T1524 T1525 T1549 T1550
IN THE TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 See end of Decision for Awards Varied
The several claims before the Commission on the first day of hearing were joined. The Tasmanian Trades and Labor Council sought and was granted leave to amend its claim and Mr Lennon stated the claim as follows: 1. A 3% increase operative from 1 September 1988, to apply to all awards and agreements of the Commission. 2. A further $10.00 per week to apply as an across-the-board adjustment, and applicable to all awards and agreements of the Commission, operative from 1 March 1989. 3. All wage related allowances to receive the 3% increase from 1 September 1988. 4. The minimum wage be adjusted as follows:
In its claim the TTLC also produced a document (TTLC.1) relating to the revised Principles. Significant amongst the areas of departure from the revised Federal Principles was the proposed inclusion of the following:-
Mr Lennon indicated that retention of the existing provisions relating to the options available upon the finding of an "arguable case" were necessary because of the difficulty of convening Full Benches in a relatively small tribunal. This proposition received general support from all other parties who expressed satisfaction with existing arrangements. He also tabled Exhibit TTLC2. This was a motion carried at the Trades and Labor Council meeting of 17 August 1988. The motion read: "The negotiating committee meet with the employers to - (a) seek 3% to operate from 01 September for all employees subject to a commitment by unions to review State awards to give effect to the structural efficiency principle; (b) a flat increase of $10 payable no later than 6 months after 01 September." Inherent in that resolution is an acceptance of the need for there to be a commitment given to observe the Principles as well as a willingness to give effect to the new Structural Efficiency Principle. Mr Lennon said that the reaction from unions generally has supported the notion that they are prepared to give a commitment: (a) to seek no increases inconsistent with the Principles that this Commission adopts; and (b) to be prepared to review the structure of awards which would be monitored by this Commission. Mr Lennon said under these circumstances the 3% should be available across the board immediately. However the reaction of employers in discussions held had been to require all the details of how awards are to be restructured before consenting to a 3% and $10.00 increase. He indicated that the employers' requirement is unreasonable and quite unacceptable to trade unions. It was argued that the logistics of negotiating award by award, following our decision, would create massive delays and be entirely impractical. Even if there was the will to complete the task of giving effect to the Restructuring and Efficiency Principle on an award-by-award basis, inevitably it would cause unacceptable delays. Mr Lennon also said that it had been shown in the past that some employers, particularly in the public sector, had adopted a negative attitude because they could save money by imposing frustrating processes before formal agreement could be given. Such processes and procedures had clearly failed and were no longer acceptable. He said that it was ridiculous to interpret the Australian Conciliation and Arbitration Commission decision1 as requiring more than a genuine commitment to the revised Principles, followed by a willingness to implement, where necessary, the structural efficiency arrangements. And to counter the alleged practice of deliberately refusing agreements for no other reason but to save cost, the Commission should, in accordance with the Act, be able to award retrospectivity in appropriate circumstances. He also said no better illustration could be found of the failure of the second tier principle than the fact that to date only 27 out of 74 private sector awards had received a 4% wage adjustment. Mr Lennon also stressed important public interest criteria in support of the union case. Among other things he took comfort from the fact that he was given to understand that the Government supported the notion of an across-the-board increase from a common date, as opposed to any other method. Insofar as remaining second tier claims were concerned, Mr Lennon submitted that they should be dealt with on merit, and that the only defence of employers in refusing claims should be incapacity to pay. He then drew a comparison between movements in award wages and CPI movements since 1985 to demonstrate the extent to which living standards have diminished. Included in other sundry items was the suggestion that if there are difficulties in automatically varying agreements, then at least the Commission could make a recommendation to flow on the effects of the State Wage Case. He said the Commission should also save the second tier principle to permit 4% claims to be dealt with. Support for the TTLC claim and submissions came from the Tasmanian Public Service Association (TPSA) and the Heads of Tasmanian Government Organisations Association who said expectations had been created by statements made earlier from the Government sector. Mr Vines also alluded to a 12% decline in real wages since 1983 and said the two-tiered system had failed to deliver a just result to employees. In this regard reference was made to the distortions created and the consequent loss of relativities. He said the type of cost neutral results sought by employers in the past had certainly saved them money but had not necessarily resulted in improved efficiency. Those whom he represented were prepared to support the thrust of the National Wage Case decision and expected it to deliver a satisfactory result to TPSA members. Similar support came from Mr O'Brien on behalf of the Federated Miscellaneous Workers Union, Mr Holden on behalf of the Hospital Employees Federation of Australia, Tasmania No 2 Branch, and Mr Imlach of the Hospital Employees Federation, Tasmania No 1 Branch. Both hospital unions asked that we exclude public sector nurses from any decision we make. The representative of the Minister for Industrial Relations (intervening) tendered (for information only) the Tasmanian Government submission to the National Wage Full Bench, made on 15 July last. Mr Willingham said that in general terms the Government had supported continuation of the existing system, whilst proposing some amendments to the Restructuring and Efficiency, Work Value, and Service Increments Principles. The Government had also submitted before the National Wage Full Bench that there should be a 6% increase; 3% of which would be paid from November 1988, and the remaining 3% no earlier than 1 June 1989. Mr Willingham said the Tasmanian Government had supported the centralised wage fixing system ever since the concept was introduced. He added that government support was conditional upon the required compliance commitment being given by unions. Provided that prerequisite was included we should again follow the decision of the Australian Conciliation and Arbitration Commission of 12 August 1988.2 Mr Willingham argued that because of the evident confusion in relation to the Structural Efficiency Principle, the parties to awards should be required to draw up an agreed agenda specifying the features which the parties intended to examine. However, because this procedure could result in unavoidable delays, the 3% increase should be made to apply no later than the end of October, 1988. In relation to the second instalment of the increase, ie $10.00 payable not earlier than 6 months from the 3%, Mr Willingham suggested that we should sit again in February 1989, or earlier, for the purpose of becoming involved in, or possibly arbitrating upon, one or more elements of a review or reviews in respect of which agreement had not been reached. There should be no expectation that the $10.00 increase would automatically apply once 6 months has elapsed from the date of effect of the 3%. Emphasis was given to the aspect of encouraging greater productivity and efficiency. The TTLC's suggestion as to how part-heard matters should be treated was accepted. We were asked to give some clarification and guidance to the parties as to how the new Principles are to be applied and operate, with particular emphasis upon the structural efficiency provisions. Mr Willingham agreed with the suggestion of the HEF Nos 1 and 2 Branches that public sector nursing awards be set aside until such time as employee organisations seek to come before us in respect of the 3% variation. Whilst conceding that wages had not kept pace with CPI movements, as alluded to by Mr Lennon and others, Mr Willingham said cognisance should be given to such matters as the reduction in standard hours for some employees, work value increases, over-award payments which have been negotiated, and increases in existing allowances and the creation of new ones. Mr Willingham said the timing of the granting of benefits such as the second-tier 4%, superannuation and the 38-hour week in relation to the 3% need to be considered on a case-by-case basis. On the question of retrospective operation of award changes, at page 128 of transcript Mr Willingham stated, inter alia:
And later, at page 129:
Mr Jarman, appearing on behalf of the Minister for Public Administration, and others, supported the position put by Mr Willingham, particularly those aspects going to the adoption of the Federal Commission's National Wage Case Decision of 12 August.3 He said that in terms of cost in the public sector alone the granting of 3% would cost $20 million per annum. We were urged to make it clear that unions should not be able to consider the 3% adjustment an automatic entitlement once they had given their commitment. We should also closely monitor the progress of award reviews. It was further submitted that once the parties had reached agreement, they should appear before the Commission to make a definitive statement, on an award-by-award basis, as to the nature of potential objective structuring. He said that there should be not only an onus but an obligation on unions to contribute to restructuring exercises. Mr Jarman also said in response to a question from the Bench that there appeared to be nothing in the Full Bench's decision of 12 August4 which precluded the parties from discussing structural changes to existing conditions or provisions in awards. Mr Abey, appearing for the Tasmanian Confederation of Industries (TCI) and others in the private sector, commenced his submission by giving some emphasis to the need for an award-by-award review as opposed to any notion of an across-the-board approach. He said that private sector employers were decidedly unenthusiastic about the level of increases proposed by the decision of the Australian Commission, but were prepared to live with in on three conditions. They were:
Mr Abey said we should reject the submission of the TTLC that an analogy could be drawn between the present 3% and the $10.00 situation and the first tier of the earlier Principles. He alleged that the TTLC proposal seemed to be based largely on the premise that their course would simply be more convenient to the parties, but this should be the least important of all considerations. He said that the 3% component of the proposed increase would, by itself, cost private employers in Tasmania $100,000,000 per annum. While the union case relied largely upon the delays in achieving the 4% second-tier movement to support their argument for an across-the-board increase, Mr Abey said that unions themselves had been guilty of procrastination. Furthermore, to this point the unions had still shown an apparent reluctance to actually give a commitment. Instead, they were awaiting other developments before making up their minds. Clearly then, it would be a mistake to set any guaranteed operative date. Mr Abey added that if unions had not been so reluctant to agree to proper offsets there would have been far more second-tier agreements now in place. Moreover, he asserted that the TTLC statistics used were very selective. Mr Abey introduced Exhibit TCI 1. This was an analysis of private sector awards which either have or have not received the second-tier increase. Mr Abey said the analysis showed that in 26 awards no claim had been lodged; 15 of the unresolved claims have been lodged since May this year, and only 6 unresolved applications were lodged prior to May. The estimated number of employees who would be covered by the still outstanding awards would be of the order of 9,200, out of a private sector workforce, subject to awards of this Commission, of around 80,000. It was further submitted that unions should be required to commit themselves to a clear agenda of the items which will be discussed in relation to the Structural Efficiency Principle before they can expect to receive a wage increase for their members. Ideally, an indicated time frame should also be included. Unless this was done disputes may occur in relation to what should be on the agenda and what should not. Mr Abey submitted that to follow the submission presented on behalf of the Government of requiring all 3% claims to be settled by the end of October this year would be contrary to the spirit and intent of the National Wage Case decision5. He reiterated that the case-by-case approach should be treated as the only appropriate method of implementation. Exhibit TCI 2 was presented to illustrate the need for second-tier wage increases, superannuation and reduced hours of work matters to be distanced from any 3% and $10.00 claims so as to cushion any adverse economic impact which may otherwise occur. The exhibit concerned was the Full Bench decision of the Federal Commission (Maddern P, Hancock, DP, Bain C) 18 August 1988 - decision in transcript re Dry Cleaning Industry Interim Award, C No 21126/88. Nevertheless it was conceded that each case would need not be considered on its own merit. It was also put to us that the agenda in relation to structural efficiency matters should be set by both the employer and employees. In summary Mr Abey proposed that we depart from the Federal decision in two respects:
Mr Abey also reiterated the TCI's fundamental opposition to the notion of retrospective date of effect in relation to matters of superannuation and the 3% wage increase. Mr Smith, representing both the TGFA Industrial Association and the Printing and Allied Employers' Federation of Australia, supported the TCI submission. He also requested that we exclude the PKIU from any decision we make in respect of private sector awards because of past industrial activities conducted on an Australia-wide basis. However, when questioned it was acknowledged that the Printers Award6 does not establish wage rates but instead provides that Federal Award wage rates will also apply to the State Award. Mr Smith proposed a form of words which would be appropriate as the form of commitment required. 1. THE SYSTEM In considering the present applications for the continuance of a centralised wage fixing system based upon a revised set of principles we believe it is necessary, in the light of recent events, to draw attention to the fact that the single most important element to the continuation and viability of such a system is the genuine commitment of all parties to it. That requirement was made very clear in 1983 when the Wage Fixation Principles were re-established by the Australian Conciliation and Arbitration Commission and adopted by every State Tribunal. At page 38 of the National Wage Case Decision of September 19837 the following is to be found following the Commission's decision to return to a centralised system:
Despite the reiterated promises of all parties to faithfully adhere to the centralised system at successive State Wage Case hearings, including the present one, the conclusion is that the recent unhappy events were wholly inconsistent with commitments and assurances given to this Commission by certain bodies whose industrial conduct can only be described as reprehensible. More particularly we have witnessed a nursing union reject outright a preliminary finding of a Full Bench8 of this Commission. That preliminary finding was reached following an enquiry conducted in accordance with agreed Wage Fixation Principles. The attitude adopted by both the Government and employer and the Royal Australian Nursing Federation was that each wanted a "quick fix". Neither was prepared to follow the proper avenues open to it, despite the fact that the rest of the workforce has been forced to play the game according to the established ground rules. Moreover, unexpected sympathetic support for their cause was forthcoming from government quarters when private hospital nurses were on strike for a comparative wage justice flow on. Notwithstanding the fact that the Commission was moved to issue an Order pursuant to Section 31 of the Act due to the seriousness of a strike in a number of significant private hospitals, that Order was blatantly ignored. In the light of this industrial lawlessness private employers were forced to capitulate and consent to that which was refused by this Commission, but willingly assented to by the government for the public hospital nurses. We are constrained to observe that the resultant millions of dollars of public funds that were committed by that action can only be described as appalling. Bearing in mind the reason why this Commission in August 1986 considered it necessary to suspend recreation leave allowance (in order to save the jobs of 400 workers said by the government to be at risk because of funding difficulties), this political decision to flagrantly ignore a reasoned Full Bench decision must be condemned. It is simply not fair to the rest of the workforce if, in effect, there can exist two disparate "systems" operating concurrently; one following a strictly regimented path, demanding for its success certain responsibilities and obligations in exchange for benefits. The other appears to be a "quick fix", politically acceptable arrangement of a de facto nature operating outside of any proper quid pro quo system, and requiring no offsets, no approbation and no ratification by any properly constituted wage fixing tribunal, State or Federal. We are firmly of the view that instances of this kind seriously threaten the viability of the centralised system. As a consequence we indicate now that we have seriously considered abandoning the Wage Fixation Principles altogether. Already events of the recent past have had repercussive effects. Recent industrial action by radiographers, employed in hospitals where nurses have received gratuitous treatment, can and must be attributed to government indulgence in relation to one group to the exclusion of another. Industrial action by radiographers has occurred notwithstanding that an appeal has been lodged but not yet heard. Whilst we warn against such action there are now clear indications that other professional groups employed in hospitals could follow suit. Such a scenario clearly is a warning that the centralised system is on the brink of breaking down so far as Tasmania is concerned. We note that in this case no assurances could be given that the government would not again resort to the same conduct. Indeed its decision to flow on to all politicians the 4% second tier without offsets is to us a positive manifestation of double standards. Our real concern stems from the fact that unless common sense prevails and enables the ordinary checks and balances inherent in a centralised system to be restored, then our State's previous record of having a stable workforce and an enviable low incidence of disputation compared to most of Australia, will be completely reversed. Inevitably, if that is permitted to take place, Tasmania could cease to attract much needed new industries vital to its continued development; or to retain and encourage expansion of existing industries. Clearly these obvious public interest implications should have been, and urgently need to be, properly understood and appreciated by all parties. It therefore remains for us to say that unless present indications are reversed, we will have no choice but to discontinue the present system. Nevertheless for the sake of those who are prepared to accept their responsibilities, we have decided that, for the time being at least, we will persevere with the system of the past 5 years, but will closely monitor what occurs as a consequence. 2. PRINCIPLES In our decision of 24 April 19879 we said, at page 28:
Apart from our already expressed reservations concerning diminution of sufficient commitment by some parties to maintain the system, we adhere to the same view expressed at that time. Mutatis mutandis, we again intend to adopt the same fundamental elements of the decision of the Full Bench of the Australian Commission handed down on 12 August 198810 with some variation to the implementation. We do so because of the public interest considerations, including the fact that the revised principles take into account those crucial economic factors so thoroughly examined on an Australia-wide basis by the Australian Conciliation and arbitration Commission. In this regard it is significant that no party sought to argue that the Tasmanian economy was significantly at variance with the conclusions reached by the Australian Commission about the economy generally. We have also been convinced that we should follow the same basic wage fixing principles because they balance the dual needs of encouraging greater productivity and efficiency via the new Structural Efficiency Principle. At the same time there is recognition of the need to deliver to the workforce an attainable and sustainable pay result in the interest of equity and industrial reality. Another persuasive factor has been the measure of consensus which existed in relation to acceptance of the revised Principles. 3. IMPLEMENTATION However, whilst there was consensus from those who chose to appear in relation to the adoption of a revised set of Principles, with the necessary cosmetic changes, because this Commission is a separate tribunal operating under different legislation, there were also more fundamental differences of opinion concerning the method of implementation. On the one hand trade union parties to proceedings held strongly to the view that the award-by-award approach would be totally impracticable given the experience of the past; private employer parties, on the other hand, disagreed. The objectors to the award-by-award approach proposed by the Australian Commission argued that:
Private employers argued, however, that although it was not expected that all of the details of "structural efficiency" arrangements needed to be in place before a 3% and $10.00 wage increase could be agreed to (or ultimately arbitrated), it should be a prerequisite that at the very least the agenda for further discussion be established before any pay adjustments occurred. However, the position of both the Minister for Public Administration and the Minister for Industrial Relations (intervening) was that provided the required commitment was given in an acceptable form, the 3% and $10.00 increase in wages and salaries should be granted no later than the end of October 1988. Support was also given to the notion of an agenda being required, or agreed to. For whatever reason, and without apportioning blame, we are of the opinion that the State system currently contains severe impediments which need to be recognised and addressed if the current Principles are to be applied fairly and equitably and at the same time achieve their stated objective. Because of this we have decided that it is a precondition that unions genuinely commit themselves to the revised principles as a whole and the new Structural Efficiency Principle in particular, and accordingly -
Leading hand rates, shift allowances expressed as money amounts (except EZ Risdon) and the minimum wage will also be varied by 3%. Where appropriate the minimum wage shall be increased by 3%. Weekly rates should be rounded off to the nearest 10 cents with results of 5 cents going to 10 cents. Annual salaries will be adjusted to the nearest $1, with 50 cents going to $1.00.
However, in the isolated case where commitments are not forthcoming from all unions party to the award, a member of the Commission may vary a certain Division(s) contained in the award where he is satisfied the particular classifications are clearly delineated and all unions whose members are covered under that Division have given the required commitment. This will only be done after hearing submissions from all parties to the award or agreement. In each case the question of the operative date of the award will be left to the Commissioner concerned.
Our approach in this instance has been largely dictated by the experience of the past sixteen (16) months. The unchallenged fact is that only 27 out of 74 private sector awards have yet received the benefits of the Second Tier Principle. While most, but certainly not all, State servants have received a 4% second tier adjustment, they too have had to wait a long time before satisfactory negotiations were concluded. Admittedly some of the private sector awards not yet varied have limited effect, nevertheless by comparison Tasmanian workers have lagged behind their mainland counterparts in this regard. In our view the fault for the delay has not, with limited but noteworthy exceptions, been through any lack of commitment to the spirit and intention of the Wage Fixation Principles by the bulk of the trade union movement. We hasten to emphasise however that by the same token there can be no expectation of automaticity so far as the second tier 4% is concerned. Nor is the latest adjustment to be given without a genuine commitment by trade unions and employers to all those rights and obligations that attach to the new Principles, especially the Structural Efficiency Principle. We will certainly be monitoring progress towards achieving the objectives of this principle with the same vigour that we have monitored others matters in the past. And to this end we will be reconvening again early in 1989 to hear reports as to progress. 4. REQUIRED COMMITMENT As stated earlier in this decision, we are only prepared to vary awards when the union or unions give the required commitment for the new system. This commitment means that they will not pursue any extra claims (award or overaward) except when consistent with this decision. The written commitment we require from the union(s) at the hearing on 9 September 1988, or at any later time, and before awards are varied to reflect this decision, shall be:
Where this no extra claims commitment is given, the following shall be inserted in the award:
5. RETROSPECTIVITY In both the current Principles of this Commission and the earlier and now revised Principles of the Australian Conciliation and arbitration Commission, retrospective dates of effect for any award changes have been prohibited. On this occasion we have been strongly urged to remove such a restriction because of an allegation that some employers have unfairly withheld final consent even though mutually satisfactory second tier negotiations had long since been concluded. This has resulted in frustration of the true spirit and intent of the Principles as a whole. We sounded a note of caution that we would closely monitor the progress of second tier claims when this possibility was suggested to us in our decision of 24 April 198712, and a Full Bench of this Commission was moved to make some criticisms of a particular party in its decision of 21 June 1988 in the Fire Brigades Award appeal case.13 Regardless of that position, we have no intention of departing from the general rule so lucidly expressed in the Australian Commission's Decision of 12 August 198814, going to the question of refusing retrospectivity. However, we cannot ignore the industrial reality of what is occurring in such areas as parliamentary salaries, which are to be backdated to 1 April 1988, and the retrospective effect of agreements entered into in respect of nurses outside of the centralised system, and in defiance of a Full Bench finding. The Act requires that we exercise our jurisdiction according to equity, good conscience and the merits of each case before us. [Section 20(1)] Obviously, however, some members of the Tasmanian working community are more equal than others. The combined effect of unreasonable or engineered delays in negotiating second tier adjustments and the industrial conduct of others has persuaded us to re-examine the notion of refusing outright the potential of awarding retrospectivity. The Act specifically addresses itself to the matter of retrospectivity and we believe we have an obligation to have regard for that provision. In the circumstances therefore we will retain all of the existing words of that part of the Principles dealing with this particular aspect, but will preface the relevant parts by the following: "subject to the provisions of the Act." 6. ADOPTION OF FEDERAL DECISION Subject to limited qualifications already referred to, we will adopt the decision of the Australian Conciliation and Arbitration Commission of 12 August 198815 in the National Wage Case, together with the revised Principles. And in these circumstances we do not believe it to be necessary to repeat the whole of the reasons accompanying that decision, or the decision itself. 7. EXCLUSIONS We were asked by several parties to set aside certain nurses awards from the effects of our decision. However, we have come to the conclusion that such a drastic step is not warranted and instead prefer to regard all awards of this Commission to be of equal standing. We will not decide in advance to exclude nominated nursing awards, but will extend to nursing unions the same opportunity to commit themselves to the same Principles intended to apply to every other trade union in the country. If that commitment is not forthcoming existing rates will not be adjusted. 8. REGISTERED AGREEMENTS On the question of registered agreements, we point out that adjustment of wages and salaries, or other amounts as a direct consequence of State Wage Case decisions would need to be considered according to the provisions of each such agreement. Where any agreement stipulates that adjustment will be automatic and the required commitment is given, then no further action is required. If no such provision is included we would recommend to parties concerned that it would be consistent with this decision to extend to agreements the benefits and obligations flowing from this decision. In those circumstances the parties would need to execute a suitably amended agreement for approval by the Commission. 9. SUBSTANTIALLY PART-HEARD MATTERS We determine that substantially part-heard matters will be finalised under the Principles determined by this Commission on 24 April 1987.16 For the guidance of the parties they shall be:- (a) Those applications that have passed through an Anomalies Conference as an "arguable case" and as yet have not been finalised by the Commission. (b) Matters where substantive submissions have commenced by one or more parties to the award, but not completed. (Where there is disagreement on this aspect the question will be determined by the President.) Applications lodged with the Commission for second tier increases pursuant to the Restructuring and Efficiency Principle that have commenced or are awaiting hearing shall be heard and determined under that Principle. All other matters will be heard and determined under the new Principles (see attachment). 10. NEW PRINCIPLES The revised Principles are appended hereto as "Attachment A."
ATTACHMENT "A" THE PRINCIPLES These principles have been developed with the aim of providing, for their period of operation, a clear framework under which all concerned - employers, workers and their unions, governments and tribunals - can co-operate to ensure that labour costs are monitored; that measures to meet the competitive requirements of industry and to provide workers with access to more varied, fulfilling and better paid jobs are positively examined; and that lower paid workers are protected. The principles provide that movements in wages and salaries and improvements in conditions - whether they occur in the public or private sector, whether they be award or overaward and whether they result from consent or arbitration - must fall within the level allowable in accordance with the State Wage Case Decision of 5 September 1988. In considering whether wages and salaries or conditions should be awarded or changed for any reason either by consent or arbitration, the Commission will guard against contrived arrangements which would circumvent these principles and their aims. COMMITMENT Any claims for improvements in pay and conditions must be processed in accordance with these principles. No adjustments will be approved by the Commission unless a union concerned in an award gives an undertaking until 1 July 1989 that it will not pursue any extra claims, award or overaward, except in compliance with this decision. When this no extra claims commitment is given, it shall be inserted in the award concerned in the following terms:
WAGE ADJUSTMENTS (a) There will be allowable under these principles, increases to a maximum of 3 per cent and $10.00. The first increase shall be available no earlier than 15 September 1988. The second amount shall be awarded no earlier than six months after the date of operation of the first increase. (b) The 3 per cent increase shall apply to award wage rates including supplementary payments. The Commission, after hearing the parties to an award and being satisfied that a proper case has been made, may recommend that overaward payments be increased by this amount. (c) Any union(s) seeking to vary a specific award to give effect to the increases allowable is required formally to agree that it will co-operate in a review (to be monitored by the Commission) of that award to give effect to the structural efficiency principle. (d) The dates of operation of the first increase agreed by the parties will be the day the agreement is approved by the Commission. (e) Where increases in individual awards are arbitrated, subject to the provisions of the Industrial Relations Act, retrospectivity will not be granted by the Commission. (f) Any claims for increases in wages and salaries or improvements in conditions which exceed the maximum allowable increases in accordance with paragraph (a) will be processed either in State wage case proceedings or before a specially constituted Full Bench, or through the Anomalies Conference procedure, at the discretion of the President. STRUCTURAL EFFICIENCY Increases in wages and salaries or improvements in conditions allowable under the State Wage Case decision of 5 September 1988 shall be justified if the union(s) party to an award formally agree(s) to co-operate positively in a fundamental review of that award with a view to implementing measures to improve the efficiency of industry and provide workers with access to more varied, fulfilling and better paid jobs. The measures to be considered should include but not be limited to:
WORK VALUE CHANGES (a) Changes in work value may arise from changes in the nature of the work, skill and responsibility required or the conditions under which work is performed. Changes in work by themselves may not lead to a change in wage rates. The strict test for an alteration in wage rates is that the change in the nature of work should constitute such a significant net addition to work requirements as to warrant the creation of a new classification. These are the only circumstances in which rates may be altered on the ground of work value and the altered rates may be applied only to employees whose work has changed in accordance with this principle. However, rather than create a new classification it may be more appropriate in the circumstances of a particular case to fix a new rate for an existing classification or to provide for an allowance which is payable in addition to the existing rate for the classification. In such cases the same strict test must be applied. (b) Where new or changed work justifying a higher rate is performed only from time to time by persons covered by a particular classification or where it is performed only by some of the persons covered by the classification, such new or changed work should be compensated by a special allowance which is payable only when the new or changed work is performed by a particular employee and not by increasing the rate for the classification as a whole. (c) The time from which work value changes should be measured is the last work value adjustment in the award under consideration but in no case earlier than 1 January 1978. Care should be exercised to ensure that changes which were taken into account in any previous work value adjustments are not included in any work evaluation under this principle. (d) Where a significant net alteration to work value has been established in accordance with this principle, an assessment will have to be made as to how that alteration should be measured in money terms. Such assessment should normally be based on the previous work requirements, the wage previously fixed for the work and the nature and extent of the change in work. However, where appropriate, comparisons may also be made with other wages and work requirements within the award or to wage increases for changed work requirements in the same classification in other awards provided the same changes have occurred. (e) The expression "the conditions under which the work is performed" relates to the environment in which the work is done. (f) The Commission should guard against contrived classifications and over-classification of jobs. (g) Any changes in the nature of the work, skill and responsibility required or the conditions under which the work is performed taken into account in assessing an increase under any other principle shall not be taken into account in any claim under this principle. SUPPLEMENTARY PAYMENTS For the purpose of this principle, a supplementary payment is a separate amount in a minimum rates award which is in addition to the minimum rate and which together with the minimum rate becomes the award rate below which no employee may be paid. Whether by consent or arbitration, a supplementary payment may be introduced into a minimum rates award or an existing supplementary payment may be increased only in accordance with the following criteria: (a) The prime consideration will be the level of actual payments to the employees covered by the award under review. Where relevant the level of supplementary payments made to similar classifications of employees in other minimum rates awards may also be taken into account. (b) The relevant union or unions must give appropriate commitments regarding the absorption of overaward payments up to the level of the supplementary payment. Supplementary payments do not justify increases to employees already receiving in excess of the minimum rate plus the supplementary payment. (c) There must be a clear understanding and acceptance by the unions concerned in the award that the introduction or adjustment of supplementary payments may alter relativities of actual rates within the award and with other awards. (d) Where appropriate, supplementary payments may vary between classifications and geographic areas. (e) The date of operation of any supplementary payment will be determined by the Commission. (f) Any claims for adjustment to existing supplementary payments (except as a result of the first increase allowed by the State Wage Case decision of 5 September 1988) will be processed in State Wage Case proceedings or by specially constituted Full Benches, or through the Anomalies conference procedure, at the discretion of the President. ALLOWANCES (a) Existing Allowances (i) Existing allowances which constitute a reimbursement of expenses incurred may be adjusted from time to time where appropriate to reflect the relevant change in the level of such expenses. (ii) Existing allowances which relate to work or conditions which have not changed may be adjusted from time to time to reflect State wage increases, except where a flat money amount has been awarded, provided that shift allowances expressed in awards as money amounts may be adjusted for flat money amount State wage increases. (iii) Existing allowances for which an increase is claimed because of changes in the work or conditions will be determined in accordance with the relevant provisions of the work value changes principle. (b) New Allowances (i) New allowances to compensate for the reimbursement of expenses incurred may be awarded where appropriate having regard to such expenses. (ii) No other new allowances shall be created unless changes in work have occurred or new work or conditions have arisen: where changes have occurred or new work and conditions have arisen, the question of a new allowance, if any, shall be determined in accordance with the relevant principle. The relevant principle in this context may be work value changes or first awards and extensions to existing awards principle. (c) Service Increments (i) Existing service increments may be adjusted in the manner prescribed in (a)(ii) of this principle. (ii) New service increments may only be allowed to compensate for change in the work and/or conditions and will be determined in accordance with the relevant provisions of the work value changes principle. SUPERANNUATION (a) Agreements may be certified or consent awards made providing for employer contributions to approved superannuation schemes for employees covered by such agreements or consent awards provided those agreements or consent awards: (i) operate from a date determined or approved by the Commission; and (ii) do not involve the equivalent of a wage increase in excess of 3% of ordinary time earnings of employees. (b) Where, following a claim for employer contributions to approved superannuation schemes for employees, the parties are unable to negotiate an agreement consistent with this principle, and conciliation proceedings before the Commission have also failed to achieve such an agreement, the Commission shall, subject to the provisions of the Industrial Relations Act, arbitrate on that claim. (c) In any case in which the Commission determines, pursuant to (b) of this principle, that claim or part thereof should be granted, it shall award no more than 1.5% of ordinary time earnings to operate no earlier than 15 September 1988 and no more than a further 1.5% to operate no earlier than 1 January 1989; provided that in any such case determined to operate on or after 1 January 1989, the Commission may award 3% of ordinary time earnings. (d) Subject to the Industrial Relations Act the Commission will not grant retrospective operation for any matters determined in accordance with this principle. (e) For the purposes of this principle, approved superannuation scheme means a scheme approved in accordance with the Commonwealth Operational Standards for Occupational Superannuation Funds. 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 minimised. 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, will not be allowed. (c) changes in work practices designed to minimise the cost of introducing shorter hours will not be a consideration for claims under any other principle. CONDITIONS OF EMPLOYMENT Except for the flow-on of test case provisions, applications for changes in conditions other than those provided elsewhere in the principles will be considered in the light of their cost implications both directly and through flow-on. ANOMALIES AND INEQUITIES (a) Anomalies (i) In the resolution of anomalies, the overriding concept is that the Commission must be satisfied that any claim under this principle will not be a vehicle for general improvements in pay and conditions and that the circumstances warranting the improvement are of a special and isolated nature. (ii) Decisions which are inconsistent with the principles of the Commission applicable at the relevant time should not be followed. (iii) The doctrines of comparative wage justice and maintenance of relativities should not be relied upon to establish an anomaly because there is nothing rare or special in such situations and because resort to these concepts would destroy the overriding concept of this principle. (b) Inequities (i) The resolution of inequities existing where employees performing similar work are paid dissimilar rates of pay without good reason, shall be processed through the Anomalies Conference and not otherwise, and shall be subject to all the following conditions: (1) The work in issue is similar to the other class or classes of work by reference to the nature of the work, the level of skill and responsibility involved and the conditions under which the work is performed. (2) The classes of work being compared are truly like with like as to all relevant matters and there is no good reason for dissimilar rates of pay. (3) In addition to similarity of work, there exists some other significant factor which makes the situation inequitable. An historical or geographical nexus between the similar classes of work may not of itself be such a factor. (4) The rate of pay fixed for the class or classes of work being compared with the work in issue is a reasonable and proper rate of pay for the work and is not vitiated by any reason such as an increase obtained for reasons inconsistent with the principles of the Commission applicable at the relevant time. (5) Rates of pay in minimum rates awards are not to be compared with those in paid rates awards. (ii) In dealing with inequities, the following overriding considerations shall apply: (1) The pay increase sought must be justified on the merits. (2) There must be no likelihood of flow-on. (3) The economic cost must be negligible. (4) The increase must be a once-only matter. (c) Procedure (i) An anomaly or inequity which is sought to be rectified must be brought to the Anomalies Conference by the peak union council, namely the TTLC. (ii) The matter is first discussed with the employers and other interested parties at the Conference. (iii) The broad principles for processing the anomaly or inequity raised are: (1) If there is complete agreement as to the existence of an anomaly or inequity and its resolution, and the President is of the opinion that there is a genuine anomaly or inequity, the President will make the appropriate order to rectify it. (2) If there is no agreement at all, one of two situations can arise. Either the President will hold that there is no anomaly or inequity falling within the concept of the Conference which would mean an end of the matter as far as the Conference is concerned, or on the other hand the President could hold that there was an arguable case which would then go to a single Commissioner or Full Bench of the Commission for consideration. (3) This procedure can be departed from by agreement and with the President's approval. PAID RATES AWARDS (a) Except in the case of first awards, the Commission will refrain from making any new paid rates awards. In the making of first awards the conditions as provided in the first awards and extensions to existing awards principle must be complied with. (b) The rates of pay prescribed by the new award must be expressed in terms of a properly fixed minimum rate plus supplementary payments. (c) The Commission may convert into a minimum rates award a paid rates award which fails to maintain itself as a true paid rates award. The conversion of such a lapsed paid rates award into a minimum rates award will involve the valuation of the classifications in it by comparison with similar classifications in other minimum rates awards excluding supplementary payments. FIRST AWARDS AND EXTENSIONS TO EXISTING AWARDS (a) In the making of a first award, the long established principles shall apply i.e. prima facie the main consideration is the existing rates and conditions. (b) In the extension of an existing award to new work or to award-free work the rates applicable to such work will be assessed by reference to the value of work already covered by the award. (c) In awards regulating the employment of workers previously covered by a Federal award or determination, existing rates and conditions prima facie will be the proper award rates and conditions. (d) Where a first award is made it shall contain a minimum rate for each classification of employee covered by it. Where the total rate determined for each classification in accordance with (a) and (c) exceeds the appropriate minimum rate for that classification, the excess amount shall be prescribed as a supplementary payment. For the purposes of this paragraph, the appropriate minimum rate will be assessed by comparison with similar classifications in other minimum rates awards. ECONOMIC INCAPACITY Any respondent or group of respondents to an award may apply to reduce and/or postpone the application of any increase in labour costs determined under the principles on the ground of very serious or extreme economic adversity. The merit of such application shall be determined in the light of the particular circumstances of each case and any material relating thereto shall be rigorously tested. 1 National Wage Case Decision, 12 August 1988 [Print H4000] C Nos 21376, 21377, 21378 and 31751 of 1988
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