[2009] AIRCFB 985
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
DECISION
Workplace Relations Act 1996
s.576H—Commission may vary modern awards
Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia
(AM2009/133)
ELECTRICAL, ELECTRONIC AND COMMUNICATIONS
CONTRACTING AWARD 2010
[MA000025]
JUSTICE GIUDICE, PRESIDENT
VICE PRESIDENT LAWLER
VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT ACTON
COMMISSIONER SMITH
MELBOURNE, 30 DECEMBER 2009
[1]
This decision deals with an application by the Communications, Electrical, Electronic,
Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) to
vary the Electrical, Electronic and Communications Contracting Award 20101 (modern
award) to introduce a special transitional provision in relation to apprentice wages. The
provision would apply where the pre-modern award apprentice rate is higher than the modern
award rate and would provide for a rate of phasing down which differs from the rate in the
model phasing provisions.
[2]
The first element of the variation seeks to add to the start of cl.A.3.5, the word “Save
as provided at cl.A.3.6”, so that it would read:
“Save as provided at clause A.3.6, from the following dates the employer must pay no
less than the minimum wage for the classification in this award plus the specified
proportion of the transitional amount:
First full pay period on or after
1 July 2010
1 July 2011
1 July 2012
1 July 2013
80%
60%
40%
20%”
[3]
The second, and substantive, element of the variation is to add a new cl.3.6, dealing
specifically with the transitioning of apprentice rates:
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[2009] AIRCFB 985
“From the following dates the employer must pay no less than the minimum wage for
apprentices in this award plus the specified proportion of the transitional amount:
First full pay period on or after
1 July 2010
1 July 2011
1 July 2012
1 July 2013
100%
100%
60%
20%
[4]
The current cll.3.6 and 3.7 would need to be renumbered as cll.3.7 and 3.8
respectively.
[5]
In support of its application, the CEPU submitted that:
 the modern award apprentice rates are substantially lower than the equivalent rates
in transitional instruments;
 contracting apprentices represent the most vulnerable class of employees within the
industry, having little capacity to organise industrially and scant basis on which to
bargain with their employer and are routinely employed at minimum award rates;
 unless the model transitional provisions are modified the will be a dramatic
reduction in contracting apprentices’ wages which will impact detrimentally upon
the welfare of apprentices and lead to a decline in the uptake of contracting
apprenticeships;
 reductions in minimum wage rates are inconsistent with the consolidated request
and Part 10A of the Workplace Relations Act 1996;
 due to the nature of apprenticeships, the application of “take home pay orders” to
them is uncertain;
 the contracting industry is vital to the future economic prosperity of Australia
because critical industries, programs and infrastructure projects are heavily
dependent upon there being sufficient electrotechnology skills, skills found
primarily within the contracting industry;
 examples of areas in which the contracting industry will prove critical include:
 the implementation by both the public and private sector of the Carbon
Pollution Reduction Scheme and related programs;
 the development of “green skills” trades;
 the construction of the National Broadband Network; and
 a resurgent resources sector;
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 any decline in the uptake of contracting apprenticeships at this time will necessarily
generate skills bottlenecks in the contracting industry, creating the potential for
consequential inflationary effects upon the broader economy; and
 accordingly, a reduction in the wage rates for contracting apprentices is
inconsistent with the objects of the Fair Work Act 2009, specifically subsections
3(a), 3(b) and 3(f).
[6]
In consultations on 14 December 2009, the Australian Federation of Employers and
Industries (AFEI) opposed the variation on the following grounds:
 in its decision dealing with transitional provisions for priority and Stage 2 modern
awards2, the Full Bench determined that a reduction in minimum wages including
some apprentices wages will be accommodated through the model transitional
provisions, including the phasing schedule, included in the modern awards;
 the CEPU has not pointed to any evidence that the model transitional provisions are
not appropriate to the circumstances of apprentices;
 any reduction in take-home pay can be dealt with by take home pay orders; and
 the variation sought would disturb the balance between cost increases and cost
reductions determined by the Full Bench.
[7]
The major employer organisation, the National Electrical Contractors Association, did
not appear on 14 December 2009 to either support or oppose the variation.
[8]
The CEPU responded to the AFEI submissions as follows:
 the variation is modest in its scope, directed to better transition the award pay
reductions of apprentices only;
 whilst take-home pay orders may be available, there is uncertainty as to whether
they would be available in respect of apprentices as they move through the years of
their apprenticeship and take home orders will certainly not protect the take-home
pay of future apprentices;
 a delay in award wage reductions for apprentices will allow for fuller review of
apprentice provisions directed toward a unified national system of training and
employment conditions for apprentices foreshadowed by the Full Bench;3 and
 the variation will maintain current conditions for apprentices for a longer period
than envisaged by the model transitional provision, rather than impose additional
costs on employers.
[9]
The CEPU application was supported by the Australian Government in a submission
filed on 22 December 2009. It emphasised the size of the wage differentials for apprentices,
the importance of skills development and the prospect of a national review of wages and
conditions for apprentices.
[10] In its decision of 2 September 2009 in relation to transitional provisions the Full
Bench said:
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[2009] AIRCFB 985
“[18]
…While the model provisions can be departed from to meet the circumstances
of a particular case, departures should be limited.”4
And later:
“[20]
We deal next with the possibility of reductions in take-home pay. The
provisions of Part 3 of Schedule 5 to the Transitional Act are concerned with the
maintenance of take-home pay. They deal with what happens when an employee
suffers a reduction in take-home pay as a result of a modern award coming into
operation. It is to be implied that the provisions do not apply to employees who
commence employment after the modern award has come into operation. So while the
provisions are concerned with what happens when the modern award comes into
operation, they do not deal with the potential for reductions in take-home pay resulting
from the operation of the transitional provisions. As will be seen, the model provisions
permit a phased reduction in pre-modern award conditions if they were more beneficial
for employees than the modern award. For that reason we think it is important to
provide protection for new employees from reductions in take-home pay which
otherwise might result from the operation of the transitional provisions. The model
provision specifies that neither the making of the award nor the operation of the
transitional provisions is intended to result in a reduction in take-home pay. It also
indicates that Fair Work Australia may make an order to remedy a reduction in takehome pay. This provision will complement the power to make take-home pay orders in
item 9 of Schedule 5 to the Transitional Act. The model provision reads:
‘Neither the making of this award nor the operation of any transitional provision
is intended to result in a reduction in the take-home pay of employees covered
by the award. On application by or on behalf of an employee who suffers a
reduction in take-home pay as a result of the making of this award or the
operation of any transitional provision, Fair Work Australia may make any
order it considers appropriate to remedy the situation.’”5
[11] In the proceedings which led to the 2 September 2009 decision submissions were
made that current apprenticeships should be permitted to run to completion under pre-modern
award wage arrangements. The Commission rejected those submissions, as the following
passage shows:
“[35]…….While this approach has the advantage of simplicity, problems are likely to
arise if new apprentices receive different wage treatment. We have decided that
apprentice wages should be covered by the model phasing-in arrangements unless
there are special circumstances in a particular industry or occupation which warrant a
different provision.” 6
[12] Consistent with the 2 September 2009 decision, apprentices in employment on
1 January 2010 should not have a reduction in their take-home pay when the phasing schedule
starts to operate on 1 July 2010. In relation to apprentices who commence employment after
1 January 2010, their rate of pay will be determined by reference to the phasing schedule.
[13] It is clear that apprentices are covered by the provision for take-home pay orders under
item 9 of schedule 5 to the Fair Work (Transitional Provisions and Consequential
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[2009] AIRCFB 985
Amendments) Act 2009. Whether such an application may be made depends upon whether the
terms of item 8 of Schedule 5 apply. Item 8(3)(b) is as follows:
“(3)
An employee suffers a modernisation-related reduction in take-home pay if,
and only if:
(a)
…
(b)
the employee is employed in the same position as (or a position that is
comparable to) the position he or she was employed in immediately before the modern
award came into operation; …”
[14] It has been suggested that there is some uncertainty whether an apprentice moving
through the years of an apprenticeship is “employed in the same position as (or a position that
is comparable to) the position the apprentice was employed in immediately before the modern
award came into operation”. We wish to make it clear that, in formulating the transitional
provisions, it was not intended that the annual progression by an apprentice would alter their
classification. Clause 2.4 of the model commencement and transitional provision should be
interpreted accordingly.
[15] The issues raised by the CEPU and the Australian Government do not raise
circumstances of a kind confined to the industry covered by the modern award. Similar
arguments for a departure from the model provisions could be advanced in a number of other
industries, not only in relation to apprentices but in relation to other classifications as well.
We do not think this is an appropriate case in which to depart from the model provisions. The
application by the CEPU is rejected.
BY THE COMMISSION:
PRESIDENT
** end of text **
1
MA000025.
2
[2009] AIRCFB 800, at para 121.
3
ibid at para 51.
4
[2009] AIRCFB 800.
5
ibid.
6
ibid.
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