STATEMENT

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards – Award stage – General Retail Industry Award 2020
(AM2017/60)

4 yearly review of modern awards – award stage – General Retail Industry Award 2020 – substantive issues.

1. Introduction

[1] The Retail Award was originally included in Group 4 of the Award Stage but was selected for plain language re-drafting. 1 In a decision dealing with the technical and drafting issues for Group 4 awards dated 8 March 2018, a Full Bench confirmed that the outstanding substantive matters will be dealt with following the plain language process.2 The plain language review of this award has been finalised and the General Retail Industry Award 2020 (the Retail Award) came into operation on 1 October 2020.

[2] This Statement deals with an outstanding claim made in the 4 yearly review of the Retail Award.

[3] There is an extensive procedural history to this matter, which we need not detail. 3 Suffice to say that a number of initial claims by the Shop Distributive and Allied Employees’ Association (SDA) are no longer pressed and the Australian Industry Group (Ai Group) and the Australian Retail Association (ARA) have withdrawn their claims for flexible part time work.

[4] The SDA has one outstanding claim. Directions were issued on 12 February 2019 (later varied by consent on 31 May 2019) for the filing of submissions. 4

[5] In this statement we summarise the evidence and submissions filed and set out the ‘Next Steps’ for the finalisation of this matter.

[6] Before turning to the claim and the evidence and submissions advanced in relation to it we set out a summary of the legislative framework that applies to the 4 yearly review of modern awards (the Review).

2. Legislative framework

[7] Section 156 of the Fair Work Act 2009 (Cth) (the Act) deals with the conduct of the Review and s.156(2) provides that the Commission must review all modern awards and may, among other things, make determinations varying modern awards. In this context ‘review’ has its ordinary and natural meaning of ‘survey, inspect, re-examine or look back upon’. 5 The discretion in s.156(2)(b)(i) to make determinations varying modern awards in a Review, is expressed in general, unqualified, terms.

[8] If a power to decide is conferred by a statute and the context (including the subject matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made, a general discretion confined only by the subject matter, scope and purposes of the legislation will ordinarily be implied. 6 However, a number of provisions of the Act which are relevant to the Review operate to constrain the breadth of the discretion in s.156(2)(b)(i). In particular, the Review function in Part 2-3 of the Act involves the performance or exercise of the Commission’s ‘modern award powers’ (see s.134(2)(a)). It follows that the ‘modern awards objective’ in s.134 applies to the Review.

[9] Section 138 (achieving the modern awards objective) and a range of other provisions of the FW Act are also relevant to the Review: s.3 (object of the Act); s.55 (interaction with the National Employment Standards (NES)); Part 2-2 (the NES); s.135 (special provisions relating to modern award minimum wages); Division 3 (terms of modern awards) and Division 6 (general provisions relating to modern award powers) of Part 2-3; s.284 (the minimum wages objective); s.577 (performance of functions etc by the Commission); s.578 (matters the Commission must take into account in performing functions etc); and Division 3 of Part 5-1 (conduct of matters before the Commission).

[10] The modern awards objective is in s.134 of the Act:

‘134 The modern awards objective

What is the modern awards objective?

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da) the need to provide additional remuneration for:

(i) employees working overtime; or

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

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

(iv) employees working shifts; and

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

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.

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).’

[11] The modern awards objective is to ‘ensure that modern awards, together with the NES, 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) of the FW Act (the s.134 considerations).

[12] The modern awards objective is very broadly expressed. 7 It is a composite expression which requires that modern awards, together with the NES, provide ‘a fair and relevant minimum safety net of terms and conditions’, taking into account s.134 considerations.8 ‘Fairness’ in this context is to be assessed from the perspective of the employees and employers covered by the modern award in question.9

[13] 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. 10 No particular primacy is attached to any of the s.134 considerations11 and not all of the matters identified will necessarily be relevant in the context of a particular proposal to vary a modern award.

[14] It is not necessary to make a finding that the modern award fails to satisfy one or more of the s.134 considerations as a prerequisite to the variation of a modern award. 12 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.13 In giving effect to the modern awards objective the Commission is performing an evaluative function taking into account the matters in ss.134(1)(a)–(h) of the Act and assessing the qualities of the safety net by reference to the statutory criteria of fairness and relevance.

[15] Further, the matters which may be taken into account are not confined to the s.134 considerations. As the Full Court observed in Shop, Distributive and Allied Employees Association v The Australian Industry Group 14 (the Penalty Rates Review):

‘What must be recognised, however, is that the duty of ensuring that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions itself involves an evaluative exercise. While the considerations in s 134(a)-(h) inform the evaluation of what might constitute a “fair and relevant minimum safety net of terms and conditions”, they do not necessarily exhaust the matters which the FWC might properly consider to be relevant to that standard, of a fair and relevant minimum safety net of terms and conditions, in the particular circumstances of a review. The range of such matters “must be determined by implication from the subject matter, scope and purpose of the” Fair Work Act (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40).’ 15

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

‘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.’

[17] 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. 16

[18] In Shop, Distributive and Allied Employees Association v National Retail Association (No.2) 17 Tracey J considered what it meant for the Commission to be satisfied that making a determination varying a modern award (outside a 4 yearly review) was ‘necessary to achieve the modern awards objective’ for the purposes of s.157(1). His Honour held:

‘The statutory foundation for the exercise of FWA’s power to vary modern awards is to be found in s 157(1) of the Act. The power is discretionary in nature. Its exercise is conditioned upon FWA being satisfied that the variation is “necessary” in order “to achieve the modern awards objective”. That objective is very broadly expressed: FWA must “provide a fair and relevant minimum safety net of terms and conditions” which govern employment in various industries. In determining appropriate terms and conditions regard must be had to matters such as the promotion of social inclusion through increased workforce participation and the need to promote flexible working practices.

…

The question under this ground then becomes whether there was material before the Vice President upon which he could reasonably be satisfied that a variation to the Award was necessary, at the time at which it was made, in order to achieve the statutory objective.

…

In reaching my conclusion on this ground I have not overlooked the SDA’s subsidiary contention that a distinction must be drawn between that which is necessary and that which is desirable. That which is necessary must be done. That which is desirable does not carry the same imperative for action. Whilst this distinction may be accepted it must also be acknowledged that reasonable minds may differ as to whether particular action is necessary or merely desirable. It was open to the Vice President to form the opinion that a variation was necessary.’ 18

[19] The above observation – in particular the distinction between that which is ‘necessary’ and that which is merely ‘desirable’ – is apposite to s.138, including the observation that reasonable minds may differ as to whether a particular award term or proposed variation is necessary, as opposed to merely desirable. 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. 19

[20] In the 4 Yearly Review of Modern Awards - Penalty Rates (Hospitality and Retail Sectors) Decision (the Penalty Rates Case) 20 the Full Bench summarised the general propositions applying to the Commission’s task in the Review, as follows:

‘1. The Commission’s task in the Review is to determine whether a particular modern award achieves the modern awards objective. If a modern award is not achieving the modern awards objective then it is to be varied such that it only includes terms that are ‘necessary to achieve the modern awards objective’ (s.138). In such circumstances regard may be had to the terms of any proposed variation, but the focal point of the Commission’s consideration is upon the terms of the modern award, as varied.

2. Variations to modern awards must be justified on their merits. The extent of the merit argument required will depend on the circumstances. Some proposed changes are obvious as a matter of industrial merit and in such circumstances it is unnecessary to advance probative evidence in support of the proposed variation. Significant changes where merit is reasonably contestable should be supported by an analysis of the relevant legislative provisions and, where feasible, probative evidence.

3. In conducting the Review it is appropriate that the Commission take into account previous decisions relevant to any contested issue. For example, the Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time it was made. The particular context in which those decisions were made will also need to be considered.

4. The particular context may be a cogent reason for not following a previous Full Bench decision, for example:

•  the legislative context which pertained at that time may be materially different from the Fair Work Act 2009 (Cth);

•  the extent to which the relevant issue was contested and, in particular, the extent of the evidence and submissions put in the previous proceeding will bear on the weight to be accorded to the previous decision; or

•  the extent of the previous Full Bench’s consideration of the contested issue. The absence of detailed reasons in a previous decision may be a factor in considering the weight to be accorded to the decision.’ 21

[21] Where an interested party applies for a variation to a modern award as part of the Review, the proper approach to the assessment of that application was described by a Full Court of the Federal Court in CFMEU v Anglo American Metallurgical Coal Pty Ltd (Anglo American): as follows: 22

‘[28] The terms of s 156(2)(a) require the Commission to review all modern awards every four years. That is the task upon which the Commission was engaged. The statutory task is, in this context, not limited to focusing upon any posited variation as necessary to achieve the modern awards objective, as it is under s 157(1)(a). Rather, it is a review of the modern award as a whole. The review is at large, to ensure that the modern awards objective is being met: that the award, together with the National Employment Standards, provides a fair and relevant minimum safety net of terms and conditions. This is to be achieved by s 138 – terms may and must be included only to the extent necessary to achieve such an objective.

[29] Viewing the statutory task in this way reveals that it is not necessary for the Commission to conclude that the award, or a term of it as it currently stands, does not meet the modern award objective. Rather, it is necessary for the Commission to review the award and, by reference to the matters in s 134(1) and any other consideration consistent with the purpose of the objective, come to an evaluative judgment about the objective and what terms should be included only to the extent necessary to achieve the objective of a fair and relevant minimum safety net.’

[22] In the same decision the Full Court also said: ‘...the task was not to address a jurisdictional fact about the need for change, but to review the award and evaluate whether the posited terms with a variation met the objective.’ 23

Q1. Question for all parties: Does any party take issue with the summary of the legislative framework at [7] – [22] above?

[23] We now turn to the claim before us.

3. The Claim

[24] The SDA seeks to vary what is now clause 17.2 of the Retail Award to limit the application of junior rates. The Retail Award currently applies junior percentages to all 8 classification levels. This means junior percentage rates apply from the shop assistant through to the store manager classifications levels. The proposed variation seeks to confine the payment of junior rates to level 1 employees only; with the consequence that employees engaged at higher levels would be paid the full adult rate.

[25] Level 1 is the general shop assistant classification and the indicative job titles for a level 1 employee are:

(a) shop assistant;

(b) clerical assistant;

(c) check-out operator;

(d) store worker;

(e) reserve stock hand;

(f) driver;

(g) boot or shoe repairer (not qualified);

(h) window dresser (not qualified);

(i) loss prevention officer;

(j) photographic employee;

(k) store greeter;

(l) assembler;

(m) ticket writer (not qualified);

(n) trolley collector;

(o) video hire worker;

(p) telephone order salesperson;

(q) door-to-door salesperson or retail outdoor salesperson;

(r) demonstrator or merchandiser not elsewhere classified (including a demonstrator or merchandiser who is not a direct employee of the retailer). 24

4. The Evidence

[26] The SDA filed an Expert Report in support of its claim. The Expert Report was prepared by Dr Martin O’Brien, Associate Professor of Economics, University of Wollongong. Dr O’Brien’s report was marked as Exhibit SDA 1 and was the subject of oral evidence on 8 October 2019. The transcript of that proceeding is available here.

[27] The purpose of Dr Martin’s report was to address the following questions:

•  What are the total number of employees engaged in the general retail industry?

•  What number of employees engaged in the general retail industry are under 21 years; and

•  In respect of the number of junior employees in the general retail industry identified as being under 21, what percentage of that employee cohort would be employed in classifications higher than Level 1? 25

[28] In essence, the purpose of the report was to establish the number of junior employees employed in classifications higher than Level 1; thus identifying the number of employees affected by the claim. Using data from the 2016 Census Dr O’Brien concluded that:

•  the total number of employees in the general retail industry was 774 675

•  the number of employees in the general retail industry under 21 years of age was 160 848

•  of these junior employees, 17 244 or 11%, were employed in classifications higher than Level 1.

[29] Dr O’Brien’s methodology is set out in his report, and, in short, involved the following steps:

1. The number of employees covered by the Retail Award is calculated from ABS ANZSIC data using the ANZSIC classes ‘mapped’ to the Retail Award contained in Research Report 2/2012: Analysing modern award coverage using the Australian and New Zealand Standard Industrial Classification 2006: Phase 1 Report. 26 The 2016 Census data was used as it is the only source of the 4 digit level ANZSIC data. In step 1 Dr O’Brien excluded, among other things, 4 digit ANZSCO unit groups with ‘clerk’ in their descriptions on the basis that the Retail Award ‘excludes clerks’.27

2. Employee totals covered by the Retail Award are compiled for those aged 15 to 20 years (junior employees), using the 2016 Census data.

3. The number of Level 1 junior employees is identified using the Fair Work Ombudsman’s list of job descriptions and aligning them with ANZSCO descriptions.

[30] At the hearing, Dr O’Brien gave evidence in relation to his Report.

[31] In the course of cross examination Dr O’Brien was taken to the Retail Award and the description of the ‘general retail industry’. Dr O’Brien acknowledged that the exclusion of clerical functions from the Retail Award only operates to exclude clerical functions performed away from the retail establishment and not functions performed at the retail establishment. 28 Dr O’Brien also conceded that by excluding clerks at classification levels 4, 6, 7 and 8, the number of employees included in his calculation ‘is less than it might have been’.29 Dr O’Brien’s evidence is that the extent of the underestimation would not be more than 1210 employees as that is the number of clerical employees excluded from his calculation.30

[32] As to step 3, Dr O’Brien confirmed that the job descriptions used come from the pay calculator at the Fair Work Ombudsman’s website. 31 Dr O’Brien accepted that the Fair Work Ombudsman’s descriptions are ‘merely a restatement of what’s in the award’32 and that they are ‘indicative job descriptions’.33 As noted at [10] in Dr O’Brien’s report:

‘In order to address question (iii) is to exclude juniors paid at Level 1. The Fair Work Ombudsman provides a list of job descriptions that encompass each level of pay within awards (Fair Work Ombudsman nd). Again, 4 digit ANZSCO data is required to identify and then remove Level 1 employees from our calculations. Unfortunately, the job descriptions provided by the Fair Work Ombudsman do not line up exactly with ANZSCO descriptions. Therefore, a level of judgement is required in this process. A summary of General Retail Award Level 1 job descriptions and ANZSCO occupations judged as encompassing these descriptions is provided in Table 1’. 34 (emphasis added)

[33] The ‘level of judgment’ referred to was exercised by Dr O’Brien. In the course of cross examination Dr O’Brien conceded that:

•  under classification level 3 an employee may not have to do supervision 35 and on that basis it is possible that some of the employees included in calculating the number of level 1 employees could actually be level 3 employees;36

•  it is possible that some employees who identified themselves as ‘store persons’, and who Dr O’Brien classified as level 1 employees, operate forklifts and hence should have been classified as level 2 employees; 37 and

•  the data used does not include employees aged under 15 years. 38

Q2. Question for all parties: Does any party take issue with the summary of the Expert Report and Dr O’Brien’s evidence at [26] – [33] above?

[34] The parties have not yet had an opportunity to make submissions regarding the findings which may be made based on Dr O’Brien’s evidence. Such submissions may be made in accordance with the timetable set out in Section 6, Next Steps.

[35] At the conclusion of Dr O’Brien’s evidence on 8 October 2019 the President said:

‘I think it can be accepted that there's a degree of difficulty with lining up the level 4 ANZSIC classifications with the award levels because they are not in the same terms, so some assessments and some assumptions have to be made.  The other way of gaining some information about that would be for a survey to be administered by the members of ABI and the NRA who are covered by the General Retail Award asking them the question, 'How many juniors do you employ', defining what a junior is, and then, 'How many of those employees are employed at level 1, 2, 3, 4, 5, 6, 7, 8?’ 39

[36] The ARA and ABI undertook to confer in relation to questions that could be asked in such a survey. On 23 October 2019 the ARA and ABI filed a draft proposed survey. 40 On 31 October 2019 the SDA filed submissions in response to the proposed survey.41

[37] Conferences were held before Commissioner Lee on 18 November 2019 and 6 December 2019 to discuss the proposed survey questions.

[38] The survey was administered via an online platform. A link was sent by the Commission to each party (in matter AM2017/60) and the email was forwarded by each employer party to their members. Participation in the survey was limited to the membership of parties in matter AM2017/60 (or enterprises represented in the proceedings). As a result, the total sample of enterprises surveyed is difficult to quantify. The analysis presented in this report is based on the 125 enterprises that provided a complete response to the survey. 42

[39] The survey was open for a period of 5 weeks from 11 February 2020 until 13 March 2020.

[40] A Survey Report analysing the results of the survey has been published on the Commission’s website on 8 October 2020. There were a limited number of responses to the survey and the report is based on the 125 responses received. As noted in the report: ‘Due to the small sample size, results should be viewed as indicative only and cannot be extrapolated across the industry as a whole’.

[41] A relevant finding from the Report is as follows:

‘Enterprises were asked to provide the number of junior employees covered by the Retail Award. A total of 146 junior employees were covered by the Retail Award among the enterprises. The majority (88.4 per cent or 129 junior employees) were employed at Level 1, 9.5 per cent were employed at Level 2 and around 2.0 per cent were employed at Level 3.’

[42] The parties will be given an opportunity to make submissions in relation to the Survey Report. Such submissions can be made in accordance with the timetable set out in Section 6, Next Steps.

5. The Submissions

[43] Submissions were received from the SDA (submission and expert report) on 5 June 2019 and the ARA (submission) on 19 June 2019. ABI filed a submission in reply on 27 August 2019.

5.1 SDA Submissions

[44] The essence of the SDA’s case is that employees performing work at a higher classification than Level 1 are recognised as having the necessary skills and competencies applicable for the higher classification and the full adult rate should apply to the rates paid to these employees, irrespective of age.

[45] The SDA submission can be distilled into seven points:

1. The SDA contends that the award modernisation process did not address the merits of what is now clause 17.2 but rather adopted the ‘limited objective’ of providing a uniform set of rates based on the terms of the relevant predecessor or awards and NAPSA’s. 43

2. Prior to the making of the modern award a number of ‘significant’ pre reform awards provided that junior employees employed above level 1 were paid the full adult rate, including the Shop, Distributive and Allied Employees Association – Victorian Shops Award, the Shop Employees (State) Award (NSW) and the Retail and Wholesale Industry – Shop Employees – ACT Award 2000. 44 The SDA submits that the underpinning awards did not support the outcome in the award modernisation process and did support the SDA’s proposal.

3. Applying the junior percentages to levels above level 1 is said to diminish the additional monetary compensation which is provided in recognition of higher skills, competencies and responsibility.

4. The retention of junior rates in their current form is inconsistent with the principle of equal remuneration for work of equal value.

5. The variation proposed is sustainable and affordable and will not have a detrimental impact on employers or the broader economy. The SDA relies on Dr O’Brien’s report as to the number of employees who could be impacted by the variation, submitting that:

‘At most approximately 17 000 employees could be entitled to an increase in wages. This number would be lower given the number of 20 year olds in that group who would already be paid the adult rate of pay’. 45

We note that of the 168 848 Retail Award employees under 21 years of age some 34 774 (21 per cent) were aged 20 years. 46

6. In its current form clause 17.2 fails to meet the object of the Act (in particular s.3(a) and (b) and does not provide a ‘fair and relevant safety net’, as required by s.134(1).

7. The proposed variation is consistent with 2017 decision to vary junior rates in the Retail Award 47 and with the variation of the Pharmacy Industry Award to provide that junior rates only apply to levels 1 and 2 in that award.48

[46] As to point 7 above, clause 16.2 of the Pharmacy Award provides:

16.2 Junior rates (pharmacy assistants levels 1 and 2 only)

An employer must pay an employee, who is classified as a pharmacy assistant level 1 or level 2 and aged as specified in column 1 of Table 4—Junior rates (pharmacy assistants levels 1 and 2 only), at least at the percentage specified in column 2 of the minimum rate that would otherwise be applicable under Table 3—Minimum rates:

Table 4—Junior rates (pharmacy assistants levels 1 and 2 only)

[47] The classification definitions are set out in Schedule A of the Pharmacy Award:

A.1 Pharmacy assistant level 1 is an employee working as a pharmacy assistant in a community pharmacy who has not acquired the competencies required to hold a qualification in Community Pharmacy and is not covered by any other classification in this Schedule.

A.2 Pharmacy assistant level 2 is an employee who has acquired the competencies required to be the holder of a Certificate II in Community Pharmacy, as determined by the National Quality Council or a successor body.

[48] The variation to clause 16.2 which confined the application of junior rates to pharmacy assistants levels 1 and 2 only was made with the consent of the interested parties. The decision approving those changes states:

‘[66] In relation to the other variations sought by the interested parties by consent (as set out in Annexure A), those variations are agreed, straightforward and uncontroversial. The interested parties made submissions at the hearing on 31 March 2017 in support of the variations. 49

[67] Having regard to the requirements set out in s.134(1) of the Act, and the consent submissions of the interested parties to support the making of the variations in Annexure A, as stated, the variations sought are necessary to achieve the modern awards objective.

[68] These variations are therefore, considered appropriate. Determinations to give effect to the variations will separately be issued. The variations will take effect on 7 August 2017.’ 50

[49] The classification definitions in the Retail Award are set out at Schedule A; those definitions make no reference to employees who hold a Certificate 1 or Certificate 2 qualification. The classification definition for a Retail Employee level 4 states:

‘A.4.1 Retail Employee Level 4 means an employee performing work at a retail establishment at a higher level than a Retail Employee Level 3. This may include an employee who has completed an appropriate trades course or holds an appropriate Certificate III and is required to use their qualifications in the course of their work.’

Q3. Question for the SDA: Is the SDA aware of any other modern awards which limit junior rates to particular classification levels?

[50] The SDA’s submissions in relation to the s.134 considerations are summarised below.

134(1)(a) – relative living standards and the needs of the low paid

[51] The SDA submits:

‘Not only are these skilled young people’s relative living standards and needs eroded by the retention of discriminatory, discounted wages in one of Australia’s lowest paid industries 51, but their cost of living pressures and caring responsibilities have also increased in line with the general population. However, there is little recognition or amelioration of the realities faced by many young people in the industrial relations arena.’52

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

[52] The SDA submits:

‘The retention of junior rates across all classifications levels in the GRIA actually exacerbates social exclusion and jeopardises workforce participation. The payment of discounted wages based on age rather than experience denies younger workers the equal remuneration they are entitled to in line with principle of equal pay for equal work. Providing the adult rate of pay for all employees at levels 2 – 8 will enable many young Australian workers, and their families, to achieve a more reasonable standard of living and participate more fully in all aspects of their lives…

The granting of the application would encourage more young employees to take on roles with higher responsibilities and skills which allows them to participate more fully and equally in the workforce in a meaningful way.’ 53

134(1)(e) – the principle of equal remuneration for work of equal or comparable value

[53] The SDA submits:

‘It is obvious that the provision of junior rates in the GRIA across all classifications levels is in direct opposition to the principle of equal remuneration for work of equal or comparable value, with many skilled young Australian retail workers performing exactly the same tasks as older colleagues, for significantly less pay.’ 54

Q4. Question for the SDA: The SDA is invited to respond to ABI’s reply submission in relation to the SDA’s equal remuneration submission (see [74] to [80] of this Statement). The SDA is also invited to comment on the observations made in various Full Bench decisions regarding the scope of s.134(1)(e). See Penalty Rates decision [2017] FWCFB 1001 at [204] – [206]; 2017-18 AWR [2018] FWCFB 3500 at [33] – [35]; and Aged Care Award – Substantive Claims decision [2019] FWCFB 5078 at [56] – [60].

134(1)(f) – the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden

[54] The SDA submits:

‘The relatively small number of employees who could receive a benefit from removing junior rates applying to the higher Levels 2-8 of GRIA would not have a significant impact on business as a whole in relation to employment costs. It would not increase the regulatory burden for business. It is likely to increase the productivity of the employees affected.’ 55

134(1)(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.

[55] The SDA submits:

‘Varying GRIA to pay adult rates to all employees at levels 2 – 8 will not detrimentally affect employment growth, inflation and sustainability, performance and competitiveness of the national economy.’ 56

[56] The SDA advances the following points in support of its submissions regarding ss.134(f) and (h):

‘(i) The FWC approved increase in the 20 yr old rate to the adult rate has not shown any detriment to employment.

(ii) Many 20 year olds in retail are already paid the adult rate of pay now. This is either through the award or an enterprise agreement. This limits the impact this variation will have on the industry.

(iii) The variation would apply to all retail businesses, making any change equitable for all employers and thus retaining a competitive and level playing field.

(iv) Finally, the retail industry, as a domestic market, would still require jobs to be done by the same number of workers. Irrespective of the levels of remuneration for young workers, overall employment will not change.’ 57

[57] The SDA makes no submission in relation to ss.134(1)(b), (d), (da) or (g).

Q5. Question for the SDA: Does the SDA take issue with any aspect of the above summary of its submissions?

Q6. Question for the SDA: The SDA is invited to provide an explanation of the basis for the following two assertions in its written submissions:

(i) At paragraph 29(i), the SDA says that the Commission-approved increase in the 20 year old rate to the adult rate 'has not shown any detriment to employment.';

(ii) At paragraph 39 the SDA says that the award level 1 aligns with a Certificate II qualification.

5.2 ABI Submission

[58] ABI opposes the SDA claim and the merit arguments supporting it on 4 primary grounds:

1. There is insufficient evidence to support the SDA claim.

•  the SDA Claim seeks to vary modern award minimum wages, requiring the Full Bench to be satisfied that such variation is justified by work value reasons - no evidence whatsoever has been filed establishing that work value reasons exist; and

•  the SDA Claim seeks a significant change which is required to be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation. The evidence as filed (such as it is) does not demonstrate the facts supporting the proposed variation, only establishing the number of employees that the proposed variation may affect.

2. The SDA’s reliance on s 134(1)(e) is entirely misconceived as that provision is irrelevant to the SDA Claim.

3. The SDA’s contestation that the Award prima facie met the modern award objective when made appears to take issue with a matter already determined by the Full Bench.

4. There are strong merit arguments that arise against the claim.

1. Requirement for work value reasons and probative evidence

[59] ABI submits that the evidence in support of the claim is limited to one report which seeks to establish the number of employees who are under 21 years of age and engaged in the retail industry at a level above Level 1 of the Award.

[60] Section 156(3) of the FW Act states:

‘(3) In a 4 yearly review of modern awards, the FWC may make a determination varying modern award minimum wages only if the FWC is satisfied that the variation of modern award minimum wages is justified by work value reasons.

(4)  Work value reasons are reasons justifying the amount that employees should be paid for doing a particular kind of work, being reasons related to any of the following:

(a)  the nature of the work;

(b)  the level of skill or responsibility involved in doing the work;

(c)  the conditions under which the work is done.’

[61] Modern award minimum wages are defined by s 284(3) as follows:

‘(3)  Modern award minimum wages are the rates of minimum wages in modern awards, including:

(a)  wage rates for junior employees, employees to whom training arrangements apply and employees with a disability; and

(b)  casual loadings; and

(c)  piece rates.’

[62] Section 12 of the Act states that a junior employee means a national system employee who is under 21.

[63] ABI submits that for the claim to be granted, s.156(3) requires that the Commission be satisfied that work value reasons exist justifying the payment of adult rates to junior employees at levels above Level 1 having regard to:

(a)  the nature of the work;

(b)  the level of skill or responsibility involved in doing the work;

(c)  the conditions under which the work is done.

[64] ABI contends that there is no evidence before the Commission which establishes:

(i) that the value of the work performed by junior employees at Levels 2-8 of the Award is equivalent to that of adult employees;

(ii) the level of skill or responsibility undertaken by junior employees at levels 2-8 in comparison with adult employees; or

(iii) that the conditions under which junior employees in levels 2-8 work are equivalent to adult employees.

[65] On this basis ABI submits that it is not possible for the Commission to make findings that a junior employee at Levels 2-8 is performing work of the equivalent value to an adult employee and, given the operation of s.156(3), without work value reasons, the claim should not be granted.

[66] In relation to the SDA’s assertion that a junior employee would not be promoted above Level 1 unless they were competent and therefore they would be doing work equivalent to that of an adult employee and be entitled to adult rates, ABI submits that:

‘The relevant question is whether work value reasons justify an increase to junior rates in the Award. It is entirely possible (in fact likely) that many junior employees are promoted beyond Level 1 of the Award for reasons other than reasons relating to the value of their work value and whether they perform the equivalent work of an adult employee. By way of obvious example, many junior employees may be promoted above Level 1 of the Award on the simple basis that current junior rates are more economical than adult rates. In such a scenario, the work performed by the junior employee may be of less value than the same work performed by an adult employee, however the employer prefers to engage the junior employee because of the lower rate of pay. Alternatively, such a decision may be made with a view to try and give the junior employee relevant experience or an opportunity at a higher classification.’ 58

[67] ABI submits that it is uncontentious that the modern award minimum wages increases sought by the claim ‘are substantial’. Table 1 below sets out those increases. With two exceptions, the table assumes that a junior employee will be elevated one classification Level at a time. For completeness, Table 1 also includes the relevant increases from Level 1 straight to Level 3 and Level 4.

Table 1 – Current percentage pay increase when junior employee elevated to a higher level

[68] Using the same method, ABI submits that Table 2 sets out the effective pay increases applying to junior employees elevated under the claim.

Table 2 – Percentage pay increase when junior employee elevated to a higher level, if SDA claim granted

Q7. Question for all interested parties: All parties are invited to consider the interaction between the junior rates (in clause 17.2) and the apprentice minimum rates (in clause 17.3). The table below compares the junior rates with those applicable to an apprentice who has not completed year 12 and who is 16 years old when they commence their apprenticeship:

The standard weekly rate is defined to mean the minimum weekly rate for a Retail Employee Level 4. Under the Retail Award what is an apprentice paid if they are 19 years old on the completion of their apprenticeship?

Q8. Question for all parties: What is the minimum award rate for a 20 year old tradesperson under the Retail Award? Is this rate the same as the C10 rate in the Manufacturing and Associated Industries and Occupations Award 2020 ($862.50)?

[69] ABI also compares the case put by the SDA in these proceedings with the case run by the SDA in Modern Awards Review 2012 - General Retail Award 2010-Junior Rates. 59

[70] In the earlier case, in support of a relatively modest (relative to the current claim before the Full Bench) claim to provide adult rates to 20 year old employees, the SDA filed 20 witness statements, while employer parties filed 7 witnesses statements. That evidence provided a basis for that Full Bench to make findings as to:

(i) the difference in the work and duties performed by a 20 year old retail employee as compared to a 21 Year old retail employee; and

(ii) the time required for most retail employees to reach a satisfactory level of proficiency in relation to Level 1.

[71] ABI submits that no equivalent evidence exists in this case which can be relied upon to support the present claim.

[72] In addition to the jurisdictional requirements of s.156(3), ABI contends that a significant change must be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation. ABI submits that no such evidence exists in this case.

[73] While a similar claim has recently been dealt with in relation to the Pharmacy Industry Award in [2017] FWCFB 3540, that variation, by way consent and without any detailed consideration by the Full Bench, ABI contends that such a variation does not provide a basis to make accept the claim in these proceedings.

2. Reliance on the principle of equal remuneration

[74] As to the SDA submissions which rely on s.134(1)(e) of the Act which identifies the principle of equal remuneration for work of equal or comparable value as a part of the modern awards objective.

[75] ABI submits that this limb of the modern awards objective is confined to addressing equal remuneration between men and women, and is therefore a neutral consideration in these proceedings and does not support the making of the claim in the manner sought by the SDA.

[76] Further, ABI submits that the two international conventions called in support of the claim do not assist.

[77] Article 1 of the ‘Equal Remuneration Convention, 1951 (No. 100)’ states:

‘For the purpose of this Convention—

...

(b) the term equal remuneration for men and women workers for work of equal value refers to rates of remuneration established without discrimination based on sex.

This convention makes no reference to age discrimination.’

[78] Further, ‘the Convention on the Elimination of All Forms of Discrimination against Women’ is also directed to the issue of sex discrimination rather than age discrimination.

[79] ABI submits these instruments have no relevance to proceedings concerning junior rates.

[80] To the extent that the SDA is framing this submission at a broader level, without reliance specifically on s.134(1)(e) or the referenced conventions but rather on some other, more general, principle of equal pay for equal work, ABI submits as follows:

‘The terms of the FW Act clearly contemplate and allow for the setting of junior rates. The FW Act presently provides for the making of special national minimum wage orders for junior employees 60 and that a term of a modern award or an enterprise agreement will not be taken to discriminate against an employee merely because it provides wages for junior employees or a class of junior employees61. 

Contrary to the SDA Submission at [64], there is no basis to suggest that an absolute principle of equal work for equal pay forms part of the modern awards objective or the objects of the FW Act.’ 62

3. The award prima facie met the modern awards objective

[81] Paragraph 17 of the SDA Submissions asserts that ‘key issues with past decisions relating to the making of the [Award] ... shows that the award cannot be accepted to ‘prima facie’ have met the modern awards objective at the time it was made’.

[82] As noted above in Section 2 of this Statement, the Preliminary Issues Decision determined that the Full Bench will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made. This position was developed in the Penalty Rates Decision:

‘the adoption of the prima facie position that the modern award being reviewed achieved the modern awards objective at the time it was made is but an example of the general proposition that previous Full Bench decisions should generally be followed, in the absence of cogent reasons for not doing so.’ 63

[83] At [759], the Full Bench in the Penalty Rates Decision expanded further:

‘it is appropriate that the Commission take into account previous decisions relevant to any contested issue and will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time it was made. The extent of a previous Full Bench’s consideration of a contested issue is relevant to assessing the weight to be attributed to that decision.’

[84] ABI responds to the SDA’s submission as follows:

‘Firstly, at a threshold level, the SDA’s submission that the Award cannot be said to have prima facie met the modern awards objective when made should not be accepted.

The principle that Awards as made ‘prima face’ met the modern awards objective is a central principle of the Award review process and it is a finding of construction that has confirmed by the Commission (and repeated by the parties) a great number of times since the Preliminary Decision was published. This finding should not be departed from in these proceedings.

This is not to say that the ‘prima facie’ presumption cannot be disturbed: by way of trite definition, a ‘prima facie’ position is something that has been proven or assumed to be true unless there is evidence presented to the contrary. As the Full Bench’s comments in the Penalty Rates Case makes clear, an assessment of the previous Full Bench’s consideration of a contested issue is relevant to assessing the weight to be attributed to that decision - or, more relevantly, the extent of probative evidence required to displace the ‘prima facie’ position.

The fact that an issue may not have been comprehensively (or in the submission of an aggrieved party, appropriately) considered during Award Modernisation does not mean that the Award should not be considered to have prima facie satisfied the modern awards objective. It simply bears upon the question of how and whether the prima facie position should be disturbed. With respect, the SDA Claim should not (and cannot) be determined as an effective ‘appeal’ of the 2008 modernisation decision. It must be prosecuted in accordance with the principles of the 4 Yearly Review as identified above.

The difficulty for the SDA in these proceedings is that even if the SDA’s submissions regarding the award modernisation process in respect of junior rates were to be accepted, this would not establish its claim for two reasons developed above:

a. no sufficient case has been prosecuted in relation to work value reasons to establish the SDA Claim; and

b. no probative evidence, sufficient to satisfy the requirements of the Preliminary Issues Decision, has been filed.

Simply put, the case supporting the SDA Claim is not sufficient to disturb the prima facie position that the Award satisfies the modern awards objective or to satisfy the requirements of the FW Act.

Further, as identified by the SDA, the issue of junior rates in retail was also raised in the 2012 Review of Modern Awards (2 Yearly Review).

Having regard to the legislative context of the 2 Yearly Review and the findings of the Full Bench in the Penalty Rates Decision outlined above, ABI and NSWBC submit that the Full Bench should also proceed on the basis that, prima facie, the Award also met the modern awards objective at the completion of the 2 Yearly Review. This flows from Item 6 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), being the provision under which that process was undertaken…’

Again, no sufficient case has been brought which would warrant a departure from the position that following the conclusion of the 2 Yearly Review, the Award satisfied the Modern Awards objective.  64

Q9. Question for ABI and the SDA: ABI and the SDA are to file a joint paper simply setting out the relevant history to the making of the modern award by reference to any decision of the Award Modernisation Full Bench, submissions to that Full Bench, transcript of any proceedings and a list of the pre-reform instruments that informed the making of the modern award and copies of those instruments. The joint paper is to include a summary of the junior rates classes in each pre reform instrument and the extent to which junior rates are limited to particular classification levels.

[85] In relation to the relevant award history we note that on 9 November 2009 the SDA made an application which sought to vary clause 18 of the General Retail Industry Award 2010 to confine the junior rate percentages to classification levels 1, 2 and 3 (AM2009/77). The SDA’s application states:

‘Junior percentages should not apply to tradespersons and above rates. A person who is a tradesperson should not be paid less than the full trade rate. As the clause currently stands, tradespeople and higher qualified persons could be paid a lower rate if they are aged 20 or under. The variation seeks to limit the payment of junior rates to persons employed at below the tradesperson level.

The justification for junior rates is that they constitute an aged based discounted rate on the skill based rate to take account of the lack of work experience, skill and maturity of junior workers. Employees employed at the level of tradesperson or higher are working at such levels of skill and responsibility that age based discounted wage rates are no longer appropriate’. 65

[86] The application was made pursuant to s.576H of the Workplace Relations Act 1996, which states:

‘576H  Commission may vary modern awards

The Commission may make an order varying a modern award if the variation is consistent with the award modernisation request to which the modern award relates.’

[87] As the application was not determined by 31 December 2009 it was determined by Fair Work Australia pursuant to item 14 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.

[88] In a decision published on 29 January 2010 66 a Full Bench dismissed the application,:

‘[3] In general terms we have considered the applications in line with our general approach in establishing the terms of modern awards. We have had particular regard to the terms of existing instruments. Where there is significant disparity in those terms and conditions we have attached weight to the critical mass of provisions and terms which are clearly supported by arbitrated decisions and industrial merit. We have considered the impact of the provisions based on the information provided by the parties as to current practices. It is convenient to deal with the variations by subject matter.

…

Junior rates

[25] The SDA seeks to exclude junior rates from applying to trades classifications. The application is opposed and not supported by underpinning instruments. We reject the application.’

[89] The Part 10A award modernisation process which led to the making of the General Retail Industry Award 2010 is canvassed in the decision of the Retail Junior Rates Full Bench 67 at [10]-[27]. In those proceedings The SDA submitted that the substance of their application was not considered by the Full Bench during the award modernisation process. Although the issue of junior rates for employees under the proposed retail industry award was agitated by the SDA at that time, it submitted that the issues were limited in scope to two matters: that employees under the age of 16 years be paid at least 50% of the adult rate of pay and that the applicability of junior rates be limited to employees engaged under the classifications of Retail Worker Level 1 and Level 2. The Full Bench accepted the SDA’s submission,:

‘[41] We agree with the SDA’s submission that the issues raised in the award making process which concerned junior rates were confined and specific. They related to the percentage of the adult rate below which no employee should be paid and to the rates for employees who worked in higher classifications and those with trade skills.

[42] There was no specific consideration given to the percentage of the adult rate which should be paid to a 20 year old. From its first draft, the SDA had proposed that retail workers at the first two classification levels should be paid 90% of the relevant adult rate. In those circumstances, and given the employers also proposed that same percentage for these workers, there was no need for the Full Bench in the Statement accompanying the exposure draft (or at any later time) to comment about appropriate percentages for these workers. It was not in contest.’ 68

4. Merit argument for retention

[90] ABI submits that there are ‘a number of persuasive merit arguments also arise against the claim’,:

‘Firstly, the existence of junior rates is specifically contemplated by the FW Act and the rationale for the existence of junior rates remains relevant, particularly so in the retail industry.

In [2014] FWCFB 1846 from [96]-[106], the Full Bench outlined a relevant history of junior rates and a number of relevant findings.

Having regard to those findings, ABI and NSWBC submit that:

a. the FW Act presently provides for the making of special national minimum wage orders for junior employees and that a term of a modern award or an enterprise agreement will not be taken to discriminate against an employee merely because it provides wages for junior employees or a class of junior employees. 69

b. as a general proposition, the rationale for junior rates of pay remains relevant, particularly so in the retail industry given the large number of juniors who are employed in it; 70

c. the productivity of young workers and value to employers being less than that of adult employees has been long accepted by Federal and State industrial tribunals. Junior rates reflect the general lack of experience of young employees and can act as an incentive or encouragement to employers to engage young persons, thereby allowing young persons to get a start or foothold in employment when they might otherwise struggle to compete against older applicants. Further, it is generally the case that the engagement of young persons will be associated with additional costs to the employer because of training and supervision needs. 71 This point, in the context of the present claim will be developed further below.

In the submission of ABI and NSWBC, the mere fact that a junior employee is classified at a level above Level 1 does not mean that the productivity or work value of that junior employee (or junior employees more generally) is equivalent to an adult employee.

Likewise the promotion of a junior employee to a higher level than Level 1 does not necessarily constitute recognition that the junior employee is performing the equivalent work of an adult employee at that higher level. Practical considerations suggest that junior employees are classified above Level 1 for various reasons including:

a. save for a proportion of 20 year olds, the applicable rate of pay for junior employees is lower than adult employees;

b. an employer may not have any available adult employees to fill the higher classification; and

c. the employer may wish to give a junior employee an opportunity to perform a more senior role in circumstances where when the junior employee might otherwise struggle to compete against older applicants.

ABI and NSWBC also do not concede that:

a. merely because a junior employee rises above Level 1, that the employee requires the equivalent supervision or oversight of an adult employee;

b. there is no merit basis to incentivise employers to engage junior employees at levels higher than Level 1;

c. applying junior percentages to levels above Level 1 in the Award diminishes the additional monetary compensation provided for in recognition of higher skills competencies and responsibilities.’ 72

Q10. Question for ABI: ABI is asked to elaborate on the submission at para 7.8, as the use of double negatives obscures the meaning of the submission.

[91] ABI’s submissions in relation to the s.134 considerations are summarised below.

134(1)(a) - relative living standards and the needs of the low paid

[92] ABI submits:

‘There is no evidence before the Full Bench which bears upon the question of the living standards of junior employees. Practical experience suggests that the younger the employee, the more likely that the employee may live with or be supported by parents or carers (and the less likely that those employees will be parents or carers themselves).

While this will not apply in every case, it appears to be a reasonable practical presumption.

The correlation between wages paid to junior employees and their living standards is therefore more complex than is the case with adult employees. In the absence of evidence, it is difficult for the Full Bench to make findings as to the relative living standards and needs of the low paid junior employees.

That being said, given that junior rates increase proportionally with adult rates, ABI and NSWBC contest the SDA’s submission at [27(ii)] that notwithstanding that “their cost of living pressures and caring responsibilities have also increased in line with the general population .... there is little recognition or amelioration of the realties faced by many young workers”.

Further, as noted above, in the absence of any evidence to the contrary, there appears to be reasonable presumption that the cost of living pressures and caring responsibilities of junior employees are not the same as adult employees.’ 73

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

[93] ABI submits that:

‘an increase in junior wages in line with the SDA Claim will self-evidently remove the existing incentive for employers to employ junior employees on classifications higher than Level 1. This will make it less likely that such roles will be offered to junior employees, decreasing the workforce participation of junior employees and denying them the higher wages that these levels currently provide (relative to junior rates on Level 1). This tends against the granting of the SDA Claim.’ 74

Q11. Question for ABI: In the 2012-13 AWR the Expert Panel considered the meaning of ‘promoting social inclusion through increased workforce participation’ in s.284(1)(b)(s.134(1)(c) is in the same terms), as follows:

‘[99] We now turn to the third aspect of the statutory framework which was the subject of submissions in this Review, namely the proper construction of s.284(1)(b).

[100] ACCI submitted that past decisions of the Panel have wrongly concluded that “social inclusion”, within the context of s.284(1)(b), encompasses both the obtaining of employment and the pay and conditions attaching to the job concerned. ACCI argued that the Panel’s conclusions in this regard ignore the conjunctive qualification in s.284(1)(b), that is, social inclusion is a concept to be promoted exclusively “through increased workforce participation”.

[101] There is considerable force in ACCI’s submission. We accept that our consideration of “social inclusion” in the context of s.284(1)(b) is limited to increased workforce participation. On that basis it is obtaining employment which is the focus of s.284(1)(b). This involves a consideration of the increased incentives that higher minimum wages can provide to those not in employment to seek paid work, balanced against potential impacts on the demand for low-paid workers and hence the supply of low-paid jobs, from large increases in minimum wages.

[102] However, we also accept that modern award rates of pay impact upon an employee’s capacity to engage in community life and the extent of their social participation. These are matters that can be appropriately taken into account in our consideration of the legislative requirement to “maintain a safety net of fair minimum wages” and to take into account “the needs of the low paid” (s.284(1)(c)). Further, the broader notion of promoting social inclusion is also relevant to the fixation of minimum wages, quite apart from the more limited construct reflected in s.284(1)(b). One of the objects of the Act is to promote “social inclusion for all Australians by” (among other things) “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through…modern awards and national minimum wage orders” (s.3(b)).’ 75

Subsequent AWR decisions have confirmed that ‘promoting social inclusion’ (within the meaning of ss.134(1)(c) and 284(1)(b)) is confined to obtaining employment. These observations are confined to obtaining employment generally; no particular preference is afforded to obtaining employment for junior employees. ABI is invited to comment.

134(1)(f) - the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden

[94] ABI submits that granting the claim will ‘unambiguously increase costs for employers engaging junior employees on levels higher than Level 1.’ 76

134(1)(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.

[95] As noted above, ABI submits that granting the claim ‘will unambiguously increase costs for employers engaging junior employees on levels higher than Level 1, and will remove the incentive for employees to engage junior employees in that way.’ 77

[96] For the purposes of this submission, ABI notes that:

(a) the ‘consequences’ of the Commission’s decision to increase the relevant rate for 20 year olds in [2014] FWCFB 1846 is not a relevant comparison (as suggested by the SDA Submission at [29(i)]). The SDA Claim is broader than that sought in the 2 Yearly Review, applies to a more diverse group of employees and is unsupported by probative evidence;

(b) it is not relevant to consider whether the SDA Claim will be ‘equitable for all employers thus retaining a competitive and level playing field’ 78. The relevant question under this limb is whether the national economy will remain competitive; and

(c) without evidence, it is not correct to assume that “irrespective of the levels of remuneration for young workers, overall employment will not change” particularly in circumstances where currently employers engage junior employees on junior rates in positions which would not be sustainable on adult rates.

[97] ABI contends that ss.134(1)(b), (e) and (g) are neutral considerations.

Q12. Question for ABI: Does ABI take issue with any aspect of the above summary of its submissions?

6. Next Steps

[98] The parties are to file final written submissions by no later than 4pm on Wednesday, 11 November 2020. The submissions filed are to include answers to the questions posed in this statement and the findings which the party submits should be made based on Dr O’Brien’s expert report and the Survey Report. Submissions are to be sent to [email protected] in word format.

[99] The matter will be listed for a short oral hearing at 10am on Wednesday, 18 November 2020.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR723389>

 1   See [2016] FWC 2837.

 2   [2018] FWCFB 1548.

 3   See [2017] FWC 6258; [2018] FWCFB 7385; Transcript, 20 December 2018; Report, 21 December 2018; Ai Group submission, 14 December 2018; ARA correspondence, 20 December 2018; Transcript, 29 August 2019 at PN9 – PN13.

 4   Amended Directions, 29 August 2019.

 5   Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [38].

 6   O’Sullivan v Farrer (1989) 168 CLR 210 at [216] per Mason CJ, Brennan, Dawson and Gaudron JJ.

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

 8   (2017) 256 IR 1 at [128]; Shop, Distributive and Allied Employees Association v The Australian Industry Group [2017] FCAFC 161 at [41]-[44].

 9   [2018] FWCFB 3500 at [21]-[24].

 10   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].

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

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

 13   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.

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

 15   Ibid at [48].

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

 17   (2012) 205 FCR 227.

 18   Ibid at [35]–[37] and [46].

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

 20   (2017) 256 IR 1.

 21   Ibid at [269].

 22   CFMEU v Anglo American Metallurgical Coal Pty Ltd [2017] FCAFC 123.

 23   Ibid at [46].

 24   General Retail Industry Award 2020 at A.1.3.

 25   Letter from Dr O’Brien, 5 June 2019.

 26   See Preston, M., Pung, A., Leung, E., Casey, C., Dunn, A., and Richter, O., ‘Research Report 2/2012: Analysing modern award coverage using the Australian and New Zealand Standard Industrial Classification 2006: Phase 1 Report’, February 2012; Spreadsheets with modern awards & relevant ANZSIC classes listed, Annual Wage Review 2012-2013.

 27   See Exhibit SDA 1 at [4].

 28   Transcript, 8 October 2019 at PN95 – PN103.

 29   Ibid at PN120.

 30   Ibid at PN206.

 31   Ibid at PN132.

 32   Ibid at PN144.

 33   Ibid at PN151.

 34   Exhibit SDA 1 at [10].

 35   Transcript, 8 October 2019 at PN183.

 36   Ibid at PN195.

 37   Ibid at PN163

 38   Ibid at PN203.

 39   Ibid at PN217.

 40   ARA and ABI, draft survey, 23 October 2019.

 41   SDA, submission, 31 October 2019.

 42   In total, 125 enterprises provided a complete response to the survey. The number of surveys distributed among members of each employer party were not provided. It is estimated that the survey was sent out to approximately 5000 enterprises, generating an approximate response rate of 2.5 per cent.

 43   See SDA submission at [19] – [22] and [31] citing [2008] AIRCFB 1000 at [71].

 44   SDA submission at [50].

 45   SDA submission at [90].

 46   Exhibit SDA 1 at [13] – [14].

 47   See [2014] FWCFB 1846.

 48   [2017] FWCFB 3540.

 49    4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues [2014] FWCFB 1788 at [32], [38] – [39].

 50   [2017] FWCFB 3540 at [66] – [68].

 51   [2013] FWCFB 1635 at [208] and [212]. See also Australian Bureau of Statistics 6302.0 - Average Weekly Earnings, Australia, Nov 2012, 1/02/2013.

 52   SDA submission at [27](ii).

 53   SDA submission at [27](iii) and [28](i).

 54   SDA submission at [27](i).

 55   SDA submission at [28](ii).

 56   SDA submission at [28](iii).

 57   SDA submission at [29].

 58   ABI submission, at 4.9.

 59   [2014] FWCFB 1846.

 60   See s.294(1) of the Act.

 61   See ss.153(3) and 195(3) of the Act.

 62   ABI submission at 5.12-5.13.

 63   [2017] FWCFB 3001 at [254].

 64   ABI submission at 6.6-6.14.

 65   Form R59, Application to vary the General Retail Industry Award 2010, at page 2.

 66   [2010] FWAFC 305.

 67   [2014] FWCFB 1846.

 68   [2014] FWCFB 1846 at [41] – [42].

 69   See [2014] FWCFB 1846 at [102].

 70   See [2014] FWCFB 1846 at [103].

 71   See [2014] FWCFB 1846 at [104].

 72   ABI submission at 7.3-7.8.

 73   ABI submission at 7.10-7.14.

 74   ABI submission at 7.16.

 75   [2013] FWCFB 4000 at [99] – [103].

 76   ABI submission at 7.19.

 77   ABI submission at 7.21.

 78   See SDA Submission at [29](iii).