IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

Mr Abey, appearing for the Company, called its General Manager (Mr C. Bowles) to give evidence in support of the Agreement. A summary of Mr Bowles- evidence and his explanation of the various aspects of the Agreement under the following headings is:

Changes to Hours of Work

- changes in working hours for employees in Hobart will result in a reduction in penalty payments for work done outside the normal spread of hours.

Changes to Work Practices

- in lieu of the current practice of calling stop work meetings at times of most inconvenience to the Company, any future stop work meeting, where possible, will be held at times allowing for continuous operation of the plant and be restricted to 30 minutes duration;

- employees will now be required to 'clock off' and 'clock on' at lunch breaks, thus achieving an estimated gain in production time of up to 10 minutes per employee, per day;

- employee representatives will be limited to one person per organisation, unless mutually agreed otherwise, in dealings between employees and management;

These two matters were joined for hearing purposes in proceedings before the Commission on 7 Spetember 1987. The application for the filing of an industrial agreement (the Agreement) follows protracted discussions between the parties and on occasions industrial action taken by employees of Tasmaid Foods Pty Ltd (the Company). T.934 of 1987 is an application to vary the Dairymens Award seeking consequential variations should the Agreement be ratified.

The Agreement, if approved, will put in place a 4% increase in wage rates, in accordance with the second tier provisions of the Wage Fixing Principles.

The industrial action by members of the Australasian Society of Engineers (ASE) and the Australian Workers' Union (AWU) in support of the 4% increase, resulted in a notification by the Tasmanian Confederation of Industries of an industrial dispute. While subsequent proceedings before the Commission did not result in a cessation of industrial action, they did play some part in getting the parties to a point where agreement was ultimately reached.

Included in the Agreement is a provision relating to superannuation, where the Company undertakes to make a contribution equivalent to 37 of each employee's base rate of pay to 'Tasplan', from 1 January 1988.

- removal of any demarcation barriers which inhibit the transfer of employees between departments;

- removal of the current five day restriction on the use of casuals; this is not intended to be used as a means of replacing permanent employees but rather supplement them in times of need, e.g. seasonal variations, extended sick leave et cetera;

- an agreed disputes procedure has been included in the Agreement, which in the light of recent experience is seen as a positive benefit;

- in lieu of the current award provision requiring an employee to notify of an absence within 48 hours, 24 hours will apply in future, with agreement that the employee will in fact notify as soon as is practicable;

- in lieu of the current award provision requiring two weeks notice of a change in starting time, seven days will apply in future; the grounds justifying such a change are unanticipated absenteeism due to sickness, accident or on compassionate grounds.

Changes in Employment Conditions

- acceptance of the Company's right to reclassify employees where:

(a) the individual does not wish to be employed in the higher classification to which he was appointed, or

(b) the person is incapable of performing the function of the higher classification to which he was appointed;

employees currently in one or other of the above categories will be reclassified if the Agreement is ratified;

- in lieu of the current agreement to pay sick leave to AWU employees on an averaging basis, sick leave will be paid at the actual rate for the day;

- an agreed list of tools is to be supplied and maintained by tradesmen; three months grace from the date of ratification of the Agreement is to be allowed to tradesmen to bring tool kits up to date; replacement of tools by the Company is to be discontinued;

- free issues of milk to employees are to be reduced and properly controlled, additional limited supplies will be made available at 507 of normal retail prices.

Improvements and Efficiencies

- the Agreement provides for an ongoing review of work/management practices; employees and management representatives will be involved with beneficial changes being implemented.

Mr Bowles advised that the 4% increase in wages would cost the Company $74,919.37 per annum.

In answering questions going to the cost benefits the Company anticipated from the above changes in work practices and conditions, he advised that the Company expected to at least "break even" and there was a possibility of some "cost benefit". It naturally follows from the above that the Company does not anticipate any increase in the cost of milk to the general public, if the Agreement is ratified.

He also believed that the negotiations leading up to the Agreement and the Agreement itself provided the basis of a new era of co-operation between employees and management.

In relation to the provision going to superannuation, Mr Abey advised that there would be a cost to the Company associated with its implementation. However, that cost could be absorbed by the Company. The existing Company scheme for the employees covered by the Agreement would be wound up, with the funds "rolled over" into the new scheme to commence in January 1988. The winding down of the existing scheme would in fact produce a long term saving for the Company, thus reducing the ultimate cost of the new scheme.

The agreed date of operation of the second tier Agreement is the first pay period commencing on or after 31 August 1987.

Mr Forster and Mr Devlin, for their respective organisations, added their total support to the Agreement, and the consequential award variations.

The ratification of this Agreement is sought under Principle 3 Restructuring and Efficiency of this Commission's Wage Fixing Principles.

Principle 3 reads:

"RESTRUCTURING AND EFFICIENCY

(a) Increases in rates of pay or improvements in conditions of employment may be justified as a result of measures implemented to improve efficiency in both the public and private sectors.

(i) Changes to work practices and changes to management practices must be accepted as an integral part of an exercise conducted in accordance with this principle.

(ii) Other initiatives may include action to reduce demarcation barriers, advance multiskilling, training and retraining and broad-banding.

(iii) Changes to working patterns may be necessary.

(b) This principle shall be subject to the second tier ceiling.

(c) 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 this principle shall not be taken into account in any claim under the work value changes principle."

The relevant parts (to this decision) of the Second Tier provision read:

"(a) No improvements in pay or conditions under the second tier principle will result in an increase in costs exceeding 4% of wages and salaries.

(b) Subject to agreement between the parties concerned, and processing of such agreement in accordance with appropriate principle, increases not exceeding 4% ceiling may be approved from a date to be fixed by the Commission.

(c) ...

(d) The Commission will not award retrospectivity in relation to any second tier increases."

Matters agreed between the parties in this case go squarely to the requirements of Principle 3(a)(i), (ii) and (iii) and also a number of conditions of employment not necessarily, but quite properly, part of restructuring and efficiency agreements.

I am satisfied that in all the circumstances the parties have made genuine attempts to address the requirements of the above principle. While I have reservations about some aspects, I believe the potential is there for this to be a "no cost" settlement for the Company. With goodwill exercised on both sides, further negotiations, as envisaged in the areas detailed in the Agreement, could result in further increased productivity. I encourage the parties to further discuss these matters.

I indicate at this point that I do not consider any work value considerations are relevant to this matter.

Having concluded, as indicated above, the Agreement will be ratified as requested by the parties.

Certain minor variations to the Agreement, as detailed by me and agreed by the parties during the hearing, will be made before the document is passed to the Registrar for registration.

In the light of the very clear statement of the Commission, in the Wage Fixing Principles, relating to retrospectivity of second tier increases, the date of operation of the Agreement will be the first pay period commencing on or after 14 September 1987. It will have a life of three(3) years.

Having decided to ratify this agreement and vary the Award from the above date, I urge the parties to give priority to the updating of the AWU/Tasmaid Foods Pty Ltd Agreement 1987 and the Tasmaid Foods Pty Ltd/ASE-AEIA Industrial Agreement 1982.

J.G. King
COMMISSIONER