Horticulture Award - Is this the end for piecework?

Employers in the Horticulture Industry have been scathing in their opposition to a recent FWC Full Bench decision which (pending a last minute appeal) looks likely to mean the practical end of the current piecework system. Unions have claimed the decision as a significant victory for workers.

Application to vary the Horticulture Award

On 15 December 2020, the AWU made an application (Application) to vary the Horticulture Award (Award). In summary, the Application sought a variation to the Award to provide:

1. a minimum floor rate or ‘safety net’ rate of pay to employees engaged as pieceworkers; and

2. a requirement for employers to record all hours worked by pieceworkers.

Current arrangements for pieceworkers

The current piecework arrangements in the Award provide that an employer and employee can enter into an agreement to be paid a piecework rate, which must enable the average competent employee to earn at least 15% more per hour than the minimum hourly rate for their classification. However, there is currently no guarantee that a pieceworker will earn at least the minimum rate for their classification. Record keeping requirements also do not currently apply, as pieceworkers are paid by output and not hours worked.

FWC decision

On 3 November 2021, A Full Bench of the FWC issued a decision with a provisional view that the insertion of a minimum wage floor in the Award is justified and necessary to achieve the Award’s objective. The Full Bench also decided in favour of introducing time recording obligations in relation to pieceworkers. Effectively, this decision will create a $25.41 per hour minimum wage rate for casual employees engaged as pieceworkers and will require horticulture employers to adjust their systems and processes to comply with the incoming record keeping requirements.

Next Steps

Don’t change anything yet. There is more to play out. FWC has prepared a draft variation to the Award incorporating the changes outlined above.

Interested parties are to provide any submissions in response to the draft variation by 26 November 2021. Affected parties should be consulting with their industry bodies and providing them with any additional concerns that arise from the decision. Noting however that FWC has made it clear that the focus of submissions in response is to comment on the balance of the draft determination, not the decision which has already been made to introduce a minimum wage floor and record keeping obligations.

Industry bodies have strongly voiced their opposition to the decision and indicated an appeal of the decision in forthcoming. We will keep you informed of the details as they arise.

If required, a hearing on the draft determination will occur on 16 December 2021. After this, FWC will issue a determination which will provide clarity on the changes to the Award, and when they will take effect. Stay tuned for details.