IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act, 1984

 

T. No. 141 of 1985		IN THE MATTER OF an application by the AUSTRALIAN WORKERS' UNION (TASMANIAN BRANCH) to vary the BUTTER AND CHEESEMAKERS AWARD
		Re: Introduction of a 38 Hour Week
COMMISSIONER R.J. WATLING		1 August, 1985
REASONS FOR DECISION
APPEARANCES:
For the Australian Workers' Union (Tasmanian Branch)		- Mr. D.P. Hanlon with   Mr. D.S. Brown   (16.7.1985) - Mr. E.J. Butler   (30.7.1985)
For the Tasmanian Chamber of Industries		- Mr. M.C. Sertori with   Mr. J. Hughes   (16.7.1985) - Mr. M.C. Sertori   (30.7.1985)
DATES AND PLACES OF HEARINGS:
16 July, 1985	Launceston
30 July, 1985	Hobart

This application made by the Australian Workers' Union (Tasmanian Branch) was for the purpose of amending Section I of the Butter and Cheesemakers Award, by reducing the hours of work for employees from 40 to 38.

This matter was referred to me by President L.A. Koerbin, pursuant to Section 15(1)(a) of the Industrial Relations Act 1984 which states inter alia -

"15(1) Subject to this Section, the President shall -

(a) allocate for hearing and determination by a Commissioner sitting alone applications for awards or for the variation of awards;"

Mr. Hanlon, representing the Australian Workers' Union, presented an exhibit (H1) which:-

(a) set out a list of eleven (11) offsets, and

(b) included a document in the form of a `draft order' reflecting the appropriate agreed award variations.

Mr. Hanlon then proceeded to give a background of the Industry to the Commission which can be summarised as follows:

1. The Industry had not come before the Commission on many occasions and since the last occasion there had been a number of changes in the Industry.

2. Approximately 110 persons employed in A.W.U. classifications in the Industry out of a total of approximately 270.

3. Persons covered by the proposed agreement represented approximately 70% of the manufacturing of milk products in the State of Tasmania; products such as cheese, butter, milk powders, casein and whey.

4. In dollar terms, production by the companies represented by this application was some $50/60 million per year.

5. They processed 210 million litres of milk per year and in the `peak' season 1 million litres per day. Approximately 70% of the 210 million litres were processed between July and December each year.

6. The most significant part of the industry is covered by two companies, United Milk Tasmania (U.M.T.) and King Island Dairy.

Mr. Hanlon then proceeded to outline the locations represented by this application.

A. Edith Creek which specialises in milk powders and whey powders. 3,000 tonnes
    processed.
    Total 24 employees - (20 A.W.U. members.)

B. Wynyard - 8,000 tonnes of cheese per year.
    Total 52 employees - (34 A.W.U. members.)

C. Devonport - butter, casein and milk powders. 8,000 tonnes, 1,100 tonnes
    and 6,000 tonnes respectively.
    Total 45 employees - (34 A.W.U. members).

D. Deloraine - butter oil. 1,000 tonnes.
    Two (2) permanent employees and 2 casuals - one of whom is an A.W.U. member.

E. Ledgerwood - 4,000 tonnes of milk powders.
    Total 24 Employees - (14 A.W.U. members.)

F. King Island - butter and cheese. 300 tonnes.
    Total 15 employees - (10 A.W.U. Members.)

Cost Offsets

Mr.Hanlon submitted that the notional cost associated with the introduction of a 38 hour week in this area of employment was approximately 5%, and then went into some detail to point out how the offsets amount to approximately 4.85% in the following areas.

1. Rationalisation of award classifications.
2. Rationalisation of certificates and allowances.
3. Maintenance of Junior percentages for a 2 year period.
4. Decrease notice for change of shift.
5. Introduction of Broken Leave clause.
6. Reduce notice of Sick Leave.
7. Payment of wages fortnightly and by cheque.
8. Termination clause for casuals.
9. Dispute Settling Procedure.
10. Overtime divisor remains at 40 for 12 months.
11. Flexibility of methods of implementation.

1.  Rationalisation of Award Classifications:

These were reduced to five Groups and amounted to a savings in administrative terms, with persons only being classified within the five groups.

Mr. Hanlon said the exercise was undertaken because a number of classifications contained in the current award were redundant and this had made it possible to broad-band classifications.

It was stated that there would be no increase in wage rates through the rationalisation of the classifications.

It was brought to my attention that the classification of Fork Lift Driver in Group 3 of the agreed document (H1) showed a higher margin per week than that applying in the current award.

The parties maintained that the amount contained in Exhibit H1 for Fork Lift Drivers was, in fact, the correct amount.

It was put top me that an administrative error had occurred when the decision emanating from No. 49 of 1982 of the Butter and Cheesemakers Industrial Board Award was gazetted and this error had been perpetuated when the Award was varied from time to time.

2.  Rationalisation of Certificates and Allowances:

The parties agreed that Group 1 employees were required to hold certain certificates and in the case of Group 2 employees, they would be working towards gaining those certificates.

It has been estimated that the cost saving of this offset and (1) above to be .25%.

3.  Maintenance of Junior Percentages for a Two Year Term:

It was agreed by the parties that, that part of the current award prescription which prescribes work to be done by juniors, will now be deleted.

The parties have declined to cost this offset.

4.  Decreased Notice for Change of Shift:

It was estimated that the cost saving associated with the introduction of this offset was .45% based on the 1984/85 year during which a total of 350 shifts were paid at penalty rates due to the operators not being given sufficient notice.

It was estimated that this will be reduced to 75 under the new arrangement.

5.  Introduction of Broken Leave Clause:

This will enable leave to be taken in two or more parts, and includes a provision allowing employees to take leave in the `off-season'.

6.  Reduced Notice of Sick Leave:

The parties have agreed that the provision for 48 hours notice to be given should be reduced to 24 hours.

It was estimated that the cost savings in (5) and (6) would be .05%.

7.  Payment of Wages Fortnightly and by Cheque:

It was agreed to completely restructure the Company's payroll system to allow for all employees to be paid fortnightly by cheque.

They were previously paid weekly by cash.

It was stated that the administrative cost savings in this area was the most significant with a saving of 2%.

The parties declined to estimate the alternative value of releasing administrative staff or place a value on the employees' time. The calculation was strictly based on wages costs.

8.  Termination Clause for Casuals.

Previously there was no provision in the award for the termination of casuals.

The parties agreed on an appropriate procedure to be included in the award.

They also declined to cost this offset.

9.  Dispute Settling Procedure.

Previously there was no provision for Dispute Settling Procedure in the award.

The parties agreed on an appropriate procedure to be included in the award.

They estimated the saving to the Company to be 1%, on the basis that if one day's production is lost, then there can be no recovery of any milk products not processed on that day.

This does not include manufactured products.

10. Overtime Divisor Remains at 40 for 12 months.

The parties agreed to the divisor for overtime remaining at 1/40 of the weekly rate for twelve months.

This will have the effect of deferring the cost in the first year of operation and spreading it over a two year period.

The estimated cost saving of this is .1%.

11. Flexibility of Methods of Implementation

Because of the seasonal nature of the industry, the parties agreed to a flexible method of taking annual leave, leisure days and the working of a 19 day month during the off-season.

The parties estimate a cost saving of .1% in this area.

Mr. Sertori, representing the Tasmanian Chamber of Industries, agreed with the submissions made by Mr. Hanlon and confirmed the Tasmanian Chamber of Industries's agreement with the Australian Workers' Union to introduce a 38 hour week in Section I of the Award.

Mr. Sertori submitted that the offsets were arrived at after exhaustive negotiations, and there had been a genuine and real attempt to offset the costs associated with the introduction of the 38 hour week.

He reminded the Commission that the cost offsets were estimated on a conservative basis and that some offsets were not costed.

He said that the Tasmanian Chamber of Industries believed the cost offsets amounted to 4.85% against a notional cost of 5% which, in their view, was a negligible cost to address and he was quite confident that it would be absorbed within the structure of the Industry.

He also pointed out that when arriving at the Agreement, due regard was given to the Wage Fixation Principles and the requirements of the Industrial Relations Act 1984, namely, the impact on the economy and the public interest.

On the question of the operative date, Mr. Sertori reported that the parties had agreed that the 38 hour week should be introduced from 1 July 1985.

He said the two companies affected by the application had worked to that operative date, had conducted in-plant discussions and had implemented the offsets and the 38 hour week from 1 July, 1985.

DECISION

I am of the view that most of the offsets contained in the agreed document (H1) represent a genuine attempt by the parties to comply with the Wage Fixation Principles and, in particular, Principle 5.

There may be other indirect cost savings associated with the agreement which the parties found difficult to cost.

I am satisfied the agreement does not offend the provisions of the Industrial Relations Act 1984.

For these reasons I believe the award should be varied to reflect the agreement reached by the parties and I decide accordingly. This includes the operative date of 1 July 1985 as I have been assured by the parties that the offsets were implemented from that date.

During the course of submissions it was put to me that the current award margin shown in Part I, Section I, Division A, Sub-section (e), Classification 30 - Fork Lift Operator, was incorrect, in that it did not reflect the rate set by the Butter and Cheesemakers Industrial Board on 5 October 1982 (No. 49 of 1982).

I was also informed that the agreed document submitted by the parties contained the correct figure.

I am satisfied that an error has occurred when the Award was gazetted in the past and it should therefore be rectified.

It is my decision that the margin for the abovementioned classification shall be $141.40 per week.

The Orders [Part I] and [Part II] giving effect to this decision are attached.

 

R.J. WATLING
COMMISSIONER