Court decision

Case update: Fair Work Commission makes fundamental changes to piecework arrangements in the horticultural industry

By Andrew Tobin and Damon King / 16 November 2021
3 min.
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Worthwhile read for: Managers, Business Owners, Horticulture Employers, Horticulture Employees, Labour Hire Providers

An historically significant decision handed down on 3 November 2021 by the Full Bench of the Fair Work Commission (Decision) will undoubtedly have implications for the labour practices of primary producers and labour hire providers to the horticulture industry.  

The Decision provisionally approves an application made by the Australian Workers’ Union to vary the Horticulture Award 2020 (Award), specifically the piecework provisions in clause 15.2 of the Award (Piecework Clause).

Arguments for and against varying the Piecework Clause

In an earlier update, we summarised the main arguments advanced by the opposing parties, for and against varying the Piecework Clause.

We concluded that there was a real likelihood that the Piecework Clause would be varied by the Fair Work Commission.  

The Decision

The Full Bench held that a variation of the Piecework Clause was necessary as the Award, in relevant respects, was not fit for purpose, essentially accepting the principal arguments advanced by the union parties.

By the Decision, the application was provisionally approved in the following respects:

  • to introduce the concept of a floor of wages whereby all employees including piece workers must be paid not less than the minimum hourly rates of pay in the Award, regardless of their individual levels of competency and productivity; and
  • to require that employers record hours of work performed by employees under piecework agreements, something which is not presently required under either the Award or the Fair Work Act 2009 (Cth).

The varied Piecework Clause is likely to come into operation early next year, given the Commission has called for implementation submissions to be provided by 26 November 2021.

Implications for employers

In terms of industry wide implications, the employer parties have previously argued that they will likely abandon the use of piecework rates altogether, be more circumspect in terms of hiring practices, and be increasingly willing to quickly move on workers with low productivity levels.

Whilst only time will tell, it is certainly the case that employers will be obliged to record (and pay) for the hours of work of all workers and, consequently, they will need to be far more circumspect and hands-on in terms of managing their labour practices and costs base.

Properly incentivising highly experienced and competent fruit and vegetable pickers to pick at greater productivity levels will become even more important for primary producers and labour hire operators, which is likely in our opinion to encourage more selective use of generous piecework rates underpinned by minimum hourly rates of pay.  
 

Authors
Andrew Tobin
Partner
Andrew is a Partner and the head of HopgoodGanim Lawyers’ Workplace and Employment practice.
Damon King
Special Counsel
Damon King is a Special Counsel in our Workplace and Employment practice with extensive knowledge of industrial and employment law matters.

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