A recent Fair Work Commission (FWC) full bench decision has confirmed the tribunal’s consistent approach to dealing with overlapping award coverage. AMMA research clerk Emma Hosegood provides this summary.

The full bench decision in Brad Allgood and Ors v Kal Tire (Australia) Pty Ltd deals with an award-coverage dispute involving employees contracted to perform tyre repairs and maintenance at a coal mine in northern New South Wales.

In refusing permission to appeal, the full bench found Deputy President Saunders correctly construed the exclusion provision of the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award) consistently with the established precedent in CFMEU v Spotless Facility Services Pty Ltd.

Background – Vehicle Award prevails

Until late 2019, the appellants were employed by Kal Tire (Australia) Pty Ltd (“Kal Tire”) to repair and maintain rubber tyres of vehicles used at a northern NSW coal mine.

The appellants were in dispute with their employer about which modern award covered and applied to them during their employment. The employees contended the Black Coal Mining Industry Award 2010 (Black Coal Award) covered them while Kal Tire contended they were covered by the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award).

In his original decision, Deputy President Saunders determined that the roles held by the employees fell within the coverage of both awards and in applying the decision of CFMEU v Spotless Facility Services Pty Ltd he concluded that the Vehicle Award prevailed over the Black Coal Award.

While the DP had some reservations in applying the Spotless precedent to his decision, he noted the Vehicle Award contained a provision that it covered employees “to the exclusion of any other modern award”. The Black Coal Award did not contain such a provision which excluded the coverage of the Vehicle Award or any other modern award.

This meant that to the extent of any overlapping coverage of both awards, the words in the Vehicle Award resolved the issue in favour of its sole coverage of the appellants.

The DP did, however, note that had he been required to determine which award classification was most appropriate for the work performed by the appellants and the environment which work was normally performed, he would have selected the Black Coal Award.

His reason was that “those classifications were most appropriate to the nature of the tyre maintenance service work undertaken by the appellants on vehicles used to produce coal in a black coal mine and the black coal mining environment in which they worked on a daily basis.”

With this observation noted in his decision, it was unsurprising the employees would seek to appeal the DP Saunders finding they where covered by the Vehicle Award.

Grounds for appeal

The employees appealed the decision on the basis that DP Saunders erred in finding the Vehicle Award covered them during their employment. The grounds of the appeal were concerned with how the DP construed the coverage provision of the Vehicle Award.

The appellants argued that the coverage of the Vehicle Award is not simply resolved because of the exclusion provision contained at clause 4.1.  They contended that the exclusionary provision is to ensure there was no double dipping by employees rather than deal with the overlapping award coverage

The appellants then pointed to the placement of the words “to the exclusion of any other modern award” which distinguished the current dispute from the decision in Spotless. The appellants argued that “if the exclusionary words were designed to provide an exclusion of coverage or application of any other modern award, they would be found at the end of clause 4.1”.

The appellants argued that clause 4.3 of the Vehicle Award was the correct provision for determining coverage in that it is intended to resolve issues of overlap based on the award classification most appropriate to the work performed by employees and the environment in which work is normally performed.

Decision – bench finds Spotless approach right

In dealing with the grounds of appeal, the full bench referred to the Award Modernisation process and its attempt to avoid overlap between awards and the inclusion of clear rules to identify which award applies.

The full bench then turned to the proper construction of the coverage provision of the Vehicle Award in its application during the appellants’ employment at the mine.

The full bench noted that the exclusive coverage provision of the Vehicle Award provides coverage of employees “who are employed by an employer where that employer’s establishment, plant or undertaking is principally connected or concerned with one or more of the activities set out in the award provisions to the exclusion of any other modern award.”

It then went on to note that the Black Coal Award does not contain a general exclusion provision like the Vehicle Award, which meant Kal Tire was not covered by more than one award in relation to the employment of the appellants. It was covered exclusively by the Vehicle Award and therefore there is no overlapping coverage which the relevant clauses of either award can engage.

The full bench found that “given the DP’s unchallenged finding that the appellants and Kal Tire were covered by the Vehicle Award in relation to the appellants’ employment at the Mine, the Black Coal Award could not cover them because the Vehicle Award provided exclusive coverage.”

Further it concluded that the issues raised by the appeal were recently considered in Spotless and it found that decision “was correct as to the operation and effect of the general exclusion provisions in a modern award vis-à-vis another modern award without a general exclusion.”

Permission to appeal was refused.

Implications for employers

Resources and energy employers would welcome the FWC consistently applying established precedent on modern award coverage, especially considering the commonality of circumstances in the industry where coverage may seem to overlap.

The decision effectively confirms that where one applicable award includes an exclusion provision, it would almost certainly be favoured by the FWC over another award that may also be considered relevant to the work performed but does not have an exclusion provision.

Given the Black Coal Award does not contain such a provision, this may dissuade employees from lodging a dispute to seek its coverage in future.

From a workplace policy perspective, the decision is also further evidence that despite attempts to modernise Australia’s industrial awards, the system remains complex and confusing for many employers and employees.

AMMA’s future vision for industrial relations in Australia, as detailed in A New Horizon: Guiding Principles for the Future of Work  includes a significantly simplified safety net that replaces the awards system in favour of universal minimum standards of employment and freedom to contract above the standardised employment safety net.

AMMA is the expert for resources and energy industry awards matters. For support or advice about modern awards and to ensure full compliance with your statutory obligations, contact AMMA’s specialist workplace consultants.