PRIOR NOTICE TO TRAINERS

In August 2009, the Australian Trainers Association (ATA) issued a notice to trainers in relation to ordinary hours of work for employees. That notice provided guidance to trainers as to whether they were to pay their employees for 40 hours per week on ordinary time rates, or 38 hours per week on ordinary time rates, pending the coming into operation of the Modern Award on 1 January 2010.

Since the distribution of that notice to trainers, there have been further developments in relation to the ordinary hours of work to be worked by employees of trainers.

APPLICATION BY AWU TO VARY AWARDS

Shortly after the release of the August 2009 notice to trainers, the ATA became aware of an application lodged with Fair Work Australia (FWA), the body which has replaced the Australian Industrial Relations Commission. The application by the Australian Workers Union (AWU) was to vary the Horse Training Industry Award 1998 and the Horse Training Industry Award 1998 [Transitional] (the Awards). That application sought to vary the ordinary hours of work for employees employed pursuant to the Awards from 40 hours per week, to 38 hours per week (the application).

In its submission in support of the application, the AWU contended that the Awards continued to provide that employees must work a 40 hour week despite reforms to the Workplace Relations Act 1996 (WR Act). Consequently, employees were disadvantaged and should only be obliged to work 38 hours per week as from 27 March 2009 when the 3 year moratorium on the 38 hour week maximum granted by the WR Act, arguably expired. The AWU sought orders that the Awards be varied to provide that employees work 38 ordinary hours per week, and not 40 ordinary hours per week, effective from 27 March 2009.

The ATA was extremely concerned about the application. If it was successful, trainers would be susceptible to claims by all employees for “back-pay” of 2 hours of overtime since 27 March 2009. The ATA therefore opposed the application and engaged their solicitors and a barrister to argue against it at FWA.

A hearing of the application was heard at FWA on 18 September 2009. At that hearing, the Commissioner requested that both the AWU and the ATA file written submissions in respect of the application.

SUBMISSIONS BY ATA AND AWU

In its submission to FWA, the ATA opposed the application as the expiry of the moratorium did not amend the Awards and it was necessary for application to be made to amend the Awards. The application had only been made by the AWU in August, so even if it was granted (which the ATA also opposed for the above reason), the variations to the Awards should not take effect from 27 March 2009. Rather, the ATA sought that the variation take effect as of 1 November 2009, as this would enable trainers to prepare for the change of ordinary hours to be worked and would ensure no claims for back-pay by employees could be made.

DECISION OF FWA

In its decision, FWA approved the proposed variation to the Awards but the ATA was successful in its argument that the variation not apply from 27 March 2009. The date on which the change took effect was from the first full pay period commencing on or about 18 September 2009. From that date, the ordinary hours of work to be worked by employees was 38 hours per week (the FWA decision).

The commencement date of 18 September 2009 was the date the application was heard at FWA. The Commissioner was of the view that this date was the fair and reasonable date to apply in the circumstances.

The variation to the Awards is effective until 31 December 2009, being the day prior to the commencement of the Modern Award, when the 38 hour week is to become operative in any case, as advised in the August 2009 Notice. So, the 38 hour week applies from 18 September 2009 to 31 December 2009. Trainers should not be concerned about that, though, as no practical changes have occurred in that period. See below.

WHAT THIS MEANS TO TRAINERS AND EMPLOYEES

The decision on the application means that from the first full pay period commencing on or after 18 September 2009, employees are only obliged to work 38 hours ordinary time per week.

Employees are no longer obliged to work 40 hours ordinary time per week.

If employees work in excess of 38 ordinary hours per week, they are entitled to be paid overtime for those hours worked in excess of 38 hours. That is, time and a half for first 3 hours and double time thereafter.

FURTHER ADVICE FROM FWA

For employers who are corporations, the rates payable to employees have been calculated on an hourly basis, and not a weekly basis. Therefore, the amount of the hourly rate payable to employees as a result of the FWA decision was not altered.

However, for employers who are sole traders and partnerships, the rates payable to employees have been calculated on a weekly basis. It was therefore unclear as to whether trainers should divide the weekly rate by 38 hours or 40 hours to determine the hourly rate for overtime or casual purposes.

Since receiving the FWA decision, the ATA has spent considerable time attempting to obtain written advice from FWA as to how trainers should divide the weekly rate. The ATA did not want to provide this Notice to trainers without written advice from FWA as to the appropriate hourly rate which applied. This Notice was therefore delayed attempting to obtain written advice from FWA.

The written advice from FWA was finally received on 18 December 2009. That advice states that FWA is of the view that there is no requirement for weekly wage rates in the transitional Horse Training Award (that is, the award that applies to sole traders and partnerships in Victoria only) to be expressed as hourly rates. The weekly rates specified in this award will continue to apply and the hours of work are to be reduced to 38 hours per week.

For those employers who are sole traders and partnerships outside of the State of Victoria, the relevant awards were not varied and therefore 40 ordinary hours of work continued to apply.

In any event, none of the above really matters now. The issue was only relevant to the period 18 September 2009 to 31 December 2009, which has now virtually passed.

The ATA is also not aware of any legal proceedings or claims that have been made in respect of the rate to be paid by trainers, or the hours to be worked by employees since the FWA decision, and does not now expect any issues in that regard.

In any event, the ATA recommends that trainers now refer to the Horse and Greyhound Training Modern Award for hourly rates, which Award commences operation on 1 January 2010 (the Modern Award). A separate notice will shortly be sent to all trainers and published on the ATA website with respect to the Modern Award and in particular, the rates payable to employees pursuant to the Modern Award.