Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective

Application to vary the Clerks – Private Sector Award 2020
(AM2020/95)

Joint Application to vary modern award to achieve the modern awards objective – application to extend the operation of Schedule I – Award flexibility during the COVID-19 pandemic

1. Background

[1] On 28 March 2020 we issued a Decision 1 granting a joint application filed by the Australian Industry Group (Ai Group) and the Australian Chamber of Commerce and Industry (ACCI), to insert a new schedule, ‘Schedule I-Award flexibility during the COVID-19 pandemic’, into the Clerks – Private Sector Award 2020 (the Clerks Award). The new schedule came into operation on 28 March 2020 and was to cease to operate on 30 June 2020, unless extended. That initial joint application was supported by the Australian Council of Trade Unions (ACTU) and the Australian Services Union (ASU).

[2] A subsequent application was filed by Ai Group and ACCI in June 2020 to vary the terms of Schedule I and its period of operation (the First Extension Application). A revised draft determination was filed by the Applicants in the morning of 30 June 2020. The ASU opposed the Application.

[3] The First Extension Application was the subject of a hearing on 30 June 2020. At the conclusion of the hearing we decided to grant the application and vary the award in the terms proposed in the revised draft determination. We published reasons for our decision on 9 July 2020. 2

[4] On Thursday 24 September 2020, Ai Group and ACCI (the Applicants) filed a joint application to extend the operation of Schedule I (the Second Extension Application.) If granted, the proposed variation would result in the extension of the period of operation of Schedule I, to 29 March 2021.

[5] We issued the following directions:

1. Ai Group and ACCI are to file any further material in support of their application by no later than 4 pm on Friday, 25 September 2020.

2. Any party opposing the Second Extension Application is to file a written submission in support of its position by no later than 12 noon on Tuesday, 29 September 2020.

3. All submissions are to be sent to [email protected] in word format. All submissions will be published on the AM2020/95 page of the Commission’s website.

4. The Second Extension Application is listed for hearing at 10 am on Wednesday, 30 September 2020, by telephone. Parties wishing to appear at the hearing are to provide the name, direct number and organisation by 4 pm on Tuesday, 29 September 2020 to [email protected].

[6] On 25 September 2020 the Applicants filed 12 exhibits containing evidentiary material in support of the Second Extension Application, as follows:

•  Exhibit 1: ABS Household Impacts Survey August 2020

•  Exhibit 2: ABS Insight into Hours Worked August 2020

•  Exhibit 3 - Labour Account Australia June 2020

•  Exhibit 4 - Unemployment Rate

•  Exhibit 5 - Ai Group Business Experiences of The Covid-19 Pandemic March to August 2020

•  Exhibit 6 - Australian Chamber - Westpac Survey of Industrial Trends

•  Exhibit 7 - ACCI SME Business Conditions Survey, 3rd Edition - August 2020

•  Exhibit 8 - Minutes of The Monetary Policy Meeting Of The Reserve Bank Board - 1 September 2020

•  Exhibit 9 - Nearly a Third of Australian Workers Have Been #Wfh - 29 June 2020

•  Exhibit 10 - Over Two-Thirds of Working Australians have had their Employment Impacted by the ‘Coronavirus Crisis’ - 24 April 2020

•  Exhibit 11 - ABS Business Indicators, Business Impacts of Covid-19, September 2020

•  Exhibit 12 - Article by Professor Sipe About Public Transport Usage

[7] The Applicants rely on Exhibits 1 and 9 – 12 to demonstrate the prevalence of working from home across all industries.

[8] The Applicants rely on Exhibits 2 – 8 to demonstrate the ongoing strain on business and business activity that Australia is experiencing in response to the pandemic which is, in turn, impacting upon availability of jobs and work hours.

[9] In a submission received on 28 September 2020 Flight Training Adelaide supported the Second Extension Application.

[10] The ASU filed a submission on 29 September 2020 in which it opposed the extension of Schedule I to 29 March 2021 but went on to advance a ‘compromise solution’ submitting that:

‘… if the Commission is of the mind to grant the employer application then the ASU would suggest a sensible compromise given the rapidly changing circumstances. We suggest the Commission extend the Schedule to November 30th 2020 and not March 29th 2021.

The advantage of this compromise would be that the parties and the Commission could review the situation in late November and see whether the further extension of the Schedule is warranted. This would mean the necessity of the Schedule could be seen in real time rather than waiting until the end of March 2021 where the Schedule may have been made redundant months before by the changing circumstances. Also as mentioned in paragraph 14, the compromise would also include the restriction in the span of hours in the Schedule by one hour i.e. 6am to 9pm instead of the current 6am to 10pm.’ 3

[11] Following the filing of the ASU’s submission, further discussions took place between the Applicants and the ASU. By email on 29 September, we were informed that the parties had reached a ‘partial consensus’ as to the extension of Schedule I:

‘The ASU, ACTU, Ai Group and ACCI agree that the schedule should be extended until 30 November 2020. Ai Group and ACCI will accordingly shortly file an amended draft determination reflecting this position.

There is however is a single point of contention between the parties as follows: Whether, in the context of any extension of the schedule, the spread of ordinary hours that may be worked under clause I.2.1 of the schedule should be between 6am and 9pm or 6am and 10pm (Monday to Friday).

The ACTU and ASU contend that if the schedule is to be extended the reference to 10pm in cl. I.2.1 should be amended to say 9pm. Ai Group and ACCI maintain the view that the schedule should continue to permit the working ordinary hours until 10pm.

The parties agree that this difference of views as to the content of cl. I.2.1 should be the only matter contested between them in the hearing tomorrow.’

[12] The Applicants filed an amended draft variation determination late on Tuesday 29 September 2020. The amended draft variation determination extends the operation of Schedule I until 30 November 2020.

[13] The amended Second Extension Application was the subject of a hearing on Wednesday 30 September 2020. A copy of the transcript of the hearing is available here. Shortly after the conclusion of the hearing we issued a Statement 4 in which we said that we had decided to extend the operation of Schedule I until 30 November 2020. We also said that we did not intend to vary clause I.2.1 in the manner proposed by the ASU and ACTU. We indicated that we would publish our reasons later; these are those reasons.

2. The COVID-19 Pandemic: Overview of the evidence

[14] The Commission has published an Information Note on the Government responses to the COVID-19 pandemic on its website, which was last updated on 28 September 2020. The information note outlines the measures taken by both federal and state governments to put restrictions on social gatherings and non-essential businesses, as well as the assistance provided to support businesses and households.

[15] On 26 June 2020 the Commission published an Information Note, prepared by Commission staff, on the Clerks Award and COVID-19. An updated Information Note was published on 25 September 2020.

[16] The business impacts of COVID-19 on the Clerks Award can be broadly assessed by looking at the impacts on 4 industries at the 1-digit industry level for which data are available, namely: Administrative and support services; Information media and telecommunications; Rental, hiring and real estate services; and Professional, scientific and technical services. However, as the Clerks Award does not ‘map’ 5 neatly to one industry we have used data at the occupation level, where available, to focus on ‘Clerical and administrative workers’.

[17] As part of a range of new products undertaken to measure the impact of COVID-19 the Australian Bureau of Statistics (ABS) has released the Household Impacts of COVID-19 Survey, which among other things, collects data on working from home arrangements by gender and age. Initially undertaken fortnightly following the onset of the pandemic, the first monthly survey was conducted throughout Australia between 7 August and 17 August 2020 of persons aged 18 years and over from 1561 private dwellings. 6

[18] In an early survey, 46 per cent of survey respondents were working from home in late April to early May 2020, at a time when government restrictions to contain the spread of the virus were similar across all states and territories (Table 1). For those respondents, around one quarter were working the same number of hours from home since the outbreak of COVID-19, while around 1 in 6 were working more hours from home since COVID-19.

[19] Females were more likely to work from home (55.6 per cent) than males (37.5 per cent) and were more likely to be working more hours from home since COVID-19. Those aged 65 years and over were more likely to work from home (55.6 per cent) compared with those aged between 18 to 64 years (45.5 per cent).

Table 1: Working from home arrangements, late-April/early-May 2020

Note: * Proportion has a margin of error greater than 10 per cent, which should be considered when utilising this information.

Source: ABS, Household Impacts of COVID-19 Survey, 29 Apr–4 May 2020, Catalogue No. 4940.0.

[20] In May 2020, the ABS asked respondents if they had worked from home due to
COVID-19 in the previous 4 weeks. Almost 2 in 5 employed persons (39 per cent) said they had worked from home in this period due to COVID-19. 7 This proportion would not include those who already worked from home prior to the onset of the pandemic. In June 2020, this proportion reduced to 34 per cent as restrictions eased and more people were able to return to workplaces.8

[21] An additional survey undertaken by the ABS to measure the impact of COVID-19 is the Business Impacts of COVID-19 survey. The latest survey was undertaken between 10 and 16 September 2020. In this survey, employing businesses were asked to provide an estimate of the proportion of their employees that were teleworking or working remotely prior to the onset of COVID-19 and currently.

[22] Teleworkers are defined by the ABS as people 15 years and over who were employed by a business that was not based at their own home but worked at home during normal business hours for a full or part day. 9

[23] The proportion of businesses with employees teleworking was higher in mid-September than prior to COVID-19 (Table 2). In mid-September, over 2 in 5 businesses (43.4 per cent) reported that they had employees teleworking. Most of the selected industries had a higher proportion of businesses reporting they had employees teleworking, with only Rental, hiring and real estate services reporting a lower proportion (30.3 per cent).

[24] The proportion of businesses reporting they currently had employees teleworking in each of these industries was higher than prior to COVID-19, particularly for Information media and telecommunications.

Table 2: Proportion of businesses with employees teleworking, prior to COVID-19 and mid-September, by industry

Note: Excludes those that did not know the proportion of employees teleworking.

Source: ABS, Business Indicators, Business Impacts of COVID-19, September 2020, Catalogue No. 5676.0.55.003.

[25] As mentioned earlier, on 25 September 2020, Ai Group and ACCI filed several exhibits relating to the shift towards working from home. Across different surveys, the submission relied on the data showing that: only 55 per cent of Australians with jobs attended their workplaces in August; 10 employers have moved to home-based work where possible, with 55 per cent of business respondents introducing working from home as an initial response to the pandemic;11 nearly one-third of workers surveyed in June 2020 had been working from home;12 when asked of employment changes experienced since the pandemic began, workers still responded ‘working from home’ even when not provided as a specific option;13 43 per cent of businesses in September 2020 reported that they had staff teleworking compared to 28 per cent prior to the pandemic;14 and that a 52 per cent decline in the usage of public transport between January and July 2020 reflects an increase in the prevalence of working from home.15

[26] The evidence supports a finding that there has been an overall increase in the incidence of working from home since the onset of the pandemic. We also accept that during the course of the pandemic the proportion of employees working from home has fallen to some extent over time, as restrictions have eased and more employees are able to return to their workplaces.

[27] The Business Impacts of COVID-19 survey also provides information on operating businesses. In the latest survey, around one-third of trading businesses were reported to be operating as normal in September (i.e., not having to modify operations, such as shifting operations online, operating with a reduced workforce, or changing staff roles or duties), higher than reported in May and June (Table 3).

Table 3: Businesses operating as normal, trading businesses

Note: Refers to trading businesses. Modified conditions include shifting more operations online, or operating with a reduced workforce, or changing staff roles or duties.

Source: ABS, Business Indicators, Business Impacts of COVID-19, various, Catalogue No. 5676.0.55.003.

[28] Among these 4 selected industries, the highest proportions operating as normal in September were businesses in Rental, hiring and real estate services and Professional, scientific and real estate services (both over 40 per cent), an increase from June. There was also a higher proportion of trading businesses in Information media and telecommunications reporting that they were operating as normal in September. However, the proportion of trading businesses operating as normal in Administrative and support services declined between June and September.

[29] Businesses that reported having modified operations as a result of COVID-19 also provided information on the types of modifications made. These are listed in Table 4.

Table 4: Modifications to business operations, 10–16 September 2020

Source: ABS, Business Indicators, Business Impacts of COVID-19, September 2020, Catalogue No. 5676.0.55.003

[30] Between 10 and 16 September 2020, the most common modification reported was to change the way products or services are provided (56 per cent), particularly for businesses in Rental, hiring and real estate services, though it was also the most common modification in Professional, scientific and technical services and Administrative and support services.

[31] The most common modification reported in Information media and telecommunications was ‘changed operating hours’ (45 per cent) which was reported by nearly two-fifths of all businesses.

[32] The available data supports a finding that the COVID-19 pandemic has had, and continues to have, a substantial adverse impact on the employers and employees covered by the Clerks Award. It may be inferred from the data that although there has been some small improvement for 3 of the 4 selected industries, a significant proportion of businesses covered by the Clerks Award continue to modify their operations as a result of the pandemic. Further, 3 of the 4 selected industries had higher than average proportions of businesses with employees teleworking.

[33] On 28 September 2020 the Commission published an Information Note, prepared by Commission staff, which provides an update of the current rate of transmission of COVID-19, with a particular focus on the situation in Victoria and NSW.

[34] On 6 September, the Victorian Government announced a roadmap for reopening, with separate roadmaps for metropolitan Melbourne and regional Victoria. Each roadmap has 4 steps towards reaching a ‘COVID normal’ and the initial plan was that progressing through each step would largely be triggered by the later of planned dates and when the number of new cases reached established thresholds. Metropolitan Melbourne moved to the Second Step of the roadmap on 14 September, allowing ‘single social bubbles’ and increased daily exercise from 1 hour to 2 hours, with the curfew commencing from 9pm. 16

[35] Regional Victoria moved to the Third Step of the roadmap on 17 September which included: no restrictions on reasons to leave home or the distance that can be travelled; public gatherings with up to 10 people; ‘household bubbles’ with visitors allowed with one nominated household (up to 5 visitors at a time); childcare and early educators open; staggered return to onsite learning; no time limit for outdoor exercise and recreation; restaurants and cafes open with a group limit of 10 people and density limits; retail open; travel within Victoria allowed (except to or through metropolitan Melbourne); and accommodation open with capacity limits. 17

[36] The ability to move to next steps is largely based on the average number of cases over a 14-day period. In order for metropolitan Melbourne to move to the Third Step of the roadmap, the 14-day average had to be between 30 to 50 cases. 18

[37] Chart 1 shows that the state-wide 14-day average was 20.9 on 28 September. As a result, on 27 September the Victorian Government announced that Metropolitan Melbourne would move to the Second Step towards reopening from 28 September. Based on public health advice some further easing of restrictions beyond those initially planned in the roadmap to recovery were announced, such as the removal of the curfew, expanded workforce limits in some industries (such as supermarkets, food distribution, abattoirs and manufacturing) and weddings allowed with up to 5 people 19 Further, it was announced that future progression through the Third and Last Steps will no longer be defined by dates in the roadmap, but instead by trigger points that are solely based on case number targets.20

Chart 1: Victoria state-wide moving average of cases (14 days)

Note: Calculated using official case notification data (truest reflection of daily cases).

Source: Coronavirus (COVID-19) in Australia, covid19data.com.au, 28 September 2020.

[38] Chart 2 below shows the daily new cases and cumulative cases of COVID-19 recorded in NSW. It shows that although the numbers of cases are lower than the peak of the epidemic in March and April 2020, there was a gradual increase in new daily cases in June and July. The chart shows signs of decreasing daily cases numbers from mid-August, an increase in early September and then a return to declining case numbers throughout the rest of September. In line with declining case numbers the New South Wales government further eased restrictions, including: allowing more than one parent to attend community sporting activities from 26 September 21; theatres, cinemas and concert halls allowed an increased capacity to 50 percent from 28 September22; and increasing the limit on sporting crowds at stadiums from 25 per cent to 40 per cent capacity (to a maximum of 40 000) from 1 October.23

Chart 2: Daily and cumulative number of reported COVID-19 cases in NSW

Note: Case counts reported by NSW Health for a particular notification date may vary over time due to ongoing investigations and the outcome of cases under review, thus this dataset and any historical data contained within is subject to change on a daily basis.

Source: New South Wales Government, NSW COVID-19 cases data, Data.NSW, last updated 24 September 2020

[39] While the pathway out of the restrictions imposed to contain the virus is becoming clearer, considerable uncertainty remains.

3. Consideration

[40] As we have mentioned, the ASU, ACTU, Ai Group and ACCI have agreed that the operation of Schedule I be extended until 30 November 2020. No other party expressed a contrary view.

[41] If granted, the variation agreed to by the ASU, ACTU and the Applicants would result in the extension of the period of operation of Schedule I, to 30 November 2020. The terms of Schedule I are canvassed in our decision of 9 July 2020 and the Schedule is set out at Attachment A to this decision. The extension of Schedule I would provide, subject to various safeguards, for the continuation of flexibilities relating to:

•  the implementation of working from home arrangements; 24

•  reductions in ordinary hours of work; 25 and

•  annual leave. 26

[42] Two of the ‘universal’ safeguards in Schedule I are particularly important:

•  in effect, disputes about the operation of Schedule I can be dealt with by the Commission, by arbitration; and

•  any direction or request given by an employer under Schedule I must be given in writing and does not apply to the employee if the direction is unreasonable.

[43] These ‘universal’ safeguards are similar to those that apply to all ‘JobKeeper enabling directions’ under Part 6-4C of the Act, in particular:

•  A JobKeeper enabling direction does not apply to an employee if it is unreasonable in all the circumstances (s 789GK).

•  A JobKeeper enabling direction does not apply to an employee unless the employer gave the employee written notice of the employer’s intention to give the direction (s 789GM).

•  The Commission may deal with a dispute about the operation of Part 6-4C by arbitration (s 789GV).

[44] As noted in Re: Vehicle Manufacturing, Repair, Services and Retail Award 2010: 27

‘In circumstances where an application to vary a modern award proposes flexibilities which are the same or analogous to those which apply to JobKeeper enabling directions and requests under Part 6-4C of the Act it is entirely appropriate that such a variation also incorporate the relevant safeguards provided in Part 6-4C. Indeed, in the context of this Application, we have given significant weight to the provision of the safeguards in Schedule J set out above at [91] in our consideration of whether the variation of the Vehicle Award in the manner proposed would ensure that the Award provides ‘a fair and relevant minimum safety net of terms and conditions’ within the meaning of s.134(1).’ 28

[45] We agree with the above observation. The alignment of the ‘JobKeeper’ safeguards with those in award schedules containing flexibilities which are similar to those in Part 6-4C, is entirely appropriate. Additional, specific, safeguards operate in relation to annual leave flexibility.

[46] We accept that extension of Schedule I until 30 November 2020 is a pragmatic and sensible compromise which will allow the parties and the Commission to review the future operation of Schedule I, based on contemporaneous data.

[47] We now turn to the only issue in contention, clause I.2.1. Clause I.2.1 deals with ordinary hours of work for employees working from home, it states:

I.2.1 Ordinary hours of work for employees working from home

(a) Instead of clause 13.3 (Ordinary hours of work (employees other than shiftworkers), for employees working from home by agreement with the employer where an employee requests and the employer agrees, the spread of ordinary hours of work for day workers is between 6.00 am and 10.00 pm, Monday to Friday, and between 7.00 am and 12.30 pm on Saturday.

(b) Day workers are not shiftworkers for the purposes of any penalties, loadings or allowances under the award, including for the purposes of Part 6 – Shiftwork.

(c) The facilitative provision in clause 13.4 (Ordinary hours of work (other than shiftworkers)), which allows the spread of hours to be altered, will not operate for the employees referred to in clause I.2.1(a).

[48] As mentioned earlier, Schedule I commenced operation on 28 March 2020. In its initial formulation the spread of ordinary hours for employees working from home was ‘between 6.00am and 11.00pm, Monday to Friday, and between 7.00am and 12.30pm on Saturday’.

[49] In the proceedings relating to the First Extension Application, Ai Group and ACCI sought to extend the operation of Schedule I (from 30 June 2020 to 30 September 2020) and to vary the terms of the schedule in a number of respects including by deleting 11.00pm in clause I.2.1(a) and replacing it with 10.00pm. We granted that application noting that:

‘Finally, we acknowledge that the continuation of the extended spread of hours related to working from home may have the effect of denying some employees an entitlement to penalty payments, that would otherwise occur, but note three points in this regard:

•  the working from home arrangements only apply on the request of an employee (and with the agreement of the employer);

•  the extension of the spread of hours in clause I.2.1(b) have been modified (from 6am – 11pm, to 6am – 10pm); and

•  disputes in respect of agreements made pursuant to clause I.2.1 can be the subject of arbitral determination by the Commission.’ 29

[50] The Applicants seeks to retain the current spread of hours for employees working from home by agreement with their employer, namely between 6.00am and 10.00pm Monday to Friday, and between 7.00am and 12.30pm on Saturday. The spread of hours on Saturday is not in dispute. As to Monday to Friday, the ASU seeks a spread of hours from 6.00am to 9.00pm.

[51] The ASU, in essence, contends that the maintenance of a 6am to 10pm spread of hours for employees working from home is no longer necessary. While the ASU accepts that more employees are working from home than was the case before the pandemic, it submits that things have ‘moved quickly in the past 3 months’ – restrictions have eased, reducing the necessity for employees to work from home. In particular, the ASU points to the re-opening of schools, eliminating the need for home schooling. The ASU also relies on:

•  the reduction in penalty rate payments as a consequence of the 6am to 10pm spread, particularly impacting low paid, mostly women, workers;

•  the risk that what was intended to be a temporary arrangement may become entrenched; and

•  the absence of direct evidence regarding the utilisation of the working from home flexibility by employees covered by the Clerks Award.

[52] There is considerable force in the points advanced.

[53] We accept that the proportion of employees working from home has fallen as restrictions have eased. But two points may be made about this phenomenon. First, the public health orders in both Victoria and NSW continue to either mandate or preference working from home. In Victoria, the Chief Health Officer’s Workplace Directions (No. 6) provides 30:

6 Operation of a Work Premises

(1) an employer must not permit a worker to perform work at the Work Premises where it is reasonably practicable for the worker to work at the worker’s place of residence or another suitable premises which is not the Work Premises.

Note: the Stay at Home Directions (Restricted Areas) (No 16) and the Stay Safe Directions (Non-Melbourne) permits a person to leave the premises where they ordinarily reside to attend work only if it is not reasonably practicable to work from their premises.

[54] In NSW, the Public Health (COVID-19 Restrictions on Gatherings and Movement) Order (No. 5) 2020 provides:

Direction of Minister about place of work

The Minister directs that an employer must allow an employee to work at the employee’s place of residence if it is reasonably practicable to do so. 31

[55] Hence, while the re-opening of schools has diminished the need for home schooling, the easing of the education restrictions has not entirely removed the necessity to work at home.

[56] The second point is that the ASU’s submission is directed at the easing of restrictions that necessitate working from home. The removal of circumstances which require employees to work from home only deals with part of the issue – it says nothing about those employees who prefer to work from home, even though they are not compelled to do so.

[57] As to the other matters, we acknowledge the impact on the low paid employees (a point to which we shall return), but find the proposition that the existing schedule will become entrenched, unpersuasive. We later deal with the need to find a more enduring solution to the facilitation of working from home arrangements. We note here that the terms of Schedule I reflect the unique circumstances relating to the restrictions imposed to contain the COVID-19 virus and do not necessarily provide a precedent for an enduring award term in respect of the facilitation of working from home.

[58] As to the absence of cogent evidence the ASU submits:

‘… the employers have not produced any specific evidence regarding the Clerks Award. We are not informed how many clerical employees have been working from home between March-June 2020 or between June-September 2020. Nor are we given any forward projections of how many clerical employees may continue to work from home in the next 6 months to March 2021 or whether that number may increase or decrease during this time.’ 32

[59] We accept the ASU’s submission regarding the absence of direct evidence of the experience of employees covered by the Clerks Award. But the absence of such evidence does not inexorably lead to the acceptance of the variation the ASU advances.

[60] As we have mentioned, the Clerks Award does not ‘map’ neatly to any one industry level ABS data source. The short point is that there is no publicly available data source which can tell us how many employees covered by the Clerical Award work from home. We can, and have, made some inferences based on the available data. It is likely that a significant proportion of employees covered by the Clerks Award are working from home; but the extent to which they are utilising the spread of hours flexibility in Schedule I is unknown.

[61] We would also observe that, based on existing data sources, we do not see how anyone could make robust forward projections about the number of clerical employees who will continue to work at home in the future.

[62] In the ‘Next Steps’ section of this decision we discuss how the existing ‘evidentiary gap’ may be addressed.

[63] On balance, we have decided to retain the existing 6am to 10pm spread. In reaching this conclusion we have had particular regard to the limited duration of the extension; the fact that the flexibility is only available on employee request; and the various safeguards (in particular the access to arbitration). We are also cognisant of the fact that the 6am to 10pm spread has been in operation since 1 July 2020; that there has been no evidence of abuse; and that altering the spread for what is to be a short period may disrupt existing working from home arrangements.

[64] We now turn to the legislative framework.

[65] The Commission may make a determination varying a modern award if the Commission is satisfied the determination is necessary to achieve the modern awards objective. The modern awards objective is in s.134 of the Fair Work Act 2009 (Cth) (the Act) and provides as follows:

‘What is the modern awards objective?

134(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.

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).’

[66] The modern awards objective is to ‘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 the particular considerations identified in ss.134(1)(a)–(h) (the s.134 considerations).

[67] The modern awards objective is very broadly expressed. 33 It is a composite expression which requires that modern awards, together with the National Employment Standards (NES), provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account the matters in ss.134(1)(a)–(h).34 Fairness in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.35

[68] The obligation to take into account the s.134 considerations means that each of these matters, insofar as they are relevant, must be treated as a matter of significance in the decision-making process. 36 No particular primacy is attached to any of the s.134 considerations37 and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.

[69] It is not necessary to make a finding that the award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award. 38 Generally speaking, the s.134 considerations do not set a particular standard against which a modern award can be evaluated; many of them may be characterised as broad social objectives.39 In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in s.134(1)(a)–(h) and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance.

[70] Section 138 of the Act emphasises the importance of the modern awards objective:

‘Section 138 Achieving the modern awards objective

A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.’

[71] What is ‘necessary’ to achieve the modern awards objective in a particular case is a value judgment, taking into account the s.134 considerations to the extent that they are relevant having regard to the context, including the circumstances pertaining to the particular modern award, the terms of any proposed variation and the submissions and evidence. 40

[72] As we observed in our decision of 9 July 2020:

‘the extent of the evidence required to support a variation depends on the context and what is necessary, from an evidentiary perspective, to support a temporary change to the award safety net in response to extraordinary circumstances is plainly different to that which is required to support a substantive, ongoing variation to a modern award.’ 41

[73] We now turn to the modern awards objective.

[74] It was common ground that the consideration in s 134(b), (c), (e) and (h) were not relevant. We deal with the other considerations below.

s. 134(1)(a): relative living standards and the needs of the low paid

[75] A threshold of two-thirds of median full-time wages provides ‘a suitable and operational benchmark for identifying who is low paid’, 42 within the meaning of s.134(1)(a). Using the two-thirds of median full-time wages as the benchmark, employees paid at classification levels 1 to 3 in the Clerks Award are ‘low paid’ within the meaning of s.134(1)(a).

[76] We accept that the proposed extension of Schedule I may result in low paid employees working from home receiving less pay than they would otherwise receive for working ordinary hours outside the spread of hours set by the award. It is axiomatic that such a reduction in pay will mean that they are less able to meet their needs. But, as noted in our decisions of 28 March 2020 and 9 July 2020 employers and employees face an invidious choice in the present circumstances and the retention of as many employees as possible in employment, albeit on reduced hours, is plainly a priority.

[77] This consideration weighs against granting the Application.

s. 134(1)(c) the need to promote social inclusion through increased workforce participation

[78] This consideration is directed at obtaining employment. The package of measures will facilitate the parties’ shared objective of retaining as many employees in employment as practicable in the current crisis.

s.134(1)(da)(ii) the need to provide additional remuneration for (relevantly) employees working unsocial hours

[79] The continuation of the extended spread of hours relating to agreed working from home arrangements may have the effect of denying some employees an entitlement to penalty payments for working unsociable hours. This consideration may be said to weigh against granting the application.

s. 134(1)(d) and (f) the need to promote flexible modern work practices and the efficient and productive performance of work and the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden.

[80] The proposed variation will promote flexibility and the ‘efficient and productive performance of work’ and will reduce the regulatory burden on business. This is a factor which weighs in favour of making the variation sought.

[81] Additional considerations apply to the proposed annual leave flexibilities (in proposed clause I.2.3). Subsections 93(3) and (4) are relevant in this regard. Subject to the requirement to take leave being reasonable, a modern award term which provides that an employee can be required to take a period of annual leave is a term of the type contemplated by s.93(3). The issue in the present matter is whether proposed clause I.2.3 is ‘reasonable’ within the meaning of s.93(3).

[82] Clause I.2.3 provides that an employer may request that an employee take paid annual leave; the employee must consider the request and must not unreasonably refuse the request. The term in question is of limited duration and is a response to an extraordinary set of circumstances. Further, the right to request is subject to a number of safeguards.

[83] We are satisfied that proposed clause I.2.3 is a permitted term and is ‘reasonable’ within the meaning of s.93(3).

[84] As to the proposed clause I.2.3(d) – the ability to take twice as much annual leave at half the rate of pay for all or part of any period of annual leave – we are satisfied that the proposed term is an ancillary or incidental term permitted by s.55(4).

4. Conclusion

[85] The terms in the varied Schedule I are terms that may be included in a modern award pursuant to ss.136(1)(a) and (c), and ss.139(1)(a), (c), (h) and (j) and s.142(1) of the Fair Work Act 2009.

[86] We are satisfied that extending the operation of Schedule I to 30 November 2020 is necessary to achieve the modern awards objective and in so deciding we have taken into account the considerations in s.134(1)(a) to (h), insofar as they are relevant. Once varied, the Clerks Award will only include terms to the extent necessary to achieve the modern awards objective.

[87] For the reasons set out above, we will vary the Clerks Award to extend the operation of Schedule I until 30 November 2020. The determination was issued with a Statement on 30 September 2020 and came into operation on the same day. As required by s.165(3), the determination does not take effect in relation to a particular employee until the start of the first pay period that starts on or after the day the determination comes into operation.

[88] A copy of the variation determination is set out at Attachment B.

5. Next Steps

[89] As we have mentioned, the terms of Schedule I reflect the extraordinary circumstances arising from the restrictions imposed to contain the COVID-19 virus. The restrictions are now easing but the direct economic and social impacts of the pandemic will be felt for some time to come. It also seems likely that there will be a continuing need for flexible work arrangements to assist employers and employees in adapting to the changed conditions and to support the recovery. The facilitation of agreed working from home arrangements looms large in this context.

[90] As noted in the President’s Statement of 31 August 2020:

‘[25] One of the most significant shifts in working arrangements since the start of the pandemic has been an increase in working from home arrangements. Government health advice, encouraging employees to work from home wherever possible, has accelerated what had been an emerging feature of contemporary working arrangements in some occupations and industries.

[91] The President’s Statement went on to observe that while enterprise bargaining was one mechanism available to facilitate working from home arrangements, the evidence suggests that enterprise bargaining is not readily accessible by small businesses.

[92] The President’s Statement also observed:

‘[37] Under modern awards, an employer and an individual employee can reach an agreement on how certain provisions apply including: time off instead of payment for overtime, cashing out or taking annual leave in advance and substitution of public holidays.

[38] Modern awards also include facilitative provisions that enable the flexible operation of provisions in the award such as variation to the span of ordinary hours, 12 hour shifts and the variation of meal breaks by agreement between the employer and the majority of employees affected in the workplace. A right to request flexible working arrangements is also available to some employees under the National Employment Standards set out in the Fair Work Act.

[39] However, most modern awards do not expressly provide for nor deal with issues relating to working from home arrangements.

[40] While working from home is currently possible and permissible in many workplaces, the absence of express provision to facilitate working from home can impose practical constraints on these arrangements. For example, absent an express provision, other award provisions such as the span of hours within which ordinary hours can be worked, continue to apply. This can constrain the utility of working from home arrangements from both the employee and employer perspectives as it requires the employer to pay overtime or penalty payments in circumstances where the employee has sought the additional flexibility in order to meet their preferences.’

[93] We agree with the above observations.

[94] These circumstances suggest that there is a need to consider whether it is necessary to vary the Clerks Award to provide more enduring means of facilitating agreed working from home arrangements. The extension of Schedule I provides the parties with an opportunity to consider whether a more enduring solution is necessary and if so, the form of that solution.

[95] As we have mentioned, there is at present an ‘evidentiary gap’ regarding the incidence of working from home arrangements amongst employees covered by the Clerks Award and the extent to which the flexibility provided by Schedule I has been utilised.

[96] We note that in proceedings regarding the Social, Community, Home Care and Disability Services Industry Award 2010 (the SCHADS Award) the Commission prepared a draft survey instrument to elicit information relating to some of the matters before it (the SCHADS Survey). The survey questions were finalised in consultation with the interested parties.

[97] The SCHADS Survey was administered via an online survey platform. The survey was distributed to the members of the parties in the proceeding, in particular the members of the various employer organisations. The survey was not designed to be representative of all enterprises employing workers covered by the SCHADS Award but ultimately it provided the ‘best evidence’ available in respect of certain issues.

[98] A report setting out the results of the SCHADS Survey was published by the Commission’s research section on 26 June 2019 and parties were given an opportunity to file written submissions on the content of the report and the survey results.

[99] Statements about why the SCHADS Survey was conducted and the contents of the survey were issued on 23 April 2019, 2 May 2019 and 8 May 2019.

[100] It seems to us that a similar approach could be taken to address the ‘evidentiary gap’ in these proceedings. We will issue a Statement in respect of this matter in the coming weeks.

[101] We direct the ASU, ACTU, Ai Group and ACCI to confer in respect of the variations to the Clerks Award (if any) which are necessary to facilitate agreed working from home arrangements. In this regard we refer the parties to the model Flexibility Schedule attached to the President’s Statement of 31 August 2020 as a starting point for those discussions. We would also refer the parties to the updated Information Note on Working published on 1 October 2020.

[102] The Commission will convene a conference in the week commencing 9 November 2020 to receive a report on the discussions. The Commission is available to assist with discussions prior to 9 November 2020, on request. A request for assistance can be sent to [email protected].

PRESIDENT

Appearances:

Mr M. Rizzo for ASU
Mr L. Izzo and Ms T. Lawrence for ACCI
Mr B. Ferguson for Ai Group
Ms S. Ismail for ACTU

Hearing details:

By telephone

2020

30 September

Printed by authority of the Commonwealth Government Printer

<PR723148>

ATTACHMENT A

Schedule I—Award Flexibility During the COVID-19 Pandemic

I.1 The provisions of Schedule I are aimed at preserving the ongoing viability of businesses and preserving jobs during the COVID-19 pandemic and not to set any precedent in relation to award entitlements after its expiry date.

I.1.1 Schedule I operates from 28 March 2020 until 30 September 2020. The period of operation can be extended on application to the Fair Work Commission.

I.1.2 Any direction or request given by an employer under Schedule I must be given in writing and does not apply to the employee if the direction is unreasonable in all of the circumstances.

I.1.3 Any direction or request given by an employer under Schedule I or any agreement made pursuant to clause I.2.1, from 1 July 2020, is not valid unless the employee is advised in writing that the employer consents to a dispute about the direction, request or agreement being settled by the Fair Work Commission through arbitration in accordance with clause 40.5—Dispute resolution and section 739(4) of the Act.

I.2 During the operation of Schedule I, the following provisions apply:

I.2.1 Ordinary hours of work for employees working from home

(a) Instead of clause 13.3 (Ordinary hours of work (employees other than shiftworkers), for employees working from home by agreement with the employer where an employee requests and the employer agrees, the spread of ordinary hours of work for day workers is between 6.00 am and 10.00 pm, Monday to Friday, and between 7.00 am and 12.30 pm on Saturday.

(b) Day workers are not shiftworkers for the purposes of any penalties, loadings or allowances under the award, including for the purposes of Part 6—Shiftwork.

(c) The facilitative provision in clause 13.4 (Ordinary hours of work (other than shiftworkers)), which allows the spread of hours to be altered, will not operate for the employees referred to in clause I.2.1(a).

I.2.2 Agreed temporary reduction in ordinary hours

(a) An employer and the full-time and part-time employees in a workplace or section of a workplace, may agree to temporarily reduce ordinary hours of work for the employees in the workplace or section for a specified period while Schedule I is in operation.

(b) At least 75% of the full-time and part-time employees in the relevant workplace or section must approve any agreement to temporarily reduce ordinary hours.

(c) For the purposes of clause I.2.2(a), ordinary hours of work may be temporarily reduced:

(i) For full time employees, to not fewer than 75% of the full-time ordinary hours applicable to an employee immediately prior to the implementation of the temporary reduction in ordinary hours.

(ii) For part-time employees, to not fewer than 75% of the part-time employee’s agreed hours immediately prior to the implementation of the temporary reduction in ordinary hours.

(d) Where a reduction in hours takes effect under clause I.2.2(a), the employee’s ordinary hourly rate will be maintained but the weekly wage will be reduced by the same proportion.

(e) Nothing in Schedule I prevents an employer and an individual employee agreeing in writing (including by electronic means) to reduce the employee’s hours or to move the employee temporarily from full-time to part-time hours of work, with a commensurate reduction in the minimum weekly wage.

(f) If an employee’s hours have been reduced in accordance with clause I.2.2(a):

(i) the employer must not unreasonably refuse an employee request to engage in reasonable secondary employment; and

(ii) the employer must consider all reasonable employee requests for training, professional development and/or study leave.

(g) For the purposes of clause I.2.2(a), where there is any reduction in the ordinary hours of work for full-time or part-time employees in a workplace or section during the period Schedule I is in operation, all relevant accruals and all entitlements on termination of employment will continue to be based on each employee’s weekly ordinary hours of work prior to the commencement of Schedule I.

(h) For the purposes of clause I.2.2(a), the approval of employees shall be determined by a vote of employees. In order for the vote to be valid, the employer must comply with the following requirements:

(i) Where any of the employees are known to be members of the Australian Services Union or another organisation, the ASU or other organisation shall be informed before the vote takes place.

(ii) Prior to the vote of employees, the employer shall provide the employees with the contact details of the ASU, should they wish to contact the ASU for advice; and

(iii) The employer must notify the Fair Work Commission by emailing [email protected] that the employer proposes to conduct a vote under Schedule I. The employer shall provide the work email addresses of the employees who will be participating in the vote, to the Commission. The Commission will then distribute the ASU COVID-19 Information Sheet to the employees prior to the vote. The Commission shall list the name of the business on a register which will be accessible to the ASU, upon request, for the period when Schedule I is in operation.

(iv) The vote shall not take place until at least 24 hours after the requirements of clause I.2.2(h)(i), (ii) and (iii) have been met.

(i) This clause only applies to employers who implemented a temporary reduction in ordinary hours under Schedule I in this Award before 30 June 2020.

(j) Any employee who has had their hours of work reduced pursuant to this Schedule I prior to 1 July 2020 may request an employer to conduct a further vote to confirm the ongoing reduction in hours pursuant to this Schedule I. Such a vote must be held within 7 days of any request. The vote must comply with the requirements in clause I.2.2(h).

(k) If any vote requested under clause I.2.2(j) does not approve of the ongoing reduction of hours or is not held within 7 days of the making of the request, the operation of clause I.2.2 with respect to the relevant employees will cease to be effective 7 days from the date when the request was made.

I.2.3 Annual leave

(a) Subject to clause I.2.3(f) and despite clauses 32.6, 32.7 and 32.8 (Annual leave), an employer may, subject to considering an employee’s personal circumstances, request an employee to take paid annual leave, provided that the request does not result in the employee retaining a balance of less than 2 weeks annual leave after the leave is taken. Such a request must be made a minimum of 72 hours before the date on which the annual leave is to commence.

(b) An employee must consider and may not unreasonably refuse a request to take annual leave made pursuant to clause I.2.3.

(c) Clauses I.2.3(a) and (b) do not prevent an employer and an employee agreeing to the employee taking annual leave at any time.

(d) Employers and individual employees may agree to take up to twice as much annual leave at a proportionately reduced rate for all or part of any agreed or directed period away from work, including any close-down.

(e) The period of annual leave must commence before 30 September 2020 but may end after this date.

(f) An employer can only request that an employee take annual leave pursuant to this clause if the request is made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and to assist the employer to avoid or minimise the loss of employment.

ATTACHMENT B – variation determination

MA000002  PR723218

DETERMINATION

Fair Work Act 2009
s.157—Variation of a modern award to achieve the modern awards objective

Australian Industry Group and Australian Chamber of Commerce and Industry
(AM2020/95)

CLERKS—PRIVATE SECTOR AWARD 2020
[MA000002]

Application to vary the Clerks—Private Sector Award 2020 – Schedule I – Award Flexibility During the COVID-19 Pandemic

A. Further to the Statement [[2020] FWCFB 5246] issued by the Full Bench on 30 September 2020, the above award is varied as follows:

1. By deleting the words “30 September 2020” appearing in clause I.1.1 and inserting “30 November 2020”.

2. By deleting the words “30 September 2020” appearing in clause I.2.3(e) and inserting “30 November 2020”.

B. This determination comes into operation on 30 September 2020. In accordance with s.165(3) of the Fair Work Act 2009 this determination does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 30 September 2020.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

 1   [2020] FWCFB 1690.

 2   [2020] FWCFB 3443.

 3   Ibid at [29] and [32].

 4   [2020] FWCFB 5246

 5   Preston M, Pung A, Leung E, Casey C, Dunn A and Richter O (2012) ‘Analysing modern award coverage using the Australian and New Zealand Industrial Classification 2006: Phase 1 report’, Research Report 2/2012, Fair Work Australia.

 6   ABS, Household Impacts of COVID-19 Survey methodology, August 2020.

 7   ABS, Household Impacts of COVID-19 Survey, Detailed Release, May 2020, Catalogue No. 4940.0.

 8   ABS, Household Impacts of COVID-19 Survey, Detailed Release, June 2020, Catalogue No. 4940.0.

 9   ABS (2002), Teleworking, New South Wales, Oct 2001, Catalogue No. 1373.1.

 10   Ai Group and ACCI joint submission, 25 September 2020, Exhibit 1.

 11   Ibid, Exhibit 5.

 12   Ibid, Exhibit 9.

 13   Ibid, Exhibit 10.

 14   Ibid, Exhibit 11.

 15   Ibid, Exhibit 12.

 16   17 Government of Victoria (2020), Coronavirus (COVID–19) roadmap to reopening: Mapping Victoria’s path toward COVID Normal, updated 28 September.

 17   Government of Victoria (2020), Coronavirus (COVID–19) updates: Restrictions in regional Victoria: Third Step of the roadmap, updated 28 September.

 18   Government of Victoria (2020), Coronavirus (COVID–19) roadmap to reopening: Mapping Victoria’s path toward COVID Normal, updated 28 September.

 19   Government of Victoria (2020), Coronavirus (COVID–19) roadmap to reopening: Mapping Victoria’s path toward COVID Normal, updated 28 September.

 20   Government of Victoria (2020), Statement from the Premier, media release, 27 September.

 21   Government of New South Wales (2020), School, sport and music restrictions relaxed, 24 September.

 22   Government of New South Wales (2020), Capacity increase for entertainment venues, 25 September.

 23   Government of New South Wales (2020), Stadiums and economy to benefit from increased capacity, 17 September.

 24   Clause I.2.1

 25   Clause I.2.2

 26   Clause I.2.3

 27   [2020] FWCFB 2367 at [93]

 28   See also Re Fast Food Industry Award 2010 [2020] FWCFB 2316 at [84]

 29   [2020] FWCFB 3443 at [44]

 30   Directions from Chief Health officer in Accordance with emergency powers arising from declared state of emergency – Workplace Directions (No 6) - 27 September 2020

 31   NSW: Public Health (COVID-19 Restrictions on Gathering and Movement) Order (No 5) 2020 (p. 6)

 32   ASU submission 29 September 2020 at [24]

 33   Shop, Distributive and Allied Employees Association v National Retail Association (No 2) (2012) 205 FCR 227 at [35]

 34   (2017) 265 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [41]–[44]

 35   [2018] FWCFB 3500 at [21]-[24]

 36   Edwards v Giudice (1999) 94 FCR 561 at [5]; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 at [81]-[84]; National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [56]

 37   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [33]

 38   National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [105]-[106]

 39   See National Retail Association v Fair Work Commission (2014) 225 FCR 154 at [109]-[110]; albeit the Court was considering a different statutory context, this observation is applicable to the Commission’s task in the Review

 40   See generally: Shop, Distributive and Allied Employees Association v National Retail Association (No.2) (2012) 205 FCR 227

 41   [2020[ FWCFB 3443 at [58]

 42   [2017] FWCFB 1001 at [166]