Modern award covers or applies to?

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Modern awards; do they cover or apply?

Award apples; s.47

S.47 of the Fair Work Act 2009 provides that a modern award applies to an employee, employer etc if the modern award covers the employee, employer etc and the modern award is in operation and no other provision of the Act has the effect that the modern award does not apply to the employee, employer etc.

Consequently, an applicable modern award will not apply to the employee, employer etc  if an applicable enterprise agreement is in operation (because s.57 says so) or if the modern award is not in operation.

So far this makes eminent sense.

Award covers; s.48

However s.48 provides that a modern award covers an employee or employer etc if the award is expressed to cover the employee, employer etc  or if the Act provides  that a modern award has that effect or where an order of the Fair Work Commission “or a court” has that effect.

Now this all seems at first glance to be comprehensible and clearly the Act seeks to distinguish between when a modern award will cover an employer, employer etc and when it will apply to and employee or employer.

But when will that be material?

Well, one example is to be found in s.382, which of course defines when a person will be protected from unfair dismissal. It provides, inter alia that a person will be so protected when he or she has completed the minimum employment period; and when

(i) a modern award covers the person; or

(ii) an enterprise agreement applies to the person; or

(iii) the person’s rate of earnings does not exceed the high income threshold.

Here again we see a distinction being drawn between when an instrument will cover an employee, employer etc and when it will apply to them.

Until today I was unaware that there was any meaningful implication to be drawn from the distinction.

But in Mikic v NT Mining Operations (2017) FWC 5220 delivered yesterday per Bissett C, the Commissioner wrote

“The FW Act distinguishes between when a modern award covers an employee and when a modern award applies to that employee.

S.48 of the FW Act states:

48 When a modern award covers an employer, employee, organisation or outworker entity

When a modern award covers an employee, employer, organisation or outworker entity

(1) A modern award covers an employee, employer, organisation or outworker entity if the award is expressed to cover the employee, employer, organisation or outworker entity…

I have found above that the MI Award covers NT Mining Operations. I have also found that Mr Mikic’s classification comes within the classifications in the MI Award. To this extent the MI Award covers Mr Mikic.

Whether the MI Award applies to Mr Mikic is not relevant to determine if he is protected from unfair dismissal. The only requirement of s.382(b) of the FW Act is that one of the circumstances apply. Those circumstances do not include whether a modern award applies.

The MI Award may not apply to Mr Mikic for a range of reasons – an enterprise agreement may apply or he may have a guarantee of annual earnings or some order of the Commission may have some effect but, as I have observed, the test in relation to protection from unfair dismissal is not whether the MI Award applies but rather if it covers Mr Mikic.

NT Mining Operations’ grounds for objection misunderstands the provisions of the FW Act. This is evidenced in its written submissions where, in discussing whether the MI Award “covers” Mr Mikic it quotes s.47(2) of the FW Act which deals with when a modern award “applies”. These are distinct concepts and not to be confused.

For the reasons given above, I am satisfied that Mr Mikic is covered by a modern award.”