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T564 (23 December 1986)

 

IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial relations Act, 1984

 

T. No. 564 of 1986 IN THE MATTER OF AN APPLICATION BY THE SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES ASSOCIATION (TASMANIAN BRANCH) TO VARY THE RETAIL TRADES AWARD
   
  RE: INTRODUCTION OF A 38 HOUR WEEK
   
FULL BENCH:
DEPUTY PRESIDENT A. ROBINSON
COMMISSIONER R.J. WATLING
COMMISSIONER R.K. GOZZI
23 DECEMBER, 1986
   

REASONS FOR DECISION [Previous Decision]

   
APPEARANCES:  
   
For the Shop Distributive and Allied Employees Association
(Tasmanian Branch)
- Mr. P.E. Targett
  Mr. K.J. Bennet
   
For the Federated Clerks
Union of Australia
(Tasmanian Branch)
- Mr. D.J. Fry
   
For the Federated Storemen & Packers Union of Australia (Tasmanian Branch) - Mr. D.J. Strickland
   
For the Transport Workers
Union of Australia
(Tasmanian Branch)
- Mr. B.J. Hansch
   
For the Tasmanian Chamber
of Industries
- Mr. T.J. Abey
   
For the Retail Traders Association - Mr. J.G. Blackburn
   
   
DATES AND PLACES OF HEARINGS:  
   
25 November, 1986 Hobart  
28 November, 1986 Hobart  
10 December, 1986 Hobart  
19 December, 1986 Hobart  
   

This application was made by the Shop Distributive and Allied Employees Association (Tasmanian Branch) [S.D.A.] for the purpose of introducing a 38 hour working week for employees within the scope of the Retail Trades Award.

Mr. P. Targett and Mr. K. Bennet, representing the S.D.A., had the main carriage of the case for the unions.

In their opening submission the S.D.A. stated that they could not reach agreement with the employers during the course of negotiations on the claim and indicated to the Bench that they would not be opposed to being ordered into conference to further discuss the matter with the employers, however, it was their submission that if the Bench adopted that course of action, then we should lay down guidelines or parameters within which discussions should take place.

Mr. Targett outlined the history of the discussions that had taken place with the Retail Traders Association (R.T.A.) and the Tasmanian Chamber of Industries (T.C.I.), which commenced in March 1984.

He said:-

    MR TARGETT

    "Although talks between ourselves and the Retail Traders Association and the Tasmanian Chamber of Industries took place on a number of occasions and it appeared that agreement would be reached, at the eleventh hour the employer representatives changed course and advised us that shorter working hours were not available to us unless: Firstly, we reduced penalty rates for Saturday morning work; secondly, the shorter working week had to be implemented on the basis of a reduction in the daily working hours of 24 minutes."

    (Transcript pages 2/3).

Mr. Targett said, because of the intransigent position adopted by the employers, the Association was left with no alternative but to await relaxation of Principle 5 of the Wage Fixation Principles in order to prosecute their claim.

Principle 5 states:-

    "(a) In dealing with claims for a reduction in standard hours to 38 per week, the cost impact of the shorter week should be minimized. Accordingly the Commission should satisfy itself that as much as possible of the required cost offset is achieved by changes in work practices.

    (b) Claims for reduction in standard weekly hours below 38, even with full cost offsets, should not be allowed.

    (c) The Commission should not approve or award improvements in pay or other conditions on the basis of productivity bargaining. These improvements should only be allowed on the basis of the appropriate Principles."

Mr. Targett presented exhibits showing the number of persons employed in the retail trade in each state and which provided comparisons between Tasmania and the other sates of Australia that had already gained a 38 hour week, namely, New South Wales, Victoria, Western Australia and South Australia (subject to appeal).

During discussions with the employers the S.D.A. raised the following issues:-

    (i) the implementation of shorter working hours;

    (ii) the hourly rate divisor; and

    (iii) additional cost offsets.

On the question of cost offsets, Mr. Targett submitted that discussions had focused on:-

    (i) the span of ordinary hours;

    (ii) the payment of tea money;

    (iii) payment of wages (i.e., by cash, cheque or direct deposit);

    (iv) Saturday morning rest period;

    (v) rest periods in general.

It was stated that these matters were not acceptable to the employers as they believed that the offsets were not of a magnitude that would defray the cost of implementing the 38 hour week.

The S.D.A. took the view that penalty rates and other prime award conditions were not available to the employer as cost offsets and that the offsets should be drawn out of changes in work practices.

To support his earlier contention Mr. Targett tendered arbitrated retail industry decisions from the Western Australian Industrial Relations Commission and the Industrial Commission of South Australia.

He further stated that:

    MR. TARGETT

    ".... It is not open to the employers to ramble freely and unfettered through he award, picking and choosing award conditions to withdraw from their employees." (Transcript page 16).

Mr. Bennet strongly supported the submissions of Mr. Targett and, in particular, the earlier suggestion that the parties be ordered into discussions with some directions from the Bench. In addition, he said:

    MR. BENNETT:

    "It is not our wish to commence negotiations at the extremes on which previous talks ended, such as the extreme demands made by employers when they said that there was to be no 19-day month, only 24 minutes per day, that there had to be a reduction in penalty rates, and even a suggestion that four National Wage increases spread over two years be discounted to pay for the cost of implementation." (Transcript page 27).

Mr. T. Abey, representing the Tasmanian Chamber of Industries, and the chief advocate for the employers in this matter, opened his submissions by stating that:-

(i) there had been protracted negotiations in 1984 and 1985 on the question of a 38 hour week;

(ii) that the employers were prepared to enter into a 38 hour week agreement, provided the cost impact was minimized;

(iii) that negotiations broke down, not because of what Mr. Targett described as the employers' intransigence, but because the S.D.A. were not prepared to identify cost offsets of a sufficient nature to justify the introduction of a 38 hour week in accordance with the Wage Fixation Principles.

Mr. Abey took comfort from the comments made by the Full Bench of the Australian Conciliation and Arbitration Commission on page 38 of the National Wage Case Decision, Print No. G3600 which stated:

    "We have some reservations about this matter, particularly having regard to the economic considerations set out earlier in the decision. We are also of the view that there are substantial practical problems associated with arbitrating both shorter hours and offsets. Nevertheless, having regard to other aspects of our decision, we are prepared to relax this Principle to the extent that the Commission may arbitrate in matters involving a claim for a 38 hour week.

    We make it clear however that such decisions should not be made on the understanding that the 38 hour week is a Commission standard. Further, when it comes to offsets, existing award standards are not sacrosanct. The Hours Principle has been redrafted to give effect to this change of approach." (Decision page 28/29).

Mr. Abey analysed the exhibits tendered by Mr. Targett. Whilst he acknowledged that the majority of employees in the retail industry throughout the country enjoyed a 38 hour week, nevertheless, he maintained that the question that should be asked was why the retail industry in this state was so insistent on reducing the cost of a 38 hour week to the absolute minimum.

He said:-

    MR ABEY:

    "The reason is because labour costs in the retail industry in this state are far and away above any other state and, in our submission, for no good reason." (Transcript page 31).

Mr. Abey tendered an exhibit (A1) which highlighted in each state:-

(a) the rate of pay for adult shop assistants;

(b) the penalty rate for Thursday late trading;

(c) the penalty rate for Friday late trading;

(d) the penalty rate for Saturday morning.

He also analysed the effect that those rates would have on the earnings of a similar classification of employee in the retail industry in each state.

Mr. Abey had no argument with the submission made by Mr. Targett inviting the Bench to direct the parties into conference, however, on the question of whether or not the Bench should lay down guidelines or parameters within which those discussions should take place, Mr Abey's response was:-

    MR. ABEY:

    "We have no particular submission to make on whether or not the Bench should give guidelines, but certainly if the Bench is to give guidelines, then we would strongly argue against any suggestion that award provisions are untouchable, or cannot be addressed." (Transcript page 34)

The hearing adjourned until 28 November 1986, to enable the Bench to consider the preliminary submissions of the parties.

At the resumption of the hearing and having had the benefit of hearing the preliminary submissions of the parties, we decided to order the parties into conference and the following statement was read into transcript.

    "We were asked by Mr. Targett of the Shop Distributive and Allied Employees Association of Australia (Tasmanian Branch) (S.D.A.) to rule upon the threshold question that - `Penalty rates and other prime award conditions are not available to the employer as cost offsets.'

    Once we provide some guidance for the parties in relation to this question, they are prepared to engage in further negotiation.

    Principle 5 provides as follows:-

      "5. STANDARD HOURS

      (a) In dealing with claims for a reduction in standard hours to 38 per week, the cost impact of the shorter week should be minimized. Accordingly, the Commission should satisfy itself that as much as possible of the required cost offset is achieved by changes in work practices.

      (b) Claims for reduction in standard weekly hours below 38, even with full cost offsets, should not be allowed.

      (c) The Commission should not approve or award improvements in pay or other conditions on the basis of productivity bargaining. These improvements should only be allowed on the basis of the appropriate Principles."

    In our view the prime emphasis should be upon finding appropriate cost offsets in the area of changes in work practices.

    Whilst the matter before us is still very much in the early stages of hearing, that which has been put to us thus far suggests employers have a predisposition towards achieving cost offsets by reducing penalty rate provisions contained in the award before all else.

    We recognise the attractiveness of this approach from their point of view. However, we point out that present conditions of employment contained in the Retail Trades Award were arbitrated matters under the Wages Boards Act, and are of long standing.

    If the employers wish to pursue the question of a reduction in penalty rates then, in our view, the proper and preferred course for reviewing such an important matter would be via a separate application to vary the award thus allowing consideration of the matter on all the proper criteria; not just as a cost offset in another matter.

    It is our strong recommendation that both parties concentrate their efforts upon costing out all work practice savings which each can find as a first priority.

    Included in that costing would be those offsets, and award matters, which have been offered already by the S.D.A.

    When the parties have exhausted that exercise to our satisfaction we will rule as to whether or not those cost offsets are satisfactory to us in all of the circumstances, assuming disagreement still exists.

    Until that stage has been reached the question of further alternatives available, if any, does not arise."

The hearing then adjourned until 10 December 1986.

On resumption, the union and employer representatives reported to the Commission that they had reached agreement on the cost offsets sufficient to warrant the introduction of a 38 hour working week in this award.

They had also reached agreement on the date of implementation being the first pay period to commence on or after 1 February 1987.

One area where the parties could not reach agreement was the `method of implementation', with the unions maintaining that there should be a mandatory 19-day month in establishments with a certain number of employees. On the other hand the employers' preferred position was that the award should allow for a full range of options to be available to implement the 38 hour week in an efficient and realistic manner. This will be dealt with later in this decision.

The cost offsets agreed to by the parties can be summarized as follows:-

    (i) Penalty rates for casuals to be applied to the unloaded rate, viz:-

          1 ½ x = 1.7
          2 x = 2.2
          2 ½ x = 2.7

    (ii) Provide for a 2 hour minimum (in lieu of 4 or trading period) for all employees working on Saturday morning. This would only apply to new employees with appropriate protection provisions for existing employees.

    (iii) Saturday morning rest period to be excluded.

    (iv) Amend Clause 24 to provide that an employee who works 4 hours or more on any one day to be granted one ten minute rest period.

    (v) Amend span of ordinary hours to read 7.00 a.m. to 6.00 p.m. Monday to Friday inclusive with the proviso that any employee currently working in the period 7.00 a.m. to 8.00 a.m. Monday to Friday as part of their regular work, would continue to receive payment for that period at the rate of time and one half.

    (vi) Amend `tea money' clause to provide that a meal allowance will only be paid in circumstances whereby an employee has worked at least 6 hours in ordinary time prior to the commencement of the overtime.

Provided that employees who prior to 1 November 1986 were regularly in receipt of a meal allowance shall continue to receive such allowance whilst continuing to work in a similar work pattern.

For the purpose of this subclause, `regularly' shall mean an employee who has received a meal allowance on at least 4 occasions in the 3 months prior to 1 November 1986.

    (vii) Maintain divisor at forty for a period of 12 months for the purpose of casual, part-time and overtime rates.

    (viii) 30 minutes for the second meal break.

Mr. Abey also informed the Commission of the savings derived from the offsets and he made the following comments when concluding this part of his submission:-

    MR. ABEY:

    "This package represents, on our calculation, a total cost offset of 1.85%, when fully realized. This of course is a long way short of our desired objective and in different circumstances we would suggest falls short of what would be acceptable to the Commission.

    There is one very good reason why we've suggested this award can be distinguished from the pack. It is common ground between ourselves and the unions that restrictive work practices in this industry simply do not exist. The industry is as efficient as possible within the constraints of the award.

    It is to the credit of the relevant unions that they have not imposed restrictive work practices which so plague many industries within this State and within this country.

    As a consequence we accept that the unions party to this award, should not be penalized simply because they have been responsible.

    For this reason, we submit that the agreement we have reached, represents the maximum realistic cost offset short of attacking prime award conditions." (Transcript Page 60)

Mr. Targett, representing the S.D.A., did not agree with the calculations made by the employers on the value of the cost offsets. He said:-

    MR. TARGETT:

    "But when you look at the retail industry or those areas that are covered under the Retail Trades Award, there is a wide variety of stores; a wide variety of sizes, trading patterns, employment requirements and if you look at the individual cost offsets and apply it to those different sizes or the different trading patterns, the cost offsets have significantly different effects and we would suggest that it is also impossible to come up with an industry average without actually sitting down and going through establishment by establishment and applying individual offsets." (Transcript page 63/64).

Even given the conflicting comments on the value of the cost offsets, the parties urged the Commission to ratify the agreement which had been reached as they felt it -

(a) could be accommodated within the Wage Fixation Principles;

(b) did not offend the public interest;

(c) was unlikely to have any adverse employment consequences.

After hearing the submissions we adjourned to consider whether or not the agreement should be ratified. Upon resumption, we had this to say:-

    "We would like to indicate that we have considered whether or not a sufficient case has been made out to justify the introduction of a 38-hour week with cost offsets in the Retail Trades Award,

    We can indicate now that we will endorse the agreed proposal. Naturally we will hand down the reasons for decision a little later in writing.

    On the question of method of implementation, we would still recommend to the parties that they again confer to see if they can reach an agreed method of implementation, and to that end we would just make a few comments designed to help the parties.

    We believe that any system or systems which are arrived at should have a rationality about them, be recognizable by all concerned as tidy types of systems which would meet the dual need of making it reasonably predictable for employees to be able to know when they can plan their time off, consistent of course with meeting the reasonable needs of individual employers and the requirements of their business.

    However of course it is difficult for us to go any further until we have heard the final views of the parties themselves.

    We are prepared to reconvene as early as possible to hear hopefully a report back of an agreed situation as to implementation, given the progress that has been made thus far by the parties, who are to be complimented on the effort that they have put in to achieve what has been achieved thus far.

    Alternatively of course when we meet again - if it is not agreed - we'll hear the parties and come down with a decision which will set out how the award should be varied; again referring the question of the drawing up of orders following that, back to the parties." (Transcript page 69/70).

In arriving at our decision on this matter we have noted the submission by Mr. Abey in relation to the non-incidence of restrictive work practices in the industry which distinguishes this case from some other shorter working week applications that have come before the Commission.

We appreciate the difficult of accurately predicting the precise value of the cost offsets in the area of this award. In this regard we can relate to the submission made by Mr. Targett. Nevertheless, we believe there has been a genuine attempt on the part of all concerned to find cost offsets in what has been acknowledged to be a very efficient industry.

We have been persuaded that every attempt has been made by the parties to comply with the Wage Fixation Principles in terms of reducing the cost impact to a minimum.

We are also satisfied that the agreement does not offend the public interest considerations which we are required to take into consideration under the Tasmanian Industrial Relations Act 1984.

The hearing was adjourned until Friday 19 December 1986.

On resumption of the hearing, Mr. Abey informed the Commission that the parties had reached agreement on the implementation of the 38 hour week in this award.

He tendered Exhibit A3 which was an outline of the agreement rather than an award provision.

The essential elements of the agreement on the method of implementation can be summarised as follows:-

(i) the ordinary hours of work shall average 38 per week, to be worked on one of the following bases -

    (a) shorter hours per day;

    (b) 8 hours on 4 days and 6 hours on 1 day;

    (c) 8 hours on 9 days and 4 hours on 1 day per fortnight;

    (d) 19 day month;

    (e) 8 hours per day with an accumulation of rostered days off, up to a maximum of 5;

(ii) the method of implementation shall be determined on a store by store approach with the primary consideration being the efficient maximisation of customer service in each establishment;

(iii) in establishments employing 15 or more full-time employees, they shall adopt one or both of the options contained in (i) (d) and (e) above;

(iv) a provision to be inserted in the award for the resolution of disputes relating to the implementation of the 38 hour week.

We support, in principle, the agreement reached by the parties on the method of implementation of the 38 hour working week and congratulate the parties on the way they have worked to finalize the subject matter of this application.

We are going to accept the suggestion of the parties that they prepare the draft order for the award variations required to implement the entire agreement, however, we would like to remind the parties that care should be taken to ensure that the draft order -

(i) truly and accurately reflects the agreed position;

(ii) is capable of being clearly understood, not only by those employers and employees covered by the scope of this award, but also those people who from time to time may be called upon to enforce the provisions of the award;

(iii) provide a method to protect both employer and employee if and when a decision is made to introduce an alternative choice in the method of implementation.

The order [correction order] will be processed by Mr. Commissioner Watling with recourse back to this Full Bench if it becomes necessary or desirable to do so.