DECISION

Fair Work Act 2009
s.160 - Application to vary a modern award to remove ambiguity or uncertainty or correct error

Funeral Industry Award 2020
(AM2021/61)

Application by the Australian Workers’ Union under s 160 of the Fair Work Act 2009 to rectify error or uncertainty in the Funeral Industry Award 2020.

[1] The Australian Workers’ Union (AWU) has made an application pursuant to s 160 of the Fair Work Act 2009 (FW Act) to vary the Funeral Industry Award 2020 (Funeral Award) to remove what are said to be ambiguities or uncertainties concerning overtime rates for casual employees. Section 160 provides, relevantly, that the Commission may make a determination varying a modern award to remove an ambiguity or uncertainty or to correct an error, and may do so, inter alia, on application by an employee organisation that is entitled to represent the industrial interests of one or more employees that are covered by the award. The AWU rules entitle it to enrol as members workers engaged in or in connection with the industries or callings of “undertaking and burial” (Rule 6, Part A(1)). The Funeral Award covers employers in the “funeral industry” and their employees (cl 4.1), with “funeral industry” being defined as “the provision of funeral services, coffin manufacturing, the removal of deceased human remains and any ancillary services” (cl 4.2). It may be accepted therefore that the AWU is entitled to represent the industrial interests of employees covered by the Funeral Award and is therefore entitled to apply to vary the award under s 160.

[2] The provisions of the Funeral Award relevant to the AWU’s application are as follows:

11.2 For each ordinary hour worked a casual employee must be paid:

(a) the minimum hourly rate for the appropriate classification; and

(b) a loading of 25% of the minimum hourly rate.

11.3 When a casual employee works overtime, they must be paid the overtime rates in clauses 19.1(b), 20.6(b) and 20.7(b).

. . .

19.2 Work on a rostered day off—other than shiftworkers

An employee will be paid 150% of the minimum hourly rate for work performed on an employee’s rostered day off.

. . .

19.4 Removals

(a) Where an employee is called to undertake removals between the hours of 7.00 pm and midnight and work is completed at or prior to midnight, the employee will be paid 150% of the minimum hourly rate for the first 3 hours of work and 200% of the minimum hourly rate thereafter with a minimum payment of 2 hours.

(b) Where an employee is called to undertake a removal, any portion of which occurs between the hours of midnight and 7.00 am, the employee will be paid 200% of the minimum hourly rate with a minimum payment of 2 hours.

. . .

20.6 Overtime for shiftworkers—Afternoon shiftworker

. . .

(b) All time worked in excess of, or outside the ordinary working hours in clause 20.2 by a casual shiftworker, or on a shift other than a rostered shift, will be paid at 195% of the minimum hourly rate for the first 3 hours and at 245% of the minimum hourly rate after the first 3 hours.

NOTE: The overtime rates for casual shiftworkers have been calculated by adding the casual loading prescribed by clause 11.2(b) to the overtime rates for full-time and part-time shiftworkers prescribed by clause 20.6(a).

(c) When less than 7 hours 36 minutes’ notice has been given to the employer by a relief employee that they will be absent from work, and the employee whom the relief employee should relieve is not relieved and is required to continue to work on the employee’s rostered day off, the unrelieved employee will be paid at 220% of the minimum hourly rate.

. . .

20.7 Overtime for shiftworkers—Non-continuing afternoon shiftworker

. . .

(b) All time worked in excess of, or outside the ordinary working hours in clause 20.2 by a casual shiftworker on a non-continuing afternoon shift, or on a shift other than a rostered shift, will be paid at 225% of the minimum hourly rate for the first 3 hours and at 275% after the first 3 hours.

NOTE: The overtime rates for casual shiftworkers have been calculated by adding the casual loading prescribed by clause 11.2(b) to the overtime rates for full-time and part-time shiftworkers prescribed by clause 20.7(a).

(c) When less than 7 hours 36 minutes’ notice has been given to the employer by a relief employee that they will be absent from work, and the employee whom the relief employee should relieve is not relieved and is required to continue to work on the employee’s rostered day off, the unrelieved employee will be paid at 250% of the minimum hourly rate.

[3] Clause 11.2 was varied, and clauses 11.3, 20.6(b) and 20.7(b) were added to the award, as part of a package of variations to the Funeral Award made arising from the Overtime for Casuals common issue proceedings conducted as part of the 4-yearly review of modern awards. The purpose of those proceedings was “the identification and resolution of potential ambiguities in a number of modern awards in relation to the overtime entitlements of casual employees”. 1 In a decision published on 18 August 2020, the Full Bench accepted the agreed position of interested parties that, in the Funeral Award, the correct calculation of the overtime rate for casual employees was derived by adding the casual loading and the applicable overtime rates separately (that is, cumulatively) to the minimum hourly rate applicable in ordinary time.2 The variations were intended to make this position unambiguously clear by expressing the overtime rate for casual employees as a percentage, inclusive of the casual loading, of the minimum hourly rate. The new clauses 20.6(b) and 20.7(b) reflect this approach.

[4] In its application, the AWU contends that, notwithstanding the clarification of the overtime provisions applying to casual employees, the interaction of the following provisions is ambiguous or uncertain and potentially inconsistent with the agreed position accepted by the Full Bench in the 18 August 2020 decision:

•  Clause 11.2 prescribes that the 25% casual loading is paid “for each ordinary hour worked”. The reference to “each ordinary hour worked” is likely to prevent this general provision being applied to overtime hours.

•  Clause 11.3 states a casual employee working overtime will be paid at the rates prescribed in clauses 19.1(b), 20.6(b) and 20.7(b). Those clauses correctly identify rates which include the 25% casual loading paid on a cumulative basis. However, there are additional overtime rates that can apply to casual employees in clauses 19 and 20 which have not been dealt with in the same manner as the entitlements in clauses 19.1(b), 20.6(b) and 20.7(b). Specifically:

(i) clause 19.2: work on a rostered day off;

(ii) clause 19.4(a) and (b): removals;

(iii) clause 20.6(c): unrelieved employee – afternoon shiftworker; and

(iv) clause 20.7(c): unrelieved employee – non-continuing afternoon shiftworker.

[5] The AWU contends in its application that the Fair Work Ombudsman contacted it in April 2021, and has indicated that it is likely to provide advice to the public that casual employees receive the same rates as permanent employees when they perform overtime work covered by clauses 19.2, 19.4(a) and (b), 20.6(c) and 20.7(c). It submits that “the current ambiguity or uncertainty concerning these provisions should be resolved to ensure the outcome agreed by the industrial parties and endorsed by the Commission is clearly reflected in the Funeral Award.”

[6] The AWU’s application seeks that provisions of the Funeral Award set out above be varied by:

1. By deleting the word “ordinary” in clause 11.2.

2. By deleting the current clause 11.3 and replacing it with the following words:

When a casual employee works overtime, they must be paid the overtime rates in clauses 19.1(b), 19.2, 19.4(a), 19.4(b), 20.6(b), 20.6(c), 20.7(b) and 20.7(c).

3. By adding the following words at the end of clause 19.2:

The rate will be 175% of the minimum hourly rate for a casual employee.

4. By adding the following words at the end of clause 19.4(a):

The rates will be 175% and 225% of the minimum hourly rate respectively for a casual employee.

5. By adding the following words at the end of clause 19.4(b):

The rate will be 225% of the minimum hourly rate for a casual employee.

6. By adding the following words at the end of clause 20.6(c):

The rate will be 245% of the minimum hourly rate for a casual employee.

7. By adding the following words at the end of clause 20.7(c):

The rate will be 275% of the minimum hourly rate for a casual employee.

[7] The AWU’s application has been posted on the Commission’s website (on a specific page concerned with the application), and interested subscriber parties to the Funeral Award have been notified of the application. On 11 May 2021, a direction was issued requiring interested parties to file any submissions in response to the AWU’s application by 8 June 2021. No submissions were received from any party in response to this direction. On 18 June 2021 a directions hearing was conducted in which only the AWU chose to participate. On 18 June 2021, the Commission sent emails directly to the Australian Industry Group, Australian Business Industrial/NSW Business Chamber and the Australian Federation of Employers and Industries to provide them with a further opportunity to file submissions in response to the AWU’s application by 25 June 2021. In email correspondence dated 22 June 2021, Australian Business Industrial/NSW Business Chamber stated that they had reviewed the application and did not intend to file any submissions. The Australian Industry Group filed a submission on 25 June 2021 which noted the AWU’s application and the Full Bench decision of 18 August 2020, and then stated:

“The common issue which resulted in a Determination amending the Award pertained to the interaction between the casual loading and the overtime penalties provided for under the Funeral Award. It did not relate to penalty rates applicable to unrelieved shiftworkers under clauses 20.6(c) and 20.7(c) of the Award. Such a matter was not a live issue at the time of the proceedings and the cumulative approach should not be taken to apply as a matter of course without further examination being conducted into the intended interaction between these provisions and the casual loading.

We do not otherwise oppose the amendment to the Funeral Award in order to give effect to the 18 August 2020 Decision.”

[8] No submission was received from the Australian Federation of Employers and Industries or any other interested parties in response to the AWU’s application.

[9] Insofar as the application concerns clause 19.2, I am not satisfied that there is any ambiguity or uncertainty requiring rectification. Clause 19.2 prescribes a penalty rate for work performed on an employee’s rostered day off. An entitlement to a rostered day off can only arise with respect to an employee working an average of 38 hours a week across a work cycle of up to 28 days who works the necessary amount of additional hours each day in order to accrue a rostered day off in the cycle. A casual employee cannot, by definition, accrue a rostered day off since, under clause 11.1, they are engaged by the hour and, under clause 11.2, must be paid for each ordinary hour worked. Clause 19.2 has no practical application to casual employees, and there is therefore no need to specify any separate penalty rates for such employees.

[10] For similar reasons, I do not consider that any ambiguity or uncertainty arises in respect of clauses 20.6(c) and 20.7(c). The provisions prescribe penalty rates for an employee who is required to continue work on their rostered day off because they are not relieved, and are not practically applicable to casual employees. A casual employee engaged and paid by the hour cannot, by definition, have days where they are and are not required to work.

[11] In respect of clause 19.4, it is clear that these provisions may apply to casual employees. Removal work is, for casuals, overtime work because it is performed outside the span of hours of 7.00am-7.00pm Monday to Friday prescribed by clause 13.2 (see clause 19.1(b)). It is different to ordinary overtime because it is not likely to be pre-arranged and may not be undertaken continuously following the performance of work within ordinary hours, and is more in the nature of a “call-out”.

[12] I accept that uncertainty arises under clause 19.4 as to the penalty rate that is payable to a casual employee performing removal work, for the following reasons:

(1) There is no logical reason why the casual loading should not be payable in respect of out-of-hours removal work, in addition to the penalty rate, as it is for overtime. Without the addition of the casual loading, the rate payable to a casual who is called in to do removal work between 7.00pm and 7.00am would be less than if a casual performs overtime work during the same period. However, clause 19.4 makes no specific reference to the casual loading being payable, unlike clause 19.1(a) in respect of overtime.

(2) Clause 11.2(b) makes the casual loading generally applicable to work in ordinary hours. However, clause 19.4 is, as earlier stated, concerned with work in the nature of overtime (and is located within clause 19, Overtime). Clause 11.3, which identifies the overtime rates applicable to employees when they work overtime and cross-refers to the relevant provisions, makes no reference to clause 19.4.

[13] There is also another element of uncertainty which is not adverted to in the AWU’s application. Clause 11.4 provides that a casual employee must be paid for a minimum of 4 hours’ work each time they are required to attend work. However, clause 19.4(a) and (b) provides for a minimum payment of 2 hours with respect to removal work. It is uncertain therefore whether a casual employee is entitled to a minimum payment of 2 or 4 hours when performing removal work.

[14] I consider it appropriate to exercise my discretion to vary the Funeral Award to resolve these identified uncertainties, since they are likely to result in confusion as to what the entitlements of casual employees are when they perform removal work. However, as to the form of the variation, I propose only to express a provisional view at this stage, given that the issue concerning the minimum engagement for casual employees performing removal work has not previously been raised. My provisional view is, in summary, that the Funeral Award should be varied to make it clear that casual employees receive the casual loading, in addition to the penalty rate, when performing removal work, but that the 2-hour minimum for such work, rather than the standard 4-hour minimum engagement for casual employees, should apply. The variations to give effect to this provisional would be as follows:

1. Vary clause 11.3 to provide:

11.3 When a casual employee works overtime, they must be paid the overtime rates in clauses 19.1(b), 19.4(a), 19.4(b), 20.6(b) and 20.7(b).

2. Vary clause 11.4 to provide:

11.4 A casual employee must be paid for a minimum of 4 hours’ work each time the employee is required to attend work, including when engaged more than once in any day, except in relation to removal work under clause 19.4.

3. Vary clause 19.4(a) to provide:

(a) Where an employee is called to undertake removals between the hours of 7.00 pm and midnight and work is completed at or prior to midnight:

(i) a full-time or part-time employee will be paid 150% of the minimum hourly rate for the first 3 hours of work and 200% of the minimum hourly rate thereafter; and

(ii) a casual employee will be paid 175% of the minimum hourly rate for the first 3 hours of work and 225% of the minimum hourly rate thereafter;

with a minimum payment of 2 hours.

4. Vary clause 19.4(b) to provide:

(b) Where an employee is called to undertake a removal, any portion of which occurs between the hours of midnight and 7.00 am:

(i) a full-time or part-time employee will be paid 200% of the minimum hourly rate; and

(ii) a casual employee will be paid 225% of the minimum hourly rate;

with a minimum payment of 2 hours.

[15] If any interested party opposes this provisional view, they shall file a submission identifying their opposition and the reasons for it within seven days of the date of this decision.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   [2020] FWCFB 4350 at [1]

 2   Ibid at [300]