FWC rules on accident pay provisions in awards


FWC rules on accident pay provisions in awards

The FWC has handed down its decision on union claims for accident pay provisions in awards – essentially attempting to standarise accident pay provisions, while confining their application to awards with a history of these provisions.


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The FWC has handed down its decision on union claims for accident pay provisions in awards – essentially attempting to standarise accident pay provisions, while confining their application to awards with a history of these provisions.

The case is reported at: 4 yearly review of modern awards—transitional provisions [AM2014/190] (18 August 2015)

Accident pay is ‘make-up’ pay which represents the difference between the workers compensation paid by the insurer and the employee’s award rate or actual rate of pay (including over award payment).

Accident pay is payable while the employee is on workers compensation, up to a maximum period – commonly 26 weeks, but continues to be paid to the employee, even where the employee’s employment has been terminated (read more on accident pay).

A Fair Work Commission full bench has grouped the 36 awards that were the subject of applications for accident pay provisions into four broad categories.

The Australian Chamber of Commerce and Industry has noted the essential elements of this decision (summarised below).

Award categories

The first category includes awards “where there has been a clear national standard of accident make-up pay in the pre-reform instruments which formed the basis for the making of the awards”:

  • Hydrocarbons Industry (Upstream) Award 2010
  • Labour Market Assistance Industry Award 2010
  • Marine Towage Award 2010
  • Mobile Crane Hiring Award 2010
  • Oil Refining and Manufacturing Award 2010
  • Professional Diving Industry (Industrial) Award 2010
  • Stevedoring Industry Award 2010

The second category includes awards “where a significant proportion of the employees had an entitlement to accident make-up pay under the terms of pre-reform instruments”:

  • Airline Operations - Ground Staff Award 2010
  • Building and Construction General On-Site Award 2010
  • Business Equipment Award 2010
  • Concrete Products Award 2010
  • Dry Cleaning and Laundry Industry Award 2010
  • Fast Food Industry Award 2010
  • Horticulture Award 2010
  • Joinery and Building Trades Award 2010
  • Mannequins and Models Award 2010
  • Storage Services and Wholesale Award 2010
  • Textile, Clothing Footwear and Associated Industries Award 2010
  • Timber Industry Award 2010
  • Vehicle Manufacturing, Repair, Service and Retail Award 2010
  • Wine Industry Award 2010

The third category includes awards “where only a limited proportion of the employees covered had an entitlement to accident make-up pay, such as where the accident pay provision in pre-reform instruments only applied in one State or to one part of the industry or industries now covered by the modern award”:

  • Clerks - Private Sector Award 2010
  • Food, Beverage and Tobacco Manufacturing Award 2010
  • Gardening and Landscaping Services Award 2010
  • General Retail Industry Award 2010
  • Graphic Arts, Printing and Publishing Award 2010
  • Hair and Beauty Industry Award 2010
  • Legal Services Award 2010
  • Manufacturing and Associated Industries and Occupations Award 2010
  • Pharmacy Industry Award 2010
  • Social, Community, Home Care and Disability Services Industry Award 2010

The fourth category includes awards “where there is no award history of accident make-up pay entitlements”:

  • Contract Call Centres Award 2010
  • Electrical Power Industry Award 2010
  • Local Government Industry Award 2010
  • Rail Industry Award 2010
  • Water Industry Award 2010

The decision

To achieve the modern awards objective, the full bench decided it was necessary the 21 awards in the first two categories be varied to include provision for accident make-up pay. But it was not persuaded the 15 awards in the third and fourth categories should be varied to include accident pay.

The full bench considered the safety net accident pay entitlement for the 21 category one and two awards should only apply for a period of 26 weeks from the time of incapacity for work due to injury or illness. However, it also considered “there are special circumstances relating to the awards in the first category” that have previously provided a generally applicable accident pay entitlement of 39, 52 or 104 weeks.

While the previous accident pay entitlements in these seven category one awards will be maintained, the full bench imposed a 52-week cap where any of those awards had entitlements in excess of 52 weeks. It also applied this 52-week cap to the Timber Industry Award 2010 in category two.

The draft orders of the full bench require the unions to provide draft orders to the Commission, including the accident pay provisions in the relevant awards, by 25 August 2015.

The draft orders will then be posted on the Commission’s website. Employer groups wishing to make submissions are required to file submissions within seven days of the posting. The operative date for the award variations will be 15 October 15.

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