PR583803 - Decision - 19 Aug 2016

[2016] FWCFB 5417
FAIR WORK COMMISSION

REASONS FOR DECISION


Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Item 4 Sch. 6—Modern enterprise award

Australian Federal Police
Australian Federal Police Award 2002
Commonwealth Employment (Protective Service Officers) Section 170MX Award 2001
(EM2013/35)

Federal police operations

VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT KOVACIC
COMMISSIONER JOHNS

SYDNEY,19 AUGUST 2016

Application for a modern enterprise award to replace the Australian Federal Police Award 2002;Commonwealth Employment (Protective Service Officers) Section 170MX Award 2001 - whether modern enterprise award should be made - modern enterprise award should be made in the circumstances - order to be settled by member of full bench..

Introduction

[1] This decision relates to applications under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the Australian Federal Police Award 2002 (Current Enterprise Award):

[2] An application to modernise the Commonwealth Employment (Protective Service Officers) Section 170MX Award 2001 (the MX Award) was not pursued because it is not an instrument capable of modernisation.

[3] The application was made by the Australian Federal Police (AFP).

[4] On 6 May 2016 the applicant filed the following material in support of the application:

      ●Joint outline of submissions (Exhibit A);
      ●Statement of Katie Melville,AFP People,Safety and Security (Exhibit B);
      ●Draft Order;and
      ●Draft of Proposed Award.

[5] The application was supported by the Community and Public Sector Union (CPSU) and the Australian Federal Police Association (AFPA).

[6] At the hearing of this matter on 23 May 2016:

      ●Mr P McNulty appeared from Ashurst,Solicitor with permission pursuant to s.596(2)(a) of the Fair Work Act 2009,appeared on behalf of the AFP;
      ●Ms E Hardy and Ms K Melville appeared for the AFP;
      ●Mr K Barlow,appeared for Community and Public Sector Union (CPSU);and
      ●Ms M Thomas-Richards,appeared for Australian Federal Police Association (AFPA).

[7] A the conclusion of the hearing we announced our decision to make the Australian Federal Police Enterprise Award 2016 (Proposed Award) subject to the finalisation of its terms in conference with Commissioner Johns.

[8] On 7 June 2016 the parties jointly filed a further amended version of the Proposed Award which addressed the issues raised by the Full Bench on 23 May 2016.

[9] On 15 June 2016,the Commission informed the parties,of minor changes it proposed to make to sub-clause 10.9(b),of its own accord. No objection was raised to the proposed amendments

[10] Further,the Commission’s Awards Modernisation team suggested further amendments to the Proposed Award because of the decision in the Annual Wage Review 2015–16 on 31 May 2016 [[2016] FWCFB 3500]. It was proposed to adjust the wages and allowances,along with other minor changes.

[11] On 19 July 2016,the Commission provided the parties with:

      ●a copy of the Proposed Award (including changes incorporated from [[2016] FWCFB 3500);
      ●a table clarifying the changes made to the Proposed Award.

[12] The parties were directed to consider the changes proposed,and provide comments and/or objections to the amended version of the Proposed Award,by 21 July 2016.

[13] On 21 July 2016,the AFP submitted that it agreed with most of the proposed changes,but suggested further amendments to the calculation of the wages and allowances figures.

[14] On 22 July 2016,the Commission provided the parties with a final version of the Proposed Award,and informed the parties that the calculations provided by the Commission on 21 July 2016,are the correct figures for the wages and allowances and will remain in the Proposed Award. A brief explanation was provided on how these figures were calculated.

[15] On 25 July 2016,the AFP wrote to the Commission,confirming it has no objection to the final version of the Proposed Award,incorporating the Commission’s calculated wages and allowances figures.

[16] These are the reasons for our decision.

The approach

[17] The approach to be taken to the making of an enterprise modern award was established by a Full Bench in Commonwealth of Australia acting through the Minister Assisting the Prime Minister for the Public Service v the Community and Public Sector Union and Others. 1 We adopt that approach in this matter.

The legislative requirements

[18] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (Transitional Act) which provides:

    (5) In deciding whether or not to make a modern enterprise award,and in determining the content of that award,the FWC must take into account the following:

      (a) the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
      (b) whether there is a modern award (other than the miscellaneous modern award) that would,but for the enterprise instrument,cover the persons who are covered by the instrument,or whether such a modern award is likely to be made in the Part 10A award modernisation process;
      (c) the content,or likely content,of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
      (d) the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate,and the extent to which those terms and conditions are reflected in the instrument;
      (e) the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
      (f) the likely impact on the persons covered by the enterprise instrument,and the persons covered by the modern award referred to in paragraph (b),of a decision to make,or not make,the modern enterprise award,including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
      (g) the views of the persons covered by the enterprise instrument;
      (h) any other matter prescribed by the regulations.

[19] Item 6 links the modern enterprise award objective to the modern award objective and the minimum wages objective found at ss.134 and 284 of the Act. It provides:

    6 The modern enterprise awards objective
    (1) The modern awards objective and the minimum wages objective apply to the FWC making a modern enterprise award under this Division.
    (2) However,in applying the modern awards objective and the minimum wages objective,the FWC must recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. This is the modern enterprise awards objective.

[20] This is a legislative requirement for the Commission to recognise,in the context of the modern awards objective and the minimum wage objective,that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. The modern awards objective,set out in s.134 of the Fair Work Act 2009 (the Act),is as follows:

    134 The modern awards objective

    What is the modern awards objective?

    (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

      (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:

        (i) employees working overtime;or

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

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

        (iv) employees working shifts;and

      (e) the principle of equal remuneration for work of equal or comparable value;and

      (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.

    This is the modern awards objective.”

[21] It is also relevant to draw attention to item 11 of Division 3 which provides:

    11 Enterprise instrument modernisation process is not intended to result in reduction in take-home pay
    (1) The enterprise instrument modernisation process is not intended to result in a reduction in the take-home pay of employees.
    (2) An employee’s take-home pay is the pay an employee actually receives:

      (a) including wages and incentive-based payments,and additional amounts such as allowances and overtime;but
      (b) disregarding the effect of any deductions that are made as permitted by section 324 of the FW Act.

    Note:Deductions permitted by section 324 of the FW Act may (for example) include deductions under salary sacrificing arrangements.
    (3) An employee suffers a modernisation-related reduction in take-home pay if,and only if:

      (a) a modern enterprise award made in the enterprise instrument modernisation process starts to apply to the employee when the award comes into operation;and
      (b) the employee is employed in the same position as (or a position that is comparable to) the position he or she was employed in immediately before the modern enterprise award came into operation;and
      (c) the amount of the employee’s take-home pay for working particular hours or for a particular quantity of work after the modern enterprise award comes into operation is less than what would have been the employee’s take-home pay for those hours or that quantity of work immediately before the award came into operation;and
      (d) that reduction in the employee’s take-home pay is attributable to the enterprise instrument modernisation process.

[22] Item 11 highlights the injunction contained in the original request provided by the then Minister which related to disadvantage to employees.

The application of the legislative task

[23] We now turn to each of the matters that we took into account.

The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application:Item 4(5)(a)

[24] The applicant provided a history of the Current Enterprise Award and the MX Award. That history can be summarised as follows:

      ●Prior to the creation of the AFP in 1979,a number of different Commonwealth policing agencies had existed. They included:

    • Commonwealth Police (1917–1919);


    • Commonwealth Investigations Branch (1919–1945);


    • Peace Officer Guard (1925–1960);


    • Australian Capital Territory Police (1927–1979);


    • Commonwealth Police (1960–1979);and


    • Federal Bureau of Narcotics (1969–1979).


      ●Under the Police Ordinance 1927,an Australian Capital Territory (ACT) police force was established,with its terms and conditions set by the Attorney-General.
      ●Pursuant to s.5(4) of the Commonwealth Police Force Act 1957,Commonwealth Police Officers were not subject to the Public Service Act 1922. Their terms and conditions were determined by the Attorney-General and Public Service Board.
      ●Following the release of Sir Robert Mark’s report on the organisation of police resources in the Commonwealth area,in 1979 the Commonwealth passed the Australian Federal Police Act 1979 (AFP Act),creating a new force which incorporated the Commonwealth Police Force and the Australian Capital Territory Police into one organisation:the AFP.
      ●In late 1979,staff at the Federal Bureau of Narcotics were transferred to the AFP.
      ●Under the AFP Act,the relevant Minister held the power to determine terms and conditions of AFP staff,but could only make an agreement in writing with a staff association following certification of the agreement by the Federal Police Arbitral Tribunal.
      ●In 1988 the Unified Workforce Agreement allowed sworn and unsworn staff to be employed under the same legislation and pursuant to the same classification system,rates of pay and terms and conditions of employment.
      ●In 1990,amendments to the AFP Act removed the ability of the AFP to employ staff under the Public Service Act and moved the ability to make determinations regarding terms and condition from the Minister to the Commissioner of the AFP.
      ●Prior to the creation of the Australian Federal Police Award 1991,AFP employees were covered by 22 federal awards and represented by 10 different unions.
      ●After the Australian Protective Service Amendment Act 2002 was passed,the responsibility of the management of the Australian Protective Service was transferred from the Secretary of the Attorney-General’s Department to the AFP Commissioner. Accordingly,those employees covered by the Commonwealth Employment (Protective Service Officers) Section 170MX Award 2001 became covered by the AFP Award.
      ●The Australian Federal Police Award 2002 was approved in 2002,being the last time the award was reviewed.

[25] It can be seen from this brief review that the Current Enterprise Award has had a long and distinct history. This factor weighed in favour of making a modern enterprise award.

Whether there is a modern award (other than the miscellaneous modern award) that would,but for the enterprise instrument,cover the persons who are covered by the instrument,or whether such a modern award is likely to be made in the Part 10A award modernisation process:Item 4(5)(b).

[26] It was submitted that there is no single award that would,but for the Proposed Award,cover all employees who are covered by the Current Enterprise Award. It was further submitted that there is no industry-based modern award covering employees in the industry.

[27] The parties submitted that a small number of AFP employees may be covered by the following occupation-based modern awards:

      ●Educational Services (Post-Secondary Education) Award 2010;
      ●Graphic Arts,Printing and Publishing Award 2010;
      ●Medical Practitioners Award 2010;
      ●Nurses Award 2010;and
      ●Professional Employees Award 2010.

[28] It may be observed that coverage by a number of modern awards may lead to difficulties in enterprise bargaining. Further,it might also lead to an unnecessary fragmentation of the award safety net and fail to achieve the modern awards objective.

[29] These factors weighed in favour of creating a modern enterprise award.

The content,or likely content,of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process):Item 4(5)(c)

[30] The parties submitted that the modern awards referred to above contain terms and conditions specific to the occupations,and that the content of these modern awards does not reflect the terms and conditions of employment in the AFP.

[31] It is apparent from the history of the industrial arrangements which have applied to the applicant that the content of the various industry specific modern awards do not reflect the needs,terms and conditions of its employees. This factor weighed in favour of making a modern enterprise award.

The terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate,and the extent to which those terms and conditions are reflected in the instrument Item 4(5)(d)

[32] The parties directed the Commission’s attention to the decision in Coleambally Irrigation Co-operative Limited v AWU and ors in which the parties submitted that the Commission considered enterprise agreements that appeared to cover activities in the relevant industry.

[33] It was submitted the terms and conditions currently applying to AFP employees covered by the Current Enterprise Awards are set out in the following enterprise agreements:

      ●Australian Federal Police Enterprise Agreement 2012-2016;and
      ●Australian Federal Police Executive Level Enterprise Agreement 2016-2019.

[34] The parties submitted that the AFP specific terms and conditions contained in these instruments include:

      ●Types of employment and associated restrictions;
      ●Classifications and rates of pay;
      ●Hours of work;
      ●Personal/carer’s leave;and
      ●Redundancy pay.

[35] The parties submitted that these AFP specific terms and conditions are reflected in the AFP Award 2002 in the following clauses:

      ●Clause 10 –types of employment;
      ●Clause 11 –redundancy;
      ●Clauses 13 and 14 –AFP specific classifications and pay rates;
      ●Clause 17 –Hours of duty;and
      ●Clause 26 –Personal leave.

[36] These factors weighed in favour of making the Proposed Award.

The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment Item 4(5)(e)

[37] It was submitted that there are enterprise specific terms and conditions that apply to employees of the applicant. A few are worthy of mention:

      ●AFP-specific allowances (such as ‘diving allowance’and ‘render explosives harmless allowance’);and
      ●Restrictions on the ability of the AFP to engage specified term and casual employees.

[38] The parties also submitted that the AFP Award 2002 contains seven classification levels,with salary relativities unique to the AFP. The parties submitted that while the lower levels are similar to other Commonwealth public sector awards,the higher levels benefit from a substantial increase in base remuneration,which were designed to reflect the career progression with the AFP.

[39] The parties submitted that if a modern enterprise award were not were not made,the classifications and established pay relativities would be lost and instead obtained from modern awards with more general application. It was submitted that this would be contrary to the principle of equal remuneration for work of equal value as between AFP employees.

[40] These factors weighed in favour of making a modern enterprise award.

The likely impact on the persons covered by the enterprise instrument,and the persons covered by the modern award referred to in paragraph (b),of a decision to make,or not make,the modern enterprise award,including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons:Item 4(5)(f).

[41] The parties jointly submitted that

      ●While a majority of AFP employees are covered by an enterprise agreement,a decision to make,or not to make,the Proposed Award will be relevant to the operation of the better off overall test (the BOOT);and
      ●a decision to not make the Proposed Award would result in the BOOT being assessed against the aforementioned modern awards. The parties submitted that these awards do not contain terms and conditions that reflect the particular circumstances of employment at the AFP.

[42] As was made clear in the award modernisation Full Bench decision dated 4 December 2009 ([2009] AIRCFB 945 at paragraph 153):

    We agree with those who have suggested that the coverage of the award is very narrow and likely to be limited in time where emerging industries are concerned or where the expansion of coverage of a modern award is involved. Accordingly we do not think the award should contain a comprehensive safety net designed for any particular occupation or industry. Rather it should contain basic conditions only,leaving room for the application of an appropriate safety net in another modern award in due course.”

[43] The Miscellaneous Award was not created or designed to be a universal safety net but to be a transition point to another modern award whose coverage may require review. These circumstances are a factor in favour of creating a modern enterprise award.

[44] These factors weighed in favour of making a modern enterprise award.

The views of the persons covered by the enterprise instrument:Item 4(5)(g)

[45] All parties to the Current Enterprise Awards supported the making of this modern enterprise award. No person opposed the award. Whilst consent is not decisive of the matter,it is a factor in favour of making a modern enterprise award.

Any other matter prescribed by the regulations:Item 4(5)(h)

[46] There were no regulations relevant to this criterion.

Should a modern enterprise award be made?

[47] AFP is a unique organisation. There is no convenient alternative award that can be said to better satisfy the modern awards objective than a modernised enterprise award.

[48] The history of the Current Enterprise Award discloses a rationale for its existence which remains current today. The terms of Current Enterprise Award contain enterprise specific terms. While some of these can and should be contained in enterprise agreements,the fact remains that the awards were developed for this enterprise,and once consolidated and modernised,remain the most suitable vehicle for a fair and relevant minimum safety net into the future. In our view there was a compelling case for the making of a modern enterprise award for AFP.

[49] The above factors clearly made the case for such an outcome. We considered that the Proposed Award should be made.

[50] While the Commonwealth Employment (Protective Service Officers) Section 170MX Award 2001 is not an instrument capable of modernisation,by virtue of being an agreement-based transitional instrument,the Australian Federal Police Award 2002 is capable of modernisation. On that basis we terminated both instruments and made the Proposed Award in the terms agreed between the parties as further amended and provided by the Commission on 22 July 2016.

VICE PRESIDENT

Appearances:

P McNulty. Ashurst

E Hardy,Australian Federal Police

K Melville,Australian Federal Police

K Barlow,Community and Public Sector Union

M Thomas-Richards,Australian Federal Police Association

Hearing details:

2014.

Sydney,Canberra.

May 23.

 1   [2015] FWCFB 616.

Printed by authority of the Commonwealth Government Printer

<Price code C, MA000142  PR583803>

About this document
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Code:
PR583803
Title:
PR583803 - Decision - 19 Aug 2016
Effective:
19 Aug 2016
Updated:
19 Aug 2017
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PR583803 - Decision - 19 Aug 2016
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