Fairwork Disrupted: Experimenting in the kitchen.....and the Fair Work Commission?

Chefs suffer inhospitable and irregular hours in order to plate up our our amazing dinners (or....during COVIDTimes, carefully package them up for takeaway)..

Not enough patrons tonight? Go home early. Full house? Stay into the early hours. Long hours and late nights are par for the course. The reality is the hospitality industry responds to demands which can’t always be predicted.

The other reality is that the Australian hospitality industry’s been hit badly by that virus that shan’t be named. Lockdowns, density restrictions, additional requirements of policing check-in and mask rules have had their impact: The ABS tells us that accommodation and food services’ jobs are 12.3% lower than March 2020.

The hit’s been so big, that you may remember former Industrial Relations Minister, Christian Porter asking the Fair Work Commission (FWC) for ‘increased flexibility’, to three hospitality awards (and four awards in total)*.

After hearing submissions from unions and business, Justice Ian Ross led a Full Bench decision which has given the green light to significantly simplify parts of the Restaurant Industry Award**.

Let’s take a look at the changes that Justice Ross himself calls “somewhat novel”.

What are these ‘novel’ changes?

Good things come in threes…?!? And conveniently, so too do the changes to the Restaurant Industry Award 2020 (from 11 August 2021).

1. Exemption rates

Employers can agree, in writing, with individual Level 5 and 6 chefs to an annualised arrangement where they receive 170% of their award weekly rate, to absorb several other entitlements. The 170% exemption rate essentially removes the administration of paying individual penalties, overtime, allowances and meal breaks up to 57 hours per week. After the 57 hours, regular overtime rules kick in.

2. Simplifying classifications

There’ll be a new, simplified classification structure. The current award has 12 classifications which will be streamlined into six, split into two streams: ‘restaurant/café workers’ and the ‘chef stream’. The former generally covers front of house tasks, cleaning, and some short orders. The latter covers chefs who have completed an appropriate apprenticeship, or equivalent training.

?3. Substitute allowance

Employers can pay employees about $1 more (or slightly more for lower classifications) to replace paying six individual allowances.*** To do this, employers need to either get individual (written) agreement with an employee, or 75% agreement from employees (to apply for a whole workplace).

The changes are temporary. The FWC will review them in nine months, sometime in May 2022.

It’s like the FWC is running a ‘pilot’ which it will review after seeing it in action for a while.

This is a standard approach in policy making but a bit new for a Tribunal. It's great to see the Commission using this sort of approach to test, get data and refine.

Is this a big deal?

It is. It's taken the 'crisis' of the global pandemic to get some real simplification of the workplace relations system. After the failure of centrally convened talks in Canberra in 2020, and the abandonment by the Commonwealth of its reforms in the Omnibus Bill (related articles linked below****), it's awesome to see the FWC drive evidence led, carefully considered change and the traditional IR parties being prepared to engage with it. The Restaurant and Catering Association played a key role in framing up these changes.

The United Workers Union (UWU) has tentatively agreed but flagged the Commission should take a ‘cautious approach’. Their key objections were around the ‘multi-skilling’ requirements of the classification simplification, and potential lack of mobility between some of the new classifications). The Commission echoed this sentiment saying, ‘we agree that a cautious approach is warranted’.

A monitoring committee will also be established by the UWU with the Restaurant and Catering Industrial Association so that an eye can be kept on the progress of the changes.

What’s this all mean?

If you run a restaurant or cafe:

From 11 August 2021, if you or your employees are covered by the Restaurant Industry Award 2020, these changes come into effect. You’ve got the opportunity to take advantage of these new flexibility and reduce administrative complexity and more streamlined payroll.

Exemption rates are waaayyy simpler than the annualised salary rules placed in many awards in 2020, which involve detailed record keeping and reconciliations.

Exemption rates are also a much ‘safer’ way of streamlining an employee’s entitlements, rather that relying on common law offsetting arrangements. These need to be carefully crafted to stand up to regulatory scrutiny. They also require confidence that wages are high enough to cover every entitlement.?

The exemption changes?take away the guess work often involved in loaded hourly rates and is a definite nod to Porter’s request for ‘administrative simplicity…in annualised salary arrangement(s)’.

If you don’t run a restaurant, here’s some food for thought.

I’m hopeful that positive results in this trial could mean we might have more novel developments in other areas, enabling the system to adapt.

One one argument, it's ‘back to the future’ for exemption rate clauses. Exemption rates were regular features of pre-reform awards, but have not been widely used in today’s Fair Work arrangements (only six of 121 awards currently have them).

The obvious candidates for the next change are the other hospitality awards in Porter’s request (Hospitality Industry General Award 2020, and Registered and Licenced Clubs Award 2010). And, the Australian Hotels Association has already submitted an application to include a simplified loaded rate in the Clubs Award.

But we wonder whether we will see this approach adopted other sectors where workers are operating under very flexible arrangements right now, especially under work from home/hybrid arrangements: Think banking and finance, clerical workers.

If there was ever a time we should be thinking about employee flexibility in our industrial relations system, it’s now. We have this change, the June changes in Part-time flexibility in the retail award, and … what’s next?

It really feels like we’re getting what the system has needed for some time now, (micro)reform to help employees work flexibly, but compliantly.

So, does this mean the reality of chefs’ fluctuating work demands will change? Well, no it doesn’t. But, it does mean there’ll be more industrial flexibility in accommodating their ongoing reality.

*General Retail Industry Award 2020, Hospitality Industry General Award 2020, Restaurant Industry Award 2020 and the Registered and Licences Clubs Award 2010.

**Restaurant & Catering Industrial [2021] FWCFB 4149, published on 14 July 2021.

***Meal breaks, meal allowance, split shift allowance, tool and equipment allowance, special clothing allowance and distance work allowance.?

**** Off the OmniBus: Part Time Flex; Is Bargaining dead after being BOOTed from the OmniBus Bill?; Get out of Jail Free? What the fate of the OmniBus Bill means for wage underpayment penalties