Bills Digest No. 22  2000-01 Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details

Passage History

Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000

Date Introduced: 29 June 2000

House: House of Representatives

Portfolio: Employment, Workplace Relations and Small Business

Commencement: On or within six months after receiving Royal Assent

Purpose

The purpose of the Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000 is to remove tallies from allowable award matters, and thus from federal awards. The effect of the Bill will be to narrow the scope of matters which federal awards can address. Tallies are a form of a 'piece rate' or 'payment by results' remuneration system and have been included in meat industry awards.

The Bill will also prevent a union picnic day clause being considered as an allowable award matter, although union picnic days are not currently prescribed as allowable award matters.

The Bill also creates a six month interim period from the Bill's date of commencement during which parties to an award can apply to the Australian Industrial Relations Commission (Commission) to vary the award so that it provides only for allowable matters. At the end of this period non-allowable matters cease to have effect. At the end of the interim period the Commission must review each award to ensure that it contains only allowable award matters.

Background

The removal of tallies and union picnic days from awards was canvassed in the Workplace Relations Legislation Amendment (More Jobs Better Pay) Bill 1999. This Bill was introduced to the House of Representatives on 30 June 1999 and passed that House on 29 September.(1) The Bill was referred to the Senate Committee for Employment, Workplace Relations, Small Business and Education for inquiry on 11 August 1999. The Committee reported on the Bill on 29 November 1999. Schedule 6 of the 'More Jobs Better Pay' Bill proposed removing some of the following matters from allowable award matters, while making all of the following non-allowable:

  • minimum or maximum hours of work
  • transfers between work locations
  • transfers from one type of employment to another (eg part-time to full-time)
  • training and education
  • recording of work times
  • accident make-up pay
  • union representation for dispute settling procedures
  • union picnic days
  • limitations of numbers of employees of a certain types, and
  • tallies.

To date, the 'More Jobs Better Pay' Bill has not passed the Senate. The Government seeks to re-introduce parts of the Bill in, to quote Minister Reith, 'bite-size chunks'.(2)

The Workplace Relations Act 1996 (WR Act) specifies that awards be limited to twenty allowable matters, however matters considered by the Commission to be incidental to the effective operation of an award can also be included. The Workplace Relations and Other Legislation Act 1996 (WROLA) provided an 18 month interim period in which existing award provisions are required to comply with allowable matters. At the end of this period non-allowable matters ceased to have effect.

A Full Bench of the Australian Industrial Relations Commission developed award simplification principles according to the provision of the WR Act authorising such principles (WR Act: section 106) in 1997. While tallies were then not subject to review, the Commission regarded the union picnic day as a public holiday, and public holidays are allowable award matters [WR Act: section 89A(2)(i)].

Tallies and picnic days are considered separately below.

Tallies

The WR Act specifies 'piece rates, tallies and bonuses' as allowable award matters [WRA s.89A (2) (d)]. Tallies and bonuses are used to set pay rates in agricultural industries, such as the meat industry, sheep shearing and fruit picking, and the clothing industry.(3) The Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000 will not remove either piece rates or bonuses as an allowable award matters, only tallies.

The issue of tallies was considered by the Senate Employment, Workplace Relations, Small Business and Education Legislation Committee in its review of the ('More Jobs Better Pay' Bill). At that time, the ACTU submitted that the three terms: piece rates, tallies and bonuses, are used interchangeably in awards in industries such as clothing and meat. It also expressed concern that clothing workers could lose their entitlements to bonus payments, thus workers under these systems may seek clarification or retention of their particular earnings by results system.(4)

The Department of Employment, Workplace Relations and Small Business was able to distinguish between the operation of these systems in its 1999 submission to the Senate Committee:

Tallies are based on inputs, in contrast to piece rate systems, which are based on outputs ... Bonuses are not related to production levels in a systematic way, often being a one-off payment when a specified level of production or performance is reached .(5)

The Senate Committee reported amendments were made to the 'More Jobs Better Pay' Bill to ensure that bonuses for outworkers would remain an allowable matter, after representations from the textile industry.(6)

The Australasian Meat Industry Employees' Union's (AMIEU) submission on the More Jobs Better Pay Bill suggested that with removal of tallies from awards, meat industry employers would replace the tally system with another piece rate system:

Removing tally provisions, given that most employers would maintain some form of incentive system, would destroy the effectiveness of the award safety net ... Award tally provisions represent a key award entitlement, which must be maintained in order to avoid substantially reducing the award safety net.

...Employees in the meat industry are not highly paid by community standards.

...The effect of making tallies a non-allowable award matter would be to make it legally possible to reduce a tally workers gross pay by 25%. The safety net value of the award would become virtually irrelevant.(7)

The Senate Committee reported that a Full Bench of the Commission had made a decision simplifying the key Federal Meat Industry Processing Award 1996 (meat industry award) in September 1999.(8) In that decision, the Commission had observed that the combined operation of the tally system with minimum pay rates in the award meant that minimum pay rates of the award were not 'properly fixed', nor were they consistent with, in particular, section 88 of the WR Act.(9)

The Commission favoured replacing tallies with an incentive payment system as proposed by the National Meat Association (the employers), rather than merely falling back to 'time-work' remuneration. The Full Bench considered a replacement structure comprising minimum rates equal to the current award minimum a for time-work, plus 20 per cent, with an extra non-absorbable 10 per cent loading for regular daily hire. The Commission was concerned not to set rates so high 'as to deter employers from adopting the incentive system'.

The Full Bench referred the proposed remuneration structure and other issues to Commissioner P. Leary for a report. It was aware that some 20 related meat industry award contained similar tally systems.

The National Farmers Federation raised the possibility of a drawn out process of replacing provisions of the meat industry award in its submission to the Senate Committee in October 1999.(10) Its fears appear to have been realised, as to date (July 2000) this decision has not been translated into an order for a replacement award. It is understood that Commissioner Leary's report has been forwarded to the Full Bench.(11) In any event, the union appears non-plussed by the decision and according to the Victorian Secretary of the AMIEU, Mr C. Bird:

...the vast majority of (meat industry) employees will continue to work under some sort of tally system - this decision does nothing to change that.(12)

The High Court decided the Constitutionality of 'transitional provisions' of the principal legislation the Workplace Relations and Other Legislation Amendment Act 1996 (WROLA). It's 'transitional provisions' required existing award provisions to comply with a Schedule contained in the Act. Similar provisions to these are contained in the WR Act under sections 89 and 143. The Construction Forestry, Mining and Energy Union challenged the transitional provisions but lost the challenge in June 2000. The decision limits access to any redress the AMIEU might have sought concerning simplification of the meat industry award.(13)

Union Picnic Days

Allowable matters under the Workplace Relations Act include public holidays [WR Act: section 89A (2) (i)]. Union picnic days have been interpreted as public holidays by a Full Bench of the Commission. The Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000 will prevent union picnic days from being included as allowable matters.

There are two Full Bench decisions relevant to picnic days and public holidays.

The Commission in its Public Holidays Test Case in 1994 determined that federal award employees throughout Australia are entitled to a minimum safety net of 11 public holidays per year. Easter Saturday was found to be a public holiday.(14) The applications were made in response to the intention of the Victorian Government to reduce the number of public holidays in 1993.

The Commission named 10 public holidays and provided that one other day be specified according to State, Territory or locality or on some other basis (such as an award picnic day).

The Commission stated that a State or Territory may add to, but not subtract from, the safety net leave provisions. The Commission also stated that its commitment was to the safety net, not to the status quo and where a holiday existed in the past but is eliminated by a State or Territory, the holiday's continued observance would not be enforced by the Commission. It clarified the limits of its role in determining public holiday leave:

... No State law is necessary to define Christmas Day as 25 December, Boxing Day as 26 December or New Year's Day as 1 January. Good Friday and the Monday thereafter also stand in their own right. The Commission, at its discretion, may prescribe any of these days to be holidays - just as it can make award provisions about "Saturdays" and "Sundays". An award provision that Good Friday is a holiday entails no intrusion by this Commission upon the law-making authority of the States ...

The Commission thought that award provisions at this time should include the following:

. that holidays (or payment in lieu) be observed in respect of New Year's Day, Good Friday, the Monday thereafter, Anzac Day, Christmas Day and Boxing Day;

that holidays (or payment in lieu) be observed also in respect of the days specified in the relevant States and Territories as Australia Day, the Queen's Birthday and Labour Day;

for an additional holiday (or payment in lieu) which may be a day identified by a governmental prescription (for example, Melbourne Cup Day) or a day otherwise specified (for example, for a union picnic); (emphasis added), and

that when Christmas Day, Boxing Day, New Year's Day or Australia Day falls on a Saturday or Sunday, a substitute day is provided

... the Commission's practice has been to recognise the public holidays determined by the appropriate authorities and, in various ways, to incorporate them in its awards. This traditional approach was a proper one and ought to be continued. When a State Government decided - as the Victorian Government had done - to alter public holiday standards, the Commission should respect that decision and, where practicable, give effect to it. (The force of this contention was reduced somewhat by the Victorian Government's abandonment of its applications in so far as they went beyond the public sector.)

... A safety net standard will reflect the Commission's judgement as to what is the minimum acceptable entitlement in respect of a particular benefit, such as public holidays. By means of bargaining, of course, an increase in one benefit may be accommodated by a reduction in another.(15)

In 1997, another Full Bench of the Commission was required to consider the continuation of union picnic days within the requirements of award simplification, or, more accurately, under the WROLA Act's 'transitional provisions'. In what became known as the Award Simplification Decision, the Commission held that union picnic days had been considered as public holidays 'for decades':

The employers and the Joint Governments submitted that union picnic days are not gazetted holidays or holidays which the public in general enjoys. Against these considerations is the fact that union picnic days have been included in the public holiday provisions of awards for decades in a large number of industries.

There are numerous decisions of the Commission and its predecessor, the Australian Conciliation and Arbitration Commission, in which a union picnic day has been treated as a public holiday. The Full Bench decision which established the test case standard for leave entitlements in Commission awards relating to public holidays included union picnic day as a day which may be included as one of the additional public holidays constituting the minimum entitlement of leave under the public holidays clauses. As we have already indicated, the use of terms in their industrial context is an important element in construing the matters listed in s.89A(2).

We have therefore concluded that union picnic day falls within the expression public holidays for the purposes of s.89A(2)(i).(16)

The effect of this decision has been that even though union picnic days are not expressly identified as allowable award matters under section 89A of the WRA, they have been regarded as public holidays which are allowable.

Award provisions stipulating a union picnic day appear to take three forms as can be see in the following examples:

(A) Clause 9: Notwithstanding the provisions of clause 10 of the Australian National University Employees (General Conditions of Employment) Award 1980, the first Monday in March each year shall be union picnic day and regarded as a public holiday for all purposes of this award. Further, in order to qualify for the union picnic day holiday, an employee shall not be absent on the working day before or the working day after the holiday and may be required to produce proof of having purchased a ticket in order to qualify for payment for the holiday. - Australian National University Maintenance Staff Award [Print A0521]

Or

(B) Clause 15: Employees shall be granted a holiday with pay on union picnic day on the third Wednesday in January of each year.Ice Making Award 1994. [Print I0167]

Or

(C) Clause 16.2: Permanent employees shall be entitled without loss of pay to an additional public holiday in a State or Territory or locality within a State or Territory when such public holiday is proclaimed or gazetted by the authority of the Commonwealth Government or of a State or Territory Government and such proclaimed or gazetted holiday is to be observed generally by persons throughout the State or Territory or a locality.


16.3: The following days shall be taken in addition to the days named above, or in lieu of where stated;
Victoria - in addition, Melbourne Cup Day.
Western Australia - in lieu of Easter Saturday, Foundation Day.
Northern Territory - Picnic Day and Show Day as regionally observed.
South Australia - in addition, the third Monday in May (Adelaide Cup), and Picnic Day, Port Pirie.
Tasmania - in lieu of Easter Saturday, Show Day and in addition Hobart Regatta Day (south of Oatlands) or Recreation Day (where Hobart Regatta Day is not observed).
New South Wales - in addition, Picnic Day shall be on the first Tuesday of November in any year, or on any other day agreed to by the union.
Australian Capital Territory - in addition, Union Picnic Day with such day to be observed on the first Monday of March in each year and Canberra day. K Mart Australia Ltd Award 1994 [Print K0068]

The forms of the clause which express the union picnic day entitlement appear very important. The more the clause is a stand-alone clause, the more likely it will be removed after this Bill becomes law.

The Minister in a press release expounded five reasons as to why union picnic days should be removed from awards. These were:

  1. It is not part of a safety net of essential or core minimum wages and conditions to protect the low paid - which is the purpose of awards.
  2. It is unfair because most workers in Australia do not have access to the entitlement - it is there for union elites.
  3. It is a relic of the past days of union control of the workforce.
  4. It is an entitlement which is abused.
  5. By taking union picnic day out of the allowable matters in awards does not stop workers accessing the entitlement.(17)

The Minister argued that:

Removing compulsory paid picnic days from the award safety net would still allow employees access to them at a workplace level by including a provision for them in workplace agreements struck between employees and employers.(18)

These arguments are not dissimilar to those presented by employers in the 1994 public holidays test case, and not accepted by the Commission.

The question of essential core minimum conditions extending to 11 public holidays appears to have been established precisely as a safety net. Accepting this definition of the safety net would address the Minister's points 1 & 2, if picnic days were accepted as public holidays. Award provisions have been enforceable by non-unionists since 1990 [WR Act: section 178(5)], and respondent employers are bound by provisions of awards [WR Act: s.149]. Therefore, if a union picnic day provision was prescribed as in the above example clauses (B) or (C), both union members and non-union members would have an entitlement. It may be possible to purchase a picnic day ticket without being a union member, in which case employees under (A) above would also have the entitlement.

As for being a relic of the past days of union control of the workforce (point 3), this would appear to be the case. Union picnic days simply allow time off work for people to spend time with their families. So this objection could be addressed by retitling the day to a Year 2000-friendly: 'Work and Family' day. The title is not sexist or racist and would not imply union control over the workforce.

The abuse of the day (point 4) appears to accord with people being paid for the time off - a criticism capable of being levelled at any of the other10 other days.

Finally in respect of point 5, the Minister suggests including union picnic days in enterprise agreements as a possible solution.

Some awards do specify picnic attendance to be paid for the union picnic day, others do not. However putting the union picnic day clause in an agreement doesn't of itself reconcile all of the points above . For example the union picnic day can be restricted to union members in enterprise agreements and employers may want this in their provisions. A dispute over the non-payment of wages on a union picnic day for certain AWU members, employed under a federal certified agreement, who could not provide proof of attendance was recently presented to the Commission. The matter was addressed by Commissioner Merriman(19). In the particular enterprise agreement, the relevant clause read:

All employees shall be entitled to attend Union Picnic Day and be paid for such.(20)

The Commission researched history of the event and found that for an employee to be paid s/he must produce evidence satisfactory to the employer, if demanded, that s/he did attend the union picnic day. Just being a union member appeared not sufficient in this case to access the entitlement. Also, removal of the award provisions for a union picnic day will narrow the no disadvantage test and therefore constrain access to the provision in future enterprise agreements.

It is open for a State or Territory to declare a union picnic day as a public holiday. Both the Australian Capital Territory and the Northern Territory have made union picnic days public holidays.

The ACT Legislative Assembly amended the Holidays Act 1958 to add the following section:

Union Picnic Day

In any year, the first Monday in March shall be observed as a holiday in the Territory by employees whose terms and conditions of employment are governed by an award specified in the Schedule.(21)

The amendment to the Act commenced operation on 28 February 1997. This would appear to give ACT workers 12 public holidays - an addition to, not a subtraction from the Safety Net, and thus in accord with the 1994 Test Case. The 12 day entitlement appears to have withstood a Federal Court challenge and almost perennial proceedings before the Commission. The Northern Territory has a similar provision for 'Picnic Day' in its Public Holidays Act (Schedule 2), which is the first Monday in August and this Act is a perfect example of the Picnic Day being included as one of the 11 public holidays.

Government members of the 1999 Senate Committee were made aware of the possibility of the unintended creation of an additional public holiday by the Australian Industry Group:

... there may be some difficulties associated with moving from the Award Test Case standard of 11 public holidays to State declared holidays, which could in fact entitle employees to additional holidays, and create different levels of entitlements in different States(22)

However, ALP members of the Senate Committee were concerned that the removal of union picnic days from awards under the 'More Jobs Better Pay' Bill could mean that even if union picnic days were declared as public holidays, awards could not be varied to reflect the reality:

...even if State Governments declare 'union picnic days' as public holidays, as is the case in the Northern Territory and ACT, these could not be included in awards.(23).

This potential appears to have been addressed however, in the 1994 Test Case, ie under its 'an additional holiday' provision. A State Government may choose to call an additional public holiday by some other name eg 'Work and Family Day', and then rely on the 1994 test case which provides for 10 public holidays and:

an additional holiday (or payment in lieu) which may be a day identified by a governmental prescription ...(24)

Main Provisions

Part 1 of Schedule 1 of the Workplace Relations Amendment (Tallies and Picnic Days) Bill 2000 removes 'tallies' from section 89A(2)(d) of the WR Act This section would then read: 'piece rates and bonuses'. A new subsection 89A(3) would prevent both tallies and union picnic days being considered allowable award matters.

Part 2 of Schedule 1 creates an interim period of 6 months from when Part 1 comes into effect.

Item 6 allows a party to an award to make an application deriving the interim period to vary the award so that it deals only with allowable matters, including expressing paid rates awards to minimum rates awards and ensuring that the award conforms with the key provisions elsewhere found in section143 of the WR Act.

Item 7 stipulates that non-allowable matters cease to have effect at the expiry of the interim period.

Item 8 requires the Commission to review each award at the end of the interim period and remove provisions from awards which have ceased to have effect.

Item 9 provides that where an award has not been reviewed under Schedule 5 of the WROLA Act, the Commission must review that award under Items 6 or 8 of this Bill.

Item 10 attempts to prevent State awards binding federal award employers who are constitutional corporations, in respect of federal award matters removed by award simplification.

Item 11 allows a Full Bench to develop principles for the variation of awards so that they conform with allowable award matters.

Item 12 outlines the situations in which certain discriminatory arrangements are otherwise acceptable, ie: junior rates of pay, requirements of the job and religious beliefs.

These provisions are in substance similar to award review provisions of both the WROLA and WR Acts. The main change is the introduction of another review period in which all award matters for each award can be reviewed.

Concluding Comments

The significant issue concerning the removal of the meat industry award tally as an award matter is the timing. It would be useful to be able to understand the replacement work and pay system for the tally system as (apparently) proposed by Cr Leary to the Full Bench reviewing that award - after such a report becomes available. Then there would only be the matter of how quickly the other 20 or so meat industry awards which have not been reviewed, could be adapted for the new structure. It is likely that some other tally system will be implemented either in the award or by employers to set a minimum daily production rate, and that if required, a suitable award provision can be designed under piece rates and/or a bonus system.

The matter of the union picnic day is more complex. Because of the reference in the 1994 Public Holidays Test Case of a union picnic day (or other day, eg Melbourne Cup Day) constituting a public holiday entitlement, it is not at all clear which type of union picnic day clause (see the three examples earlier) will stay or may be removed.

If, on the one hand, a clause providing for a union picnic day as in the example (A) above is removed after this Bill becomes law, will a public holidays clause listing the 11th public holiday as the union picnic day be considered non-allowable? Will the title of the 11th public holiday (union picnic day) be considered non-allowable, but otherwise the entitlement to 10 public holidays plus an additional day as prescribed or proclaimed stay? Will award provisions for the 'Picnic Day' in the Northern Territory remain allowable while other award clauses prescribing union picnic days are rendered non-allowable?

The States may consider the creation of an additional public holiday so as to clarify the prescription of an 'additional day' in the Commission's Public Holidays Test Case. The proclamation by a State of a holiday does not render unnecessary the need for federal award variations giving effect to the State's decision(25). However, in this case, the federal award standard already countenances such a possibility. In any case, State award employees who have an award provision for a union picnic day will not be affected by this Bill.

Endnotes

  1. In his Second Reading Speech for this Bill, the Minister inadvertently refers to the 'More Jobs Better Pay' Bill passing the House of Representatives on 14 October 1999. This is not correct.
  2. The Hon Peter Reith, Transcript of Doorstop interview, Parliament House, 'Democrats' position on pattern bargaining', 6 June 2000.
  3. 'Consideration of the Provisions of the Workplace Relations Legislation Amendment (More Jobs Better Pay) Bill 1999' Senate Employment, Workplace Relations, Small Business and Education Legislation Committee, November 1999, p. 79.
  4. ibid., p. 216.
  5. ibid., p. 78.
  6. ibid., p. 216.
  7. ibid., pp. 214-215.
  8. AIRC, Print R9075, 24 September 1999.
  9. Ibid., par [90].
  10. 'Meat industry wants Govt to end the tally system', Daily Commercial News, 27 October 1999.
  11. Personal communication with Cr Leary's associate.
  12. 'IRC removes tally system', Workforce, Issue 1129, 1 October 1999.
  13. High Court of Australia, Re Pacific Coal Pty Limited; Ex parte Construction, Forestry, Mining and Energy Union [2000] HCA 34 (15 June 2000).
  14. AIRC Print L4534, 4 August 1994.
  15. ibid
  16. AIRC, 'Award Simplification Decision' , Print P7500, 23 December 1997.
  17. The Hon Peter Reith, 'Background information on compulsory paid union picnic days -reasons for its removal as an allowable matter in the Workplace Relations Act', 30 April 1999.
  18. ibid
  19. Commission, Print S2043, 20 December 1999.
  20. ibid
  21. ALHMWU and Uniting Church of Australia ACT (Property Trust), trading as Mirrinjani Retirement Village (Federal Court) AG 88 of 1997, (6/5/98).
  22. Consideration of the Provisions of the Workplace Relations Legislation Amendment (More Jobs Better Pay) Bill 1999' Senate Employment, Workplace Relations, Small Business and Education Legislation Committee, November 1999, p. 84.
  23. Ibid., p. 217.
  24. AIRC, Print L4534, 4 August 1994.
  25. Australian Conciliation and Arbitration Commission: Decision in Meat Industry (Shops) Award 1958, 91CAR 102.

Contact Officer and Copyright Details

Steve O'Neill
24 August 2000
Bills Digest Service
Information and Research Services

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ISSN 1328-8091
© Commonwealth of Australia 2000

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Published by the Department of the Parliamentary Library, 2000.

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