As part of its four-yearly review of modern awards and award flexibility, the Full Bench of the Fair Work Commission has proposed a new time off in lieu (TOIL) model clause for modern awards without existing TOIL provisions.

Winners and lieu-sers

The Australian Industry Group (AiG) successfully captured the FWC's attention in respect of its claim to insert TOIL provisions into modern awards that do not currently have TOIL provisions. The FWC indicated a provisional view that it is necessary to incorporate a model TOIL clause. However,  the FWC rejected AiG's claim to replace existing TOIL provisions in certain modern awards with a new model TOIL clause.  The FWC also rejected AiG's claim to insert a 'make-up time' provision into 51 of the 122 modern awards, finding that this was not necessary  because make-up time agreements can be entered into pursuant to existing flexibility arrangement provisions.

The FWC's proposed TOIL model clause will facilitate agreements between an employee and their employer to take TOIL instead of payment for overtime at a time or times agreed, subject to appropriate safeguards.The proposed change is beneficial to employees and employers, because employees are assisted with balancing their work and non-work commitments, and employers save by calculating the TOIL on an hour for hour basis rather than at the relevant overtime penalty rate (with the exception of modern awards which currently provide for TOIL at the overtime penalty rate).

Next Steps

At present, the FWC has only expressed a provisional view while it receives submissions from interested parties. If this proposed clause is adopted, it will be included in modern awards which provide for overtime payments but do not currently contain TOIL provisions. Employers will be required to:

  1. Reach written agreement with employees for each occasion on which overtime is to be taken as TOIL, within four weeks of the overtime being worked;
  2. Pay the employee for any accrued TOIL that the employee has not used at the applicable overtime rate, at the request of the employee;
  3. Retain records of (a) and (b) as employee records;
  4. Pay the employee for the overtime at the applicable overtime rate, at their request or if they do not take TOIL within 12 weeks of the overtime being worked; and
  5. Pay the employee for any accrued entitlement for TOIL  that has not been taken, at the applicable overtime rate, upon termination of employment.

The proposal will apply to 113 modern awards including the Banking, Finance and Insurance Award 2010, Cleaning Services Award 2010, Real Estate Industry Award 2010, Restaurant Industry Award 2010 and the Hospitality Industry (General) Award 2010. The Building and Construction General On-Site Award 2010, the Joinery and Building Trades Award 2010 and the Seagoing Industry Award 2010 are specifically excluded from the new model.

Interested parties can make further submissions directed at the TOIL clause model to the Fair Work Commission by Friday 28 August 2015 with a further hearing scheduled for Friday 4 September 2015.

[2015] FWCFB 4466