REVIEW OF CLAUSES 7, 8 AND 16 OF THE MUNICIPAL EMPLOYEES (WESTERN AUSTRALIA) AWARD 2021 PURSUANT TO S 40B OF THE INDUSTRIAL RELATIONS ACT 1979 (WA)

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00013

DELIVERED : TUESDAY, 16 January 2024

FILE NO. : APPL 27 OF 2023

Applicant

AND

(Not Applicable)

Respondent

CatchWords : Industrial Law (WA) – Municipal Employees (Western Australia) Award 2021 – Commission's Own Motion – s 40B – Whether award provisions are obsolete or in need of updating – Method of payment provisions ambiguous or confusing – Annual leave provisions – Inconsistency with Minimum Conditions of Employment Act 1993 – Award varied

Legislation : Minimum Conditions of Employment Act 1993 (WA) 

Result : Award varied

Representation:

Western Australian Municipal, Administrative, Clerical and Services Union of Employees

Western Australian Local Government Association

Local Government, Racing and Cemeteries Employees Union (WA)

Case(s) referred to in reasons:

Australasian Society of Engineers, Moulders and Foundry Workers, Industrial Union of Workers, Western Australian Branch v John Lysaght (Australia) Ltd (1982) 62 WAIG 1345

Commission's Own Motion v (Not Applicable) [2023] WAIRC 00837

Reasons for Decision

1         These reasons deal with a few loose ends that remained in my earlier reasons handed down on 26 October 2023 in this matter: Commission's Own Motion v (Not Applicable) [2023] WAIRC 00837. In those reasons, I declined to vary the Municipal Employees (Western Australia) Award 2021 ‘facilitative provisions’ contained in clause 18.4 ‘Payment of Wages’ and clause 23 ‘Annual Leave’ on the basis that the clauses were invalid. However, I observed that those provisions may be obsolete and in need of updating pursuant to s 40B of the Industrial Relations Act 1979 (WA) for reasons other than those which were argued at the original hearing.

2         The parties were invited to provide the Commission with any proposals for variation of these two clauses, if the parties agreed the clauses were in need of updating. These matters were programmed to be dealt with on the papers.

Clause 18 ‘Payment of Wages’

3         The current text of clause 18 is set out in [2023] WAIRC 00837 at paragraph [17].

4         In [2023] WAIRC 00837 at paragraphs [25]‑[30], after setting out some of the history of the origins of the clause, I observed that it was possible that aspects of the clause were unintentionally carried over from previous agreements, and that the provisions may be obsolete.

5         The Western Australian Local Government Association (WALGA) proposes that clause 18 be varied by:

(a) in clause 18.1, deleting reference to pro‑rata payments when less than the full week is worked, and specifying that clause 18.1 is subject to clause 18.2;

(b) at the end of clause 18.2, adding the words ‘and in accordance with the [Minimum Conditions of Employment Act 1993]’; and

(c) deleting clauses 18.3, 18.4 and 18.5 entirely.

6         All other parties support the addition of the words WALGA proposed for clause 18.2, and the deletion of clause 18.5. But there are various views about the balance of WALGA’s proposals.

7         As to clause 18.1, the Hon. Minister for Industrial Relations supports WALGA’s proposed variation which the Minister notes does not substantively alter the clause’s operation.

8         Western Australian Municipal, Administrative, Clerical and Services Union of Employees (WASU) supports the deletion of the reference to pro‑rata payments but says that the proposed addition of words specifying the clause is subject to clause 18.2 is superfluous and confusing because the obligation in clause 18.1 is absolute and not subject to any exceptions.

9         I agree. It is inappropriate to describe clause 18.1 as being subject to clause 18.2. Clause 18.2 simply does not condition clause 18.1 in any way.

10      Local Government, Racing and Cemeteries Employees Union (WA) (LGRCEU) submits that WALGA’s proposed variation is outside the scope of what the Commission is to determine in these proceedings, not arising directly or indirectly from the issues concerning clause 18.4. It also says that the reference to pro‑rata payments is not obsolete because there are employees who, for various reasons, work less than a full week.

11      One difficulty with LGRCEU’s position is that the words it contends should be retained include the reference to clause 18.2, which, as I have said, is inappropriate. Clause 18.2 does not assist in clarifying how an employee working less than a full week is to be paid.

12      The second difficulty is that the requirement to pay pro‑rata where less than a full week is worked appears to conflict with clause 20 ‘Hours of Duty’, which allows ordinary hours to be averaged over work cycles of 14, 21 and 28 days.

13      The LGRCEU submits that no other provision of the Award deals with payment where less than a full week is worked. However, clause 12.1 expressly provides that a part‑time employee shall be paid the appropriate hourly rate of pay for each hour worked. Clause 18.9 provides a method for calculating the appropriate hourly rate of pay. Clause 13.1 provides for a casual employee to be paid the ordinary hourly rate with the addition of 20%.

14      I consider it appropriate to update clause 18.1. The second sentence of clause 18.1 appears to be intended to refer to provisions which previously did appear, but no longer appear, in the Award. Their retention is confusing. I would, therefore, vary the award by deleting all of the second sentence of clause 18.1.

15      As for clause 18.3, LGRCEU and the Minister both agree clause 18.3 is ‘somewhat obsolete’ and probably ought to be deleted. However, WASU does not support the deletion of clause 18.3. It says:

Clause 18.3 is an important obligation within the Award. It prohibits employers from being more than two days late in paying an employee their monetary entitlements. An employer that is more than two days late in paying an employee would be at risk of being sued in the Industrial Magistrates Court for contravening clause 18.3 of the Award for the quantum of the underpayment (if it is still outstanding) plus pecuniary penalties.

Removing clause 18.3 from the Award would have the effect of potentially encouraging rogue and unscrupulous employers to consistently pay employees late without any meaningful deterrent or consequence. The Award provides the employees, the unions, and the industrial inspector with an avenue to stamp out any such conduct by seeking orders from an Industrial Magistrate. As such, the obligation should be maintained within the Award.

16      I accept that the intended purpose of clause 18.3 is to prohibit late payment of wages. The language used is anachronistic and not easy to understand. The requirement contained in clause 18.3 should be retained, but the clause reworded.

17      As for clause 18.4, WASU neither supports nor objects to the proposed deletion of clause 18.4.

18      The Minister submits that clause 18.4 in its current form no longer makes sense, given the removal of the words describing the averaging system. The Minister says that removing the clause in its entirety would remove the ambiguity. Alternatively, the ambiguity could be removed by adding provisions that explain the averaging system. The Minister offered a third alternative, which is to include a provision modelled on clause 4.6.2 of the Metal Trades (General) Award as follows:

18.4 Wages shall be paid as follows:‑

18.4.1 Actual 38 ordinary hours

In the case of an employee who works 38 ordinary hours each week, wages shall be paid weekly or fortnightly according to the actual ordinary hours worked each week or fortnight.

18.4.2 Average of 38 ordinary hours

In the case of an employee who works an average of 38 ordinary hours each week during a particular work cycle, wages shall be paid weekly or fortnightly according to a weekly average of ordinary hours worked even though more or less than 38 ordinary hours may be worked in any particular week of the work cycle.

19      This wording might be an appropriate substitute for a former version of clause 18.2. But it does not deal with the same topic that the current clause 18.4 is directed at. The current clause 18.4 deals with how absences from duty, other than on paid leave, impact on wages where an employee works an average of 38 ordinary hours each week during a work cycle that includes a rostered day off.

20      LGRCEU submits that clause 18.4 is not obsolete. It says that employers are regularly required to deal with time deductions for absences from duty where the employee works on a RDO system. It says that the current clause 18.4 provides a method by which absences are to be treated in terms of calculating wage entitlements within an RDO roster system, and therefore it still has work to do and should be retained.

21      Clause 18.4 refers to not accruing ‘credits’ when an employee is absent from work. The Award does not define or describe ‘credits’ anywhere else in a relevant sense. In the 1982 version of the Metal Trades Award, credits were described in the Special Note explaining the averaging system:

…

…An explanation of the averaging system of paying wages is set out below:

(i) Clause 3.—Implementation of the 38 Hour Week in subclause (1) paragraph (c) and (d) provides that in implementing a 38‑hour week the ordinary hours of an employee may be arranged so that he is entitled to a day off, on a fixed day or rostered day basis, during each work cycle. It is in these circumstances that the averaging system would apply.

…

(iii) … In effect, under the averaging system, the employee accrues a "credit" each day he works actual ordinary hours in excess of the daily average which would otherwise be seven hours 36 minutes. This "credit" is carried forward so that in the week of the cycle that he works on only four days, his actual pay would be for an average of 38 ordinary hours even though, that week, he works a total of 32 ordinary hours.

Consequently, for each day an employee works eight ordinary hours he accrues a "credit" of 24 minutes (0.4 hours). The maximum "credit" the employee may accrue under this system is 0.4 hours on 19 days; that is, a total of seven hours 36 minutes.

(iv) As provided in subclause (3) of this clause, an employee will not accrue a "Credit" for each day he is absent from duty other than on annual leave, long service, holidays prescribed under this award, paid sick leave, worker's compensation or bereavement leave.

…

Australasian Society of Engineers, Moulders and Foundry Workers, Industrial Union of Workers, Western Australian Branch v John Lysaght (Australia) Ltd (1982) 62 WAIG 1345 at (1349).

22      This shows that the text of clause 18.4 originated from and is directed to the circumstances where averaging was necessary as a result of the implementation of the 38 hour week. Given the decades that have since passed, it is reasonable to assume that employers in the Local Government sector have well and truly implemented the 38 hour week, and that it is observed pursuant to the ‘Hours of Work’ clause which permits averaging over various work cycles, which of course may include rostered days off.

23      LGRCEU has not demonstrated that any employer observes a 38 hour week by the accrual of credits for each day an employee works eight ordinary hours. I am satisfied that the concept of ‘credits’ is ambiguous, obsolete, and liable to confuse.

24      However, I accept LGRCEU’s submission that it is desirable to clarify that wages should be reduced when the average hours are not worked due to absences from duty other than for paid leave. I would therefore be minded to adopt the Minister’s proposed clause, with minor amendments and the addition of a further clause 18.4.3 as follows:

Where an employee is paid in accordance with clause 18.4.2, the average weekly pay will be reduced by the ordinary hourly rate for each hour the employee is absent from duty other than on paid leave.

Clause 23 ‘Annual Leave’

25      In [2023] WAIRC 00837 at paragraph [41], I expressed the provisional view that the current wording of clause 23 was inconsistent with the Minimum Conditions of Employment Act 1993 (WA) (MCEA). It purports to limit the circumstances where annual leave can be taken outside of 12 months of the date upon which the leave accrued due. Section 25(1) of the MCEA, prohibits an employer from refusing an employee taking, at any time suitable to the employee, any annual leave that accrued more than 12 months before that time.

26      WALGA and WASU both proposed that clause 23.6 be replaced with the following words, which align with the corresponding provision in the Local Government Officers’ (Western Australia) Award 2021 (LGO Award):

Annual leave shall be given and taken in such period or periods and at such a time or at such times mutually convenient to the employer and the employee and in accordance with the Minimum Conditions of Employment Act 1993 (WA).

27      The Minister supported this proposal.

28      LGRCEU, however, advised it had reservations about this proposed wording. It said that ‘there is a risk that, in practice, those who are applying the terms of the clause may not resort to the terms of the MCEA and apply the [proposed wording] as though the taking of all annual leave requires the agreement of both the employer and the employee’.

29      It proposed that the clause either replicate the relevant provisions of the MCEA, or that it be worded as follows:

…Subject to the provisions of the Minimum Conditions of Employment Act 1993 (WA)…

…Annual leave shall be given and taken in such period or periods and at such a time or at such times mutually convenient to the employer and the employee…

…The employee is to give the employer at least two weeks’ notice of the period during which the employee intends to take [their] leave…

30      The parties agree about the intent of proposed amendments. While there is some appeal in the idea of consistency with the LGO Award, I prefer the LGRCEU’s proposed wording being clearer than the wording proposed by WASU and WALGA.

Dispensation and Orders

31      Accordingly, pursuant to s 40B, I propose to make orders as follows:

(a) That the Award be varied by:

(i) Deleting clauses 18.1 to 18.5 and inserting in substitution the following clauses:

18.1 Each employee shall be paid the appropriate rate shown in clause 16 ‘Wages’ of this award.

18.2 Wages shall be paid at the discretion of the employer on either a weekly or fortnightly basis and in accordance with the Minimum Conditions of Employment Act 1993 (WA).

18.3 Wages must be paid within 2 days from the last day of the pay period.

18.4 Wages shall be paid as follows:

18.4.1 Actual 38 ordinary hours

In the case of an employee whose hours of duty are 38 ordinary hours each week, wages shall be paid weekly or fortnightly according to the actual ordinary hours worked each week or fortnight.

18.4.2 Average of 38 ordinary hours

In the case of an employee whose hours of duty are an average of 38 ordinary hours each week during a particular work cycle, wages shall be paid weekly or fortnightly according to a weekly average of ordinary hours of duty even though more or less than 38 ordinary hours may be worked in any particular week of the work cycle.

18.4.3 Where an employee is paid in accordance with clause 18.4.2, the average weekly pay will be reduced by the ordinary hourly rate for each hour the employee is absent from duty other than on paid leave.

18.5 [deleted]

(ii) Deleting the words ‘Except as provided in 18.4’ in clause 18.9.

(iii) Deleting clause 23.6 and inserting the following clause in substitution:

Subject to the provisions of the Minimum Conditions of Employment Act 1993 (WA), annual leave shall be given and taken in such period or periods and at such a time or at such times mutually convenient to the employer and the employee.