MA000017 - Decision - 04 Oct 2013

[2013] FWCFB 5729

FAIR WORK COMMISSION

DECISION


Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 5,Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years

The Ark Clothing Co Pty Ltd
(AM2012/93)
The Australian Industry Group
(AM2012/225)
Council of Textile and Fashion Industries of Australia Limited
(AM2012/248)
Textile,Clothing and Footwear Union of Australia
(AM2012/93,AM2012/225,AM2012/248,AM2012/273)

Textile,Clothing Footwear and Associated Industries Award 2010

Clothing industry

SENIOR DEPUTY PRESIDENT HAMBERGER

DEPUTY PRESIDENT SMITH

COMMISSIONER LEE

SYDNEY,4 OCTOBER,2013

Transitional review of modern awards - review of Textile,Clothing,Footwear and Associated Industries Award 2010

[1] Under Schedule 5,Item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Provisions Act),the Fair Work Commission is required to conduct a review of all modern awards after two years (the transitional review). In the transitional review the Commission must consider whether the modern award in question is achieving the modern awards objective and is operating effectively,without anomalies or technical problems arising from the Part 10A award modernisation process.

[2] In a Statement 1 issued by the President,Justice Ross on 27 April 2012 regarding the process for dealing with the transitional Review,His Honour indicated that applications in relation to the Textile,Clothing,Footwear and Associated Industries Award 2010 (the modern award) in respect of outworkers would be allocated to a Full Bench. On 5 July 2012,Justice Ross indicated that the applications concerning outworkers would be dealt with as part of Stage 3 of the transitional review process.2

[3] Applications seeking variations to the modern award were received from The Ark Clothing Co Pty Ltd (The Ark) (AM2012/93),the Australian Industry Group (AIG) (AM2012/225),the Council of Textile and Fashion Industries of Australia Limited (TFIA) (AM2012/248),Business SA (AM2012/270) and the Textile,Clothing and Footwear Union of Australia (TCFUA) (AM2012/273). AM2012/270 was subsequently withdrawn by Business SA. The application by the TCFUA (AM2012/273) contained a mix of outworker and non outworker matters. The other applications were concerned only with those provisions in the modern award that relate to outworkers.

[4] Commissioner Lee listed matter AM2012/273 for report back and hearing on 5 December 2012. Prior to listing the matter,the Commissioner issued directions advising parties that in addition to dealing with the matters in AM2012/273,a number of proposed technical/drafting variations (technical matters) identified by Fair Work Commission would also be considered. Submissions on the proposed technical amendments were sought. Subsequent to the conference and hearing on 5 December 2012 directions were set for arbitration.

[5] On 13 February 2013,prior to the arbitration taking place,the TCFUA,Australian Business Industrial (ABI) and AIG jointly sought that the dates for arbitration be vacated and that the time be used for conciliation.

[6] On 15 February,Senior Deputy President Hamberger issued a statement which indicated that President,Justice Ross had referred all aspects of AM2012/273 to the Full Bench convened for proceedings in relation to the outworker provisions of the modern award. The statement indicated that documents filed in compliance with the directions of Commissioner Lee would be provided to the Full Bench for consideration.

[7] At the Full Bench proceedings conducted on 7 March 2013,the Full Bench determined that Commissioner Lee would conduct any required conferences between the parties in relation to the non-outworker matters in AM2012/273 and that the Commissioner would report back to the Full Bench on these matters.

[8] Subsequently,conferences were convened by Commissioner Lee on 29 April 2013 and 21 May 2013. These conferences dealt only with the non-outworker related matters contained in matter AM2012/273 as well as the technical matters identified by the Commission. These conferences were attended by representatives of the TCFUA,AIG and ABI.

[9] Subsequent to the conduct of these conferences,the TCFUA,AIG,and ABI advised the Commission that they had reached agreement on all of the non-outworker related matters,and filed a proposed draft variation to the modern award for the consideration of the Full Bench.

[10] In relation to the outworker provisions,written submissions were received from each of the applicants,as well as a number of other interested parties. 3 An initial hearing was conducted in 7 March 2013 by the Full Bench in Melbourne (with a video link to Adelaide).

[11] On 22 May 2013,correspondence was received from the TCFUA,AIG,and ABI,advising that they believed it would be of benefit if the outworker matters were listed for conciliation.

[12] On 23 May 2013,Senior Deputy President Hamberger wrote to those parties advising that the outworker related matters would be referred to Commissioner Lee for the conduct of a conference on 26 June 2013 to explore possible resolutions to the outworker matters. The parties were advised that the matters remained before the Full Bench. This conference was attended by representatives of The Ark,TFIA,TCFUA,AIG,ABI,Business SA and FairWear.

[13] While progress was made at that conference on a range of issues,a number of disagreements remained. The Full Bench subsequently conducted further hearings on 9,10 and 11 July 2013.

[14] At the commencement of proceedings on 9 July 2013 the TCFUA,AIG,TFIA,ABI and Business SA indicated that they had reached a consent position in relation to AM2012/225,AM2012/248 and AM2012/273. As part of this consent position,these parties agreed no longer to press most of the aspects of their applications save and except for the manner in which those aspects were reflected in the consent position.

The Legislative context

[15] The transitional review is being conducted under Item 6 of Schedule 5 to the Transitional Provisions Act. Item 6 provides:

    6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years

    (1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day,FWA must conduct a review of all modern awards,other than modern enterprise awards and State reference public sector modern awards.

    Note:The review required by this item is in addition to the annual wage reviews and 4 yearly reviews of modern awards that FWA is required to conduct under the FW Act.

    (2) In the review,FWA must consider whether the modern awards:

    (a) achieve the modern awards objective;and

    (b) are operating effectively,without anomalies or technical problems arising from the Part 10A award modernisation process.

    (2A) The review must be such that each modern award is reviewed in its own right. However,this does not prevent FWA from reviewing 2 or more modern awards at the same time.

    (3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.

    Note:Any variation of a modern award must comply with the requirements of the FW Act relating to the content of modern awards (see Subdivision A of Division 3 of Part 2-3 of the FW Act).

    (4) The modern awards objective applies to FWA making a variation under this item,and the minimum wages objective also applies if the variation relates to modern award minimum wages.

    (5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.

    (6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).’

[16] The legislative provisions applicable to the transitional review were considered in a decision relating to the Modern Awards Review 2012 given on 29 June 2012. 4 In that decision the Full Bench dealt with various preliminary issues relating to the approach to be adopted in the transitional review. Amongst other things,the Full Bench noted:

    [23] First,any variation of a modern award must comply with the requirements of the FW Act which relate to the content of modern awards. These requirements are set out in Subdivision A of Division 3 of Part 2-3 of the FW Act...

    [25] Any variation to a modern award arising from the Review must comply with s.136 of the FW Act and the related provisions which deal with the content of modern awards (ss.136–155 of the FW Act) ...

    [89] In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process,the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision,such as a significant change in circumstances,which warrant a different outcome ...

    [99] To summarise,we reject the proposition that the Review involves a fresh assessment of modern awards unencumbered by previous Tribunal authority. It seems to us that the Review is intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so,such as a significant change in circumstances which warrants a different outcome. Having said that we do not propose to adopt a “high threshold”for the making of variation determinations in the Review,as proposed by the Australian Government and others.

    [100] The adoption of expressions such as a “high threshold”or “a heavy onus”do not assist to illuminate the Review process. In the Review we must review each modern award in its own right and give consideration to the matters set out in subitem 6(2). In considering those matters we will deal with the submissions and evidence on their merits,subject to the constraints identified in paragraph [99] above.’

[17] The modern awards objective is set out in s.134 of the Fair Work Act 2009 (the FW Act) 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

    (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.

    When does the modern awards objective apply?

    (2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers,which are:

    (a) the FWC’s functions or powers under this Part;and

    (b) the FWC’s functions or powers under Part 2 6,so far as they relate to modern award minimum wages.

    Note:The FWC must also take into account the objects of this Act and any other applicable provisions. For example,if the FWC is setting,varying or revoking modern award minimum wages,the minimum wages objective also applies (see section 284).’

[18] The FW Act contains specific provisions concerning modern award terms relating to outworkers. These are set out at s.140 of the Act:

140 Outworker terms

    (1) A modern award may include either or both of the following:

    (a) terms relating to the conditions under which an employer may employ employees who are outworkers;

    (b) terms relating to the conditions under which an outworker entity may arrange for work to be performed for the entity (either directly or indirectly),if the work is of a kind that is often performed by outworkers.

    Note:A person who is an employer may also be an outworker entity (see the definition of outworker entity in section 12).

    (2) Without limiting subsection (1),terms referred to in that subsection may include terms relating to the pay or conditions of outworkers.

    (3) The following terms of a modern award are outworker terms:

    (a) terms referred to in subsection (1);

    (b) terms that are incidental to terms referred to in subsection (1),included in the modern award under subsection 142(1);

    (c) machinery terms in relation to terms referred to in subsection (1),included in the modern award under subsection 142(2).’

Background to the outworker provisions of the modern award

[19] Schedule F 5 of the modern award deals specifically with outworkers. Special provisions for outworkers have existed in federal awards for some decades. The current scheme broadly owes its origins to a 1987 decision by Deputy President Riordan.6 In that decision the Deputy President stated:

    ‘The evidence and material in this case discloses a very distressing situation which has no place in a society which embraces the concepts of social justice. The undisputed facts reveal the existence of widespread and grossly unfair exploitation of migrant women of non-English speaking background who are amongst the most vulnerable persons in the work-force.” 7

[20] Deputy President Riordan was particularly concerned with the use of complex contractual arrangements in a way that facilitated widespread avoidance or evasion of duties and obligations imposed by the award. The Deputy President inserted a set of provisions specific to outworkers into the Clothing Trades Award 1982 which,in modified form,continued to exist until the creation of the modern award. These included provisions with regard to record keeping and specific enforcement mechanisms. They also included detailed provisions aimed at ensuring regularity of hours and minimum levels of income.

[21] The modern award was made by the Australian Industrial Relations Commission as one of 17 priority modern awards. An exposure draft of the modern award was published on 12 September 2008. It included outworker provisions based on those in the Clothing Trades Award,but further negotiated and updated by some interested parties from government and the TCFUA. From there all interested parties were given the opportunity to make written and oral submissions in response to the exposure draft. None of the major employer groups made submissions in support of significant changes to the outworker provisions contained in the exposure draft. One feature of the exposure draft that differed from the Clothing Trades Award was that the latter defined outworkers as a person who performed work for an employer outside the employer’s workshop of factory under a ‘contract of service’. In other words it only covered outworkers who were employees. The exposure draft on the other hand,included in the definition of outworker:

    ‘an individual who is a party to a contract for services and who,for the purposes of the contract,performs work:

    (i) in the textile,clothing or footwear industry;and

    (ii) at private residential premises or at other premises that are not business or commercial premises of the other party to the contract,or (if there are two or more other parties to the contract) of any of the other parties to the contract.’

[22] This broader definition,which in effect brought contractors within the reach of the award,reflected s.576K of the Workplace Relations Act 1996. This provision had been enacted by the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008, which,inter alia,initiated the process of award modernisation. According to the supplementary explanatory memorandum to the Bill (at paragraph 22) this provision was included because:

    ‘Outworker arrangements are typically complex and outworkers are not always engaged as a direct employee of the business contracting the work. Often outworkers are engaged under contracting arrangements.’

[23] The supplementary explanatory memorandum continued:

    ‘The amendment will ensure that modern awards can include provisions relating to both employee outworkers and to contract outworkers and to contract outworkers in the textile,clothing or footwear industry.’

[24] The modern award was published on 19 December 2008. In the accompanying decision,the only comments the Commission made about the outworker provisions were the following:

    [150] Important submissions were also made in relation to the regulation of outworkers. There has been no disagreement about the need to properly protect this class of employee. In the submissions of the TCFUA and some State governments,it was put that we should ensure that existing State legislation which protects outworkers should not be inadvertently overridden by the modern award. We agree with this and have made provision for the saving of relevant State legislation.’ 8

[25] Some relatively minor amendments were made to the outworker provisions in the modern award by Fair Work Australia on 3 March 2010. 9 These,inter alia,changed the definition of outworker by specifically referring to the definition in the recently passed FW Act. The revised definition of outworker in the legislation continued to include individuals performing work ‘for the purpose of a contract for the provision of services’. The current outworker provisions in the modern award are attached to this decision.

The Consent Position

[26] As part of the ‘consent position’,the TCFUA,AIG,TFIA,ABI and Business SA supported the following nine changes to Schedule F of the modern award:

1. The insertion of the following clause at the beginning of Schedule F:

      ‘For information in relation to the operation of this Schedule the following organisations can be contacted for further information:

    • Australian Industry Group


    • Business SA


    • NSW Business Chamber


    • Textile,Clothing and Footwear Union of Australia.’


2. Amending clause F.2.2 (a) (viii) so that the work record made and retained by the principal must include ‘the time (including sewing time) for the work required on each garment,article or material’,as opposed to merely the ‘the sewing time’for the work etc. as now.

3. Amending clause F.3.2 (b) so that the written agreement between the principal and the worker must indicate - if the worker is to be provided with work on a part time basis - whether agreed numbers of hours ‘are to be averaged and over what period’.

4. Amending clause F.3.4(b) so that the work record in respect of arrangements made under the clause includes the details of the time standard applied in accordance with clause F.4.4(a) in order to determine the appropriate ‘time (including sewing time)’for the purposes of clause F.2.2(a)(viii),as opposed to merely ‘the sewing time’as now.

5. Amending F.3.4 (c) so that work records in respect of arrangements under the clause must indicate the number of working hours to complete the work by multiplying the relevant number of garments etc. by ‘the time (including sewing time’referred to in clause F.2.2,as opposed to merely the ‘sewing time’per garment etc. as now.

6. Amending clause 4.2(a) to allow a principal to provide a worker with regular part time work of no less than 15 regular hours per week (as opposed to 20 as now);or no less than 10 regular hours per week with the consent of the TCFUA (as opposed to 15 as now).

7. Inserting a new clause allowing regular part time work to be averaged over a period not exceeding four consecutive weeks.

8. Inserting a clause ensuring that payment for regular part-time hours where there has been agreement to average those hours is based on the average number of hours agreed (as opposed to,for instance,the actual number of hours worked.)

9. Making a number of amendments to the appendix to Schedule F to ensure that the information provided to outworkers reflects the amendments to the schedule as well as some other minor changes.

[27] The parties to the consent position submitted that the consent position is necessary to achieve the modern awards objective for the following reasons:

    ●the averaging of hours is a flexible modern work practice which is not presently a feature of schedule F of the TCF Award (s.134(1)(d));

    ●the averaging of hours may assist in providing greater stability in income for outworkers which supports the relative living standards and needs of the low paid (s.134 (1)(a));

    ●the appendix to schedule F assists in providing a simple and easy to understand modern award system (s.134(1)(g));

    ●the identification of relevant organisations within schedule F and the appendix for the provision of information regarding the operation of the award assists in providing a simple and easy to understand modern award system (s.134(1)(g)).

[28] The parties to the consent position relied on the evidence led by the TCFUA in the proceedings. 10

[29] The changes to Schedule F agreed to by TCFUA,AIG,ABI,TFIA and Business SA in their ‘consent position’can be grouped into four categories:

1. Changes to make clear that work records must include all the time taken to make each garment etc. (not just ‘sewing time’);

Changes to allow regular part time hours to be averaged over a period of up to four weeks;

2. Changes to allow regular part time hours to be no less than 15 per week (or 10 with the consent of the TCFUA);

3. Changes to improve the provision of information to users of the Schedule.

[30] We are satisfied that the changes agreed to by TCFUA,AIG,ABI,TFIA and Business SA would help ensure that the modern award complies with the modern awards objective. In particular the changes to the part time provisions are consistent with more flexible modern work practices and the efficient and productive performance of work. The other changes will clarify the operation of the modern award. We consider it appropriate to vary the modern award in line with the proposed changes.

The AIG’s Jurisdictional Argument

[31] Despite the resolution of most of their application through the ‘consent position’the AIG continued to submit that parts of Schedule F are beyond jurisdiction and should be deleted. In particular,AIG submitted that Schedule F.6.3,F.6.4 and F.7 are not contemplated for inclusion in modern awards by ss.139,140 and 142 of the FW Act,and are therefore beyond statutory power.

[32] AIG submitted that the terms of clause F.6,which focuses on award compliance and a mechanism for the union to ensure compliance with the award,are not contemplated by any of the matters identified in s.139. AIG agreed that s.140 of the FW Act defines outworker terms for the purpose of terms which may be included in modern awards. However AIG submitted that clause F.6 is not about ‘conditions which an outwork entity may arrange for work to be performed to the entity.’Section 140 did not therefore create jurisdiction for the Commission to include F.6 in the modern award.

[33] AIG noted that s.142 of the FW Act enables modern awards to include terms that are incidental to the terms identified in ss. 139 or 140 of the FW Act,or are machinery terms. However it submitted that for a term to be ‘incidental’ it must not only be incidental to a permitted or required matter in the modern award but also must be ‘essential’ for the purpose of making a particular term operate in a practical way. AIG submitted that clause F.6 is not ‘essential’as the FW Act already requires compliance with modern award terms and provides a mechanism for the union to review and inspect records. Nor is F.6 a ‘machinery term’ as this refers to such matters as title,date or table of contents.

[34] With regard to clause F.7 of the modern award,AIG submitted that the process for the recovery of monies from an apparent principal is already provided in Part 6-4A of the FW Act (which commenced on 1 July 2012). Given that these statutory provisions ‘wholly and entirely traverse the same ground that F.6.3 and F.7 traverse... those terms cannot be necessary for Schedule F to do its work.’Moreover,AIG submitted,if those terms did not exist in the modern award,the net result would be no different as a result of s.483 (a) to (c). 11 AIG concluded that F.7 as an ‘enforcement’provision was not permitted by ss.139,140 or 142 of the Act.

[35] The AIG’s submissions were supported by ABI,TFIA,and Business SA. They were opposed by the Commonwealth Government,TCFUA,and the ACTU.

[36] The Commonwealth rejected as misconceived the submission that F6.3,F6.4 and F7 were not needed because of the enactment of Part 6-4A. In particular,Schedule F utilises the powers referred to the Commonwealth by the States as well as the core powers ‘thereby enabling coverage of all outworker entities,whatever their corporate or non-corporate status,who directly or indirectly arranged for work to be performed by outworkers’. 12 Part 6-4A,by contrast,is expressly limited to the core constitutional powers available to the Commonwealth Parliament,and does not rely on the referred powers. Thus any outworkers who are not employed or contracted by a corporation (and are not in a Territory) would not be covered by the provisions of Part 6-4A - though they would be by Schedule F of the modern award. ‘Taking F7 out would leave those persons vulnerable,and for that reason it should not be done.13

[37] The Commonwealth submitted that the provisions of Schedule F are within the general notion of terms relating to the conditions under which an employer may employ employees who are outworkers;and terms relating to the conditions under which an outworker entity may arrange for work to be performed for the entity (either directly or indirectly),if the work is of a kind that is often performed by outworkers,as provided for by s.140 of the Act. The term ‘conditions’has historically been given a very wide meaning. The Commonwealth also drew attention to paragraph 548 of the explanatory memorandum which stated that:

    ‘Clause 140 is intended to give Fair Work Australia broad scope to include terms dealing with chain of outworkers,in particular it will allow terms dealing with chain of contract arrangements,registration of employers,employer record keeping and inspection to be included in modern awards.’

[38] We note that in 1999,a Full Bench of the Australian Industrial Relations Commission considered whether similar provisions to Schedule F which were then in the Clothing Trades Award 1982 were “allowable award matters”under s.89A(2) of the Workplace Relations Act 1996 (the WR Act). These included similar provisions regarding record keeping requirements,and inspection and enforcement mechanisms. Under s.89A(2)(t) of the WR Act awards could include:

    pay and conditions for outworkers,but only to the extent necessary to ensure that their overall pay and conditions of employment are fair and reasonable in comparison with the pay and conditions of employment specified in a relevant award or awards for employees who perform the same kind of work at an employer’s business or commercial premises.

[39] As part of its consideration,the Commission concluded that ‘Giving the words “pay and conditions”their “ordinary meaning having regard to industrial relations usage”... we are of the view that clauses 26,27 and 27A come within the description of “pay and conditions for outworkers”and are also “incidental to”...”pay and conditions for outworkers.” 14

[40] We are satisfied that the word “conditions”should be given its ordinary meaning having regard to its industrial relations usage. Accordingly we are quite satisfied that the provisions at F.6.3,F.6.4 and F.7 are “terms relating to the conditions under which an employer may employ employees who are outworkers,or terms relating to the conditions under which an outworker entity may arrange for work to be performed for the entity (either directly or indirectly)...”. Such terms are expressly contemplated for inclusion in a modern award by s.140 of the FW Act. Accordingly we reject AIG’s contention that there is a jurisdictional bar to their inclusion in the modern award. The AIG’s application for their deletion from the modern award is therefore dismissed.

The Ark’s Application

[41] The Ark is a Melbourne based clothing business with 40 employees. It purchases over $1 million worth of manufactured clothing from Melbourne based makers. In its application (AM2012/93) The Ark sought “whatever variations are most efficient to remove legitimate subcontractors from the scope of Schedule F of the Award.”

[42] The Ark submitted that the Australian TCF manufacturing industry needs to be competitive and flexible if it is to survive in the face of global competition. Overseas manufacturers can utilise a cheap,deregulated workforce which results in labour rates which are a fraction of the labour rates paid in Australia. A small manufacturing sector has been able to survive in Australia by being able to utilise a small but efficient flexible labour force despite the high labour rates paid by Australian manufacturers. Flexibility enables small runs of goods to be produced quickly enabling sales to respond to market demands. Overseas manufacturers require large orders and long lead times. Companies utilising local manufacturers can make smaller runs initially and quickly make more stock if the market demands. This ability to respond quickly is a major competitive advantage for Australian manufacturers. However,according to The Ark,the modern award conditions substantially reduce this vital flexibility by:

    ●Forcing the industry to adopt conditions of labour hire more suited to industries that do not have the same need for flexibility;

    ●Not recognising the need for individual workers to carry out work for multiple Principals;

    ●Not recognising the intricate and interconnected supply chain required to produce most goods;

    ●Not recognising the seasonal nature of the work. Fashion houses have two or three seasons each year and the work is intense as stock is prepared for each season. However,between the seasons the work load may be quite weak.

[43] The Ark also submitted that the compliance requirements of Schedule F add to costs and reduce competitiveness. More flexibility would also give outworkers greater control over their working hours. The Ark submitted that the introduction of the modern award had led to work being moved offshore.

[44] The following gave evidence on behalf of The Ark:

    ●Jon Griffin (chartered accountant);

    ●Hung Tranh Trinh (manufacturer);

    ●Denise Longley (computer pattern maker);

    ●Arthur Thomas (manufacturer;and

    ●Jenny Layton (Principal,The Ark).

[45] Mr Griffin stated that it was impossible to comply with both the Income Tax Act and the Fair Work Act,as an outworker could be an employee under the latter and a contractor under the former. This could lead a business operator into committing an offence under the Tax Act. 15 He also asserted that treating a contractor as an employee led to an increase in costs for the business,such as payroll tax,workers’compensation premiums,superannuation etc.16

[46] Mr Trinh gave evidence that the requirement to provide at least 20 hours a week made it difficult for him to employ outworkers. Workers did not necessarily want that much work and that amount of work was not always available. 17

[47] Ms Longley gave evidence that she would prefer to work from home,for a number of different companies. However under the modern award she had been forced to work in a factory. If she worked from home she was deemed to be an outworker and each company had to engage her for a minimum of 20 hours. They did not necessarily have enough work to make up 20 hours. “I work for five companies - I do not have a 100 hours in a week. I enjoy the flexibility of working when and with whom I want. 18 She said that she had bought her own computer pattern making equipment for $20,000,and earned a substantial wage. During her examination-in-chief she said that she charged a set hourly rate19. She said she preferred working for different companies for the variety.20

[48] Mr Thomas gave evidence that he had formerly used contractors to make a garment. Different contractors would perform different tasks,as one might need up to six different machines to complete a garment. During quiet periods there would not be enough work to employ this number of people. 21 When work was busy he could not afford to pay overtime.22 When he engaged contractors they worked for a number of different factories.23

[49] Ms Layton gave evidence that the lack of contractors within the industry affected the speed and efficiency of being able to respond to market demands. The Ark was established 22 years ago as a home based business. Under the modern award this would not have been possible. 24 During her examination-in-chief she said they needed different people at different times for different parts of the process and for the different fabrics and the different products they made. She compared her business to a house builder:‘you don’t need an electrician,a plumber,a roofer,a brickie,a cabinet maker all year round. We don’t either....we have a jeans maker,we might only sell jeans for four months of the year. So what do we do with that maker who’s a jeans maker? You know,they don’t become a T-shirt maker. The buttonholer doesn’t - we don’t need a buttonholer on T-shirts and we don’t need them on jeans,so how do we employ a buttonholer when we’re only going to do shirts for six months of the year and some of those shirts don’t have buttons on them.25

[50] Ms Layton described what she saw as the difficulty for someone starting a business now had who needed ‘an extra pair of hands sewing...But under Schedule F she couldn’t afford to take someone on at 20 hours a week and guarantee that she would need that level of work done on a regular basis.’ 26

[51] In response to a question from the Bench,Ms Layton confirmed that the main problem she saw with Schedule F were the minimum hours,in combination with the requirement to pay overtime after 38 hours:‘Because of one person gives you 20 hours a week you have to find another person that only wants you for exactly 18 hours a week. 27

[52] The following witnesses gave evidence on behalf of the TCFUA:

    ●Michele O’Neil (National Secretary);
    ●Susan Tran (outworker);
    ●Ky Dang To (outworker);and
    ●Elizabeth Macpherson (Organiser and Compliance Officer).

[53] Ms O’Neil said that ‘outworkers as a group within the TCF industry are regularly required to work under appalling conditions of engagement. These include,the practice of sham contracting,the imposition of unreasonable completion times by principals,long and excessive hours of work,very low rates of pay,non payment of overtime,superannuation and leave entitlements. Frequently,outworkers are required to register an ABN (or increasingly to incorporate) in order to receive work. If they refuse,the principal will go elsewhere.’ 28

[54] Ms O’Neill stated that:

    The TCFUA collects extensive data on the level of compliance in the industry. In addition to its daily organising work and general contact with thousands of workers and workplaces,between 1 July 2010 and 31 December 2012,the TCFUA undertook compliance checks in 1,319 workplaces in the TCF industry and had direct contact with 1,184 outworkers during the same period. The union’s assertions in relation to the experience of outworkers are evidence based and grounded in direct and intensive contact with these workers.

    The TCFUA has observed a small but not insignificant change in the levels of compliance with the minimum award conditions over the last 12 months to 2 years. After 20 years or so,the union is finally starting to see a difference to the working conditions of outworkers. For the first time some outworkers are receiving the correct minimum weekly award wage and superannuation is being paid on their behalf for the first time in the entire time they have lived and worked in Australia.’ 29

[55] Ms Tran gave evidence that she has worked as an outworker since 2006. She is paid per piece and received about $4-$5 per hour,with no superannuation,sick leave,public holidays or annual leave. She said:

    The clothing company tells me that I must have ABN or ACN Pty Ltd to work with them. If not,it is very difficult to get work.’ 30

[56] Mr Ky Dang To gave evidence that until the recent involvement of the union he got paid about $7 an hour without entitlements such as superannuation,paid holidays etc. ‘Recently the Company agreed to engage me to be a full time outworker under Ethical Clothing Australia program. I am paid by hour rate and the work is regular every week....However,my employer keeps giving me a hard time and says he wants me to become subcontractor. 31

[57] Ms Macpherson stated that:

    In my experience,sham contracting arrangements are rife in the TCF industry. For example,I have met with outworkers who were told to say that they had engaged a casual such as one of their children so they could be classified as an employer,and therefore were not an outworker. Outworkers were told that if they did this,then they were guaranteed on going work.

[58] Ms Macpherson also said that:

    I have been told by outworkers of situations where the principal has reduced,or stopped their work in response to the outworker refusing to be forced into a sham contracting arrangement. 32

[59] We are satisfied,based on the evidence,that the current working hours restrictions do present obstacles in the way of some businesses in the TCF industry. However we are hopeful that the changes agreed to as part of the ‘consent position’will add flexibility and reduce some of these obstacles.

[60] We are also satisfied,based on the evidence presented by the TCFUA (and to some extent even The Ark’s witnesses),that there continues to be a poor level of understanding of,and compliance with,the outworker provisions of the modern award,though we note Ms O’Neil’s evidence that there has been some improvement in the recent past. It is reasonable to infer from the evidence that removal of contractors from the remit of the modern award would lead to an increase in ‘sham contracting’in order to evade award obligations. Indeed the changes made to the outworker provisions by the FW Act were clearly intended to give the Commission the power to include non employee working arrangements precisely to prevent these arrangements being used in this way. We do not consider such a major change in the modern award - with all its potential downside for a very vulnerable section of the workforce - should be made without a much stronger evidentiary case than that presented by The Ark.

[61] Moreover even if we had been persuaded by the merits of The Ark’s case,it is very doubtful that we have the power to grant their application to remove ‘legitimate subcontractors’from the scope of the modern award. As Ms Wiles pointed out in her submission on behalf of the TCFUA,s.163 of the FW Act provides special criteria relating to changing the coverage of modern awards. In particular s.163(1) states:

    ‘The FWC must not make a determination varying a modern award so that certain employers or employees stop being covered by the award unless the FWC is satisfied that they will instead become covered by another modern award (other than the miscellaneous modern award) that is appropriate for them.’

[62] Section 12 of the FW Act defines the terms “employee”and “employer”. It indicates that the appropriate definition is to be found in the first Division of each Part. A note draws particular attention to Part 6-4A - ‘Special provisions about TCF outworkers.’A similar note draws attention to Part 6-4A at s.133 which deals with the definition of “employee”and “employer”in relation to modern awards. Division 2 of Part 6-4A is headed “TCF Contract Outworkers Taken to be Employees in Certain Circumstances”. S.789BA(1) states that the Division covers the provisions of the FW Act (with some exceptions that are not relevant here.) Later in the Division s.789BB states:

‘789BB TCF contract outworkers taken to be employees in certain circumstances

    (1) For the purposes of the provisions covered by this Division:

    (a) a TCF contract outworker is taken to be an employee (within the ordinary meaning of that expression),and to be a national system employee,in relation to particular TCF work performed by the outworker,if:

    (i) the work is performed directly or indirectly for a Commonwealth outworker entity;and

    (ii) if the entity is a constitutional corporation—the work is performed for the purposes of a business undertaking of the corporation;and

    (b) the person (whether a Commonwealth outworker entity referred to in subparagraph (a)(i) or another person) that engages the outworker is taken to be the employer (within the ordinary meaning of that expression),and to be a national system employer,of the outworker in relation to the TCF work.

    Note 1:See section 17A for when TCF work is performed directly or indirectly for a person.

    Note 2:See also section 789BC,which allows regulations to deal with matters relating to TCF contract outworkers who are taken by this section to be employees.

    (2) A TCF contract outworker is a TCF outworker who performs work other than as an employee.

    (3) In interpreting any of the following for the purposes of the provisions covered by this Division:

    (a) provisions of this Act;

    (b) any instrument that is relevant to the relationship between the TCF contract outworker and the person referred to in paragraph (1)(b);

    an interpretation that is consistent with the objective stated in subsection (4) is to be preferred to an interpretation that is not consistent with that objective.

    (4) The objective is that a TCF contract outworker who is taken to be an employee in relation to TCF work should have the same rights and obligations in relation to the work as an employee would have if he or she were employed by the person referred to in paragraph (1)(b) to do the work.

    (5) This section has effect subject to regulations made for the purposes of section 789BC.

[63] A ‘Commonwealth outworker entity’is defined in s.12 as an ‘entity that is an outworker entity otherwise than because of s.30F or 30Q’(that is the provisions that extend the meaning of outworker entity in relation to a referring State.

[64] While not a model of pellucid drafting,we conclude that the combined effect of all the relevant provisions is that the Commission must not vary the modern award so that certain types of outworkers are excluded from coverage unless it is satisfied that they would instead be covered by another modern award. It is clear that acceding to The Ark’s application would mean that at least some contract outworkers would be excluded from award coverage altogether. This is not something permitted by the FW Act. Both for this reason,and for the previous reasons referred to,we dismiss The Ark’s application.

Non-outworker and technical matters

[65] Subsequent to the Full Bench concluding its proceedings on 9 July,correspondence was received from the TCFUA on 18 July,confirming a submission made at the commencement of the proceedings of the Full Bench on the 9 of July,that the parties had further agreed additional information relevant to the proposed variation to clause 20.6,(Pedestrian forklift operator) That additional information is as follows:

    ●That the variation will be prospective (i.e. operate from the date of the determination) and

    ●That the variation to clause 20.6 made by the Determination does not take effect so as to require an employee engaged as a Pedestrian forklift operator to repay any component of the wages pertaining to the Pedestrian forklift rate of pay paid in respect to the period 1 January 2010 until the date of the Determination.

[66] The correspondence made clear that the parties did not seek to have the additional information above included in the Determination,but rather that it be referenced in the decision of the Full Bench that accompanies the determination.

[67] The Full Bench has considered the terms of the draft determination proposed by the TCFUA,ABI and AIG in so far as it deals with the non-outworker matters and technical amendments. We are satisfied that the proposed amendments are consistent with the modern awards objective in s.134 of the Act. Further,we are satisfied the amendments proposed will allow the awards to operate more effectively,without anomalies or technical problems arising from the Part 10A award modernisation process. Accordingly,we think it appropriate to amend the award consistent with the terms of the draft determination provided by the TCFUA on the 4 July 2013.

[68] In respect to the “additional information”relevant to the variation of clause 20.6,we confirm that the determination operates in respect to all matters,including clause 20.6,prospective from the date of determination. That is,the variations do not have retrospective effect.

Determination

[69] A determination varying the modern award is attached to this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms V Wiles with Ms M O’Neil for the Textile,Clothing and Footwear Union of Australia

Mr T Clarke for the Australian Council of Trade Unions

Ms S Marshel and Ms S Dann for FairWear

Mr R Bunting,Solicitor for the Australian Government

Mr M Mead for the Australian Industry Group

Ms J Kellock and Mr N Tindley for the Council of Textile &Fashion Industries of Australia

Mr S McIvor and Ms Z Jenkins for Australian Business Industrial

Mr H Wallgren for Business SA

Mr Metcalfe,of Counsel and Ms J Layton for The Ark Clothing Company

Hearing details:

2013

MELBOURNE

7 March

9,10,11 July

Attachment A

Schedule F—Outwork and Related Provisions
F.1 Definitions
F.1.1 Arrangement means any arrangement made by a principal with any legal or natural person to have work carried out for the principal,whether or not the person carries out the work,but does not include employment of an employee who is not an outworker to carry out the work.
Note:The obligations in this part apply whether or not a principal has obtained the work which is the subject of the arrangement pursuant to any other arrangement or from any other person.
F.1.2 Ordinary working week means the hours and days occurring between midnight on Sunday night and midnight on Friday night in any week.
F.1.3 Outworker has the same meaning as that contained in section 12 of the Fair Work Act 2009 (Cth).
F.1.4 Principal means:
(a) An employer;or

    (b) An outworker entity within the meaning of the Fair Work Act 2009 (Cth).

F.1.5 Work means work on or in relation to any garment,article or material in the textile,clothing and footwear industry,including for example design,preparation,manufacture,packing,processing and finishing work,and organisation,procurement,control,management or supervision of work.
F.1.6 Worker means:
(a) an outworker;or
(b) a person who personally performs work which is the subject of an arrangement.
F.2 General requirements for making arrangements
F.2.1 Registration
(a) A principal must be registered by the board of reference under clause F.5.7 prior to making any arrangement.
(b) A principal must not make any arrangement with another principal unless the other principal is registered by the board of reference under clause F.5.7.
F.2.2 Work records
(a) Upon making an arrangement,a principal must make and retain a written record (a “work record”) which contains:
(i) The principal’s name,address,ABN/ACN and/or registered business number;
(ii) The principal’s board of reference registration number;
(iii) The name and address of the person to whom the arrangement applies;
(iv) The address(es) where work is to be performed;
(v) The time and date for commencement and completion of the work;
(vi) A description of the nature of the work required and the garments,articles or material to be worked on (including diagrams where available and details of the type of garment or article,seam type,fabric type,manner of construction and finishing);
(vii) The number of garments,articles or materials of each type;
(viii) The sewing time for the work required on each garment,article or material;and
(ix) The price to be paid for each garment,article or material.

    A copy of a work record must be given to the person with whom the arrangement is made prior to the commencement of any work which is the subject of the arrangement.

F.2.3 Lists
(a) A principal must make and retain a list (“List”) containing the name and address of each person with which it makes an arrangement and the date each arrangement is made.
(b) A principal must provide a copy of the List to the General Manager or their nominee and to the relevant State Branch of the Union within 7 days of the last working day of February,May,August and November of each year.
(c) The General Manager or their nominee may allow an organisation with a legitimate interest in the Textile,Clothing and Footwear Industry to peruse the List.
F.2.4 Terms of arrangements
A principal must not make an arrangement unless:
(a) The arrangement contains a term requiring the person with whom the arrangement is made to have a written agreement with any other person who performs any work which is the subject of the arrangements;
(b) The written agreement must specify each of the matters set out in clause F.2.2(a);and
(c) The written agreement must provide for wages and conditions no less favourable than those contained in clauses F.3 and F.4.
F.3 Additional requirements for making arrangements with workers
F.3.1 A principal must comply with this clause in addition to clause F.2 where the principal makes an arrangement:
(a) with a worker; or
(b) with a body corporate owned or managed by the worker or member of their family.
F.3.2 Written agreements
Prior to the commencement of work which is the subject of an arrangement,a principal must make a signed written agreement (“Written Agreement”) with the worker which specifies:
(a) whether the principal will provide the worker with work on a full-time or part-time basis;and
(b) if part-time,the agreed number of hours of work per week in accordance with clause F.4.2(a).
F.3.3 The proposed terms of the written agreement must be expressed clearly and simply in a language the worker understands and must be provided in writing to the worker in that language a reasonable time before it is signed.
(a) Any proposed variation of the written agreement must also comply with clause F.3.2(b) and will take effect three days after an agreement to vary the written agreement (“Variation Agreement”) is signed.
(b) A copy of the proposed written agreement,the signed written agreement and variation agreement,along with an English language version of each document if in a language other than English,must be retained by the principal (“Written Agreement Records”).
F.3.4 Additional information in work records
A work record in respect of an arrangement under this clause must contain the following information in addition to that prescribed in F.2.2:
(a) The time and date for the garments,articles or materials to be provided to and picked up from the worker to facilitate commencement and completion of work in accordance with F.2.2(a)(v);
(b) Details of the time standard applied in accordance with clause F.4.4(a) in order to determine the appropriate sewing time for the purposes of clause F.2.2(a)(viii);
(c) The number of working hours that will be necessary to complete the work,calculated by multiplying the number of garments at clause F.2.2(a)(vii) by the sewing time per garment,article or material at clause F.2.2(a)(viii);and
(d) The number of hours and days within the ordinary working week that will be necessary to complete the work in order to determine the appropriate time and date of commencement and completion at clause F.2.2(a)(v),and
(e) The total amount to be paid to the worker for the hours and days at clause F.3.4(c),applying the appropriate rates of pay set out at clause F.4.4(b).
F.3.5 A principal must provide the worker with a copy of this Schedule in the appropriate language for the worker.
F.3.6 A principal must provide the worker with the minimum conditions set out in clause F.4.
F.4 Minimum conditions for workers
F.4.1 National Employment Standards
A principal must apply the NES to the worker as though the worker is an employee,whether or not the principal is an employer or the worker is an employee.
F.4.2 Hours of work
(a) A principal must provide the worker with work which is:
(i) full-time,38 hours per week;or
(ii) regular part-time,with no less than 20 regular hours per week to be agreed between the principal and the worker;or
(iii) regular part-time,with no less than 15 regular hours per week to be agreed between the principal and the worker with the consent of the Union in accordance with Schedule F—Outwork and Related Provisions.
(b) In each ordinary working week,a principal must not require the worker to complete more than 38 hours’work,or the agreed number of part-time hours,whichever is less.
(c) Subject to clause F.4.7,in each ordinary working week where the worker is ready,willing and able to work,a principal must pay the worker for either 38 hours’work or the agreed number of part-time hours’work,regardless of whether the principal provided enough work for those hours of work to be performed.
F.4.3 Work on weekends and public holidays
(a) A principal must not require the worker to work,or set the time and date for commencement and completion of work so that the worker is required to work,on a Saturday,Sunday or public holiday without obtaining the prior written agreement of the worker,specifying the date/s and number of hours to be worked on each date.
(b) Unless otherwise specified in the written agreement,the worker will be deemed to have worked 7.6 hours on each date.
(c) Where,notwithstanding F.4.3(a),the time and date for commencement and completion of work would require the worker to work on a Saturday,Sunday or public holiday:
(i) the time and date for completion will be deemed to be extended by the time necessary to ensure work on a Saturday,Sunday or public holiday is not required;or
(ii) the worker may elect to perform the work and will be deemed to have completed 7.6 hours work on each Saturday,Sunday or public holiday on or between the time and date for commencement and completion of the work.
F.4.4 Time standards and payment
(a) In determining how long work will take to perform (“the Time Standard”) a principal must allow a fair and reasonable time,including;
(i) providing more time for the work to be performed than the time standard set for comparable work undertaken in a workshop or factory;and
(ii) providing reasonable additional time to perform ancillary tasks such as bundling and unbundling,sorting and packing.
(b) A principal must pay the worker at the following rates:
(i) For each minute of work in the ordinary working week,1/2280 of the weekly rate for the appropriate classification set out at clause 20 (“the ordinary minute rate”);
(ii) For each minute of work in excess of 38 hours or the agreed weekly hours,whichever is less,1.5 times the ordinary minute rate;
(iii) For each minute of work performed or deemed to have been performed on a Saturday,Sunday or public holiday,200% of the ordinary minute rate;and
(iv) For each public holiday on which the worker does not work,1/5 of the weekly rate for the appropriate classification set out at clause 20,calculated on a proportionate basis for a part-time arrangement.
(v) Any additional payment due pursuant to clause 23.2 applies notwithstanding this clause.
F.4.5 Payment
(a) A principal must pay the worker within two working days’of the end of the ordinary working week at a time and by a method agreed between the principal and the worker.
(b) At or prior to the time of payment,a principal must provide the worker with details in writing of the gross payment,any deduction made and the net payment.
F.4.6 A principal must provide the worker with all necessary materials,trimmings and sewing threads to perform the work required of the worker,and cause all relevant materials,products,garments or articles to be delivered and collected from the worker at no cost to the worker.
F.4.7 Stand-down
A principal may stand-down the worker where no work is available as a result of circumstances outside the control of a principal,subject to the following conditions.
(a) The principal bears the onus of establishing that no work is available.
(b) The stand-down is for a maximum period of two days in any four week period and ten days per year.
(c) The principal must make and retain a written record of the stand-down (“stand-down record”) setting out the name and address of the worker,the commencement date and duration of the stand-down and the reason for the stand-down.
(d) Within two working days of a stand-down,a copy of the stand-down record must be provided to the worker and the Union.
F.4.8 A principal must apply the remaining provisions of this award to the worker as though the worker is an employee,whether or not the principal is an employer or the worker is an employee,excluding the following clauses:

    ●Dispute resolution (clauses 10.1 and 10.2)
    ●Hours of work;
    ●Overtime;
    ●Payment of wages;
    ●Regular part-time employment;
    ●Award posted;
    ●Casual employment;
    ●Dining room allowance;
    ●Meal allowance;
    ●Midday meal break;
    ●Rest breaks;
    ●Rest room allowance;and
    ●Tool allowance.

F.4.9 A principal must not make one or more arrangements covered by this Schedule with more than 10 workers at any one time,unless the principal has the consent of the Union or the board of reference,which may exercise its discretion to allow the principal to do so.
F.4.10 Dispute Resolution
In the event of a dispute involving parties to which this schedule applies in relation to a matter arising under this Award,or the NES,in the first instance the parties will attempt to resolve the dispute through direct discussions. If the dispute cannot be resolved through direct discussions,a party to the dispute may refer the dispute to Fair Work Australia. The provisions of clauses 10.3–10.5 apply in respect of the dispute.
F.5 Registration and board of reference
F.5.1 For the purposes of this part,the General Manager or their nominee must appoint a board of reference for each of the following places:

    ●Adelaide;
    ●Brisbane;
    ●Hobart;
    ●Melbourne;
    ●Perth;and
    ●Sydney,

    or at such place as they may from time to time determine.

F.5.2 The board must consist of two Union representatives and two principal representatives with the addition of the General Manager or such person as they may nominate as chairperson of the board. In the event of the representative members of the board being equally divided in opinion,the chairperson may cast their vote to give a majority decision.
F.5.3 Any board member may appoint a nominee to act on their behalf at any time.
F.5.4 Three members,one of whom must be the General Manager or their nominee will constitute a quorum.
F.5.5 A board of reference may sit at such times and places as the members may agree or the General Manager or their nominee may fix and may adjourn from time to time and place to place.
F.5.6 The functions of the board of reference are to deal with any matter as provided for in this part.
F.5.7 Powers of board of reference to register principals
(a) On application,the board of reference may register a principal on conditions it determines for a period of 12 months.
(b) The board of reference may revoke the registration of principal for failure to comply with any or all of such conditions.
(c) Upon registration,the board of reference will give principal a registration number.
(d) The General Manager or their nominee will maintain a record of registered principals.
(e) At the time of registration,and on each anniversary of registration,a principal must place a notice in the public notices column of a metropolitan daily newspaper circulating throughout any State in which work is to be performed stating:
(i) the principal’s name,address and ABN/ACN;
(ii) that the principal is registered under this award;
(iii) the principal’s registration number;
(iv) the location at which all relevant records,including but not limited to work records,lists,written agreement records and stand-down records,in the principal’s possession or custody may be inspected by the Union.

    A principal may make an agreement in writing with the Union or apply to the board of reference to be exempted from the notice requirement. A copy of any written agreement made between a principal and the Union must be lodged with the General Manager or their nominee.

F.6 Observance of award
F.6.1 A principal must not,in any way,whether directly or indirectly,be a party to or concerned in conduct that:
(a) hinders,prevents or discourages the observance of this Schedule;
(b) causes or encourages or is likely to cause or encourage,a breach or non-observance of this Part.
F.6.2 A principal must retain all work records,lists,written agreement records and/or stand down records required under this part for a period of six years after the relevant record was made.
F.6.3 Within two working days of a request being made,the principal’s work records,Lists,written agreement records and/or stand down records must be provided by the principal to the Union for inspection and copying:
(a) At a time and place agreed between the Union and the principal;or
(b) In the absence of agreement,between 8.00 am and 5.00 pm on a working day at an alternative appropriate premises nominated by the principal within a 50 kilometre radius of the principal’s premises (which may be the principal’s premises);or
(c) If the principal fails to nominate such a place,between 8.00 am and 5.00 pm on a working day at an appropriate place nominated by the Union within a 50 kilometre radius of the principal’s premises (which may include the Union’s premises but must not include the principal’s premises).
F.6.4 The Union will not divulge any information contained in a work record in compliance with F.2.2(a)(ix) concerning the price to be paid for each garment or article in any circumstances to any party save for in enforcement or dispute resolution proceedings in a Court or Tribunal.
F.7 Recovery of unpaid remuneration
F.7.1 Unpaid remuneration includes any amount payable to a worker,whether or not an arrangement applies to the worker,including but not limited to amounts in respect of:
(a) commission;
(b) leave or other entitlements;and
(c) reimbursement or compensation for an expense incurred or loss sustained by the person,
which has not been paid to the worker.
F.7.2 Extended liability of principal
(a) A principal who makes an arrangement will be liable for any unpaid remuneration payable to a worker engaged by a person with whom the arrangement is made (“the Person”),unless:
(i) the principal has obtained a written statement (“Written Statement”) from the person that all unpaid remuneration payable to the worker has been paid;and
(ii) the principal does not have reason to believe that the written statement is false.
(b) A principal may withhold any payment due to the person until the person provides a written statement to the principal. Any penalty for late payment under the arrangement does not apply to a payment withheld under this clause.
(c) Where the person is also a principal,the person must not provide a written statement knowing it to be false.
(d) Clause F.7.2 does not apply where the person is bankrupt or under external administration and payments under the arrangement are payable to the administrators or trustee in bankruptcy.
(e) Nothing in this subclause limits or excludes any other liability or right of recovery in respect of:
(i) Unpaid remuneration;or
(ii) Money owed by a principal to the person.
(f) A principal is not excluded from liability pursuant to this subclause by obtaining a written statement from a body corporate owned or managed by the worker
F.7.3 Extended liability of apparent principal
(a) A worker may make a claim (“the claim”) for any unpaid remuneration relating to the work against a principal who the worker believes they carried out the work for (“the apparent principal”).
(b) A claim may be made by serving a statutory declaration on the apparent principal within six months after the completion of the work specifying:
(i) the name of the worker;
(ii) the address at which the worker may be contacted;
(iii) a description of the work done;
(iv) the date or dates on which the work was done;and
(v) the amount of unpaid remuneration claimed in respect of the work.
(c) An apparent principal served with a claim will be taken to be liable for the unpaid remuneration other than where:
(i) the apparent principal serves the claim on another person that the apparent principal knows or reasonably believes is liable for the claim (“the liable party”) within 14 days:and
(ii) the apparent principal notifies the worker of the service;and
(iii) the liable party pays the unpaid remuneration to the worker within 14 days of the service;and
(iv) the liable party serves notice in writing on the apparent principal that payment has been made and the amount.
(d) An apparent principal may set off or deduct any unpaid remuneration paid to the worker from any amount the apparent principal owes to the liable party.
(e) Nothing in this subclause limits or excludes any other liability or right of recovery in respect of:
(i) unpaid remuneration;or
(ii) money owed by an apparent principal to a liable party.
(f) A principal or apparent principal will not be liable for any unpaid remuneration pursuant to this clause to the extent that the principal or apparent principal proves that the relevant work was not done or the amount of unpaid remuneration claimed is in excess of the amount to which the worker is entitled.
(g) An apparent principal is not excluded from liability pursuant to this subclause by obtaining a written statement from any party,including (but not limited to) a body corporate owned or managed by the worker. A principal or apparent principal is not excluded from liability pursuant to this subclause by obtaining a written statement from,or serving a claim upon,a body corporate owned or managed by the worker.

Appendix to Schedule F—Information to be given to outworkers

Preamble

If you work at home or outside a workshop or factory making garments,or parts of garments or sewing sheets etc.,you may be an outworker.

If you are an outworker,you are entitled to the same wages and conditions,in general,as workers in clothing factories.

The Textile,Clothing,Footwear and Associated Industries Award 2010 sets out legally enforceable rights and obligations. This applies to all outworkers including employees,independent contractors,and holders of business name registrations.

According to this law some of the entitlements outworkers must receive are set out below:

Hours of work

An outworker may only be employed to work full-time,which is 38 hours a week,or regular part-time,which must be at least 15 hours per week. The hours must be agreed to in advance by the outworker and the employer.

This means you are guaranteed payment for the agreed number of hours per week,even if you are not given any work,unless you are stood-down in accordance with the award.

You cannot be required to work on Saturdays,Sundays or public holidays. You may agree to work on those days if asked to do so by your employer. You will have to be paid overtime rates if you do work on these days.

As a full-time or regular part-time worker you can only be required to work seven hours and 36 minutes each day. If you are asked by your employer to work more than this number of hours,you must be paid overtime.

This means that even if you are paid by the piece you cannot receive less than the hourly award rate of pay.

Overtime

If you agree to work more than seven hours and 36 minutes in a day,Monday to Friday,you must be paid one and a half times the normal hourly rate for each hour over the seven hours and 36 minutes.

For every hour you agree to work on a Saturday,Sunday or public holiday,you must be paid double the normal hourly rate.

Wages

According to law,as at 1 July 2013,the usual weekly wage for 38 hours,Monday to Friday,is $664.80.

The hourly rate is $17.49. Remember,the law says you must not be paid less than the hourly rates according to the award.

Annual leave (holidays)

You are entitled to annual leave. You should get paid 20 working days’paid leave for every year you work full-time. You should be paid before you go on holidays,and this holiday pay should include an extra amount - a holiday leave loading - of 17.5% of your pay.

This amount of annual leave for regular part-time workers depends on the hours you work in a 12 month period. The Textile,Clothing and Footwear Union of Australia or Department of Industrial Relations or The Australian Industry Group or Chamber of Manufactures of New South Wales or Victorian Employers Chamber of Commerce and Industry or Textile,Clothing and Footwear Council of Australia will help you to work this out.

Payment for public holidays (such as Christmas or New Year’s Day) which occur when you are on leave,should be added onto your holiday pay.

Public holidays

If you normally work on a day on which a public holiday falls you should receive a day’s pay without working on that day. Some States have different public holidays but all have about 10 different public holidays a year.

The public holidays that apply across Australia are New Year’s Day (1 January),Australia Day (26 January),Good Friday and Easter Monday in March or April,ANZAC Day (25 April),Christmas Day and Boxing Day (25 and 26 December). There are extra public holidays that apply on different days in different States.

Superannuation

By law,your employer has to make a superannuation contribution of up to 9% to an approved fund,for you. Normally,this would be the Australian Retirement Fund,which is approved by both union and employer organisations.

The Textile,Clothing and Footwear Union of Australia or Department of Industrial Relations or The Australian Industry Group or Chamber of Manufactures of New South Wales or Victorian Employers Chamber of Commerce and Industry or Textile,Clothing and Footwear Council of Australia will help you to work this out.

Workers Compensation

If you become ill or suffer injury as a result of the work you do you may be entitled to workers compensation,which helps you pay for any treatment you might need to get better,and for time off work.

The laws covering workers compensation are different in each State and it is important that you contact The Textile,Clothing and Footwear Union of Australia or Department of Industrial Relations or The Australian Industry Group or Chamber of Manufactures of New South Wales or Victorian Employers Chamber of Commerce and Industry or Textile,Clothing and Footwear Council of Australia for information and help to make a claim.

Materials

Your employer must provide all necessary materials,trimmings and sewing threads for the work you are doing.

Delivery and pick up

The employer must deliver and pick up the work free of charge to you.

Record of work

Every time you receive work you should keep a record.

This should show:

    ●employer’s name,address and telephone number;
    ●the date you receive the work and the date the work was completed;
    ●the number of hours and days it took to do the work;
    ●the number of items,what the item is and how long it took to make each item;and
    ●the total amount of money paid for the completed work.

 1   [2012] FWA 3514,PR522782.

 2   [2012] FWA 5721

 3   Submissions in support of AM2012/273 (application by TCFUA) were received from:ACTU,Asian Women at Work,Australian Government,Australian Migrant and Refugee Women's Alliance,Catharine Courtney,Brisbane Sister of Mercy,Catholic Justice and Peace Commission,Centre for Multicultural Pastoral Care,Committee to Protect Vietnamese Workers,Cue Clothing Co,Dalrove Pty Ltd,DHK Manufacturing Pty Ltd trading as Mr K,Fair Wear,Sr Pauline Robinson,Congregational Leader,Missionary Franciscan Sisters,Sr Cecilia Priest,Missionary Franciscan Sisters,Office of the Employee Ombudsman SA,Oxfam Australia,Sisters of Good Shepherd,Sisters of Mercy,So Stella,Working Women’s Centre SA

 4   [2012] FWAFB 5600

 5   Attachment A of this Decision

 6   [1987] IR 416

 7   at 419

 8   [2008] AIRCFB 1000

 9   [2010] FWAFB 1811

 10   Exhibit Joint 1

 11   PN2646

 12   PN2729

 13   PN2734

 14   Print R2749,12 March 1999,at paragraph 16

 15   PN1613

 16   PN1638

 17   PN 1808-1812

 18   Exhibit Ark 3

 19   PN1949

 20   PN1952

 21   PN2026-7

 22   PN2032

 23   PN2036

 24   Exhibit Ark 5

 25   PN2247

 26   PN2270

 27   PN2365

 28   Exhibit TCFUA 1,paragraph 9

 29   Exhibit TCFUA 1,paragraphs 20-21

 30   Exhibit TCFUA 2

 31   Exhibit TCFUA 3

 32   Exhibit TCFUA 4

Printed by authority of the Commonwealth Government Printer

<Price code G, MA000017  PR540240>

About this document
(1)
Code:
PR540240D
Title:
MA000017 - Decision - 04 Oct 2013
Effective:
4 Oct 2013
Updated:
6 Oct 2013
(0)
MA000017 - Decision - 04 Oct 2013
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