On December 22, 2022, a Full Bench of the Fair Work Commission issued a decision to insert a new model clause into 78 Modern Awards regarding leave during shutdowns (‘the Decision’).
The Decision was made in the ‘plain language proceedings’ as part of the continuing four-yearly review of modern awards which commenced in 2014, and it affects 78 Modern Awards which already contain shutdown provisions. Modern Awards which may be of interest to tree contractors are:
• Gardening and Landscaping Services Award 2020
• Electrical, Electronic and Communications Contracting Award 2020
• Timber Industry Award 2020; and
• Clerks—Private Sector Award 2020.
Existing Modern Award Shutdown clauses
Many Modern Awards currently contain clauses that permit an employer to direct employees to take annual leave during a shutdown period. Typically, under the current clauses, an employer must give employees a minimum of four weeks’ notice of their intention to do so. In addition to this, some Modern Awards further permit employers to direct staff to take unpaid leave during a period of shut down if the employee does not have sufficient annual leave accrued to cover the shutdown period.
The Model Clause – Direction to take annual leave during shutdown
Under the new model clause, an employer may only direct employees to take annual leave during a shutdown period if the employer provides 28 days’ written notice of a temporary shutdown period (although a shorter notice period can be given by agreement between the employer and the majority of affected employees). Notice must also be given to any employees who are engaged after the date notice was initially given to other staff.
If notice was given, then an employer may direct employees to take accrued annual leave during the shutdown period. The direction must be in writing and must be reasonable (including in relation to the length and frequency of shutdowns).
The model clause will replace any existing clauses on the matter in each affected Modern Award.
There will, however, be adaptations to the model clause in various Modern Awards to incorporate existing prescriptions which:
• Limit the application of shutdown provisions by reference to the circumstances in which the shutdowns occur (such as restrictions relating to the time of year during which the shutdown occurs and the purpose of the shutdown, ie: shutdowns may be limited to the Christmas/New Year holidays, and/or may be for the purpose of pre- planned maintenance); and
• Prescribe a notice period of longer than 28 days for a shutdown.
Where an employee does not have sufficient accrued annual leave for duration of the shutdown – removal of directions to take unpaid leave
In its Decision, the Full Bench concluded a direction to take unpaid leave during a shutdown is, in substance, a ‘standdown’, and modern awards are not permitted under the Fair Work Act 2009 (Cth) to contain such terms. Accordingly, the amendments will remove/replace modern award provisions permitting an employer to direct an employee onto unpaid leave during a shutdown.
Under the amendments, an employee with insufficient accrued annual leave may take annual leave in advance during a shutdown in accordance with an agreement under the relevant Modern Award terms. Where there is a shutdown which is not the subject of a direction to take leave, an employer and an employee may agree in writing for the employee to take leave without pay.
In relation to the implications of the amendments (and in response to concerns raised by employers), the Full Bench indicated1:
1. In some circumstances, a shutdown may be due to circumstances which qualify for standing down employees (unpaid) without needing to rely on modern award terms.
The Full Bench gave the following example: “In the building industry, if a head contractor closes down a building site over Christmas/New Year, that is likely to cause a stoppage of work for which a subcontractor employer cannot reasonably be held responsible and thus enable [an unpaid] stand down under s524.” 1See [69] – [70] of the December Decision. 2.
Employers may manage annual-leave requests (including reasonable refusal of requests under s88) throughout the year so employees have sufficient accrued leave to cover a shutdown period.
The Full Bench stated “…where it is an established feature of an employer’s business, or a relevant part of it, to shut down in the Christmas/New Year period, it would be unlikely that a refusal to agree to a leave request which would leave the employee with insufficient accrued leave to cover the shutdown period would be unreasonable within the meaning of s88(2) unless there were some strong countervailing factors pertaining to the individual concerned.” 3. Employers may manage shortfalls of accrued annual leave in other ways, including (where applicable), use of accrued rostered days off, TOIL, or granting requests to take annual leave in advance.
4. An employer could identify useful work that could be performed in a part of its operations by employees who do not have sufficient accrued annual leave to cover all or part of a shutdown, and who do not agree to take leave without pay, provided the work is within the terms of relevant modern award provisions dealing with employer and employee duties.
When do the variations take effect?
The Decision states that the variations will take effect on May 1, 2023.
Please contact TTIA if you have any queries with regard to the above. TTIA will be running seminars in the first half of this year dealing with this and any other substantive industrial relations/award changes.
TTIA briefing sessions
After a forced interruption during the COVID period, TTIA will be resuming our popular Member Briefing sessions in May/June of this year in locations throughout various States. We will be dealing with many substantive industrial relations/award changes, including those as a result of the change of federal government last year. Tree contractors are invited to access details of venues and dates by phoning the TTIA Hotline on (02) 9264 0011, or emailing ttia@ttia.asn.au, and will receive a special discount should you wish to attend any of the sessions.
For more information log on to ttia.asn.au.
