State/territory disability award allowances permitted under Act

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State/territory disability award allowances permitted under Act

A Full Federal Court has ruled that allowances relating to hardships and disabilities at specific locations can be included in federal awards despite the general principle that state based differences should not be carried over to national awards.

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A Full Federal Court has ruled that allowances relating to hardships and disabilities at specific locations can be included in federal awards despite the general principle that state-based differences should not be carried over to national awards.

[Full text of this case: Australian Chamber of Commerce and Industry v Australian Council of Trade Unions [2015] FCAFC 131 (14 September 2015)]

Employers’ argument


The Australian Chamber of Commerce and Industry (ACCI) argued that s154(1)(b) of the Fair Work Act prevented any modern award terms that are expressed to operate in (even if not throughout) only one or some states or territories. In effect, the intention is that such a term must operate in every state or territory, in ACCI’s view.

In this matter, certain allowances related to the Broken Hill area. An allowance of 4.28 per cent of the standard rate of pay was payable for working in this remote area, which meant that it operated in only one state (New South Wales).

ACCI concluded that the construction of s154(1)(b) urged by ACCI would render impermissible any disability allowance expressed by reference to a location, or locations, in a state or territory or in a number of states or territories unless the language (even if not the substance) of a term did not exclude any state or territory (ie it included every state or territory).

Meaning of “disabilities”


In the judgment, Justice R Buchanan wrote that the ACCI approach “suggests that the drafters of the Fair Work Act set out to elevate form over substance” and he found the suggested approach to be artificial.

Justice Buchanan went on to refer to s134(1)(g) of the Act, noting that s134(1)(g) allows provisions in the one statute to be construed harmoniously if possible.

Justice G Flick referred to s139(1)(g)(iii) and pointed out that that provision expressly provides for such allowances to be paid – noting that that provision is to be construed as either providing an exception to the otherwise general operation of s154(1) or as a specific statutory provision dealing with a question not sought to be addressed in that section.

Justice Flick went on to say:

“Although the term ‘disabilities’ in the present proceeding may not have been embraced by all parties as being properly characterised as an ‘allowance’ for ‘disabilities associated with’ working at Broken Hill, that is how the term in the award properly should be characterised.

The terms ‘disability’ and ‘disabilities’ have an accepted meaning when employed in human rights legislation and, indeed, are terms used with that same meaning in some provisions of the Fair Work Act: e.g., s 284(1)(e).

... There is to be distilled from s139 no legislative intent to employ the words used in any other manner than that in which they have come to be commonly employed in the industrial relations context. The use of the phrase ‘conditions or locations’ in s 139(1)(g)(iii) is a reference to ‘disabilities’ confronting any worker employed to work in particular ‘conditions’ or those ‘locations’.”

The bottom line: Parties to awards can sometimes confront the issue of whether state-based conditions can be carried over to a federal award. This Federal Court decision provides guidance on the inclusion of disability allowances that relate to particular locations.

Australian Chamber of Commerce and Industry v Australian Council of Trade Unions [2015] FCAFC 131 (14 September 2015) 

See also: Disability paymentsAllowances 

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