The Fair Work Commission is currently finalising changes to employee arrangements within the Horticulture Award. The Commission’s provisional view is that overtime will be introduced to the arrangements for casual employees. It involves an average of hours worked over eight weeks, those hours being worked between 6am and 6pm Monday to Friday, and Saturday by agreement.
The Commission reached this provisional view following an extended process involving submissions from the National Farmers Federation, Voice of Horticulture, the Australian Workers Union (AWU) and the National Union of Workers (NUW).
While the Commission acknowledges that the horticulture sector has unique circumstances and staffing requirements, it remains committed to bringing the Horticulture Award into line with the Fair Work Act around casual employment arrangements.
APAL believes that the Fair Work Commission’s provisional view does not consider the nature of horticulture’s harvest periods, and that the proposed changes will disadvantage both growers and seasonal workers.
For growers, it is likely to result in cost increases that are not sustainable and, as a result, will encourage more complex employment arrangements that will avoid the additional cost of overtime for casuals.
Those casual employees in horticulture who, for a variety of reasons, rely on short but intense periods of work are likely to have fewer hours offered.
What it will mean for growers
Under the proposed changes, growers will need to pay casual employees overtime (50 per cent of casual rate) if they work over 304 hours in an eight week period (see examples below).
For apple and pear growers whose harvest period typically lasts up to 26 weeks, they will need to reconsider how they engage a casual workforce or incur a cost increase to their casual labour bill.
The proposed changes do not impact the calculation for establishing piece work rates.
Practical examples: Overtime calculation for casuals under the Fair Work Commission provisional changes
Tim, a backpacker, is working for Sweety Orchards on a casual basis. Tim has worked through a three week pear harvest period working 50 hours a week (50 x 3 = 150 hours) and then had a week off. He then returned for another three week apple harvest period working 50 hours a week (another 50 x 3 = 150 hours). All Tim’s worked hours were between 6am and 6pm Monday to Friday.
So, Tim has worked for Sweety Orchards for seven weeks (three weeks on, one week off, then three weeks back on) and worked a total of 300 hours. Using the Fair Work Commission’s provisional view to calculate overtime, the overtime calculation is shown below. In this scenario, the eight-week averaging period provided both employers and employees the flexibility of working longer hours when it was required, without incurring overtime. This is effectively the same as the current arrangement for casuals.
Tim, a backpacker, is working for Sweety Orchards on a casual basis. Tim has worked through a four-week pear harvest period working 50 hours a week (50 x 4 = 200 hours) and then had a week off, then returned for another four-week apple harvest period working 50 hours a week (another 50 x 4 = 200 hours). All Tim’s worked hours were between 6am and 6pm Monday to Friday.
So, Tim has worked for Sweety Orchards for nine weeks (four weeks on, one week off, then four weeks back on) and worked a total of 400 hours. Using the Fair Work Commission’s provisional view to calculate overtime, the overtime calculation is shown below. In this scenario, the additional two weeks worked (100 hours) has resulted in a 5.75 per cent pay increase. Sweety Orchards would potentially reconsider offering Tim anything more than 304 hours in an eight-week in the future, if they cannot pass on the 5.75 per cent cost increase.
Sweety Orchards might also consider that if the majority of the harvest labour are employed under piecework arrangements and their Supervisors are full time staff, that cost increase of 5.75% on a minority of their staff, whilst not preferable, is manageable.
Example 3: Piecework scenario
The Fair Work Commission’s provisional decision to provide overtime to casuals working under the Horticulture Award, does not impact the calculation for establishing piece work rates. Sweety Orchards employs its fruit pickers on a piecework basis and uses the Horticulture Award to calculate piece rates per bin of fruit harvested – see example in the table below.
How we got here
These changes have been the subject of scrutiny by the Fair Work Commission, involving on-going and intense negotiation with the National Farmers Federation (NFF) (and its Horticulture Council) and the Voice of Horticulture, and the Australian Workers Union (AWU) and National Union of Workers (NUW).
This has involved:
- 2010: The terms of the current Award were introduced during Award Modernisation.
- 2014: Four-yearly review commenced with the purpose of reviewing all of the modern awards.
- Early 2015: The Fair Work Ombudsman raised concerns about confusion as to whether casuals in horticulture are entitled to overtime. The AWU, with support from the NUW, made a claim to clarify that casuals are entitled to overtime.
- Mid 2015: NFF jointly with Voice of Horticulture engaged a barrister to oppose the AWU claim and filed over 100 pages of submissions and 27 witness statements, including experts. Evidence from an academic who conducted a survey of Voice of Horticulture members on the potential impacts of this proposed change on the industry was filed.
- Mid 2016: Approximately three days of hearing contesting the AWU claim.
- Mid 2017: A decision was handed down that stated that some form of overtime would be introduced for casuals. The decision recognised that casuals are seasonal employees working long hours over short periods and that onerous overtime requirements would result in employers taking measures to avoid overtime. The Full Bench set out a provisional view that overtime would be paid at a rate of time and a half with ordinary hours limited to: 12 hours per day, 6am to 6pm, 304 hours over eight weeks.
- Late 2017: NFF filed further submissions and witness statements seeking no time span of hours and an expanded averaging period of 988 hours over 26 weeks.
- Early 2018: A short hearing led to a conciliation process between employer and employee parties which the Fair Work Commission is reviewing.
The conciliation process
The NFF has responded to the Fair Work Commission’s provisional decision with a revised proposal that reflects the short-term, volatile nature of horticulture’s harvest periods.
The NFF proposal averages hours over a period of 26 weeks (six months). It considers an ordinary day to be 12 hours worked at any time during the day, and 50 per cent when the daily or weekly period is exceeded (plus casual loading). The proposal is for no spread of daily hours, providing flexibility for work on all days of the week.
APAL fully supports the NFF proposal as one that fosters a sustainable industry. It strikes a balance that growers can afford but still remains attractive to workers looking for short, intense periods of work.
The employee parties have pushed for quite a different outcome of a four-week averaging period, an ordinary day to be eight hours worked at any time during the day, and 50 per cent when the daily or weekly period is exceeded (plus casual loading).
Conciliation brings the two parties together to negotiate with consideration to the Fair Work Commission’s provisional view.
NFF, through the Horticultural Council (which includes APAL), will continue to work with Government and the Fair Work Commission to ensure they understand what is fair and workable for growers.
APAL will ensure growers are keep up to date on any changes.
1. What are the proposed changes to the Horticulture Award?
Under the Fair Work Commission’s provisional view, growers will need to pay casual employees overtime (50% of casual rate) for every hour they work over 304 hours in an eight-week period, those hours being worked between 6am and 6pm Monday to Friday, and Saturday by agreement. Work outside of these hours and on Sundays is deemed overtime, however the provisional view did not comment on the rate applied. The proposed changes do not impact the calculation for establishing piecework rates.
2. Have our obligations changed yet?
No. There has been no final ruling from the Fair Work Ombudsman as yet. Should the changes become official, the NFF has requested a transition period for industry.
3. When will they come into effect?
There is no expected date for the Fair Work Ombudsman ruling.
4. Is there still time to have an influence on the proposed changes?
While there has been no final ruling from the Fair Work Ombudsman, NFF, through the Horticultural Council (which includes APAL), will continue to work with Government and the Fair Work Commission to ensure they understand what is fair and workable for growers and their casual employees.
APAL will continue to talk with key stakeholders and politicians about how the proposed changes will impact growers.
5. How will we find out our obligations if changes occur?
The Fair Work Commission will make a public statement, as will the NFF’s Horticulture Council. APAL will keep members informed. We will help growers understand these changes by providing examples of what these changes may look like within individual businesses.
APAL encourages those businesses who are concerned to seek expert advice and will help facilitate these connections.
Listen to APAL CEO Phil Turnbull discuss the proposals on ABC Victoria Country Hour, 22 May, 2018 – first news item