IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

These applications were first listed for hearing before the Commission on 2 July 1987. Although there was some opposition from the Royal Australian Nursing Federation (RANF) the matters were joined for hearing purposes.

I also indicate at this point that the RANF request for a separate decision for nursing staff is refused. It therefore follows that this decision relates to all public sector parttime and casual employees covered by the Hospitals, Hospital Employees (Public Hospitals), and the Nurses (Public Hospitals) Awards.

The above identified employees are the only group within the public hospital system which has not received the benefit of a reduction in standard working hours.

Reduced working hours for public hospital employees have been implemented on a piecemeal basis over a period in excess of two years. Their introduction has been by the registration of agreements.

The applications in this matter not only seek the benefit of reduced working hours for part-time and casual employees, but, also appropriate award variations to reflect a 38-hour working week for all public hospital employees, thus replacing the existing agreements.

The other significant difference in this matter, is that the applications are opposed by the Minister for Public Administration (the Minister).

As this is the first opposed reduced hours matter affecting public hospital employees and involves a significant sector of employment for which cost offsets are difficult to achieve, the Minister requested the applications be referred to a Full Bench. This request was supported by the Minister for Industrial Relations and the Tasmanian Confederation of Industries, both interveners in accordance with the provisions of Section 27 of the Industrial Relations Act 1984.

The proceedings were adjourned on 2 July to allow further discussion between the parties and a request to be made to the President for the convening of a Full Bench.

Prior to the conclusion of the conference I advised the parties that the President had refused the request for a Full Bench to hear the applications on the merit.

The merit of the claims was debated before me on 13 and 14 July 1987.

It was submitted by the applicants that changes in the Wage Fixing Principles now made it possible for opposed reduced hours claims to be arbitrated by the Commission. In considering such claims the only requirement on the Commission is to "satisfy itself that as much as possible of the required cost offset is achieved by changes in work practices". [Principle 8(a)]

In addressing the above, various exhibits were presented by theparties. While there was agreement on the estimated cost of granting the applications ($712,585) there was some dispute over the actual cost savings that could be achieved.

In the circumstances I intend to base my decision in this matter on the figures in Exhibit S2, which contains cost offset information produced on behalf of the Minister. This exhibit was also reproduced by the applicants (RANF and HEF 2) and was at least conceded by them as providing agreed minimum cost offset figures. It naturally follows, that it was their submission, that the cost offsets achieved by the agreed work practice and other changes, resulted in higher savings than demonstrated by Exhibit S2.

A total of eight (8) cost offsets detailed in Exhibit S2 produced an estimated total saving of $416,612 or 58.5% of the total cost.

It was submitted that the actual cost was therefore 2.076% of the total wages bill for the employees affected. Percentages of that order have been accepted by industrial tribunals as representing minimal cost in the context of reduced hours claims.

Two decisions were relied on by the applicants as supporting their submission that the Commission should, in the light of the submissions and exhibits, grant the claim. Those decisions are by a Full Bench of this Commission, dated 15 February 1985, in T.14 of 1985, and a Full Industrial Commission decision of the South Australian jurisdiction dated 24 December 1986 (I. 81/1986).

In both instances while the cost offsets were minimal the applications were granted.

It was submitted that the public interest would not be offended in any way by the granting of the claims.

The RANF requested a prospective date of operation of the award variations from the date of the finalisation of submissions, i.e. 14 July 1987. It was their submission that a substantial part of the cost offset arrangements were already in place and accepted by employees, particularly nurses. The Government had therefore had up to eighteen months retrospectivity of changed work practices which had produced corresponding cost savings.

Other applicants either supported the RANF submission on the date of operation, or requested an early decision from the Commission with a prospective date of operation from the date of decision.

The Hospital Employees' Federation of Australia, Tasmania No. 1 Branch (HEF No. 1), adopted a different stance from that of the other applicants on an important matter of principle involved in this case. It was submitted by the HEF No. 1 that the 20% loading, currently paid to part-time employees in lieu of annual leave, public holidays, sick leave, etc., should be deleted from the awards. In its place part-time employees should receive the same conditions as full-time employees on a pro rata basis. It was submitted that this change would not only provide consistency but also put into effect a cost saving of some significance.

In a similar vein it was submitted that the true spirit and intention of reduced working hours would be better served by part-time employees receiving increased leisure time where possible. To this end it was submitted that part-time employees, working five out of every seven days, or twenty out of every twenty-eight days, should work a nineteen day month on the same basis as full-time employees.

By contrast other applicants and the Minister (with some reservations) submitted that it was not practicable to reduce working hours for part-time employees. It was also said that increased leisure time had no real attraction to these employees.

The above submission, if accepted, highlights a significant difference between this group of employees and those employed full-time. The difference is that the estimated increased cost is a real increase in the salary and wages bill, whereas generally speaking, for full-time employees, the cost of reducing hours is notional.

The Government, through its respective advocates, opposed the applications on the basis that the Commission was in fact being asked to approve a 5% increase in salaries and not a reduction in working hours.

It was submitted that because of the real increases in costs attaching to these applications the Government sought full cost offsets. If they were not forthcoming, it was not in the public interest to grant the claims.

It was also submitted that there were real flow-on implications if these applications were granted, particularly in significant areas of part-time and casual employment such as the Education Department.

It was further submitted by the Government that the applications should not be separated but should be considered in toto.

If the Government view was not accepted by the Commission, any retrospective application of a 38-hour week was totally opposed. Further there was sufficient precedent for the Commission to phase in the introduction of reduced hours thus reducing the initial cost in this case.

It was the view of all parties, with the exception of the RANF, that should the Commission grant the applications the parties should be referred into conference to prepare draft orders for later issue by the Commission. This course was generally favoured as the granting of these applications would allow finalisation of award variations accommodating the 38-hour week for all employees covered by the subject awards.

The RANF however, had produced what they considered were appropriate award variations and requested orders varying nursing awards be issued with the Commission's decision.

There can be no doubt that in the current economic climate any increase in costs, particularly in an area such as the public hospital system, must raise serious questions of public interest. Such considerations have caused me considerable concern in arriving at a decision in this matter.

If the public interest was the only consideration there is no doubt that I would dismiss these applications. However, other factors required by the Industrial Relations Act 1984 and the Wage Fixing Principles of this Commission must also be addressed.

Perhaps the most unfortunate aspect of these claims is that they are being dealt with in isolation. The piecemeal approach to the introduction of reduced working hours to public hospital employees has automatically ensured that the more difficult and costly groups of employees have been left till last. While I appreciate the problems in dealing with the question across the board I believe, in retrospect, that is the approach that should have been adopted. Had this been done greater cost offsets may have been achieved in some areas to compensate for those where savings are difficult if not impossible to find.

The parties, and of course the Commission, are now confronted with a group of employees for which cost offsets are difficult to achieve.

However, I believe in the context of Principle 8 - Standard Hours, the parties have addressed the appropriate requirements. Consideration of the various cost offset exhibits clearly demonstrates the time and effort that has been given to the reaching of agreement, in changes to work practices and some conditions of employment.

On the basis of the exhibits and the submissions of the parties I am satisfied that the requirements of Principle 8 have been satisfied as far as it is possible in relation to the employees concerned.

I believe on the basis of equity, it would not be conducive to good industrial relations to have some part-time employees continue to receive a lesser rate of pay than full-time employees doing the same job.

On balance it is my decision that the awards, the subject of these applications, will be varied to provide the benefits of a 38-hour working week to part-time and casual employees.

The parties are directed to confer on the content of appropriate orders to reflect this decision and also to incorporate the provisions currently contained in a number of registered agreements applying to full-time employees. I would expect this process to take no longer than four weeks.

The date of operation of the award variations and therefore the date of effect of this decision is the first pay period commencing on or after 3 August 1987.

I have already expressed concern at the cost aspects of these applications and indicated that Exhibit S2 is the cost offset document, that I have used as the basis for this decision. During the proceedings certain qualifications were sought to these cost offsets, particularly in relation to offset 2, the agreement to vary awards to allow payment of salaries by means other than cash. I make it clear that I regard the cost offsets in Exhibit S2 as non-negotiable. I expressed my concern during the hearing in relation to one of the cost offsets; as to whether or not it had a 'real' value. Any reduction in the value of the cost offsets contained in Exhibit S2 would be unacceptable to the Commission.

One other aspect of the submissions warrants further comment from the Commission. I refer to the submission of the REF No. 1 where it expressed the view that the real intention of a 38-hour working week was to provide more leisure time for employees, not increased rates of pay. I entirely endorse that submission and express the view that where it is possible and reasonable to reduce working hours on a proportionate basis, that should be done. To that end, part-time employees working on five out of seven days, or, twenty out of every twenty-eight should be particularly considered with the view to treating them the same as full-time employees.

J.G. King
COMMISSIONER