crown was directed to the significant increase in part-time work and casual work in the State over recent years. That was clearly established and brings to the fore the need to ensure in modernising awards that appropriate provision is made for such work so as not to impose artificial impediments upon such employment ... We accept it is appropriate in an award review for the parties to consider in particular whether the award unnecessarily imposes impediments to such work opportunities . . . It is consistent also with the community's need for part time work . . . 28 These stated principles have been applied in a number of recent judgments of the Commission. The reasoning therein by the members of the Commission provides some assistance to the Commission in this consideration. Schmidt J in Crown Employees (Public Service Conditions of Employment) Award 1997 [2001] NSWIRComm22 considered [at 19] the above Review principles when it noted the observations of the Full Bench of the Commission in Award Review Decision: . . . the Commission is not given a general discretion in s19 to insert into an award being reviewed any other conditions which the Commission might consider a 'modern' award should contain. The review directed by s19 concerns the provisions of existing awards. Unless properly arising from the matters specified in s19 itself, during a review the Commission is not at liberty to insert into awards other conditions not already contained therein. If award parties wish to advance such matters they must, in our view, utilise the other provisions of the Act to which we have referred.

Her Honour expressed some concern as to a particular provision she noted while conducting a review of an award before her. On an examination and hearing of argument her Honour, however, determined she would not interfere with the provision where a resolution by the Commission would have the effect of introducing another condition of employment and affect other associated agreements. 29 In Rock and Ore Milling and Refining (State) Award; Rock and Ore Milling and Refining Redundancy (State) Award; Rock and Ore Milling Superannuation (State) Award [2001] NSWIRComm54 when hearing a submission as to the effect together of s17 and s19 of the Act said [at 17]: In my view, there is absolutely no confusion here as to the two processes. Sams DP in this case referred [at 19] to the decision in Mechanical Opticians (State) Award (unreported, IRC4196 of 1999, 24 October 2000) where McLeay C was asked to declare obsolete a provision in the contract of employment clause which the unions submitted was contrary to the Workplace Relations Act 1996 (Cth). The issue was strongly contested. McLeay C found the provision could not be removed by virtue of a s19 award review as the change sought by the union was "a substantial variation to the award provision in regard to notice of termination of employment." . Sams DP determined in Rock and Ore Milling where change was expressly demanded by the statute itself, as it was in the issue before him, a s17 application was unnecessary in a s19 review by the Commission.

30 In the matters of Tennis String and Sutures Industry (State) Award and Tennis Strings and Sutures Industry Redundancy (State) Award (unreported decisions, Nos IRC99/1281 and IRC99/6129, 15 March 2001) Walton J, Vice President in an ex tempore decision examined a proposed clause which fell outside the provisions of s19(6). It was an entirely new provision. His Honour determined not to make any variation to the award under s19 of the Act even if it was agreed to, finding the application should be brought in an alternative manner to the Commission. 31 In Warehouse Employees - Drug (State) Award [2001] NSWIRComm37, Kavanagh J considered an agreed variation to wage rates in an award where it was argued that an application had to be made under s17 of the Act for a variation of the rates to the award. The Commission found an agreed wage rate increase could be ordered in accordance with the principles enunciated in s19(2) of the Act, that is, for the purpose of modernising the award and because under s19(3)(b) the wage rates were matters to be taken into account. The Commission further found, in relation to the agreed amendment, it satisfied the general principle enunciated in s10 of the Act, namely: The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees.

The Commission found the variation achieved a fair and reasonable condition of employment and was empowered under s19 to make a determination as to rates of remuneration (s19(3)(b)) and in such circumstances there was no need to proceed to a s17 application.

Consideration 32 From all the above authorities and taking into account the guidelines set in the two Full Bench decisions of the Industrial Relations Commission, namely, the Award Review Decision and the State Part-Time Work Case and s19 of the Act, the Commission must give consideration to the part-time provision in the award. Whether the provision provides an artificial impediment to part-time employment and whether it imposes an impediment to part-time work opportunities however cannot be considered in isolation. 33 I find the Commission is not authorised under a s19 review to re-write a clause to an award to increase work flexibility for an employer in an industry. The Commission, in a review, must recognise that in the making of this award there was a balancing exercise. While there should not be, in any award, a clause which provides "unjustified impediments to employment" or "artificial impediments to part-time and casual work" a s19 Review does not empower a full re-write of any clause in an award in isolation from the effect of the re-write on the industry as a whole and on associated awards. 34 Industrial regulation always constitutes some type of impediment to employment. In the making of an Award, regard must be had to the balancing of interests and in this case for the Commission to approve such a change in the part-time employment clause as proposed would require it to conduct an inquiry into whether the provision is so out of step with community attitudes that it should be struck down and an alternative provision, not agreed to, be approved. Such is not the Commission's role in a s19 review. What is required here is a consideration of an insertion into an award of a condition not already contained therein. This application goes beyond the stated and limited purpose of modernising an award as required under s19 of the Act.

35 In support of the general proposition that it is proper to vary the terms of this award and to make part-time work in the boot trade more flexible by reducing the number of hours a worker can work as a part-time employee on a regular basis, Employers First relies on the principles enunciated in the State Part-Time Work Case where the Full Bench declined to set a 12 hour minimum standard clause for State awards stating (at 205): . . . a weekly minimum of twelve hours, . . . in our view would have untoward and undesirable results . . . We add that the approach again carries with it a real risk of direct and indirectly discriminatory consequences, in that it could particularly deprive women, young workers and those with disabilities from access to part time work agreements which their personal circumstances require and which would not make such agreed arrangements exploitive in any sense. 36 Employers First submits the present clause abrogates the fundamental right of an employer to manage his own business. In relation to the number and/or category of persons in employment the employer's organisation submits this employer, under the current provision of a 12 hour weekly minimum and 30 hour weekly maximum, is prevented from engaging employees on a part-time basis suitable to his employment needs. 37 However, no evidence was led to persuade the Commission that the present part-time clause would not serve to provide the flexibility needed by this employer. They only employ at this stage three casual employees and one part-time employee. Generally their workforce is a full time workforce. This is not a criticism of this employer. They are free to take management decisions as to their rosters. 38 Ms Barratt relies on the statement of Mr Barlow, from Mr Minit: A more flexible part time arrangement would allow us to fully train the number of part time employees who could be used to ease the inconvenience that is sometimes caused to employees by the roster allowing us to cover absences more efficiently and giving us the flexibility to roster employees to meet consumer demand.

When asked in cross-examination why he was not using the existing part-time provision to overcome staffing problems on Thursday night, Mr Barlow said: We could but this come (sic) down to the whole reason we are doing this. With part timers we would have to guarantee 12 hours a week. Because all the shops have their extended hours on the same day of the week we could give each one three or four hours to cover the evenings but there are no other evenings during the week where they could do the additional hours to do the 12 hours a week. 39 Employers First further relies on the decision of Schmidt J in Storeworkers - Davids Distribution Pty Limited NSW Distribution Centres Award 1998 (unreported, IRC98/1117, 6 November 1998 at 22) where her Honour accepted the existing part-time clause posed an inappropriate impediment to both the efficient operation of warehouses and the employment of a greater number of store workers, and she determined to exercise her discretion to ensure that the artificial limit on employment opportunities was removed. 40 The Commission has found the Award Review Case, the does not simply authorise the re-writing of an award so as to increase the flexibility of a part-time employment clause in an award to suit a particular employer. While in its consideration, the Commission has regard to whether the present clause provides an "unjustified" impediment and an "artificial" impediment to part-time employment the Commission finds Employers First, on the facts, has not proven the present part-time clause provides the boot trade industry, or even for Mr Minit, an unjustified or even artificial impediment to part-time work. 41 What the evidence revealed was the company, Mr Minit, has not fully utilised the category of worker as defined in the award through the part-time clauses. The Commission heard no satisfactory evidence the existing provision would not provide a more flexible working environment for both the employer and the employees. This employer has made little to no attempt to design rosters which could incorporate the employment of part-time workers. In effect the only evidence offered was: We would prefer not to offer a guaranteed four hours per day nor 12 hours per week but prefer to offer not less than 7.6 hours per week up to 38 per week. 42 Questions such as are there alternatives to the proposed amendment? Does the change unfairly or deleteriously affect employees? Should there be other amendments to balance any disadvantage to employees caused by such a change should all be addressed in the Commission's consideration. 43 The real proposition before the Commission, as the unions' submit and the Commission accepts, is the award requires change because a large employer in the boot industry, Mr Minit, wishes to take advantage of the changes proposed in relation to part-time work. Such a proposition amounts to no more than a submission that a particular employer would like to be freed from the strictures of an award. This is not an argument relevant to modernisation. It may well be a suitable argument for consideration in an application for a variation of the award or for a new award where the Commission has the opportunity of balancing the competing claims of the parties in discharging its primarily obligation to do justice between an employer and an employee and taking into account the public interest.

44 The Commission accepts a provision in an award can be so inconsistent with modern thought and law that it will of its own force be removed in the modernising process (for example, the performance of certain work by males only). However, the proposition that a minimum weekly engagement of 12 hours is so offensive to modern thought that it must be altered is not accepted. Such a clause could have been perceived as a very modest minimum in the historical context that the part-time hours minimum of 12 per week was a large concession at the time that 20 hours a week was considered the norm. The State Part-Time Work Case guides the Commission to consider the issue of part time work in the context of all relevant evidence as to the effect of change on the industry concerned and with the public interest in mind. 45 Given the evidence of the operation of Mr Minit in shopping malls where there are contractual obligations on the employers to trade, what they as employers perceive as a norm in the boot trade industry, cannot be determined in isolation without an examination of the workings of other employers in the industry and a consideration of the effect of possible changes on the full retail industry. 46 I am satisfied the evidence can simply be read as saying "what we would prefer is a different arrangement" as distinct from evidence of the need for more flexibility than the award allows. 47 I am satisfied this application by Employers First should be dismissed as not an appropriate application under a s19 award review. I am satisfied the application is a substantial one which would have a effect in the boot trade industry and have a flow on effect on the retail industry.

48 I am satisfied the present provisions are acceptable within the purpose and ambit of a s19 review of the award.

49 Therefore, having found the application outside a s19 Review, the Commission is not required to rule on the application of Employers First but, having heard the evidence relied upon by the employer, I would dismiss this application, if it was before me as an application for a variation to the award, on the evidence relied upon. The evidence of one employer does not address the needs of all employers in the industry or the needs of the employees in the industry or address the public interest considerations that must be before the Commission.

50 A rejection of this application under a s19 review is not, however, a rejection of any of the principles stated by the Full Bench in the State Part-Time Wage Case as to modern trends towards a need for part-time work. It is simply to be said that considerations of such an application under a s17 for variation of the award or under s10 for a new award must require a more comprehensive examination of the effects of any proposed change on the industry and on the employers and employees in the context of what is in the public interest. 51 Accordingly, I order this application for review proceed without the proposed amendments put forward by Employers First.

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